Central Government requires that East Sussex provides certain key services as a legal obligation with very little discretion over who receives them.
These services are funded in the main by local taxes (council tax and business rates) and by central government grants which are determined annually.
Amid unprecedented rising demand for local services, which is likely to present us with a £55 million funding gap, East Sussex County Council has agreed open consultation with residents on where savings might be found in the future.
At a Cabinet meeting last week, the council's Leader, Conservative Cllr Keith Glazier, outlined the financial position. Councils are restricted in the amount they can raise directly from Council Tax and therefore reliant on central government funding.
The need for increased central funding is due, primarily, to a rise in demand for social care in East Sussex, by both adults and children. These are statutory services that the council is obliged to provide. An increase in the complexity of some cases and the costs of supply of certain services is also leading to soaring costs.
There has also been a dramatic increase, over the past three years, in home-to-school transport costs in the county.
East Sussex is not helped by having one of the highest percentages of older people in the country combined with one of the lowest business rates incomes.
The county is set to have one of the highest proportions of over 65-year-olds at 26% (against an England average of 18 per cent) and twice the national average of over-85-year-olds by 2027. Additionally, there are significant pockets of deprivation in the county. As a consequence, 75% of the budget is committed to social care leaving less for other services.
"Children’s services in the county are under huge pressure, with complex cases leading to a minority costing over £1 million per annum each", says Cllr Glazier. "We have both a moral and legal requirement (from central government) to provide such services which therefore must be funded from somewhere. The council's issue is, from where -- since the situation leaves an increasingly unfunded burden on the authority."
Cllr Glazier added: “Independent reviews and inspections confirm that we are a well-run authority with services that offer good value-for-money. We are doing all the right things and are clearly not alone in facing these challenges.”
OFSTED have regularly ranked Children’s and Looked-After-Children’s services as Good or Outstanding, while the LGA Peer Review Challenge last year said of the authority: “East Sussex does what it says it will do, and it does it well.”
The council's decision to undertake a services consultation is intended to inform options ahead of the local government settlement. "We cannot wait until the settlement figure is known before starting this", adds Cllr Glazier, "because by then (late-December) it would be too late for meaningful consultation should the government grant for East Sussex leave us with a shortfall in the budget."
The council leader emphasised that the consultation will give us the full information necessary to make decisions when setting next year’s budget. We must have plans in place to ensure that we can continue to protect the vulnerable. Details of the consultation, and how residents can respond, will be published shortly.
Key areas of budgetary concern:
The areas giving particular budgetary concern where costs and demand have risen markedly, and continue to rise, amid greater case complexities, are:
- Spending on looked-after-children continues to rise, average placement costs nearly doubled in 2023/24 vs. 2020/21, amid more complex cases, while demand increased by 8%
- Average weekly costs for Adult Community Care services rose by 40% in 2023/24 vs. 2020/21, while demand increased by 9% driven by our disproportionately aging population
- Spending on home-to-school transport is set to almost double to nearly £29 million in 2024/25 vs. 2020/21, driven by rising costs and increased demand
- East Sussex is currently required to provide home-to-school transport services daily to almost 5,000 children
- 1,355 children (a 43% rise in numbers vs. 2020/21) on Special Educational Needs Educational Health Care Packages currently account for 80% of the home-to-school transport bill
- Educational Health Care Packages (EHCP) covering 4,471 recipients cost £31.8 million in 2023/24; the number of recipients is estimated to approach 4,900 this current financial year.
- These EHCP needs are forecast to rise by a further 21% over the 3-year horizon from 2025/26, and by 36% over the 5-year horizon
- These increasing demands will take the authority increasingly into an unfunded position vs. central government support
The Cabinet member responsible for adult social care, Conservative Carl Maynard, says that East Sussex has a proven track record of engaging with service users in consultations and carefully considering all options available following engagement with the public. “By engaging in a consultation, we are able to properly consider all the options available and this is most certainly not a box-ticking exercise."
The pressures on the county’s finances come after years of prudent Conservative control which have seen savings of £140 million since 2010. Most of the increased costs are completely outside the county council’s direct control, making it hard to find further savings.
