Financial bail out for Eastbourne

The authority had asked the government for millions of pounds to plug the gap in its finances for this year and the following year to avoid effectively having to declare itself bankrupt, like some local authorities have.

The council said it needed £6.8m for 2020/2021 and £6m the following year as it says it lost 60 per cent of its income – mainly through tourism – due to the coronavirus and lockdowns.

The government refused but has approved total capitalisation direction to fund revenue expenditure, which means the council can borrow the money but will need to sell assets to repay the loan.

The council’s assets are mainly in property and any loan is not expected to be linked to preferential rates.

Eastbourne council leader David Tutt said 2020 had been a difficult year.

“Over the last year, Eastbourne council has been working tirelessly to be among the first line of defence for our town against the coronavirus pandemic, protecting residents and businesses,” he said.

“2020 has been a year like no other, the challenge of Covid-19 so deeply affecting us all. That challenge has been met by an equally colossal response by the people of our borough.

“First and foremost, we offer our heartfelt sympathies to all the families in our town who have so painfully lost loved ones to the virus. The loss of every single person is a tragedy.

“We also pay tribute to everyone in Eastbourne who has put in such an incredible response to this emergency. It’s been a real community effort, the scale of which has probably not yet fully sunk in.

“Our ambitions for the borough are undimmed. We have great belief in our people, businesses and partner organisations.

“Collectively we can work towards a resilient recovery. And our communities can be reassured that we continue to support them. We also recognise that we need to commit to delivering a sustainable financial position which will start with a period of stabilisation.

“Our approach to the budget and achieving our targets is made all the stronger thanks to the support

of the people we serve.”

His Liberal Democrat colleague Steve Holt, the deputy council leader who also holds the portfolio for finance, said, “The pandemic has hit the council’s income, created increased demand for our services and led to more hardship across the borough requiring a rapid expansion of support for jobs and the economy.

“At the start of the pandemic, we recognised the challenges it would have on the council. Eastbourne Borough Council derives around 60 per cent of income from tourism, and we experienced a massive decline in this – including £6 million worth of revenue from the forced closures of our theatres and conference venue.

“In addition, there were substantial additional costs to the council as we pro-actively responded to the impact of Covid-19 on our town.

“We recognised that early intervention was important and have already made savings of £4.8 million this year.

“We also approached the government in the summer when they asked for councils with exceptional financial circumstances to contact them.

“We are not alone in asking for additional support, and we suspect that others will likely follow.

“The government said it would cover the cost of Covid-19 to councils. With significantly reduced tourism revenues and higher demand led expenditure, this announcement is part of this commitment and a recognition that our financial challenge due to a loss of income was unavoidable as a result of coronavirus lockdowns.

“The package means we are simply allowed to borrow to cover the lost income and increased Covid-19 costs - not dissimilar to what government is doing itself to pay for the costs of coronavirus nationally.

“The support package announced is offered after a rigorous assessment of the council’s governance and recovery programme. It is a strong vote of confidence in the ability of our town’s economy to recover, and in the ability of Eastbourne council to guide that strong recovery. Our focus is to do just that.”

The Conservative group of Eastbourne councillors said members “are delighted the government has saved Eastbourne council from the horrors of being subject to a Section 114 regime which would mean no new expenditure would be permitted, with the exception of safeguarding vulnerable people and statutory services.

But the group’s leader Robert Smart said, “However, it must be recognised that the perilous financial position existed before Covid.”