2.1
To deliver our vision we will work to be a responsive council with
well-run services. We will focus on four outcomes over the next
four years as set out in our Council Plan. For each of the outcomes
shown below, we set out what we will do and how we will measure
progress. The detailed delivery plans are set out in the
council’s directorate plans and service strategies.
1.
A city to be proud of
Investing in our city
An accessible, clean, and sustainable city
2.
A fair and inclusive
city
An inclusive and fairer city
A city where people feel safe and welcome
Homes for everyone
3.
A healthy city that helps people to
thrive
A better future for children and young people
Living and ageing well
4.
A responsive and learning council
with well-run services
2.1
Council staff deliver hundreds of different services for residents,
businesses and visitors.
2.2
We conduct weddings, look after the seafront and downland, maintain
the transport network, and maintain the city’s parks and
green spaces. Services we must provide by law include education
services, children’s safeguarding, children’s and adult
social care support, waste collection and disposal, planning and
housing services, road maintenance, and library services.
2.3
In 2025/26 we are expecting to spend over £962 million
delivering services for the city. It therefore costs £2.6
million a day to run council services. We are committed to spending
this money as efficiently and economically as possible. The charts
below show the major areas of service where money is spent followed
by the primary sources of funding.
![[Figures in brackets denote changes from the previous year]]($20260205144818_031380_0098991_04Appendix4MTFS.docx_files/image004.png)
3.1
The period covered in this strategy represents a challenging time
for local authority finances, with inherent uncertainty in the
financial planning process and significant ongoing forecast
increases in demand for key services. This also represents the most
challenging time for Brighton and Hove City Council’s
finances in its history. Setting out clear financial plans is an
absolute priority as the Council moves towards greater financial
sustainability over the next 4 years.
3.2
Nationally, public finances look very challenging over the medium
term, which has put continuing pressure on Local Government
finances. The
government’s review of the allocation of local government
resources under the Fair Funding Review, coupled with the Business
Rates Reset, has resulted in the Council’s core spending
power increasing much more slowly than the assumptions within the
MTFS.
3.3
The Council is currently experiencing significant and unprecedented
pressures on statutory services, particularly in respect of
emergency and temporary accommodation, adults and children’s
social care and home to school transport. These pressures place a
huge strain on the Council’s budget. In response, a
comprehensive transformation programme has been developed to ensure
that the Council can remain financially sustainable over the coming
years. This includes programmes to reduce demand for statutory
services (emergency and temporary accommodation, adults and
children’s social care), to drive commercialisation and
income generation, to reduce spend on contract and buildings, and
to drive greater efficiency across the Council through digital
innovation and functional alignment. The budget strategy
identifies funding to resource these programmes, and is also
underpinned by asset disposals to generate capital receipts (as the
Council continues to use flexible use of capital receipts to fund
transformation activity).
3.4
The provisional Local Government Financial Settlement (LGFS) was
announced on the 17 December 2025, which resulted in the council receiving £27.416m less
resources over the multi-year settlement period of 2026/27 to
2028/29 compared to the previous MTFS assumptions.
3.5
LGFS provides for a 2.1% real-terms increase in core spending power
in 2026/27 but this assumes that councils will make full
utilisation of the allowable Council Tax increase (2.99%) and Adult
Social Care Precept (2.00%). As the MTFS sets out later, locally
there are projected budget shortfalls of more than £93
million over the next 4 years, which is a common scenario across
the much of the sector, clearly indicating that the Local
Government settlement does not go far enough in addressing the
financial challenges local authorities continue to face.
3.6
The outlook for 2026/27 remains very challenging. The Council is
still experiencing the impact of recent economic conditions,
suppressing many of the council’s income sources such as
planning incomes and commercial rents, while higher interest rates
and the impacts of increased National Living Wage and Employer
National Insurance rates have also put increased pressure on
commissioned and contracted service costs as suppliers and
providers experience a higher cost base. This has
disproportionately impacted the cost of and demand for the
Council’s Homelessness and Temporary and Emergency
Accommodation services, where there is an impact of higher rents
for tenants, compounded by landlords exiting the rental market due
to the new burdens under the Renters Rights Bills. In addition, the
cost of social care providers and home to school transport services
are particularly affected. There is also an ongoing national
and local lack of sufficiency for children’s and adult
learning disability, and mental health social care places, which is
also driving up costs.
3.7
The level of pressures,
particularly in emergency and temporary accommodation, means that
it has been incredibly challenging to balance the 2026/27 budget
without impacting on the Council’s financial resilience to an
unacceptable level. Savings proposals have been identified to
reduce the gap, but given the exceptional demand pressures on
emergency and temporary accommodation and social care, alongside
very low levels of reserves, the Council has requested Exceptional
Financial Support (EFS) of £15 million from the government.
This is part of a strategy to fully fund service pressures going
into 2026/27, protect and increase levels of reserves, and provide
sufficient time for savings to be delivered through the
transformation portfolio. The MTFS is fully balanced over a 4 year
period, and has taken account of the costs associated with
EFS borrowing.
3.8
The final budget for 2026/27 proposes a total net General Fund
Budget of £341.476m, an increase of £8.672m from
2025/26. The budget includes savings proposals of £20.749m
and the following recommendations to full Council on Council Tax
and the Adults Social Care Precept as follows:
3.9
The final 2026/27 Annual Budget and Medium-Term Financial Strategy
2026/27 to 2029/30 will be presented to Council for approval on the
26 February 2026.
3.10
The budget setting and medium-term planning process is made up of
four primary requirements as follows:
3.11
The main component parts of the budget and medium-term planning
process are set out below:
·
The Medium Term Financial Strategy (MTFS) – this
provides high-level spending and funding estimates, assumptions and
proposals over a 4-year planning period at a strategic or programme
level.
·
The Annual Budget and Council Tax – it is a legal
requirement to set a balanced budget and Council Tax each year,
funded by taxation, government grants, retained business rates and
fees, charges and commercial rents.
·
The Capital Investment Programme – this is a rolling
5-year investment programme for the construction, acquisition or
improvement of capital assets in support of Council Plan
priorities, primarily funded by capital grants, capital receipts,
or borrowing.
·
The council’s capital programme has been substantially
reviewed to improve alignment with Council Plan priorities. A
number of schemes were decommitted, resulting in reduced capital
financing costs. This process will continue into 2026/27 and future
years, overseen by an officer-led Capital Programme Board, to
further improve alignment with priorities, continue to assess
affordability, and consider opportunities to invest in new schemes
that will support the Council Plan.
·
A Capital Programme review would entail a review of the Capital
Financing budget in terms of the revenue implications of changes in
capital decisions. The current capital investment plans results in
substantial capital financing costs in the form of both interest
and Minimum Revenue Provision (MRP) charges for schemes
supported by borrowing. Where schemes do not support Council Plan
priorities they should therefore be decommitted or reduced as far
as practicable to reduce pressures on the revenue
·
The Innovation Fund – a fund that utilises capital
receipts from the disposal of capital assets to fund one-off
revenue costs to support change and transformation. This fund
therefore enables the Strategic Transformation Portfolio, new
Invest-to-Save business cases and other costs to underpin the
delivery of council wide transformation and savings to achieve a
balanced MTFS.
4.1
As noted above, the council provides hundreds of services across
the city. This requires significant organisation and management of
a wide range of resources and assets, as well as monitoring the
performance of contracted and commissioned services. The council is
therefore structured into 3 major corporate directorates headed by
a Corporate Director with the objective of working together as one
council. The authority and its directorates are supported by
corporate support functions including finance, legal, HR, IT&D
and other functions.
4.2
This section provides information about the major corporate
directorates and the service strategies they are putting in place
over the medium term to support the achievement of the Council Plan
priorities set out in Section 1. The strategies also provide
high-level information about the services provided together with
identification of the areas for potential savings and efficiencies
as well as plans for investment and transformation to achieve
continuous improvement and longer-term financial
sustainability.
Supporting a
Better Brighton & Hove for All
5.1
The Families, Children and Wellbeing Directorate brings together
different services for children and families including education
and learning, family help and protection, libraries, community
cohesion, Public Health and support for skills and employment. Much
of the education and special educational needs provision is funded
through the ring-fenced Dedicated Schools Grant (DSG). This budget
strategy is focused on General Fund spend.
5.2
The main area of General Fund spend relates to the placement costs
for children and young people in care. Spend on children’s
placements is under pressure given the national placement
sufficiency issues. There is a national shortage of both foster
care placements and residential provision. This has resulted
in children being placed in provision based on availability rather
than need, often at an inflated cost.
5.3
Nationally the number of children with child protection plans and
children being brought into care has continued reduced slightly
over the last reported 12 months. Over recent years the numbers in
Brighton & Hove have been reducing in the context of national
rises. During 2025 the number of children subject to a child
protection plan has remained relatively steady. The number of
children in care, including unaccompanied asylum-seeking children,
has risen slightly with the complexity of need increasing.
5.4
There has continued to be high numbers of children and young people
experiencing emotional health and wellbeing difficulties and this
together with an increase in the number of children with
disabilities and complex needs requiring special residential
provision continues to place huge pressure on budgets. Both locally
and nationally, there has been an increase in the number of
adolescents requiring intensive support due to the vulnerability to
exploitation in all its forms.
5.5
Our vision is for a Directorate that is ambitious and committed to
working with others to provide services and support that provide a
better Brighton and Hove for all. We want to support Brighton and
Hove to be a healthy city, where people thrive; where children,
young people and families have a better future. We are
committed to operating as One Council, working together and across
to both improve outcomes and reduce costs. Inevitably, this
will require difficult decisions in balancing untargeted,
non-statutory support with preventative, statutory and safeguarding
provision.
About the
Services
5.6
There are four key branches in the directorate as follows:
Education and Learning
This service area includes:
·
Education including partnerships, school organisation, Access to
Education and Hidden Children.
·
Virtual School for children in care and those previously in care
and those open to children’s social work services.
·
Inclusion Support Services for schools including Education
Psychology services and Schools Wellbeing services.
·
Special Educational Needs statutory service.
·
Nurseries and Early Years.
Family Help and Protection
This service area includes:
·
Family Help and Protection services for children in need, those in
need of protection, children in care and care experienced young
people.
·
Specialist Community Disability services for 0-25 including respite
and short breaks provision.
·
Fostering, family placement and permanence services for children in
care.
·
Unaccompanied asylum-seeking children services.
·
Specialist Adolescence and youth justice services
·
Front Door for Families which includes the MASH (Multi Agency
Safeguarding Hub).
·
Multi-disciplinary Partners in Change Hub.
·
Contact and Family Group Conference Services.
Commissioning and Communities
This service area includes:
·
Commissioning services including children’s placements; Home
to School Transport.
·
Community cohesion services including community safety, Prevent and
Violence Against Women & Girls
·
Libraries and customer.
·
Safeguarding Children Partnership, Quality Assurance and
Performance Management.
·
Adult Education, Employment and Skills.
·
Third Sector commissioning.
Public Health
This service area includes:
·
Starting Well and Healthy Child Programme (0-19).
·
Mental Health and Suicide Prevention.
·
Drug and Alcohol treatment and recovery.
·
Sexual Health & contraception services.
·
Healthy Lifestyles.
·
Health Protection.
·
Aging Well.
Supporting the
Council’s Priorities
5.7
Below is a summary of work we have planned over the next four years
that supports the priorities set out in the Council Plan:
A city to be proud of
·
Develop a Library Sustainability Plan to ensure a thriving
provision of services for residents across the city
A fair and inclusive city
·
Refresh and deliver the Community Safety and Crime Reduction
strategy.
·
Implement the Combatting Drugs Strategy.
·
Develop the Community Cohesion Roadmap
·
Implement our City of Sanctuary action plan.
·
Support schools in delivering equalities curriculums, including
anti-racist education.
·
Implement the Violence Against Women and Girls, Sexual and Domestic
Abuse action plan.
·
Support the Community and Voluntary Sector through the delivery of
the grants programme.
A healthy city that helps people to
thrive
·
Keep children and young people safe, ensuring no child or family is
left behind and deliver our Corporate Parenting Strategy.
·
Develop our prevention and family support work including delivering
the government’s Families First reforms of children’s
social care and Best Start Family Hubs.
·
Support the provision of high quality and inclusive education from
early years through to adult learning.
·
Work with partners to deliver ambitious employment and training
opportunities, including the Get Sussex Working Plan and the
Connect to Work programme.
·
Deliver the SEND Strategy and support inclusive education across
the city’s schools.
·
Improve the mental and physical health of children through the
Healthy Child Programme and schools’ wellbeing service.
·
Co-produce a Youth Strategy and deliver the Young Futures Hub
pilot
·
Enable people to live healthy and happy lives through the reduction
of harm through the use of tobacco, alcohol and drugs.
·
Help people be physically active and promote good mental health,
reducing the risk of suicide.
A responsive and learning council with
well-run services
·
Meet the needs of our residents and other customers through an
improved customer offer in libraries.
Medium Term Budget
Strategy
5.8
We will work collaboratively within and across all directorates and
with key partners to deliver safe and whole family services which
focus on prevention, improving outcomes for all and provide value
for money. We are committed to delivering inclusive and
accessible provision.
5.9
To achieve this, we will:
·
Work across the directorate and wider council to provide efficient,
high-quality services that meet need and provide value for
money.
·
Explore opportunities to deliver services in partnership with
others on both a Sussex and South-East regional basis.
·
Commission services that meet statutory duties whilst supporting
the delivery of a better Brighton and Hove for all, ensuring
effective contract management is place.
Transforming
Services and Managing Demands
5.10
The directorate has reviewed all the services it delivers,
identifying those that are essential and making efficiency savings
wherever possible. Essential services include those that are
statutory, those where a business case demonstrates the service is
the best use of resources and those that generate income for the
council.
5.11
The children’s social care reforms as outlined in the
forthcoming Children’s Wellbeing & Schools Bill will have
a significant impact upon how family help and protection is
delivered in the city from 2026. This will be an opportunity
to expand the scope of our Family Hubs and build upon our
Outstanding children’s social work services, meeting need at
earlier point and thereby avoiding escalation into more costly
interventions. The Brighton & Hove Children’s
Safeguarding Partnership has developed a partnership model of
practice and the Right Support, Right Time continuum of need
– it is anticipated these will support family help being
provided at the earliest point, thereby reducing escalation into
statutory services.
5.12
The council is part of the Department for Education’s
Regional Care Co-operative pilot, a partnership of 15 local
authorities across the south-east who have committed to work
together to through a joint commissioning and procurement approach
to shape the children’s placement market. It is
anticipated this joint working and commissioning power will address
sufficiency issues, resulting in the right placements for children
being available at a cost that reflects market value as opposed to
availability.
5.13
There are a number of savings that have been proposed in order to
support the council’s overall financial position. These
include
·
Identification of alternative funding streams to enable non
statutory services to children and families to continue to be
provided.
·
Children’s Social Care transformation.
·
Youth Arts and Participation.
·
Family Help.
·
Adoption Allowances.
·
Transfer of Council run Nursery to an alternative early years
provider.
·
Libraries savings.
·
General Efficiencies.
