Hastings council leaders say the authority is on course to run out of reserves

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Hastings council leaders say the authority is on course to run out of reserves, unless the government takes action to address homelessness costs.

The warning came on Monday (February 3) as Hastings Borough Council’s cabinet endorsed budget proposals for 2025/26, which are due to go to a full council vote next week.

These proposed budget include a 2.99 per cent council tax increase, pre-agreed savings of £417,000 and plans to draw £845,000 from the authority’s general reserves.

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The reserves would be used to address a deficit in the council’s spending. Council leader Julia Hilton (Green) linked this deficit to the authority’s long-standing homelessness pressures, which are on track to result in a £903,000 overspend in the current financial year.

Cllr Julia Hilton. Pic: ContributedCllr Julia Hilton. Pic: Contributed
Cllr Julia Hilton. Pic: Contributed

Cllr Hilton said: “Forty per cent of our net revenue budget is being spent on temporary accommodation. So even though our housing team have put in place … all the recommended measures to try to prevent homelessness, the pressure is unrelenting.

“The extra funding for homelessness prevention is welcome [but] it is simply not enough to tackle the huge scale of the problem. Without a clear strategy from government to tackle homelessness, the brutal fact is that we will run out of reserves in two years’ time.”

With the £845,000 draw, the authority’s general reserves are forecast to fall to £4.5m by the end of 2025/26 (from an expected figure of £5.4m at the end of the current financial year).

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The council’s recommended minimum level of general reserve balance is £4m.

The council is also currently forecasting a £2.8 million deficit in 2026/27. While this forecast deficit comes with a lot of unknown factors (such as the final level of government grant funding), it could result in the council’s general reserves reducing to £1.8 million — a figure well below the recommended minimum.

The cabinet-backed budget proposals also include a 2.99 per cent increase in the authority’s council tax demand. This increase would translate into an extra £8.93 for a Band D household, with the borough council’s share of the bill increasing from £298.76 to £307.69 in the 2025/26 financial year.

The full increase to bills is expected to be larger as other charging authorities — including East Sussex County Council — are also expected to increase their portions of council tax.

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