Crawley Borough Council finances hit by temporary accommodation costs

During a meeting of the full council, leader Michael Jones presented a budget monitoring report for the first quarter of 2023/2024.

All eight of the cabinet portfolios were overspent – housing by more than £2million – leaving a general fund deficit just short of £1.9million for the quarter once interest earned on investments is included.

Increased inflation and rises in the cost of living have been partly responsible for the financial woes faced by councils up and down the country. But the main finger of blame was pointed at the government’s chipping away at funds usually given to councils to help run services.

Mr Jones said the authority received about 8.6 per cent of the grants it did in 2010, ‘with nothing given by the government to replace it’.

He added: “That is a shocking position for this current government to put local councils in and a real indication of why so much is wrong in this country at the moment, in my opinion.”

A number of councils have been forced to file Section 114 orders – essentially an acknowledgement of bankruptcy.

Mr Jones said: “I’m absolutely confident we’re going to see many local councils start to fall over now, through no fault of their own. But I’m confident that we won’t be in a Section 114 bankruptcy event or declaration ourselves unless we’re hit with a very large, unexpected bill – such as several hundred Chagossians arriving in Crawley and our costs rising in that respect.

“Or if temporary accommodation needs get any worse – and there’s no guarantee that they won’t.”

Another possible expense could materialise should the government end its contract with a number of hotels currently housing asylum seekers.

There has been no news yet about which hotels in which areas would be involved, but the Local Government Association has said any decision would ‘have a direct impact on councils’.

Mr Jones described the temporary housing situation as ‘not sustainable’. He added: “This is the whole point I’m trying to make. The government has to listen, it has to listen now and step in. We have all the pressures of a major urban area – a major metropolitan borough, frankly – when it comes to temporary accommodation.”

Crawley’s total spend on temporary housing this year is forecast to be £5.6million, including a quarter one overspend of £1.9million.

Mr Jones said: “We are in a frustrating position where, if it were not for the rising rates of people presenting to the council as homeless – who we have a duty to provide temporary accommodation for – then the council’s financial position would otherwise be relatively sound.”

Conservative leader Duncan Crow said he recognised the ‘unique pressures’ being faced by the council but advised that they shouldn’t ‘take our eye off of the ball’.

He added: “We still need to be bearing down on budgets and looking to be as efficient as possible where we can in all parts of the council.”

Mr Jones told councillors the authority had been and was being efficient, adding: “The problem we have is, year on year, there is only so far you can push, there’s only so far to cut. When you cut to the bone, you’ve cut to the bone – the only thing you can cut further is through.

“What really concerns me now is we’ve worked through all the efficiencies. I’ve been through with the officers all the potential savings. We’re now at the point where there’s nothing else to cut.

“The only things will be front-line services and that is desperately concerning. We don’t want to do that and we’ll do everything we can to avoid that.”