Investment in
Services
5.14
The following investment in services is planned to meet demographic
and other cost increases to maintain investment in priority
services and meet statutory requirements:
·
Support for Children in Care.
·
Home to School Transport.
·
Support for Children with Disabilities.
·
Schools PFI Contract.
5.15
This investment will ensure the council is able to meet its
statutory obligations to keep children safe, promote the education
of children with SEND and support the development of a healthy city
where people thrive.
Supporting a
Better Brighton & Hove for All
6.1
The Homes and Adult Social Care directorate was created in January
2025. The directorate primarily contributes to the council
priorities of being a fair and inclusive city, a healthy city where
residents thrive and providing responsive and well-run
services. Both Adult Social Care and Housing have seen
regulatory inspections and ratings being re-introduced by the Care
Quality Commission (for Adult Social Care) and the Regulator for
Social Housing (RSH) and Building Safety Regulator for Housing (for
Housing). Following engagement with the RSH, the safety and
quality of our housing stock was rated C3 and for ASC our
inspection by CQC led to a rating of Requires Improvement.
About the
Services
6.2
The Homes and Adult Social Care directorate consists of Housing and
Adult Social Care services.
Housing services include:
·
Council housing landlord services comprising:
o Tenancy Services, including the Travellers
Service;
o Housing Repairs & Maintenance;
o Housing Investment & Asset
Management;
o Increasing the supply of homes in the
city
·
Regulating the quality of private sector housing.
·
Providing temporary and emergency accommodation
(homelessness).
·
Providing supported accommodation.
·
Managing the Housing Register and Allocations Policy.
Adult Social Care services include:
·
Services for vulnerable adults with Care Act eligible needs
including:
o Assessment and Commissioning
Services.
o Carelink Out of Hours Services.
o Support for Older people including those with
memory or cognition conditions;
o Support for physical and sensory
disabilities;
o Mental health services in partnership with
Sussex Community NHS Foundation Trust;
o Services for adults with learning disability and
autism from 25 years;
o Support for carers and all ancillary
activities.
·
Note, services for adults with learning disability and autism up to
25 years old continue to be delivered through the Families,
Children and Wellbeing Directorate, with delegated powers within
that Directorate for budget spend for this cohort. However, the
whole budget for all adult social care services, including adults
with a learning disability are within scope of this strategy.
Supporting the
Council’s Priorities
A city to be proud of
·
Through the Joint Health and Wellbeing Strategy, Adult Learning
Disability Strategy, Autism Strategy, and our contribution to the
Accessible City Strategy, we are supporting people to have improved
lives and access to the city.
·
Our commissioning always considers how we can be more sustainable
and contribute towards carbon net zero. We also aim to maximise
social value through our commissioning.
·
Continue to develop strategies and business cases to provide
genuinely affordable homes.
·
Urgently address building safety and regulatory issues with clear
action plans and appropriate resourcing.
·
Increase participation in civic and community life through
neighbourhood engagement and participatory strategies.
A fair and inclusive city
·
Reducing health inequalities is at the heart of our Joint Health
and Wellbeing Strategy and one of the key priorities of Improving
Lives, the Sussex wide Health and Care strategy.
·
We are working with the city to develop more age and dementia
friendly spaces and developing our combatting drugs strategy with
Public Health.
·
Through the Safeguarding Adults Board we are looking to
continuously improve how we work across multiple agencies in the
city to protect those most vulnerable to harm and abuse.
·
Improve council housing quality and sustainability through Housing
Revenue Account (HRA) investment and make better use of existing
housing capacity to meet different housing needs.
A healthy city
that helps people to thrive
·
Activities Work and Learning is a priority within the Adult
Learning Disability Strategy.
·
Improve private rented housing quality and sustainability through
closer working and oversight of landlords.
·
Reduce homelessness and rough sleeping through our preventative
approach and increased housing supply.
A responsive and learning council with
well-run services
·
We work with partners across the city to focus on the health and
wellbeing of our residents. Through meticulous budget management
and good governance, we aim to have resilient, safe, and effective
services fit for the future.
·
Improve customer contact systems throughout the service and provide
more accessible information on key services for residents.
·
Ensure equalities data is monitored and informs service
improvement.
Medium Term Budget
Strategy
6.3
The budget strategy seeks to ensure that we deliver good quality
housing, good experiences when seeking housing or advice about
housing as well as adult social care services that promote
independence, keep people safe, and prevents the need to visit
acute health settings. These delivery intentions are
supported by investments and proposals of savings and mitigation
against the context of increasing demand, increasing complexity,
and increasing costs.
6.4
The strategy will require collaborative working across the
Integrated Care System with NHS Sussex and joint management of
provider sufficiency. Effective management of hospital discharge
will be key to avoiding increased acuity and need for social
care.
6.5
Across the Homes division, ensuring effective use of the Homeless
Prevention Grant in tandem with the council’s objective of
significantly increasing housing supply is key to managing and
preventing future demand and costs. A wide range of options and
incentives to landlords and tenants are being explored and are
covered in the MTFS to use every possible method of meeting demands
until supply can be improved.
Transforming
Services and Managing Demands
Homes:
6.6
The demand for, and cost of, temporary accommodation together with
the increasing complexity of need amongst those living in temporary
accommodation remains the challenge for the General Fund budget of
the directorate. Radical actions have been taken to enable
the council to meet the increasing demand in an affordable way
whilst ambitious solutions such increasing housing supply take
place. Other saving and mitigation proposals include
increasing our housing stock through a new wholly council-owned
company as well as continuing the work of the joint venture with
Hyde Housing.
6.7
The HRA budget aims to balance the priorities of the council and
its tenants and leaseholders and reflects a range of council
policies and programmes on customer service, repairs and planned
maintenance, capital investment in housing and engagement. There
are no savings required in the HRA overall, however budget
pressures, in particular activities such as building health and
safety compliance works, means there will be impacts on other areas
of the budget in the medium term.
Adult Social Care:
6.8
The demand for services continues to grow and the complexity of
need continues to increase due the continued advances in medicine
and people living longer with limiting conditions. These
challenges mean that the saving proposals are focused on managing
demand by triaging referrals so that those who are not eligible for
adult social care services are referred to organisations that can
help with their identified needs; ensuring that annual reviews of
service users take place so that care packages are appropriately
designed to meet the current needs of residents as well as managing
the annual price reviews of providers whilst finding ways to
support the care workforce.
6.9
Over the last two or three decades, the funding of Adult Social
Care has attracted a lot of debate. The Care Act had two
parts: the first related to national minimum standards of
expectations and this has been in force since 2014; the second is
related to funding; ten years on and this has not been
enacted. Meanwhile, the demand for services and the
complexity of need continues to grow. Within the context of
increasing demand and acuity of need, the council must deliver
services within finite resources and therefore when determining the
provision of services to meet need, it must do so in the most
cost-effective way possible.
6.10
Brighton and Hove has a diverse range of providers – in-house
services, not for profit providers and for-profit providers (the
latter two types of providers are known as the private and
independent sector). In commissioning to meet need and
delivering best value, the council will provide services where the
private and independent sector cannot deliver or is no more cost
effective than the council; where the independent sector can
support residents with good quality care at a more cost-effective
cost than the council then in order to meet needs within the
budget, the council will commission providers in the independent
sector. This will see a considerable change in the mix of provision
over the medium term.
Investment in
Services
6.11
Over the 4-years, estimated cost and demand pressures of over
£31million are projected across Adult Social Care services.
This is in addition to provision for real terms uplifts (inflation
provision) of around £16 million. Based on expected increases
in Core Spending Power over the medium term, these costs would put
the authority into financial deficit without clear plans to address
costs. Adult Social Care will contribute to this effort but will
need to ensure statutory duties are met.
6.12
Homelessness costs have been increasing significantly since the
pandemic with only some of this being matched by Homeless
Prevention and Rough Sleeping Grants. There is an £11 million
investment in 2026/27 to reflect the increase in the cost of
homelessness, but there is also a significant programme of
transformation to address the cost of and demand for Temporary
& Emergency Accommodation in 2026/27 and future years.
Supporting a
Better Brighton & Hove for All
7.1
City Operations’ focus is on making the city a vibrant place
where people want to live, visit and do business, and where the
unique character of Brighton and Hove is celebrated and enhanced.
This includes making the city an accessible and sustainable place
where people are well-connected and can enjoy an attractive,
well-maintained built and natural environment.
7.2
The focus during 2026/27 is driving innovation and the sustainable
transformation of service delivery, ensuring our services are
reliable, well-run and support the continued improvement to the
look and feel of the city. We will work in partnership to make
progress towards our net zero ambitions, seeking to work with
others to bring forward innovative projects such as the development
of a solar farm, and seeking to secure a strategic energy
partnership. As we work with others, we will collaborate to with
our residents and businesses to find improvements to the services
we offer, offer new paid for services and finding opportunities to
work with the amazing army of volunteers across the city. More
widely, we will develop our commercial strategy, bringing forward
new ideas that capitalise on the unique assets and heritage of our
city, and drive income through our venues and events, whilst
protecting our open spaces and aligning our income ambitions with
the place we want to become, A Better Brighton and Hove for All.
Our focus will also be on working with partners to prepare for the
opportunities that a new Sussex & Brighton Combined Mayoral
Authority will bring to our place-based ambitions.
About the
Services
Place
7.3
Place leads on place-making and many of the council’s built
environment functions. The service shapes development in the city
through the statutory plan making process, development management
and building control to ensure good urban design and protection of
heritage, as well as compliance with building regulations to ensure
safety. Driving the city’s progress towards net zero, the
focus is on delivery of high impact projects to address the effects
of climate change and sustainable development.
7.4
The Place directorate also shapes the city through its major
regeneration programme and investment in major projects, including
development of new affordable homes through the Homes for Brighton
& Hove joint venture and New Homes for Neighbourhoods
Programme. The team includes the council’s in-house
Architecture and Design service and has a focus on creating better
buildings and public spaces which are more climate resilient.
City Infrastructure - Transport &
Regulatory Services
7.5
City Infrastructure develops clear plans to address the
city’s current and future transport needs, working closely
with Transport for The South East (TfSE) and other transport
partners to deliver major highway infrastructure projects on key
travel routes, such as Valley Gardens. A key priority is to
maintain and improve the city’s transport network to
transform user experience, increase resilience and extend the life
of key highway assets, including managing the risks posed by
flooding and protecting coastal highway structures. The service
also ensures the city keeps moving through regulating road use,
managing on-street and off-street parking and ensuring that all
works are coordinated on the highway. Influencing people’s
travel choices to reduce congestion and support improvements in air
quality is also an important focus, providing sustainable transport
options including enhancements in public transport, walking and
cycling schemes, concessionary travel and an electric vehicle
charging network.
7.6
Regulatory Services provides a broad range of
services including Food Safety, Environmental Protection, Health
& Safety, Licensing, Trading Standards and Animal Licensing.
The budget is linked to statutory functions to provide a wide range
of Environmental health and regulatory services which protect
public health.
Environmental Services
7.7
Environmental Services delivers recycling, refuse and street
cleansing services to improve the cleanliness of the city and meet
the council’s environmental obligations. This includes traded
commercial, bulky and garden waste services to residents and
businesses across the city. Through the delivery of major projects,
focused on reducing waste, maximising recycling and minimising
waste sent to landfill, the service delivers ongoing and
significant projects. This focus will continue with ongoing changes
to increase the materials that can be recycled, further embed
behaviour change linked to the new food waste collection service,
and ongoing improvements to the service through digital and
cultural transformation.
Culture & Environment
7.8
Culture & Environment manages the
city’s visitor economy assets including the Brighton Centre,
parks and the seafront to ensure the city remains a leading
national and international visitor destination. It oversees an
annual programme of varied and inclusive major outdoor events and
community events to promote the city, and manages major contracts
with key culture providers, including the Royal Pavilion Museums
Trust and Brighton Dome & Brighton Festival, to ensure they
have a diverse reach and contribute to the city’s economic
ambitions. The service is responsible for managing and conserving
every park and green open spaces, ensuring that our spaces are
accessible whilst conserving and managing habitats and spaces where
plants and animals can thrive, and biodiversity is
restored.
7.9
The service also leads the delivery of the council’s ten-year
plan for revitalising sports facilities and manages contracts with
the RNLI for the seasonal beach lifeguards service, leisure
contract, and investments in key leisure assets.
Digital Innovation
7.10
The IT & Digital (IT&D) service has been an in-house
function working in partnership with East Sussex County Council and
Surrey County Council. This partnership has delivered significant
savings, but as we approach a period of significant transformation,
with digital at the heart of the changes in many services, 26/27
will be about embedding a new sovereign service, tailored to the
needs of Brighton & Hove. The service has supported digital
innovation across the council, supporting the trialling of new
technologies that will enable transformation of council services,
both in terms of efficiency and in terms of managing demand.
Supporting the
Council’s Priorities
7.11
Below is a summary of work we have planned over the next four years
that supports the priorities set out in the Council Plan.
A city to be proud of
·
Develop Brighton & Hove as a place where people want to live,
work, and learn.
·
Grow a diverse and sustainable city economy.
·
Promote and protect what makes Brighton & Hove unique.
·
Keep our city clean and manage waste including introduction of a
new food waste collection service.
·
Work towards carbon net zero.
·
Protect and enhance the city’s natural environment.
·
Make it easier for people to move around the city through network
management, our Bus Partnership and other initiatives such as Park
& Ride.
A fair and inclusive city
·
Create safe public spaces that are accessible for all.
·
Support Homes for everyone by increasing supply through Homes for
Neighbourhoods, Joint Venture programmes and other regeneration
programmes.
A healthy city that helps people to
thrive
·
Support the provision of high quality and inclusive education from
early years through to adult learning.
A responsive and learning council with
well-run services
·
Enable the successful delivery of digital improvement projects and
programmes through the co-design and co-delivery of underpinning
technologies, platforms and services in IT&D to support
services in delivering corporate priorities.
·
Develop a scalable and resilient IT&D technical architecture
which provides a secure, highly available platform for business
services.
·
Good governance and financial resilience.
Medium Term Budget
Strategy
7.12
City Operations fulfils a specific place making role for Brighton
and Hove, leading the city towards achieving net zero carbon,
building people’s pride in place and supporting the growth of
a diverse and resilient economy. Key directorate objectives for
2026/27 include:
·
Delivering a programme of digital innovation that will see
significant savings over the next 4 years.
·
Delivering a new events strategy that will be underpinned by
community engagement and priorities, whilst driving increased
income in areas such as filming.
·
Delivering key improvements to the council’s sports
facilities in line with the Sports Facilities and Investment Plan,
which ensure increases in income and capitalising on new trends on
sport and leisure activity.
·
Developing a new sustainable local Transport Plan for the city, and
ensuring investment in road maintenance provides the greatest value
for money and alignment with the cities transport priorities.
·
Implementing progressive service changes as part of the
Environmental Services improvement programme including a new model
of collection, increases in recycling and ongoing improvements in
the service.
·
Progressing the city’s major regeneration and infrastructure
projects.
