Crawley Borough Council’s Budget Meeting

Last night was Crawley Borough Council’s Budget Meeting. While changes to budgets happen throughout the year, the formal budget sets out planned service, capital and housing expenditure over the following 12 months and the rate at which council tax will be set.

As a council you are not allowed to borrow to fund services, you are not allowed to use capital reserves–those stemming from the sale of assets–to prop up your budget, you cannot use money from rents paid to the council on anything other than housing, and you are required to set out exactly how every pound of expenditure will be funded. In addition, council tax increases are capped (unless there’s a referendum)–often below inflation, as are various fees and charges (for instance, the council is limited to CPI while contractors increase their costs by RPI), and there are increasingly strict rules around investments.

These rules are designed to ensure that councils do not simply sell everything off or build up unsustainable debts to prop up the council’s unaffordable expenditure, invest recklessly, or pass huge costs onto residents.

As a result, the level of income for councils is largely dictated by central government, requiring councils to cut their cloth accordingly, and since 2010 local government has suffered greater cuts in their income than any other part of the public sector.

Since Labour regained control in 2014, we have mostly got around this by generating greater commercial income, enabling us to be one of the very few councils in the country to be able to avoid frontline cuts throughout my time as Leader other than the pandemic budget. Unfortunately, with the UK’s dire economic prospects right now, no matter what ingenuity we bring to the budget there’s simply no way of making up the difference of the huge real-terms cuts in the council’s income.

Into this mix comes a new problem, rising service pressures. While upper-tier authorities have been facing growing costs for some time in the course of adult social care, until now district-tier authorities such as Crawley have largely avoided extra pressure. No longer.

Over recent years, the utter failure of the government to make any meaningful progress in addressing the UK’s housing crisis, combined with district councils’ legal obligation to provide temporary accommodation to all those who qualify under the Housing Act (1984) has created an exponentially growing cost pressure over which councils have almost no control and for which they receive, in practice, no financial support.

Clearly, there is a human cost attached to every one of those residents stuck in temporary accommdation, and for the council there’s now an existential risk.

Right now, a greater proportion of Crawley’s net revenue budget is spent on temporary housing costs than almost any other council in the country. While this picture is a little distorted by the existence of unitary authorities meaning that in most places temporary housing costs are hidden amongst their much larger combined two-tier budget, when you are having to spend almost a third of your net revenue on temporary housing then the situation really is dire.

To be clear, this pressure comes from dealing with the town’s existing residents without housing. While we can question the wisdom of the Home Office’s unilateral decision to concentrate asylum hotels in one of the most expensive housing markets in the country, so far extremely few of those in the hotels qualify for temporary accommodation from the council. As a result, the impact of this has been largely in reducing the availability of local hotel places, resulting in council residents being located increasingly far from the town.

When I first joined the council in 2010, the need for temporary accommodation was so low that the Conservative-led council of the day were in the process of giving up its temporary housing. Yet, despite continuously building new temporary properties throughout my time as council leader, the growth has been exponential, almost doubling each year over recent years.

Frankly, there is nothing more that the council can do about this than it is already doing. There are only really two options to avoid district councils across the South East from growing bankrupt: fixing the UK’s housing market or fixing council budgets. That’s why in addition to passing a balanced budget last year, potentially its last, the council Declared a Housing Emergency.

After 14 years of consistently making both worse, there really is no reason to believe that the Conservatives are going to come up with a solution now.