East Sussex County Council leaders back borrowing budget
County council leaders have backed budget proposals, which would rely on the government allowing the authority to borrow as much as £70m in the coming year.
On Tuesday (January 27), East Sussex County Council’s cabinet endorsed a proposed budget for the 2026/27 financial year.
This includes a 4.99 per cent council tax increase and savings totalling more than £3m, or more than £6.3m when combined with those already agreed previously.
However, Cllr Nick Bennett, cabinet member for resources and climate change, warned councillors that these measures would not come close to covering the council’s additional costs.
He said the council is expecting to face additional costs of more than £71.7m next year, as a result of inflation and additional demands in adult social care and children’s services.
Cllr Bennett said: “The increase in funding available is only £21m. That is from council tax. Business rates and government grants provide no additional funding to this authority in 2026/27.
“With savings of £6.4m planned for next year — plus bringing forward the 2025/26 deficit of £11.5m funded from reserves — the overall gap is £55.5m.”
Councillors heard how this shortfall could not be made up by drawing money from reserves.
In a statement, chief finance officer Ian Gutsell said the council’s reserves are currently at the “absolute minimum level required to safeguard …against unforeseen risks and volatility.”
The council plans to cover the shortfall by seeking Exceptional Financial Support (EFS). This is expected to come in the form of a £70m capitalisation direction, which has been requested from (but not yet confirmed by) the government.
Conservative council leader Keith Glazier said: “It is not through a lack of good planning. It just is that the reserves now, over many years, have been spent.
“The pressures continue to grow year on year and unfortunately the Fair Funding Review … has gone the other way and actually left us worse off.
“We will continue to make that case to government and I thank all councillors for the work they have done, because I don’t think lobbying has ever been greater than it has been this year.”
Chris Collier, leader of the council’s Labour group, said he was “hopeful” support may be coming from central government in the near future.
If the capitalisation direction is agreed by the government, the council will essentially be allowed to borrow money to cover its day-to-day spending.
Liberal Democrat group leader David Tutt said it appeared to be the “only option” available to the council.
Green Party group leader Johnny Denis said EFS “was probably the only thing we can do.”
A final decision on the 2026/27 budget is due to be made at a full council meeting on Tuesday, February 10.