·
Working with Homes and Adult Social Care to deliver new council
homes and affordable homes through the New Homes for Neighbourhood
Programme and Homes for Brighton & Hove joint venture.
7.13
To ensure the directorate can achieve its objectives the budget
strategy focuses on maximising income and exploring alternative
service delivery models, in particular:
·
Delivering core services effectively and efficiently, pursuing all
opportunities for collaboration, innovation and streamlining
through improved use of technology, or bringing together areas of
work, skills and expertise.
·
Investing in services to modernise them for the future and ensuring
we continue delivering the best for our customers whilst reducing
running costs.
·
Adopting a more entrepreneurial approach to secure new sources of
partnership funding and maximise existing income streams and drive
forward new sources of income and commercialisation.
·
Reviewing standards of service and exploring new partnerships or
contractual arrangements to support service delivery, as well as
opportunities to have community-led services.
·
Supporting staff and their professional development to ensure the
directorate has a diverse, resilient workforce and one with the
relevant skills, knowledge and expertise to deliver its core
objectives.
Investment in
Services
7.14
A wide range of capital and revenue investments are planned across
City Operations to support the achievement of priorities and help
to deliver transformation and savings programmes as follows:
·
Long term capital investment to renew and strengthen the
infrastructure of the city will continue, to ensure effective
management of the highway network and improve air quality, along
with the delivery of major regeneration projects to bring about
quality new affordable housing and business space whilst generating
income from land and property assets and increasing business rate
and council tax returns.
·
Working with Homes & Adult Social Care to provide continued
investment in the development of new Council housing through the
New Homes for Neighbourhood Programme and new living wage rent
housing through the Homes for Brighton & Hove joint
venture.
·
Delivering major regeneration programmes to generate further
revenues each year in new council tax and business rates.
·
Investment in Seafront Infrastructure, including £8m
investment in progressing the restoration of Madeira Terraces.
·
Implementation of the new 10-year Sports Facilities Investment
Plan, including progressing the delivery of a new Leisure Centre to
replace the King Alfred.
·
Implementation of the City Downland Estate Plan with over 60
actions prioritised into a short, medium, and long-term programme
of projects, using natural capital and generating income.
·
Continued investment in the city’s cultural assets including
working with the the creative industries in the city around future
workspaces and income generating opportunities.
·
Delivery of the Royal Pavilion Estate Masterplan, to ensure the
city’s heritage assets life is protected and remains
accessible to residents and visitors to the city.
·
Delivery of the Local Transport Plan capital programme to provide
integrated transport projects and a maintenance programme of
carriage and footway resurfacing works on the transport
network.
·
Continued investment in the city’s electric vehicle charging
network utilising government grant funding.
·
Investment of £8m in the Brighton Marina to River Adur
coastal protection scheme in partnership with other Authorities and
with significant investment from the Environment Agency.
·
Investment in the city’s playgrounds, parks and open spaces
including the Stanmer Park Master Plan restoration project.
·
Investment in the Fleet Strategy to ensure services are delivered
efficiently through the use of the council’s
fleet.
·
Investment in the city’s tree collection to tackle the
impacts of elm disease and ash dieback.
·
£1m capital investment in the city’s public
toilets.
·
Continued investment in Environmental Services infrastructure and
operational sites to improve the working environment and impact on
the service’s carbon footprint.
·
Investment in business systems to improve service performance and
customer experience.
Supporting a
Better Brighton & Hove for All
8.1
The majority of the council’s Support Service Functions
(except IT&D) are headed up by the three corporate roles of the
Director of People & Innovation and two statutory directors,
the Director of Governance & Law (and Monitoring Officer) and
Director of Property & Finance (and S151 Chief Financial
Officer). However, some support services are managed in a
partnership with East Sussex and Surrey Council Councils including
Internal Audit & Counter Fraud and Procurement. A number of
front-line services are also managed within these directorships
including Electoral Services, Local Land Charges, Welfare Support,
Housing Benefit administration, and local tax collection and
administration.
8.2
The aim of all support service functions is to provide trusted,
efficient and expert support to the council to enable it to be a
responsive and well-run council. This includes providing good
quality customer services both internally and externally, and
providing the strategic planning, operational support, and
management information and insight to drive innovation and change
in support of delivering planned transformation and savings
programmes. Another key role is to ensure that the council
maintains strong governance and internal controls to manage public
resources effectively and to take safe, legally compliant decisions
and actions.
8.3
Central Hub therefore operate as a ‘Strategic Business
Partner’ to the organisation and its service directorates and
support them through complex changes by being involved in the
development of options and their evaluation, through to
decision-making and supporting implementation.
About the
Services
8.4
The primary services provided by Central Hub include:
Cabinet Office
·
Plays a key role
in developing, guiding and internally promoting key strategies and
acts as a liaison between the Administration and officers to drive
policy development and develop strategic partnerships across the
city.
·
Leading the
Council’s application for local government reorganisation
under the government’s devolution priority programme, and
liaising with external stakeholders within and outside the public
sector.
Property & Finance (including WRBS,
procurement, internal audit & counter fraud)
·
Provides strategic planning and management of the council’s
commercial, agricultural, heritage and operational property
portfolio.
·
Finance, including the statutory Section 151 Chief Financial
Officer role, overseeing the delivery of the council’s annual
and medium term financial planning processes, ensuring sound
financial management across the Council, as well as a wide range of
financial advisory and statutory services.
·
Internal Audit & Counter Fraud provides wide ranging reviews of
services and systems to ensure effective internal controls and
governance are in place and that fraud risks are minimised.
·
The procurement service supports the development of procurement
strategy and policies including sustainability, Environmental,
Social & Governance strategy, social value and modern slavery.
It also supports procurement of goods and services to the value of
approximately £300m per annum and manages and authorises
waivers of Contract Standing Orders.
·
Welfare, Revenues and Business Support (WRBS) which includes:
·
Provision of strategic support and policy development for
responding to welfare reforms, as well as direct delivery of local
welfare support, assistance and advice.
·
Collection and recovery of Council Tax (and Council Tax Reduction
Scheme), Business Rates, Sundry and Corporate Debts.
·
Processing of Housing Benefit claims and managing the transfer to
Universal Credit.
·
Provision of Payroll Services to the council, schools and other
contracted organisations and processing of payments to the
council’s suppliers and providers (Accounts Payable).
·
Provision of banking, purchasing card and urgent payment
services.
·
Support for the development and management of major corporate
financial, HR and Payroll systems.
People & Innovation including
Communications & Public Relations
·
Human Resources
sets our workforce policies and strategies, recruitment and
employee relations, so we can recruit, retain and support the
talent we need to deliver high quality services now and into the
future.
·
Health, Safety,
Wellbeing, Facilities and Building Services provides operational
and strategic support to the council under the Health and Safety at
Work etc. Act, including policy development and monitoring,
governance and assurance and complete management of our corporate
landlord portfolio of properties including reactive repairs and
maintenance so we provide a safe working environment to deliver
public services.
·
The Strategic
Communications and Engagement service provides two-way public and
internal communications and engagement that share information about
the council’s decisions, policies, priorities and services
and ensures residents’ voices are heard and reflected in the
council’s work, alongside managing content on our website,
upholding the integrity of our brand, and meeting our statutory
warning and informing duties to support community and
organisational resilience.
·
The Innovation
service drives transformation and improvement initiatives across
the organisation including enabling delivery of financial strategy.
It seamlessly integrates Corporate Programme Management Office,
Business Improvement, Corporate Performance and Risk Management,
Customer Experience (including complaints handling) and Information
Rights functions, ensuring a synergistic approach to driving
change, efficiencies and corporate governance oversight.
·
Learning,
Inclusion and Organisational Development works to operationalise
our Learning Framework throughout our organisational culture so we
can be a more connected, confident, creative and innovative,
diverse and inclusive and healthy and psychologically safe
organisation to deliver our best for the city. We support the
organisation’s development through work on skills and
capability, training, leadership and workforce development,
apprenticeships and strategic Equality, Diversity and Inclusion
programmes.
Legal, Democratic and Electoral Services
8.5
Legal and Democratic Services ensure Members, officers and the
public can rely on strong democratic governance and lawful exercise
of Council functions. The Teams deliver solution‑focused legal
advice and support ethical and transparent decision‑making, keeping
our committee system moving smoothly, supporting effective
scrutiny, and providing the foundations for accessible, inclusive
civic participation across the city.
8.6
Alongside this, the service delivers high‑impact operational
functions that touch residents at key moments in their lives.
Electoral Services run safe, secure and well‑organised
elections; Registration Services support births, deaths and
memorable ceremonies; Local Land Charges enable property
transactions with accuracy and pace; and the Coroners and Mortuary
teams investigate sudden or unexplained deaths and provide
dignified, secure mortuary and post‑mortem facilities
with professionalism, independence and care.
8.7
Together, these teams provide services that are legally robust,
customer‑focused and
essential to the effective delivery of Council functions.
8.8
Many of the services above are also involved in providing a wide
range of traded or contracted services to schools, South Downs
National Park Authority, East Sussex Fire & Rescue, district
councils and others which generates incomes.
Supporting the
Council’s Priorities
8.9
Central Hub play a key role in facilitating other services to
deliver against the Council Plan priorities, including the key aim
of being a responsive council with well-run services at both a
strategic and operational level. Helping the council to develop
robust financial strategies, workforce plans, digital customer
strategies, conduct effective communication, engagement and
partnership working, develop robust and innovative policies, and
respond effectively to welfare reforms is critical to maintaining
sustainable, financially resilient and accessible council
services.
8.10
A key determinant of the demands placed on Central Hub is therefore
the level of change experienced across the organisation. This has
been and remains at very high levels due to the cumulative effect
of the growing financial challenges requiring ever greater
innovation in everything from digital services to corporate debt
management to financing strategies that help resources and services
go further. This creates a tension between the need to provide cost
effective support functions while ensuring that the council and its
services have the support to make sound business judgements and
decisions that minimise legal, financial, employment, equality,
health & safety, governance, internal control and other
risks.
8.11
Central Hub underpin the authority’s governance framework,
ensuring safe and legally compliant decision-making, as well as
maintaining reviewing and improving the council’s internal
control environment. Advisory and Business Partnering services
within Finance, HR, IT&D and Procurement help the organisation
to maximise its use of resources, fully evaluate options, avoid
costly fines, mistakes or non-compliance occurrences, and thereby
deliver cashable and non-cashable savings or cost-avoidance.
Similarly, Programme Management and other resources ensure
effective oversight and delivery of major improvement and
innovation programmes funded by the Transformation Fund or Capital
Investment.
8.12
These services are integral to front line delivery and work best
when operating as a trusted Strategic Business Partner as part of
both corporate and directorate leadership teams’ roles in
developing strategic responses and solutions for delivery. They
also ensure collaborative ‘one council’ working across
the council by being able to share or link information to ensure a
holistic approach to policy or service development. Over the medium
term Central Hub aim to support council priorities through:
A city to be proud of
·
Supporting the development of underpinning policies, plans and
strategies, such as Devolution, Economic Strategy, and Poverty
Reduction.
·
Providing a key place-shaping role through effective communication
campaigns and channels including priority areas such as waste
minimisation, promoting sustainability, publicising and consulting
on regeneration and major developments, promoting cultural events
and city travel.
·
Providing support and oversight for the development of capital
investment strategies and the use of capital receipt flexibilities
to improve council services and invest in core infrastructure for
the city.
A fair and inclusive city
·
Continuing to develop a new approach to community engagement,
including our approach to digital engagement and consultation
– enabling a more agile approach to listening and
responding.
·
Reinvigorating collaborative working across the city to support
co-operation across city partnerships and drive positive
change.
·
Supporting the Poverty Reduction Steering Group to develop a more
sustainable, preventative, and holistic welfare response.
·
Oversight of the council’s Fair and Inclusive Action Plan
(FIAP) which supports the organisation to become reflective of the
community, and to improve the experience and diversity of all
staff, including embedding the council’s Anti-Racism Strategy
and approach in all council policies.
·
Embed policies and practice concerning Social Value, Community
Wealth Building, Sustainability and Modern Slavery across all
contracts.
A healthy city that helps people to
thrive
·
Supporting the development of the Employment and Skills Plan.
·
Providing key financial advice and support to enable School
Organisation changes including implications for the DSG, General
Fund, Housing Revenue Account and/or Capital Resources.
·
Ensuring effective legal support and advice to support safeguarding
and child protection including through decisions of the court.
·
Providing communications plans which are an essential part of
promoting health and wellbeing in the city and enabling behavioural
change.
A responsive and learning council with
well-run services
·
Proactively listening and responding to resident concerns through
increased use of digital channels of communication and engagement
to ensure the council becomes a learning organisation able to
continually improve services.
·
Driving improvement and innovation by martialling project and
programme management resources to support transformation and
savings programmes.
·
Enable the successful delivery of digital improvement projects and
programmes through the co-design and co-delivery of underpinning
technologies, platforms and services with IT&D to support
services in delivering corporate priorities.
·
Implementing the Corporate Systems Improvement (CSI) programme to
modernise corporate HR, Finance, Payroll and Procurement systems to
improve the integration of data, increase automation and efficiency
including through the use of emerging AI technologies, and improve
customer service.
·
Developing a people strategy designed to ensure we are a learning
organisation that has an engaged and motivated workforce who are
able to deliver their best to the city and enable all priorities to
be supported.
·
Supporting the organisation to ensure it fulfils its legal and
moral health & safety responsibilities to provide a safe
working environment where staff are supported to be happy and
well.
·
Through procurement, ensuring that the city council's spending
power is used to secure good value for money and, as far as
possible with contract regulations and market conditions, to
procure local services, and improve sustainability and social
value.
Medium Term Budget
Strategy
8.13
The MTFS delivery strategy for the Central Hub will be delivered
under the following key heading:
8.14
Strengthened, Commercially Minded Asset Management
• Central Hub will adopt a more
commercially minded approach to managing the council’s
assets.
• Disposal of selected assets
will generate essential capital receipts to support the MTFS.
• Operational buildings will be
used more efficiently through targeted rationalisation.
• Planned investment will be
prioritised to ensure resources deliver maximum value.
• The wider estate will be
managed strategically, with a stronger focus on financial
performance.
8.15
Transformation of Service Delivery
• All contractual arrangements
will undergo systematic review to ensure value for money and
alignment with council priorities.
• Improvements to corporate
systems will streamline workflows and unlock new income
opportunities.
• These changes will enhance
responsiveness, efficiency, and financial resilience across
services.
8.16
Adoption of New Delivery Models
• Central Hub will maximise the
use of existing digital platforms to reduce manual effort and
improve productivity.
• Services will expand income
and commercial opportunities through new models, partnerships, and
innovative approaches.
• Operating models will be
refreshed to ensure services remain efficient and fit for
purpose.
8.17
Refocus Resources on Core Priorities
• Funding and activity across
services will be reassessed to ensure alignment with strategic
priorities.
• Resources will be redirected
to critical outcomes, with services stepping back from lower
priority activities where necessary.
• This reshaping of effort will
support long term MTFS sustainability and improve organisational
support.
