Council tax increase for Eastbourne households backed

On Wednesday (February 9), Eastbourne Borough Council’s cabinet met to discuss its budget proposals for 2022/23, which are set to go to a full council vote later this month. 

The proposals include plans to increase council tax by 1.99 per cent, which would mean an average Band D household pays £261.89 to the borough council as part of its annual bill.

The budget proposals do not include any new planned savings, however around £3.3m of the £6m savings approved in June last year (known as the recovery and reset programme) are set to come into effect in 2022/23. 

With these the council says it looks set to be able to set a balanced budget next year without having to draw money from its reserves.

However, Steve Holt, Liberal Democrat cabinet member for finance, warned that the council’s economic recovery is not yet a done deal.

Cllr Holt said: “We are still recovering from covid and our economy was hit particularly badly, as was our income and indeed some of the projects we were looking to do. 

“Financial recovery is reliant upon the incoming savings from the recovery and reset programme.”

The £3.3m of savings come on top of the £2.8m already made through the recovery and reset programme in 2021/22. By making these savings, Cllr Holt said, the council did not have to use the full £12.8m of capitalisation allowed by government. 

This capitalisation meant the council could borrow money to pay for its day-to-day services, but would have to sell assets to repay the loan. 

He added: “Recovery and reset will allow us to transition out of capitalisation and balance the budget using revenue and resources. Capitalisation allowed us the use of £12.8m over two years and with careful management we have managed to reduce this down to £9m. 

“However, it is still very difficult and recovery is not assured, I am afraid. Income streams, in particular tourism, leisure and commercial events, sales and fees, are still at risk and continue to present a challenge dependent on recovery through the country.”

The full savings programme, some of which has already come into effect, includes: reduced level of maintenance in the town’s parks and seafront; an increase to the cost of garden waste collections; less frequent street cleansing; and shorter opening hours for public toilets.

The planned savings also include plans to make use of a tax mechanism known as the ‘cultural exemption’. This would allow the council to make its ticket sales exempt from VAT and would be expected to save something in the region of £500,000 in 2022/23.

It was this saving in particular which saw concerns raised by Conservative  Kshama Shore.

Cllr Shore said: “It is a hefty figure we are talking about something around £6m over the two years we are looking to save. 

“But some of the issues I do worry about. One of them is the cultural exemption. I know you said you had been advised by a consultant who was telling me that you can save up to £676,000 in VAT. 

“I have raised my concerns about it. I wish those concerns to be recorded here once again. Do not let the tax tail wag the commercial dog. 

“It is never good to try and get around the tax rules. I’m not suggesting that it is avoidance, I’m just saying we need to be very careful about how these savings are achieved.”

This saw criticism from council leader David Tutt, however, who argued the mechanism would bring benefit, even if the amount would be limited.

Cllr Tutt said: “That is half a million pounds plus that can be used for the  people of Eastbourne, rather than going to the revenue. I would rather it were spent here than [going to] HM Customs and Excise. 

“I recognise that you are concerned about the policy. Of course we will be going to a budget meeting very shortly and you will be able to move an amendment that says give that money to the customs office, give it to the taxman and this is how we will fund that expenditure instead.”  

Conservatives also highlighted the funding received in government grants, arguing that the Liberal Democrat administration had underplayed how much this money had helped balance the budget.

Rober Smart, leader of the conservative group, said: “It appears with extra government grants of £2.23m there is no need for any capitalisation

“So whilst there is often criticism in terms of what the government is giving you, it looks like there is £2.23m here in cash.”

The budget proposals are set for further debate at a full council meeting on February 23.