Investment in
Services
Investment in
Central Hub will be through a mix of revenue, capital and
Innovation Fund resources as follows:
·
Investing in additional resources to restructure and build
resilience in the Emergency Planning Function;
·
Investing in the core finance and payroll systems, including the
Corporate Systems Improvement Programme;
·
Investment in the Commercial Property Portfolio:
·
Stabilising the
income received from commercial properties;
·
Transformation
programme investment which will review and dispose of surplus or
underperforming assets;
·
Capital investment
through the Commercial Asset Investment Fund to ensure retained
assets are properly maintained to optimise income;
·
There will be Innovation Fund investment in project and programme
management support, the Workspace Innovation Programme, and
additional HR and Leadership Development and Finance support to
drive innovation and change.
·
Transformation Programmes managed by the directorate that aim
to:
·
Drive organisational change through digital innovation, functional
alignment and review of delivery models;
·
Achieve economies through improved procurement and contract
management;
·
Reduce Corporate Landlord (estates & facilities) costs over the
medium term, and dispose of surplus assets.
9.1
Local authorities have operated with single year settlements for a
number of years, which has hampered the ability to set Medium Term
Financial Strategies with the uncertainty of changes in funding
beyond the coming financial year. The 2026/27 budget is being set
in the context of a three year settlement, which provides certainty
over the level of resources and therefore enables more sound
planning over the medium term.
9.2
The council’s Medium Term Financial Strategy will need to
recognise that investment in transformation and change will be
critical to achieve longer term financial sustainability. The broad
principles adopted in development of the MTFS include:
·
A focus on ensuring that capital and revenue resources and
investment support Council Plan priorities;
·
Development of associated Service Strategies to link revenue,
capital and transformation plans and programmes across the
council;
·
Realistic, evidenced-based funding and inflationary assumptions
using government OBR forecasts where local evidence is not
available;
·
A balanced MTFS and balanced annual revenue budgets with only
planned drawdowns of reserves and balances;
·
A fully funded 5-Year Capital Investment Programme including
provision of a corporate Innovation Fund held centrally;
·
Regular reviews of reserves and the Working Balance to ensure
appropriate coverage for emerging risks and provision of
appropriate risk reserves and balances;
·
Budget envelopes (‘blocks’) set for each Directorate to
ensure delivery of services within available resources;
·
An assessment of cost and demand pressures that are identified and
agreed as part of the MTFS to ensure scrutiny, ownership and
accountability;
·
Robust savings, efficiency and mitigation plans which are owned,
tracked, and monitored;
·
Identification and assessment of budget risks to ensure an
effective risk management and mitigation strategy;
·
Reviews of fees & charges to ensure all charges consider
commercialisation and current rates of inflation.
9.3
In the context of the provisional settlement and national economic
forecasts, this section sets out the key resource assumptions to be
adopted over the 4-year planning period.
Council Tax increases and Tax base
Changes
9.4
Current Council Tax referendum principles were announced by the
government as being maintained over the multi-year settlement
period until 2028/29. The MTFS assumes that the referendum
principles will continue into 2029/30. This allows for a 2.99%
annual increase to Council Tax and a 2.00% Adult Social Care
precept.
9.5
Tax base growth estimates are based partly on historic trends and
partly on known and expected housing developments over the next few
years. Note that no changes to the Working Age Council Tax
Reduction Scheme (CTRS) are assumed for the period.
|
Council Tax
Assumptions
|
2026/27
|
2027/28
|
2028/29
|
2029/30
|
|
Council Tax
Increase
|
2.99%
|
2.99%
|
2.99%
|
2.99%
|
|
Adult Social
Care Precept
|
2.00%
|
2.00%
|
2.00%
|
2.00%
|
|
Tax base
increase (growth)
|
1.21%
|
0.86%
|
0.86%
|
0.86%
|
|
Council Tax
Collection Rate
|
98.75%
|
98.75%
|
98.75%
|
98.75%
|
9.6
Potential risks and issues include:
·
Changes in Second Homes and increased empty homes premiums;
·
Reduction in Council Tax collection rates leading to increased bad
debt provisions;
·
Delays in developments creating overstatement of Council Tax
taxbase;
·
Council Tax Reduction caseload numbers (dependent on economic
conditions).
Business Rates Increases and Tax base
9.7
The Business Rates system has been reset for 2026/27 with the
accumulation of growth in the system so far redistributed to local
authorities based on the Fair Funding Review assessment of need.
The 2026/27 budget includes no inflationary increase or growth
assumptions due to the reset. The below table details the growth
and inflation assumed over the remaining MTFS.
|
Business Rate
Assumptions
|
2026/27
|
2027/28
|
2028/29
|
2029/30
|
|
BRR CPI
Increase (OBR)
|
n/a*
|
2.29%
|
2.02%
|
1.98%
|
|
Tax base
increase
|
n/a
|
0.50%
|
0.50%
|
0.50%
|
*note: no Inflationary increase
included in 2026/27 due to a full business rates reset in the
year.
9.8Potential
risks and issues include:
·
Growth or inflation assumptions are overestimated, impacting on
future income level;
·
The risk that appeals provisions could be understated requiring
additional one-off resources;
·
Collection performance impacted by economic conditions and
prosperity.
Fees and Charges
9.9
Fees and charges budgets are assumed to increase by the standard
corporate inflation rate assumed in the MTFS. The MTFS assumption
sets a target uplift that includes a combination of economic
growth, ongoing commercialisation and generation of new incomes.
However, Penalty Charge Notices (parking fines) are excluded from
this increase as the levels of fines are set by government and
cannot be changed independently. Similarly, Temporary accommodation
income is assumed to increase by a lower amount (2.00%) to average
out historic changes to Local Housing Allowance (LHA) rates.
|
Fees &
Charges Assumptions
|
2026/27
|
2027/28
|
2028/29
|
2029/30
|
|
General
increases
|
3.0%
|
3.0%
|
3.0%
|
3.0%
|
|
Parking Penalty
Charge Notices
|
0.0%
|
0.0%
|
0.0%
|
0.0%
|
|
Temporary
Accommodation
|
2.0%
|
2.0%
|
2.0%
|
2.0%
|
Government grants
Revenue Support
Grant (RSG)
9.10
As described in the Budget Report, several funding streams have
been rolled into RSG within the Fair Funding Review (FFR) from 1
April 2026. In addition, there are four consolidated funding
streams (Public Health Grant, The Crisis & Resilience Fund,
Homelessness, Rough Sleeping & Domestic Abuse Grant, and the
Children, Families & Youth Grant).
9.11
The below table shows the provisional Local Government Finance
Settlement (LGFS) allocations over the three year settlement
period, and the equivalent total for 2025/26.
9.12
The multi-year
settlement to 2028/29 transitions local authorities to their new
funding allocations by the end of the three year period through
changes in the RSG. The reductions in 2027/28 and
2028/29 reflect the second and third year transition over to the
council’s new funding allocation.
|
Government
Grants
|
2025/26
£m
|
2026/27
£m
|
2027/28
£m
|
2028/29
£m
|
2029/30
£m
|
|
RSG (2025/26
adjusted for rolled in grants)
|
76.774
|
75.522
|
66.480
|
57.591
|
57.591
|
|
The Better Care
Fund
|
11.669
|
11.669
|
11.669
|
11.669
|
11.669
|
|
Public Health
Grant
|
29.375
|
29.751
|
30.006
|
30.288
|
30.288
|
|
Crisis &
Resilience Fund
|
4.503
|
3.982
|
3.980
|
3.841
|
3.841
|
|
Homelessness,
Rough Sleeping and Domestic Abuse Grant
|
10.726
|
9.353
|
8.924
|
8.068
|
8.068
|
|
Children,
Families and Youth Grant
|
2.687
|
3.827
|
3.794
|
3.364
|
3.364
|
The above table includes the following assumptions:
·
All grants received in 2029/30 will be the same value as in 2028/29
on the basis that the Council will fully transitioned to its
revised FFR allocation;
·
The Better Care Fund is presented within RSG in the Governments
presentation from 2027/28 onwards temporarily due to upcoming
reform. This has been presented as a separate line for the purposes
of comparison.
Other Grants
9.13
There are other grants received across a whole range of services
such as the Housing Benefit Subsidy, Extended Producer
Responsibility (EPR) grant, PFI Credits, Bus Service Improvement
Grant, Asylum grant, and a number of grants to support schools
& education such as Dedicated Schools Grant, School Meals and
Pupil Premium. These are provided by government outside of the
LGFS, and are budgeted for individually depending on the relevant
government announcements of those grants.
Corporate Inflation Provisions &
Assumptions
Pay
9.15
The current pay award assumption for 2026/27 is 2.75% on the basis
that inflation has reduced during 2025/26 as predicted by the OBR
and is expected to remain lower during 2026/27. Pay has been a
significant financial risk over the past 3 years during a period of
very high inflation. The pay award assumption is higher than
predicted CPI and therefore could mitigate this risk. Each 1%
increase equates to approximately £1.650m of additional cost
to the General Fund budget. This is also a significant risk area
for the separate Schools and Housing Revenue Account budgets.
Local Government
Pensions
9.16
The East Sussex Pension Scheme has just undertaken a triennial
review covering the period 2026/27 to 2028/29. The East Sussex
Pension Fund, in common with many funds across the country, is
currently performing well in terms of investment performance, which
has resulted in a reduced employer contribution rate of 14.90%
(down from 19.80%).
Prices
9.17
The provision for general price inflation ranges between 1.00% and
3.50% as a base position depending on the type of expenditure. The
largest type of expenditure is Third Party Payments which covers
the majority of non-staffing expenditure within adults and
children’s social care which has an assumed base position
increase of 2.5% across the MTFS. The impact of inflation above
these assumed base rates is separately identified as a
‘Service Pressure’ rather than applying generic
increases to all service areas.
|
Inflation
Provision
|
2026/27
|
2027/28
|
2028/29
|
2029/30
|
|
Employee
costs
|
2.75%
|
2.50%
|
2.50%
|
2.50%
|
|
Premises
costs
|
2.50%
|
2.50%
|
2.50%
|
2.50%
|
|
Transport
|
2.50%
|
2.50%
|
2.50%
|
2.50%
|
|
Supplies and
Services
|
1.00%
|
1.00%
|
1.00%
|
1.00%
|
|
Third Party
Payments
|
2.50%
|
2.50%
|
2.50%
|
2.50%
|
|
Transfer
Payments
|
2.50%
|
2.50%
|
2.50%
|
2.50%
|
|
Waste
PFI
|
3.50%
|
3.50%
|
3.50%
|
3.50%
|
9.18
Budget Commitments capture unavoidable contractual costs or other
known changes in expenditure, resources or income arising from
previous decisions made by the council including the capital
financing costs arising from previous and proposed Capital
Investment Programme approvals. Other commitments can arise from
legislative changes, function and funding changes, or changes above
the expected or budgeted costs such as national pay awards. Known
commitments over the next 4 years are shown below.
|
Commitments
|
2026/27
|
2027/28
|
2028/29
|
2029/30
|
|
£m
|
£m
|
£m
|
£m
|
|
Change in
capital programme financing costs
|
0.913
|
1.618
|
0.620
|
(0.172)
|
|
Financing costs
associated with EFS
|
0.000
|
1.250
|
0.000
|
0.000
|
|
Reversal of
one-off New Homes Bonus received in 2025/26
|
1.014
|
0.000
|
0.000
|
0.000
|
|
Reversal of
2025/26 one off risk provision
|
(1.747)
|
0.000
|
0.000
|
0.000
|
|
Reduction in
Employer Pension Contributions
|
(6.832)
|
0.000
|
0.000
|
0.000
|
|
One of Risk
Provision for 2026/27
|
1.125
|
(1.125)
|
0.000
|
0.000
|
|
Cost of 2025/26
pay award above the budgeted assumption
|
0.827
|
0.000
|
0.000
|
0.000
|
|
Loss of
Homelessness Funding
|
1.373
|
0.428
|
0.857
|
0.000
|
|
Impacts of
previously approved decisions
|
(0.137)
|
0.817
|
(0.174)
|
0.298
|
|
Reduction in
Flexible Use of Capital Receipts
|
0.000
|
0.000
|
1.000
|
1.000
|
|
Reduction in
Crisis & Resilience Fund to support General Fund
Expenditure
|
0.200
|
0.000
|
0.000
|
0.300
|
|
Change in
contributions to/from reserves (total)
|
(0.608)
|
0.730
|
0.000
|
0.000
|
|
Total
Commitments
|
(3.872)
|
3.718
|
2.303
|
1.426
|
9.19
Impacts of previously approved decisions covers a wide range of
financial implications including reversals of decisions to use
one-off resources to support previous budgets, changes in insurance
premia, planned repayments of specific reserves and so on.
9.20
Medium term financial planning requires an assessment of the
investment requirements to support Council Plan priorities
including an assessment of the financial pressures (‘Service
Pressures’) facing priority services in terms of increases in
costs and demographic growth in demands. This applies particularly
to ‘demand-led’ statutory services for vulnerable
adults, families and children such as adult and children’s
social care and homelessness support.
9.21
Over the last decade or more, there has been significant growth in
demand for services with increasing prevalence of mental health
issues in children and adults, growing numbers of children with
Education Health & Care Plans, a growing demand for
homelessness and temporary accommodation services due to housing
supply issues and the cost of renting, and increased complexity of
care across adult social care as people live longer with complex
and limiting health conditions.
9.22
When combined with reductions in grant funding by previous
governments and previous restrictions on the allowable level of
council tax increases, these demand-led cost pressures have been
the main driver of the substantial ‘budget gaps’ that
the council has been experiencing for over a decade. Alongside
efficiencies and economies, this has required substantial service
savings and income generation programmes to achieve balanced
budgets. Current estimates are based on recent trends, forecast
demographic changes, and projections around market sufficiency and
pricing for externally commissioned services and contracts. High
level projections over the MTFS period are currently as shown
below:
|
Council Plan
Priority Investments
|
2026/27
|
2027/28
|
2028/29
|
2029/30
|
|
|
£m
|
£m
|
£m
|
£m
|
|
A city to be
proud of:
|
|
|
|
|
|
City Operations
Services
|
2.580
|
0.351
|
0.185
|
0.139
|
|
Closure of New
England House
|
1.200
|
|
|
|
|
A healthy city
which helps people to thrive:
|
|
|
|
|
|
Housing -
Emergency & Temporary Accommodation
|
11.106
|
1.100
|
1.762
|
1.650
|
|
Loss of Housing
Benefit Subsidy
|
2.400
|
|
|
|
|
Other
investments and pressures
|
0.365
|
|
|
|
|
A fair and
inclusive city:
|
|
|
|
|
|
Adult Social
Care Services
|
1.809
|
12.644
|
13.480
|
14.320
|
|
Children's
Social Care Services
|
3.232
|
1.620
|
1.771
|
1.396
|
|
Other Children
& Family Services
|
0.068
|
0.300
|
|
|
|
Home to School
Transportation
|
1.285
|
0.670
|
0.738
|
0.809
|
|
Educational
Services and Support
|
0.606
|
0.434
|
0.126
|
|
|
Increased SEN
investment
|
0.239
|
0.050
|
0.050
|
|
|
A responsive
and learning council with well-run services:
|
3.208
|
1.456
|
1.050
|
1.347
|
|
TOTAL COUNCIL
PLAN INVESTMENTS
|
28.098
|
18.625
|
19.162
|
19.661
|
9.23
Together with provision for inflation, including nationally
negotiated pay awards, the above investment requirements are not
expected to be fully matched by available resources which
include:
·
Council Tax increases, precepts or taxbase growth
·
Business Rate Retention increases or taxbase growth
·
Increases in Fees & Charges or new income generation
·
Increased Government Grant Funding
This means that
there are anticipated to be substantial budget shortfalls in future
years, continuing the trend over the last decade or more. This
requires identification of savings and transformation programmes
that can help the council to provide services more efficiently and
at lower cost but may also require some difficult choices regarding
the services the council is able to offer in future, particularly
where these are not a statutory requirement.
9.24
Bringing together all of the resource assumptions, inflation
assumptions and Council Plan Investments set out in this section
enables an overall projection of the council’s budget
position to be estimated for each of the next 4 years. This
includes commitments arising from previous decisions including the
financing of approved capital investment programmes.
|
Summary
Projections and Budget Gaps
|
2026/27
|
2027/28
|
2028/29
|
2029/30
|
|
|
£m
|
£m
|
£m
|
£m
|
|
Commitments
(incl. from previous decisions)
|
(3.872)
|
3.718
|
2.303
|
1.426
|
|
Net Inflation
(on Pay, Prices, Income, Pensions)
|
9.668
|
9.389
|
9.817
|
10.103
|
|
Sub-total
|
5.796
|
13.107
|
12.120
|
11.529
|
|
Net Investment
in Priority Services
|
28.098
|
18.625
|
19.162
|
19.661
|
|
Reversal of
Collection Fund net deficit funding
|
0.000
|
1.768
|
0.000
|
0.000
|
|
Projected net
resourcing changes
|
(8.672)
|
(7.591)
|
(5.266)
|
(14.893)
|
|
Savings
Requirements (Budget Gaps)
|
25.222
|
25.909
|
26.016
|
16.297
|
|
Exceptional
Financial Support
|
(4.473)
|
4.473
|
0.000
|
0.000
|
|
Revised Savings
Requirements (Budget Gaps)
|
20.749
|
30.382
|
26.016
|
16.297
|
9.25
The projected budget shortfalls above indicate the savings and
efficiencies required over the next 4 years in order to legally
balance the budget. The total projected savings requirement over
the next 4 years is £93.444m.
9.26
To address the projected budget savings requirement identified in
the MTFS projections above, and to ensure that the reliance on EFS
is on a one off basis, the council has identified savings plans
across the MTFS from efficiencies and economies, or from reductions
in services, or alternative delivery of the services provided. To
ensure that statutory duties can be met and to be able to continue
to provide local services that residents and visitors rely on, the
council will look to challenge all costs, consider potential
sources of income, and review the affordability of services and
capital investments.
9.27
The Council has received feedback from both the external auditors
and the Corporate Peer Challenge (LGA Peer Review) highlighting
that the MTFS requires a deliverable plan to enable the Council to
transition to a financially sustainable position. As a result, a
significant amount of work has already taken place during 2025/26
to establish programmes to address the budget shortfalls across the
MTFS. A new Savings and Innovation Delivery Board has been
established during the year to be a cross-council officer board to
work collaboratively to drive through and monitor the programmes
and the delivery of savings arising from the programmes.
|
Transformation
& Savings Programmes
|
2026/27
£m
|
2027/28
£m
|
2028/29
£m
|
2029/30
£m
|
|
Changing
delivery models for services:
|
|
Adult Social
Care Service Delivery model
|
0.700
|
1.100
|
|
|
|
Environmental
Services Delivery Model
|
0.375
|
0.275
|
|
|
|
Grounds
maintenance Delivery model
|
|
|
0.100
|
0.100
|
|
Review of
Traded services delivery models
|
|
0.040
|
0.068
|
|
|
Procurement
and Commissioning economies:
|
|
Transformation
Programme: Procurement, Commissioning
& Contract Management
|
|
2.000
|
1.000
|
1.000
|
|
Procurement
& contract management efficiencies
|
0.204
|
0.317
|
0.450
|
0.650
|
|
Demand
management and Prevention Programmes:
|
|
Transformation
Programme: Adult Social
Care
|
9.392
|
5.650
|
4.900
|
1.850
|
|
Transformation
Programme: Homes &
Homelessness
|
4.843
|
1.764
|
2.104
|
1.576
|
|
Transformation
Programme: Children’s
Services
|
1.021
|
1.818
|
1.673
|
1.226
|
|
Strategy to
address Housing Benefit Subsidy shortfall
|
|
2.000
|
1.000
|
|
|
Income &
Commercialisation Initiatives:
|
|
Transformation
Programme: Income &
Commercialisation
|
1.265
|
0.990
|
1.560
|
1.860
|
|
Transport &
Parking Initiatives
|
2.500
|
1.475
|
1.350
|
0.600
|
|
Other Income
& Commercialisation Initiatives
|
0.231
|
0.875
|
0.225
|
|
|
Efficiency,
Automation & Digital Programmes:
|
|
|
|
|
|
Transformation
Programme: Digital Innovation &
Technology*
|
|
|
|
|
|
Corporate
Systems Improvement Programme
|
|
0.100
|
0.100
|
0.100
|
|
Other Digital
& Innovation Initiatives
|
0.030
|
0.005
|
0.050
|
|
|
Efficiencies in
delivering services
|
1.015
|
0.189
|
0.018
|
0.018
|
|
Service
Redesigns and Functional Alignments
|
1.137
|
0.558
|
0.297
|
0.144
|
|
Cessation or
reduction of non-statutory services:
|
|
|
|
|
|
Reduction or
reprovision of non-statutory services
|
0.796
|
2.500
|
2.500
|
1.000
|
|
Alternative
Funding of Services:
|
|
|
|
|
|
Reprioritising
Public Health Investment
|
0.648
|
0.500
|
|
|
|
Flexible Use of
Capital Receipts
|
2.000
|
|
|
|
|
Other new
funding sources or repurposing
|
0.535
|
1.298
|
1.171
|
0.123
|
|
Corporate/Cross-Cutting
Programmes:
|
|
|
|
|
|
Transformation
Programme: Asset Strategy
|
0.475
|
0.288
|
0.600
|
0.700
|
|
Transformation
Programme: Organisational
Change*
|
1.125
|
5.000
|
5.000
|
5.000
|
|
Other Asset
Management Strategy
|
0.300
|
|
|
|
|
Corporate
Landlord and Net Zero Programme
|
0.320
|
0.140
|
0.100
|
0.100
|
|
Capital
Programme Reviews; Future years
|
|
1.500
|
1.500
|
|
|
Review of
Council Tax Base assumptions
|
|
|
0.250
|
0.250
|
|
Subtotal
|
28.912
|
30.382
|
26.016
|
16.297
|
|
Less: Proposals
that reduce service pressures already accounted for
|
(8.163)
|
|
|
|
|
Total
Transformation and savings plans
|
20.749
|
30.382
|
26.016
|
16.297
|
*the
Transformation Programmes for Digital Innovation and Organisational
Change are intrinsically linked; the Digital Innovation a key
enabler to effect the organisational change required. Therefore,
the expected savings are shown as a single line and described
further below.
9.29
The above table includes high level estimates of savings from
future transformation, efficiency or income generation programmes
together with planned reductions in non-statutory or discretionary
services. Some estimates are based on more detailed business cases,
while others require more information but are based on prudential
assumptions using best practice case studies and research, industry
standard assumptions, or reasonable estimates and projections. A
brief commentary regarding each specific Transformation Programme
is described below.
9.30
The council has agreed a Strategic Transformation & Innovation
portfolio of programmes and projects to support delivery of the
Council Plan and drive savings and cost reduction in the MTFS.
Through the portfolio, we will reimagine what we do and how we do
it – building a Learning Organisation that is agile,
inclusive and future-ready. By 2030, we will deliver smarter
services, co-create change and embed innovation as a way of
working. The portfolio will strength financial resilience through
bold savings and strategic investments, achieving our vision of a
better Brighton & Hove for all.
9.31
The programmes are categorised to deliver within the following
themes:
·
Key Demand Led
Pressures programmes will work to address
the most critical pressures in the council, primarily in
Homelessness and Temporary Accommodation, Adult Social Care and
Children’s Services.
·
Financial
Lever programmes will assist in
underpinning the Council’s financial sustainability through
commercialisation, asset management and procurement commissioning
and contract management activity.
·
Strategic
Enablers will ensure the organisation is
geared up to deliver transformation over the medium
term.
9.32
The delivery of the programmes will be kept under review by the
officer-led Savings & Innovation Delivery Board and CLT to
ensure the programmes keep track on delivering the outcomes
required.
Key Demand Led
Pressures
Adult Social Care
Demand
9.33
This strategic
programme covers the key areas of improvement in Adult Social Care
(ASC) for Brighton & Hove. When compared to statistical
neighbours, the council is an outlier in the number of residential
placements (particularly for working age), completed annual reviews
and reablement offer. The prevention offer at the entry point to
ASC services, in line with national best practice, is another area
of focus. Key areas of improvement were also reflected in the
recent regulatory outcome by Care Quality Commission
(CQC).
The strategic programme
comprises the following workstreams:
·
Market
management: Reducing permanent residential and nursing care
admissions and taking a more targeted approach in responding to
provider fee uplift requests
·
Targeted reviews
of the care needs of service users to ensure care needs are met and
appropriate;
·
Increased
Community Reablement to promote independence;
·
Improved
prevention offer at the ASC front door.
Homes and
Homelessness
9.34
The programme
will deliver on one of the most challenging areas for Brighton
& Hove with deepening homelessness crisis and managing
increasing demand for Temporary Accommodation (TA). Brighton &
Hove’s use of TA is increasing, with increased reliance on
spot purchased accommodation. The financial cost is coupled with
challenging outcomes for individuals who have much higher needs
year on year. The trajectory is unsustainable and the council is
now considering bold, strategic action to address the
issue.
The strategic programme
comprises the following workstreams:
·
Increasing the
supply of more affordable TA to reduce the use of spot purchased
accommodation.
·
Reducing the unit
cost of existing TA.
·
Improving
effectiveness in prevention of homelessness.
·
Accelerating move
on from TA.
Children’s
Services
9.35
This programme
covers the key areas of improvement and transformation in
Children’s Services for Brighton & Hove. When compared to
statistical neighbours, the council has a lower number of children
in residential care but also significantly fewer homes in the south
compared to north. Children are at risk of residential care due to
a combination of complex need and sufficiency issues. The council
is keen to bring down spend on placements at the same time as
keeping children local, improving placement quality and keeping
children in families.
The strategic programme
comprises the following workstreams:
·
Development of
new accommodation for separated children;
·
Reunification of
children to their families;
·
Expanding the
Mockingbird and Fostering Plus Programmes and innovating to enable
children with more complex needs to remain local in foster families
and increase fostering households within the city;
·
Improved
prevention offer through investing in Families First
transformation;
·
Investment in
Early Help to reduce the number of children needing social work
intervention and entering care;
·
Reviewing the
Home to School transport model.
Financial Levers
Asset Management Strategy
9.36
The strategic programme aims to have a coherent and data driven
Asset Strategy. This will allow the council to maximise capital
receipts, reduce liabilities and risk, and retain income generating
and strategic property. The focus of the programme is to
·
Produce capital
receipts of at least £50 million over four years;
·
Identify and
produce more capital receipts for subsequent years;
·
Rationalise
operational buildings;
·
Increase the number
of active transactions in each stage of the pipeline;
·
Generate efficiency
gains and enable better strategic decisions through better data
management;
·
Reduce the cost of
running operational buildings through disposals.
Procurement,
Commissioning and Contract Management
9.37
The strategic
programme will:
·
Identify indicative
savings and deliver savings strategies.
·
Increase the use of
spend analysis to inform strategic decisions and identify
savings.
·
Consolidate
contracts and reduce duplication.
·
Improve social
value and contract outcomes.
·
Create a
centralised, comprehensive contract register with reporting
solution.
·
Produce training,
templates, and guidance with clear, published roles and
responsibilities for procurement, commissioning and contract
management.
·
Enhance
collaboration between Procurement, Legal, Finance and service
teams.
9.38
A piece of work was commissioned to undertake a short, urgent
review of all aspects potentially within the scope of the strategic
programme, the outcome of which will be used to define the
parameters of the programme, and provide prioritisation of the
programme to first target the areas of spend which will deliver the
greatest results.
Income &
Commercialisation
9.39
The strategic programme aims to embed a business mindset and
commercial strategy across services, exploiting market
opportunities and harnessing the city’s unique identity and
environment to deliver new income streams. It will deliver the
following outcomes:
·
Increased net
positive income for the council;
·
Sustainable
commercial culture and capability;
·
Clear governance
and risk management for all commercial activities
A phased approach
will be taken:
·
Phase 1: Focus
on quick wins within City Operations and expanding current services
within available capacity.
·
Phase
2: Incubate and refine commercial models, then scale to other
directorates and more complex areas.
Phase 1 is already
in progress, with a number of workstreams identified for
exploration and implementation within 2026/27.
Strategic Enablers
Organisational
Change
9.40
The strategic programmes aims for the Council to be a more
connected, confident, innovative, inclusive, and resilient
organisation so we can be a sustainable council, ready for the
future. Through this we will:
·
Build a learning culture that is connected, confident, innovative
and creative, diverse and inclusive, healthy and psychologically
safe;
·
Deliver financial savings and service improvements;
·
Create the workforce required to deliver a better Brighton and Hove
for all;
9.41
Delivery will be achieved through:
·
Organisational design, seeking efficiencies by exploring functional
alignment workstreams (i.e. bringing together similar activities to
reduce duplication across the organisation) and using Digital
Innovation to enable the exploration of different ways of
working;
·
Review of Delivery Models across council services to ensure the
most efficient and appropriate delivery model is in place for each
service;
·
Operationalising our Learning Framework and developing our
capability as an organisation
·
Improvements in staff wellbeing and reducing sickness absence.
Digital Innovation
9.42
This strategic
programme aims to deliver a refreshed digital and technology
strategy, focusing on innovation, operational efficiency, and
economic engagement.
This programme
includes:
•
Managing the disaggregation of Orbis IT&D
•
Refreshing the IT&D strategy
•
Improving technology and processes to increase efficiency and
reduce costs
•
Turbocharging innovation pilots to identify and realise
savings
•
Delivering for the local tech economy
Devolution and Local Government
Reorganisation
9.43
The Devolution and Local Government Reorganisation (LGR) strategic
programmes prepare the council and its partners for two connected
but distinct areas of reform to local governance.
9.44
The devolution programme focuses on establishing the Sussex and
Brighton Combined County Authority and supporting the transfer of
strategic powers and funding from central government. This creates
an opportunity to strengthen local democracy, unlock investment,
improve long term financial resilience, and support economic growth
across Sussex
9.45
The LGR programme focuses on the possible restructuring of councils
and any related changes to local boundaries. It ensures the council
is ready for a safe and lawful transition, protects the
city’s identity and democratic voice, and supports continuity
of services for residents.
9.46
Together, the programmes ensure the council is fully engaged in
shaping proposals, coordinating evidence, assessing risks and
opportunities, and aligning local activity with the
government’s priority timelines for delivering both
devolution and reorganisation across Sussex.
9.47
The Transformation Fund is a key resource to enable and support
transformation across the organisation. The size of the fund was
increased in December 2025 to reflect the scale of the
transformation required across the organisation in order to balance
the authority’s budget over the period of the MTFS.
9.48
The Fund will continue to be kept under review as budget plans
develop further and spend-to-save opportunities and further
investment requirements emerge in more detail over the planning
period. At this stage, the indicative requirement for the
Transformation Fund for 2026/27 to 2029/30 is shown in the table
below. However, this is considered to be a minimum investment level
based on the experience of previous 4-year invest-to-save
programmes.
|
4-Year
Indicative Transformation Fund (using Capital Receipts
Flexibilities)
|
|
Category of
Investment
|
2026/27
|
2027/28
|
2028/29
|
2029/30
|
|
£m
|
£m
|
£m
|
£m
|
|
Transformation
& Innovation Strategic Programmes
|
3.400
|
1.900
|
0.600
|
0.600
|
|
Invest-to-Save
business cases
|
0.700
|
0.100
|
0.300
|
0.300
|
|
Digital and AI
Development Resources
|
1.550
|
1.550
|
1.550
|
1.550
|
|
Managing Staffing Changes
(exit packages)
|
1.250
|
0.500
|
0.500
|
0.500
|
|
Enabling
Resources (PMO, Workspace, HR, etc)
|
3.326
|
3.326
|
2.326
|
1.326
|
|
Total
Transformation Fund
|
10.226
|
7.376
|
5.276
|
4.276
|
9.49
The investments are described in summary below:
Strategic Transformation
Programmes
The above section describes
in detail the strategic programmes that have been established to
address the council’s financial challenge over the period of
the MTFS. The current estimate of the investment requirement in
order to deliver those programmes is a minimum of £6.500m
over the MTFS.
Invest-to-Save Business
Cases
The medium-term planning process
encourages innovation and invest-to-save business cases aimed at
complementing the council’s Transformation & Innovation
portfolio, supporting the achievement of Council Plan priorities
and, importantly, contributing to the future financial
sustainability of the council. Business cases will need to
demonstrate a return on investment within a reasonable time period
(max 5 years) but ideally within the 4-year medium-term financial
plan period.
Digital and AI Development
& Skills:
Digital and AI is a specific form of
invest-to-save. The council has already invested heavily in staff,
systems and technologies to provide improved digital and on-line
services. However, this process does not stop and as technologies,
including AI and robotics, improve and develop, the council will
need to move with the technology and ensure appropriate skills are
developed to make the most of any investment. Provision of
£1.550 million each year is included but some of this cost
could potentially be transferred to revenue in later years if this
is affordable within the overall budget envelope.
Managing Staffing
Changes:
Transformation and change
inevitably results in significant changes to services which will
entail changes to the mix or level of staffing in services. This
can lead to potential redundancies which the council attempts to
manage through holding vacancies or redeployment as far as
possible, but otherwise through voluntary severance where this
meets the council’s business case criteria. This can involve
significant redundancy and/or pension strain costs. At least
£2.750 million is expected to be required over the
period.
Transformation Enabling
Resources
Ensuring that
transformation and change can be delivered requires resources that
can be flexibly deployed across different programmes or to ongoing
long-term change programmes. As a result of the considerable amount
of transformation required, the support has been scaled up compared
to previous years.
|
Transformation
Enabling Costs (4-Years)
|
|
Category of
Investment
|
Annual
Cost
|
|
£m
|
|
Project &
Programme Management Resources
|
0.766
|
|
Workspace
Innovation Resources (to rationalise operational
buildings)
|
0.180
|
|
HR Management
of Change and Policy Support
|
0.128
|
|
Contribution to
Leadership Development Support
|
0.052
|
|
Finance
Support
|
0.200
|
|
Total
|
1.326
|
9.50
The council is required to maintain an adequate level of reserves
to deal with future forecast or unexpected pressures. Councils are
not permitted to allow spend to exceed available resources which
would result in an overall deficit and potential Section 114 report
to the full Council. Sections 32 and 43 of the Local Government
Finance Act 1992 require authorities to have regard to the level of
reserves to meet estimated future spend when calculating the budget
requirement.
9.51
Reserves can be held for three main purposes:
·
A Working Balance to help cushion the impact of uneven cash flows,
unexpected events and avoid unnecessary temporary borrowing;
·
Additional risk provisions to mitigate against specific, identified
risks; and
·
A means of building up funds (i.e. earmarked reserves) to meet
known or predicted liabilities.
9.52
A summary of earmarked reserves and the forecast of reserves and
balances can be found in Annex
A.
9.53
The appropriate level of reserves is a judgement based on a number
of factors including the level of risk inherent in the budget
planning cycle, the availability of resources and other recourses
to support such as the government’s offer to local
authorities to engage with MHCLG if Emergency Financial Support
(EFS) is needed.
9.54
An assessment of the risk environment is required in order to
determine the suitability of the baseline reserves and balances
position. This assessment should include consideration of the
robustness of efficiency plans, levels of uncertainty regarding
cost estimates (demand / price inflation), consideration of
national and local policy changes and wider national economic and
political factors.
9.55
The MTFS includes the following principles for the management of
reserves:
·
Reserves should not normally be used as a substitute for permanent
efficiencies to meet permanent spending pressures;
·
Reserve levels and contributions should be reviewed at least twice
annually at budget and outturn to ensure contributions are equal to
planned use over the medium-term;
·
Over the medium-term, the Working Balance should be maintained at
the minimum recommended level of £12 - 15 million. Where it
falls below this, the MTFS should be updated to show how the
Working Balance will be restored;
·
Earmarked Reserves must be approved and should only be held if
absolutely necessary and where there is a clear future and/or
multi-year commitment or liability;
·
Additional risk provisions should ideally be built up where
specific or enhanced risks are identified. This can be provided
through either:
·
Setting aside resources from a planned or fortuitous outturn
underspend;
·
Building in provision for an additional risk provision in the
Annual Budget; or
·
Building in provision over a longer period through the MTFS.
9.56
The authority has a low level of reserves compared to other
councils of a similar size. The authority has been forecasting
significant overspends since the pandemic, and with the exception
of 2022/23 (which saw an overspend of £3.3 million which
reduced the Working Balance to around £5.6 million), strong
financial management and implementation of mitigations and spending
controls has meant that reserves have not reduced further.
9.57
The MTFS aims to ensure the Working Balance is restored and that
sufficient risk provisions are provided to support the significant
savings programmes required to balance the budget and MTFS over the
4-year period.
9.58
The council’s external auditor has
commented on the financial sustainability of the
authority and has highlighted this as a significant weakness over
the past two years. A strategy to restore the Working Balance and
provide sufficient risk provisions will therefore help to address
the auditor’s improvement recommendations.
9.59
It is recommended within the budget report that the working balance
is increased to a minimum level of £12 million in the medium
term, with the creation of a further General Risk Reserve, which
will be undertaken through the setting aside of some of the EFS
requested to support the 2026/27 budget.
One-off Resource Requirements
9.60
Additional one-off resources may be needed in 2026/27 or later
years for a wide range of reasons which could present additional
financial challenges as these would require identification of
resources to meet any commitments. One-off resources may need to be
identified to cover the following:
·
Any Collection Fund deficits (current monitoring indicates a
£1.768m net deficit for 2025/26) *;
·
Any General Fund outturn overspend (i.e. TBM overspend) *;
·
Any increase to provisions or reserves required to cover increased
cost estimates *;
·
Any unavoidable/unexpected one-off expenditure or commitments;
·
Any one-off allocations for priorities (subject to availability of
resources).
* The reverse is also true whereby
surpluses or underspends could increase the availability of one-off
resources or, at least, reduce the call on one-off resources.
9.61
Projected one-off resource requirements for 2026/27 are reported
within the main budget report to Cabinet and Budget Council,
reflecting latest estimates and projections from in-year TBM budget
monitoring and monitoring of Collection Funds together with any
additional identified one-off funding requirements or additional
available one-off resources.
9.62
The CIPFA Resilience Index compares a council's position across a
range of measures associated with financial risk, highlighting
where additional scrutiny may be required. The data for the latest
resilience index is obtained from the Revenue Expenditure and
Financing England Outturn Report 2024-25 ('RO Forms') and reflects
figures submitted by Local Authorities to MHCLG.
9.63
The findings of the Resilience Index 2025 indicate that reserves
have fallen nationally and that social care expenditure is still
increasing well beyond inflation. This is in line with other
evidence from the sector and while it may not be unexpected it is
crucial to understand that these two indicators play an important
part in the sustainability and health of the local government
sector. A new indicator measuring homelessness spend ratio has been
introduced recognising the growing issue of the cost and demand
for homelessness in many local authorities.
9.64
The snapshot below (please enlarge for improved legibility)
compares BHCC with all other unitary authorities for 2024/25. The
resilience highlights that the most pressing financial risk for the
council is the level of reserves, where the council’s
position is amongst the lowest of all Unitary Authorities at 13.14%
of net revenue budget, as well as the council’s change in
reserves.
9.65
Social care spend as a proportion of the net budget appears to be
average while borrowing (Gross External Debt) is also close to the
average, recognising that more than 50% of BHCC’s debt is
related to the HRA (Council Housing Stock).
10.2
The Capital Strategy must be approved by the full Council and aims
to ensure that all members can understand and determine the overall
long-term policy objectives for the use and deployment of capital
resources including borrowing. The Capital Strategy therefore
provides detailed information on capital resource projections,
capital financing need, and the approach to non-treasury
investments (e.g. commercial property) and the management of
risk.
10.3
An officer-led, Capital Programme Board (CPB), ensures that the
framework for setting the Capital Investment Programme continues to
focus on Council Plan priorities, deliverability and affordability,
and adheres to the Capital Strategy approved by full Council. The
CPB also monitors financial performance and service outcomes.
10.4
Officers work closely with Cabinet to shape the development of the
Capital Programme on an ongoing basis. Cabinet approve the addition
of new schemes through Targeted Budget Management reports or
through separate scheme reports, or through the annual budget
approval process. Governance structures, processes and procedures
of the Capital Programme are continually assessed to strengthen
financial management, decision making, and accountability.
10.6
In summary, the majority of the council’s capital investment
is within longer-term programmes that support Council Plan
priorities. The key programmes and projects, aligned to Council
Plan priorities, are as follows:
Homes for Everyone:
·
Housing supply schemes including New Homes for Neighbourhoods and
Home Purchase Scheme;
·
Investment in new build housing through the Housing Revenue Account
and Housing Joint Venture (with Hyde Housing);
·
Investment in maintaining and improving the Council Housing Stock
and building safety through the Housing Revenue Account;
·
The Strategic Investment Fund (SIF) to provide legal and project
management resources to support major regeneration programmes that
draw in substantial private sector investment.
·
Investment in new supply of Temporary Accommodation
A Healthy City where People Thrive:
·
Investment in a new leisure centre at the King Alfred site;
·
The Education Capital programme, which provides investment from
central government including New Pupil Places, Education Capital
Maintenance and Devolved Formula Capital for schools;
·
Disabled Facilities Grant funded adaptations to support
independence at home.
A City to be Proud of:
·
Renovation and restoration of the Madeira Terraces;
·
Valley Gardens Phase III;
·
Investment in the Royal Pavilion Estate supported by the Heritage
Lottery;
·
The Local Transport Plan (LTP) covering a wide range of
transport-related schemes;
·
Significant investment in coast protection programmes;
·
The Carbon Net Zero investment programme.
A Responsive Council with Well-run
Services:
·
The Information Technology & Digital Future Fund to maintain
and upgrade the council’s infrastructure and IT
architecture;
·
The Asset Management Fund (AMF) to maintain operational buildings,
improve sustainability and reduce long term maintenance costs;
·
Corporate Planned Maintenance (PMB) to undertake planned building
works and upgrades;
·
Vehicle and plant annual replacement programmes.
10.8
Capital receipts from the sale of surplus land and buildings are an
important capital resource that not only provides funding for the
capital investment programme but also supports the Innovation Fund,
that fund the council’s Strategic Transformation portfolio
and Invest-to-save initiatives using the government’s capital
receipt flexibilities.
10.9
Capital receipt projections are regularly reviewed having
considered the social value implications of any decision to dispose
first.
10.10
Capital receipts are becoming an increasingly critical element for
balancing the council’s budget over the medium term. A major
programme of property disposals has been approved by Cabinet and
are planned for future years to meet the demand for capital
receipts.
10.11
Taking into account capital programme approvals already made and
projected commitments for funding the above continuing objectives,
the current expected requirement for capital receipts (which are
periodically updated and reported to Cabinet) over the MTFS period
is as shown below.
|
Capital Receipt
Requirements
|
2025/26
|
2026/27
|
2027/28
|
2028/29
|
2029/30
|
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
|
Capital
Programme Commitments
|
|
|
|
|
|
|
Capital
Programme approvals
|
(12,129)
|
(228)
|
(27,860)
|
(47)
|
|
|
Innovation/Transformation
Investment
|
|
|
|
|
|
|
Managing Staff
Changes
Transformation
enablers
|
(1,250)
(1,030)
|
(1,250)
(3,326)
|
(500)
(3,326)
|
(500)
(2,326)
|
(500)
(1,326)
|
|
Digital
Resources
|
(1,948)
|
(1,550)
|
(1,550)
|
(1,550)
|
(1,550)
|
|
Invest to
Save/Transformation
|
(2,200)
|
(4,100)
|
(2,000)
|
(900)
|
(900)
|
|
Investment in Temporary
Accommodation
|
|
(10,000)
|
|
|
|
|
Modernisation
schemes ending
|
(810)
|
|
|
|
|
|
Corporate
Investment Funds
|
|
|
|
|
|
|
IT&D
Fund
|
|
(380)
|
(500)
|
(500)
|
(500)
|
|
Commercial
Asset Investment Fund
|
|
(500)
|
(500)
|
(500)
|
(500)
|
|
Asset
Management Fund
|
|
(1,000)
|
(1,000)
|
(1,000)
|
(1,000)
|
|
Strategic
Investment Fund (Regeneration)
|
|
(250)
|
(250)
|
(250)
|
(250)
|
|
Total
Commitments
|
(19,367)
|
(22,584)
|
(37,486)
|
(7,573)
|
(6,526)
|
10.12
Comparison of existing commitments and projected demands on capital
receipts with known or planned disposals has been undertaken as
shown in the table below, indicating a significant shortfall of
circa £35 million that will require substantial further
disposals to be identified.
|
Capital Receipt
Projections
|
2025/26
|
2026/27
|
2027/28
|
2028/29
|
2029/30
|
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
|
Brought forward
balance
|
189
|
(7,398)
|
(18,184)
|
(23,128)
|
(28,956)
|
|
|
Expected Net
Capital Receipts (approved)
|
11,780
|
11,798
|
32,542
|
1,745
|
0
|
|
|
Capital Receipt
commitments
|
(19,367)
|
(22,584)
|
(37,486)
|
(7,573)
|
(6,526)
|
|
|
Carry forward
balance (deficit)
|
(7,398)
|
(18,184)
|
(23,128)
|
(28,956)
|
(35,482)
|
|
10.13
Cabinet has approved a range of property disposals during 2025/26
that are included in the table above. The next tranche of property
disposals are planned to be presented to Cabinet in April 2026
which will reduce the currently projected shortfall of £35
million. Further disposal opportunities will still be required and
will be presented to Cabinet in due course.
10.14
The key opportunities to generate capital receipts are likely to
come from:
·
Rationalisation of the operational portfolio of buildings;
·
Lease re-gearing opportunities – but likely to need to
compromise housing ambitions;
·
Further Commercial Asset disposals – however, this forgoes
revenue income which is highly problematic and adds to future
budget gaps. There may also be debt to pay off (capitalise)
reducing the available receipt.
·
School sites – this is a major potential area for generating
receipts following closure of two school sites owned by the
council;
·
Identifying
opportunities for capital receipts within the agricultural
estate;
11.1
The MTFS is primarily concerned with the development of the General
Fund revenue and capital budget. However, there are links to the
Housing Revenue Account (Council Housing) revenue budget and
capital programme which follow a separate budget setting
process.
11.2
The Housing Revenue Account (HRA) is a ring-fenced account which
covers the management and maintenance of council owned housing
stock. This must be in balance, meaning that the authority must
show in its financial planning that HRA income meets expenditure
and that the HRA is consequently viable.
11.3
The introduction of self-financing in 2012 provided additional
resources from the retention of all rental income and, through
greater control locally, enabled longer term planning to improve
the management and maintenance of council homes. Since that
introduction there have been a number of factors which have
compromised the financial stability of the HRA leading to a
projected deficit position from 2026/27.
11.4
Understanding the demands on resources over the coming years
remains key to ensuring the financial viability for the HRA. There
are several challenges which are impacting on the financial
viability over the medium to long term. This includes the rising
cost of services and investment needs arising in relation to
compliance with the Building Safety Act, Fire Safety Regulations
and Social Housing Regulation Bill as well as the impact of
inflation on services.
11.5
An emerging issue for the council is investment requirement in 8
Large Panel System (LPS) blocks across the city. Whilst investment
was anticipated over a longer period of time for these blocks,
there is a need to ensure the blocks remain safe in the short term
with measures being introduced which require a significant revenue
investment for the HRA over the short term. Longer term plans are
being developed for these blocks with required capital investment
forming part of future budget papers where reasonable estimates can
be made.
11.6
The Autumn Statement 2025 announced a 10-year rent settlement
allowing landlords to raise rents by CPI plus 1%. This currently
extends to April 2036, with a view to be able to increase rents by
CPI +1% for the 10 years succeeding 2026/27. This has been factored
into the HRA’s MTFS. However, whilst this is a welcome boost
for the long-term financial forecast, it will not address all of
the current financial issues that the HRA is facing. A strategy
needs to be developed to be able to manage those issues in the
short term.
11.7
The capital plan for the HRA is split into two main areas of
investment for improving the quality, safety, and energy efficiency
of council homes and for the supply of new housing. Investment in
existing stock is funded from direct revenue funding from
tenants’ rents (including associated rent rebates) and HRA
borrowing that is supported by tenants’ rents over a longer
period. Investment in new supply is mainly funded from retained
capital receipts (including Right to Buy sales and commuted sums),
grant funding and HRA borrowing.
11.8
The Programme reflects the delivery of planned maintenance,
improvement programmes and major capital projects informed by a
recent stock condition survey and ongoing surveys of the
council’s housing stock. This is alongside the existing and
emerging priorities of the HRA Asset Management Strategy. Key
considerations include improving the safety and quality of homes
and ensuring regulatory compliance is met. This includes working in
consultation with external bodies such as the Regulator of Social
Housing and East Sussex Fire and Rescue Authority, as well as
tenants and leaseholders to inform the planned and major works
strategy. Investment also continues in carbon reduction initiatives
to support the city’s commitment of becoming carbon neutral
by 2030.
11.9
The HRA continues to look at the range of initiatives it has to
deliver additional housing and meet the commitment to deliver new
affordable council homes. These initiatives include the New Homes
for Neighbourhoods Programme (NHFN), Home Purchase Scheme,
Converting Spaces programmes and the Homes for the City of Brighton
& Hove Joint Venture.
11.10
Work will continue through 2026/27 to deliver housing supply
pipeline schemes. The Home Purchase Scheme will continue to explore
opportunities to buy back ex-right-to-buy properties, whilst the
extended Home Purchase Scheme will look at off the shelf purchase
opportunities to increase the supply of affordable housing within
the HRA. The NHFN Programme is a longer term approach to the
delivery of new homes; work will continue on approved projects and
to bring forward new projects for consideration by Cabinet.
12.1
The Dedicated Schools Grant (DSG) is a ring-fenced grant that
provides funding for Schools, Academies, Early Years, Special
Educational Needs and a small number of allowable Central
items.
12.2
Similarly to the HRA, the development and setting of schools’
budgets follows a separate process involving statutory consultation
and oversight of the Schools Forum. However, there are links with
the General Fund budget setting process as General Fund budget
proposals and savings can potentially impact schools and vice
versa.
12.3
The DSG is divided into four blocks – the Schools Block, the
High Needs Block (HNB), the Central School Services Block (which
allocates funding to local authorities for their ongoing
responsibilities towards both maintained schools and academies),
and the Early Years Block. Each of the four blocks of the DSG are
determined by separate national funding formulae (NFF).
12.4
On 17th December 2025, DfE published initial DSG allocations for
2026/27. These are summarised in the table below, together with
comparisons to the 2025/26 allocations:
|
Financial
Year
|
Schools
Block
£’000
|
Central
School
Services
Block
£’000
|
High Needs
Block
£’000
|
Early
Years Block
£’000
|
Total
DSG
£’000
|
|
2025/26
|
176,362
|
2,316
|
41,300
|
40,809
|
260,787
|
|
2026/27
|
181,164
|
2,332
|
43,409
|
49,385
|
276,290
|
|
Increase
|
4,802
|
16
|
2,109
|
8,577
|
15,503
|
Whilst funding
allocations across all blocks have increased in 2026/27 it is
difficult to draw direct comparisons with the prior year due to
changes in accounting arrangements, particularly within the Schools
and High Needs Block. For 2026/27, a number of former specific
grants are being rolled into core funding, and the impact of these
presentational changes are referred to in the paragraphs
below.
12.5
As set out in the paragraph above there are significant
presentational changes to the way mainstream schools are being
allocated funding in 2026/27. In 2025/26, mainstream schools
received separate funding via national insurance and school budget
support grants linked to pay pressures. These have been allocated
outside of the main DSG in 2025/26 and equate to approximately
£5.1m. For 2026/27, this funding has been rolled into the
Schools Block of the DSG and will be allocated as part of core
budget funding. This means, on a like-for-like basis, funding in
the Schools Block has actually reduced in 2026/27. The overriding
reason for this is that Schools Block pupil numbers have decreased
from 28,545 in October 2024 to 27,852 in October 2025. This is a
reduction of 693 pupils and equates to an overall loss of direct
DSG Schools Block pupil funding of c. £3.8m.
12.6
School balances at the end of 2024/25 were a net deficit of
£2.623m, a reduction of £2.904m from the £0.281m
net surplus balance at the end of 2023/24. Forecasts for the end of
the 2025/26 financial year suggest that the school balances
position will move to a net deficit of approximately £5m.
This is a key indicator of the financial challenges being
experienced.
|
Schools Balances
|
Nursery
£’000
|
Primary £’000
|
Secondary
£’000
|
Special
£’000
|
Total
£’000
|
|
Final
2023/24 balances
|
24
|
(1,143)
|
2,048
|
(648)
|
281
|
|
Final
2024/25 balances
|
163
|
(2,665)
|
(395)
|
274
|
(2,623)
|
|
Movement
|
139
|
(1,523)
|
(2,443)
|
922
|
(2,904)
|
12.7
Schools are required to submit draft budget plans for 2026/27 by
the end of February 2026. At that stage there should be a clear
indication of the likely budget position of schools for the 2026/27
financial year. However, it is anticipated, there will be further
pressure in terms of schools’ budgets and license deficit
requirements in 2026/27.
12.8
Staff within Education and Finance will continue to work with
schools to assist them in addressing financial challenges alongside
other advisory support such as DfE accredited Schools Resource
Management Advisers (SRMA).
12.9
The headline allocation of High Needs Block (HNB) funding for
2026/27 is shown in paragraph 12.4. The initial settlement results
in an increase in allocation to Brighton and Hove of c. £2.1m
however this is entirely due to the transfer in of previous grant
funding. A key aspect of the December 2025 DSG announcement is
that, for 2026/27, DfE are temporarily suspending the high needs
national funding formula (NFF), which in previous years has been
used to calculate local authorities’ high needs allocations.
Instead, local authorities’ allocations for 2026/27 will be
based on their 2025/26 allocations, with some presentational
adjustments (transfer in of former grant funding), as described
above. This means that the current published high needs block
allocation for 2026/27 contains no inflationary uplift from 2025/26
i.e. it is at a cash flat level.
12.10
The wider reforms to the SEND system, which the government will set
out in early 2026, DfE has advised that they will review the
methodology for allocating high needs funding so that it supports
the SEND reforms. As part of the local government financial
settlement the written statement included the following
extracts:
We recognise that local
authorities are continuing to face significant pressure from DSG
deficits on their accounts. In June this year, we announced a
two-year extension to the DSG Statutory Override to support local
authorities to manage these impacts. The government has also
confirmed that it will bring forward a full Schools White Paper
early in the new year. This will set out substantial plans for
reform of special educational needs (SEND) provision to deliver a
sustainable system which – first and foremost –
supports children and families effectively, and which is also
financially sustainable.
We recognise that the
size of deficits that some councils may accrue while the Statutory
Override is in place may not be manageable with local resources
alone, and will bring forward arrangements to assist with them as
part of broader SEND reform plans. Whilst we do not expect local
authorities to plan on the basis of having to meet deficits in
full, any future support will not be unlimited. Councils must
continue to work to keep deficits as low as possible. We will
provide further detail on our plans to support local authorities
with historic and accruing deficits and conditions for accessing
such support later in the settlement process.
12.11
For Brighton and Hove, the previous HNB forecast for the 2026/27
financial year showed a potential in-year overspend of £3m
but this assumed a real terms increase in HNB funding of c.
£1.9m. Therefore, as it stands, there is a potential 2026/27
in-year deficit of almost £5m against the HNB, which would
increase the estimated cumulative overspend on the central DSG to
approximately £7.5m by the end of 2026/27.
12.12
The council will need to update its DSG management plan but further
information regarding the government’s funding plans will be
critical to this process.
12.13
The Early Years Block has seen further increases in terms of
funding in 2026/27. This is partly as a result of a full year
effect of the new 30-hour entitlement for Under 2s, but, also,
after many years of lobbying, DfE has taken the cap off the 3 and
4-year old funding allocation to Brighton and Hove. This will mean
a significant increase in the hourly funding rate paid to early
years providers in the city.
13.1
The Medium Term Financial Strategy (MTFS) of a large public sector
organisation with many demand-led services and complex and changing
funding streams will always contain significant and varying degrees
of risk. The cost of living crisis, higher inflation and higher
interest rates and the demand for the council’s
services have significantly impacted the council’s
expenditure and income in recent years. The most significant
emerging challenge is the cost of and demand for Temporary and
Emergency Accommodation. In addition, the council has seen higher
than anticipated pay awards, higher costs of social care, impacts
on fees & charges due to economic conditions, continued high
levels of Council Tax Reduction claimants (i.e. taxation
losses).
13.2
These pressures have resulted in current forecast overspends
in-year requiring ongoing recruitment and spending controls to help
mitigate the financial position alongside other financial recovery
measures. This highlights the need to recognise the financial risks
of unexpected events and the impact this has on the resilience of
the authority.
13.3
The pressures experienced in recent years, including increases in
the cost of living, may continue well into the medium term.
13.4
The government announced a three-year provisional settlement for
2026/27 to 2028/29 on 17 December 2025, providing certainty for
local authorities on funding allocations. However, this Council has
seen a reduction in resources under the Fair Funding Review
compared to the prevailing assumptions in the MTFS.
13.5
In general, other factors that can have a material effect on the
medium term financial position of an authority include:
·
Changes in function and/or funding – for example the impact
of Local Government Reorganisation and Devolution;
·
Changes in the economy including the impact on business rates
income and/or Council Tax Reduction claimant numbers or collection
rates;
·
Similarly, impacts on the levels of house building which affects
Council Tax;
·
The level of future successful appeals against the business rating
list;
·
Changes in employer costs e.g. pension or national insurance
changes;
·
Achievement of performance targets for performance related grant or
partnership funding;
·
Delivery and achievement of savings and transformation
programmes;
·
Ability to manage identified demand-led service pressures;
·
Decisions on council tax increases and the council tax reduction
scheme;
·
Democratic support for change including partnership working or
integration.
13.6
Risks to the MTFS arise from both external and internal factors.
External risks include, for example, government policy decisions
that can have positive or negative impacts on costs or national or
local economic conditions that can affect income sources up or
down. External risks are generally the most difficult to manage or
plan for.
13.7
Internal risks can also arise for a number of reasons, such as cost
overruns, underachievement of savings plans, changing priorities or
ineffective systems of demand management. They may also be
influenced by external factors. It is vital to have adequate
mechanisms to manage internal risks if financial stability is to be
achieved. There are a number of ways in which the effects of risks
can be managed and these are set out in the following risk table.
Furthermore, the council’s MTFS, by taking a longer term
planning approach, aims to minimise the impact of some of the major
financial risks and the impact on investment in support of the
council’s priorities.
13.8
The forecasts within the MTFS are based on prudential assumptions
that reflect the most likely position based on current knowledge
and data. There are therefore risks of over or under stating
expenditure or income estimates which have been considered.
13.9
The identified risks are scored for Likelihood (L) and Impact (I).
The scores are multiplied to give a resulting risk score. The key
to the scores is given in Annex
B together with assessed risk scores for identified
risks, including the potential financial sensitivity.
|
|
Estimated Balance as at 01/04/26
£'000
|
Planned Use
2026/27 £'000
|
Estimated Balance as at 31/03/27
£'000
|
Review Arrangements
|
Conclusion
|
|
General Fund
Reserves
|
|
General Fund Working
Balance/General Reserves
|
7,840
|
4,160
|
12,000
|
Reviewed against the
register of financial risks, taking into account the requirements
of the Local Government Act 2003.
|
A minimum working
balance of £12-15m is recommended by the Chief Finance
Officer in accordance with the requirements of Section 25 of the
Local Government Act 2003.
The 2026/27 budget is
being set with the assumption of EFS being granted from government,
which will contribute to the working balance, increasing it to
£12.000m.
|
|
General Fund Working
Balance/General Reserves - held for specific future
commitments
|
175
|
(175)
|
0
|
Following closure of
accounts.
|
Balance will be used to
fund ongoing corporate commitments.
|
|
General Risk
Reserve
|
0
|
3,899
|
3,899
|
Following outturn
position.
|
A new reserve created to
provide a more prudent buffer for risks and unforeseen costs within
the revenue budget
|
|
Library PFI
Reserve
|
520
|
(156)
|
364
|
Following closure of
accounts.
|
Use for funding the
project over the lifetime of the PFI scheme. Expected to be
increased contributions from reserves, due to inflationary
pressures. Contributions to the reserve may be required in future
years.
|
|
Waste PFI Project
Reserve
|
6,688
|
(343)
|
6,345
|
Following closure of
accounts.
|
Use for funding the
project over the lifetime of the PFI and to bridge the gap for when
PFI credits stop. This reserve has been used to fund the Term Time
only costs and will be replenished in time to meet existing Waste
PFI commitments.
|
|
Section 106 Receipts
(Revenue)
|
501
|
0
|
501
|
Reviewed throughout the
year to reflect agreed liabilities and new agreements.
|
Retain for specified
purpose.
|
|
Developer Contributions
Unapplied (S106 Capital)
|
747
|
0
|
747
|
Reviewed throughout the
year to reflect agreed liabilities and new agreements.
|
Retain for specified
purpose.
|
|
ICT Investment
Reserve
|
334
|
(125)
|
209
|
Following closure of
accounts.
|
Held to support planned
IT&D expenditure over the next two years.
|
|
Local Elections
Reserve
|
0
|
700
|
700
|
Following closure of
accounts.
|
Hold for costs of local
elections
|
|
Dome Planned
Maintenance
|
103
|
(53)
|
50
|
Following closure of
accounts.
|
Retain - subject to
lease agreement with Brighton Dome & Festival
Society.
|
|
Hove Park 3G Pitch
Renewal
|
0
|
15
|
15
|
Following closure of
accounts.
|
Held to replace pitch at
the end of its useful life. Pitch replaced in 2025/26 and was
funded by existing reserve. Future contributions will be received
to replace the newly replaced pitch at the end of its useful
life.
|
|
Surface Water Management
Reserve
|
421
|
39
|
460
|
Following closure of
accounts.
|
Retain to support
planned SWMP related works, emergency work and to contribute to any
carbon neutral opportunities.
This reserve is retained to meet our statutory obligations as the
Lead Local Flood Authority.
|
|
Sports Facilities
Reserve
|
453
|
0
|
453
|
Following closure of
accounts.
|
Retain to support Sports
Facilities.
|
|
Licensing - other
reserve
|
26
|
0
|
26
|
Following closure of
accounts.
|
Retain for specified
purpose - to fund potential future deficits or repayment to
licensees. Reserve smooths out fluctuations in volumes of
licences issued each year.
|
|
Taxi
Licensing
|
82
|
0
|
82
|
Following closure of
accounts.
|
Retain for specified
purpose - to fund potential future deficits or repayment to
licensees. This smooths out fluctuations in volumes of licences
issued each year.
|
|
Overdown Rise Footpath
Maintenance
|
20
|
0
|
20
|
Following closure of
accounts.
|
Commuted sum held for
future years maintenance costs of the foot path.
|
|
HMO Licensing Fees
Reserve
|
531
|
41
|
572
|
Following closure of
accounts.
|
Retain to support annual
inspections of HMO licenses - this is a statutory function
(Mandatory HMO Licensing Fees income needs to be used only for the
running of the Mandatory HMO Licenses.)
|
|
Damage Deposit Guarantee
Scheme
|
94
|
0
|
94
|
Reviewed during the year
as part of budget monitoring process
|
Retained for specific
purpose but required level will continue to be reviewed.
|
|
RP&M Trust Sinking
Fund
|
50
|
0
|
50
|
Following closure of
accounts.
|
Retain - subject to
lease agreement with RPMT
|
|
HMO Additional Licensing
Fees
|
833
|
(192)
|
641
|
Following closure of
accounts.
|
Additional HMO Licensing
Fees income needs to be used only for the running of the Additional
HMO Licenses. Each license is for 5 years. The fee income is
therefore used for that 5-year period.
|
|
Selective Licensing
Fees
|
1,736
|
(390)
|
1,346
|
Following closure of
accounts.
|
Selective Licensing Fees
income needs to be used only for the running of the Selective
Licenses. Each license is for 5 years. The fee income is therefore
used for that 5-year period.
|
|
Travellers Site Capital
Reserve
|
79
|
0
|
79
|
Following closure of
accounts.
|
Held to fund future
major works costs of the Travellers site.
|
|
Restructure Redundancy
Reserve
|
130
|
124
|
254
|
As part of closure of
accounts.
|
Restructure &
Redundancy costs are funded within the capital programme as part of
the capitalisation direction.
|
|
CIL - Neighbourhood
reserve
|
384
|
0
|
384
|
Following closure of
accounts.
|
Allocations from the
Neighbourhood Reserve will be made in accordance with the agreed
process which involves ward councillors.
|
|
CIL - Strategic
reserve
|
1,217
|
0
|
1,217
|
Following closure of
accounts.
|
Allocations from the
Strategic reserve will be made in line with the strategic
objectives set out in the initial scheme and will be approved by
Cabinet.
|
|
Total General Fund
Reserves
|
22,964
|
7,544
|
30,508
|
|
|
|
Schools / DSG
Reserves
|
|
Schools LMS
Balances
|
(5,600)
|
0
|
(5,600)
|
Following closure of
accounts.
|
Balances are held by
school governing bodies. Position unclear for future
years.
|
|
Total Schools / DSG
Reserves
|
(5,600)
|
0
|
(5,600)
|
|
|
|
TOTAL RESERVES
|
17,364
|
7,544
|
24,908
|
|
|
|
General Fund
Provisions
|
|
10 Year lease revenue
costs Provision
|
105
|
0
|
105
|
Review of annual
contribution to this provision at closedown.
|
This is required to pay
back the borrowing costs when 10 year leases finish in
2032/33.These are 30 properties leased through Rough Sleeping
Accommodation Programme partly funded by MHCLG.
|
|
Voluntary Severance
Provision
|
1,250
|
(750)
|
500
|
Following closure of
accounts.
|
To fund cost of
potential severance agreements from 2026/27 Budget
plans.
|
|
Insurance
Provision
|
3,940
|
0
|
3,940
|
The Insurance Fund is
subject to a bi-annual health check by the actuaries. The last
health check was completed in March 2025.
|
The level of the
Insurance Fund will be adjusted in line with the recommendations of
the actuary report which enables £81k to be released to
support the 2025/26 in year position. The next health check is due
in due in March 2027.
|
|
Total General Fund
Provisions
|
5,295
|
(750)
|
4,545
|
|
|
|
TOTAL ALL
FUNDS
|
22,659
|
6,794
|
29,453
|
|
|
Risk Scoring Key:
|
Likelihood (L)
(of
occurrence):
|
1
– Almost impossible
2
– Unlikely
3
– Possible
4
– Likely
5
– Almost certain
|
|
Impact (I):
|
1
– Insignificant
2
– Minor
3
– Moderate
4
– Major
5
– Catastrophic or fantastic
|
|
Risk Score (L) x (I):
(Overall
rating)
|
1 to
3 Low
4 to
7 Moderate
8 to
14 Significant
15 to
25 High
|
|
Risk
|
Likeli-hood
(L)
|
Impact / Sensitivity
(I)
|
Risk =
(L) x (I)
|
Possible Impact on Financial Strategy
|
Mitigation / Management
|
|
Council Tax base is lower than anticipated e.g. higher caseload for
CTRS (Council Tax Reduction Scheme) discounts /lower number of new
properties / more student exempt properties / more SMI exemptions /
more discounts awarded, resulting in a deficit on the collection
fund
|
3
|
3
0.1%
reduction in council tax base = £0.210m
|
9
|
Would require reductions in budgets (increased savings) for the
following year
|
Close monitoring of the collection fund and checking validity of
exemptions and discounts particularly new property developments,
student numbers, CTRS discounts and empty property
discounts.
|
|
Collection of council tax, including CTRS claimants, falls due to
its impact on household budgets alongside other Welfare Reform
impacts, resulting in a deficit on the collection fund
|
3
|
3
0.1%
reduction in council tax collection = £0.210m
|
9
|
Would
require reductions in the budget (increased savings) for the
following year
|
Close
monitoring of the collection fund, including claimants under CTRS.
Appropriate communications, advice (linked to Welfare Reform advice
services) and collection strategies have been agreed to minimise
impact.
|
|
Services fail to operate within set budgets due to increased
service demands or weak systems of demand management
|
3
|
4
1%
gross expenditure on demand led budgets = £3.4m
|
12
|
Excess service pressures would have to be met through additional
resources, such as reserves, or through unplanned savings having to
be made elsewhere. Possible need for emergency spending and/or
recruitment restrictions with potential impacts on service delivery
and quality. Reduction in reserves / working balance.
|
Close monitoring and analysis of demand-led budgets and overall
budget through budget monitoring (TBM).
Identify action plans to mitigate cost pressures.
Strategic MTFS investments provided for Homelessness, ASC,
Children’s Social Care and demand-led pressure
areas.
|
|
Services fail to operate within set budgets due to unachievable
income or poor collection performance
|
3
|
3
1%
of fees and charges income = £1.2m
|
9
|
Income pressures that can only be met through additional resources,
such as using reserves, or savings being made elsewhere in the
budget. Possible need for emergency spending and/or recruitment
restrictions with potential impacts on service delivery and
quality.
Reduction in reserves / working balance.
|
Monitoring of income budgets and collection performance (rates)
through TBM reporting. Identify action plans to mitigate
unachievable income, price variations and exceptional legal
costs.
In-year review of charging policy and revised charges approved if
absolutely necessary.
Internal Audit review of services where appropriate.
|
|
Services fail to operate within set budgets due to increased labour
or supply chain costs, contract price variations or other
inflationary impacts
|
4
|
4
1%
gross expenditure = £5.5m
|
16
|
Excess costs would have to be met through additional resources,
such as reserves, or through unplanned savings having to be made
elsewhere. Possible need for emergency spending and/or recruitment
restrictions with potential impacts on service delivery and
quality. Reduction in reserves / working balance.
|
Close monitoring of budgets and overall spend through budget
monitoring (TBM).
Identify Financial Recovery action plans to mitigate specific areas
experiencing cost pressures.
Focus contract management resources to areas of concern.
Financial management controls such as vacancy management and
additional spending controls.
|
|
Services fail to operate within set budgets due to unachievable
savings arising from:
-
Over-estimate of the savings potential;
-
Higher than estimated costs to implement the savings
opportunity.
|
3
|
3
5%
of GF savings = £1.0m
|
9
|
Overspending that can only be met from additional resources such as
reserves or savings being made elsewhere in the budget. Possible
need for emergency spending and/or recruitment restrictions with
potential impacts on service delivery and quality. Reduction in
reserves / working balance.
|
Monitor savings through TBM and identify action plans and/or
alternative measures to mitigate the unachievable
savings.
Potentially refer back to members for decisions on alternative
savings proposals where these are significant or cannot be
mitigated elsewhere.
|
|
Pay assumptions are lower than finally agreed pay awards and other
pay related costs.
|
3
|
3
0.5%
change in
pay award
=
£0.9m for the General Fund
|
9
|
Pay award pressures can only be met through additional resources,
such as reserves, or savings being made elsewhere in the budget.
Possible need for emergency spending and/or recruitment
restrictions with potential impacts on service delivery and
quality. Reduction in reserves / working balance.
|
Monitor progress on pay award negotiations and wider national
settlements.
Lobby government for more funding if nationally negotiated pay
awards are significantly higher than local or national assumptions
(e.g. Spending Review assumptions).
Excess pay award costs need to be addressed in-year through
financial management controls and then built into budget planning
(MTFS) for future years.
|
|
PFI Waste tonnages higher than projected resulting in additional
disposal costs
|
2
|
3
1%
increase in tonnage per annum = £0.2m p.a. over life of PFI
contract
|
6
|
Would increase the waste disposal budget and compensating savings
would need to be identified elsewhere in the budget.
|
Provision (contingency) for higher tonnages made in the assessment
of the waste PFI reserve for future years.
Monitor and identify specific areas of growth and undertake waste
minimisation and further recycling measures.
Trends are monitored and reflected in the MTFS for future
years.
|
|
Inflation continues to impact on contracted social care provider
costs
|
4
|
4
1%
increase in contract prices = £2.0m
|
16
|
Excess costs would have to be met through additional resources,
such as reserves, or through unplanned savings having to be made
elsewhere. Possible need for emergency spending and/or recruitment
restrictions with potential impacts on service delivery and
quality. Reduction in reserves / working balance.
|
Identify Financial Recovery action plans to mitigate specific areas
experiencing cost pressures.
Focus contract management resources to areas of concern.
Consider financial management controls such as vacancy management
and additional spending controls.
|
|
The uncertainties within the housing market, changes in housing
benefit and welfare reform, or ongoing impacts of the cost of
living crisis create spending pressures within the budget e.g.
homelessness
|
4
|
3
10%
increase in net temporary accommodation and rough sleeping budget =
£2.0m
|
12
|
Would create additional pressures in the Housing Strategy and
potentially other related budgets which would need to find
compensating savings.
|
Officer working group is set up specifically monitoring the
strategic measures to mitigate the increase in cost and demand of
TA.
Continue to assess and monitor the potential impact of changes to
the welfare benefit system and plan and respond to government
consultations accordingly. Lobby Government for additional
funding.
|
|
Increased property related insurance premiums as a result of
national or international storm damage claims over the longer
term
|
3
|
2
10%
further increase = £0.4m
|
6
|
Would require compensating savings to be identified in 2026/27 and
future years.
|
Insurance premiums have been retendered and are reviewed annually.
Budget has planned increases in 2026/27 as price increases are
expected.
Continued emphasis on risk management to help prevent future
claims.
|
|
Major civil incident occurs e.g. storm, flooding, riot
|
2
|
3
Estimated
“Bellwin” threshold = £0.7m
|
6
|
|
Ensure
appropriate insurance cover is in place and that the Insurance Fund
is sufficient to cover uninsured risks.
|
|
Severe winter weather places additional spending pressures on
winter maintenance and other budgets across the council
|
2
|
3
Depends
on severity of weather event
|
6
|
|
|
|
Cost overruns occur on schemes in the agreed capital
programme
|
3
|
2
1%
cost overrun on total 2025/26 programme =
£1.4m
|
6
|
|
|
|
Capital receipts lower than anticipated
|
3
|
3
10%
reduction in planned 2025/26 receipts = £1.2m
|
9
|
|
|
|
Income from business rates is lower than expected due to successful
rating appeals / higher levels of relief awarded / redevelopment of
existing sites gives temporary reduction / collection performance
declines
|
|
3
1%
of forecast retained business rates income = £0.8m
|
9
|
|
|
