Brent Council warns on its financial situation: 'Without intervention, we will enter freefall'...'currently we are living on borrowed time'

We need to mobilise again: Anti-Austerity March July 2015 (Photo: Daily Mirror)

 

In a paper written before the General Election result was known Brent Cabinet are warned at their meeting tomorrow that the financial outlook for the Council is dire. They are facing cuts of £16m in 2025-26 and £30m in 2027-28:

 

Without intervention, we will enter freefall, heading towards the ground, with no easy way to pull back. Plainly, this will mean the functions that this council will be able to perform will be changed irreversibly, allowing for only the most vital services to remain.

 

Unfortunately, despite warnings from London Councils LINK and councils of every political hue across the country the incoming Starmer administration is sticking to its self-imposed fiscal rules and an improvement in the financing of local government and reform of the regressive council tax do not appear to be on the cards. The papers before the Cabinet repeat warnings made by the Brent finance chief last year LINK with increased intensity. This is from the Lead Cabinet Minister, Mili Patel's,  Foreword to tomorrow' report LINK:

 

While our financial monitoring is robust and an area of pride to this council, the picture that these reports paint is much more sobering. If central government is the body entrusted to preserve the health and condition of the nation, it is local government that is left to deliver it. Since 2010, Brent Council has made at least £210m of cuts and the impact continues to be felt by everyone that lives and works in this borough. In the same period, our core funding from central government has decreased by 78%.

 

We have made it clear at each Council Tax setting budget meeting, this has meant that the funding burden for Brent Council has been derived principally from Council Tax, Business Rates and Fees and Charges. In other words – local Brent residents.

 

In this period, the number of council employees has also reduced by at least 50%, shifting more work onto fewer people. As a council, we have innovated, we have identified efficiencies and we’ve continued to generate more income than ever before. These measures alone are not enough in the long-term though, but for now they are enough to keep this council on borrowed time.

 

In this financial year (25/26) officers and members will be asked to identify a staggering £16m in cuts if this council is to continue standing still as we are today. There is no doubt, these cuts will be challenging for residents and for officers and members alike.

 

It is therefore unconscionable to consider that things could still get worse. If things remain the same, the best estimate for 27/28 is that we will need to find in the region of £30m in savings.

 

Without intervention, we will enter freefall, heading towards the ground, with no easy way to pull back. Plainly, this will mean the functions that this council will be able to perform will be changed irreversibly, allowing for only the most vital services to remain.

 

Sadly, we are not alone in this position. There were more section 114 notices in 2023 than in the 30 years before 2018, with a survey from the Local Government Association showing that almost one in five councils “think it is very or fairly likely they will need to issue a section 114 notice this year or next due to a lack of funding.

 

Local authorities like Brent have become the government’s emergency provider of last resort, delivering more services than ever, patching over political paralysis; from adult social care reform to the housing crisis; it is local government left picking up the price.

 

Residents are rightly angry – as the compact between council and citizen creaks more with every year. Residents rightly expect that by paying into the system that they should see a positive dividend. It is far harder to explain to residents that they are paying not just for their bins; but for looked after children, for whom the council is morally and legally obliged to support.

 

Under the Homelessness Reduction Act, we are also compelled to support those at threat of losing their home. The common thread between the Medium Term Financial Strategy (MTFS) our Q1 report and the Financial Outturn is the enormous pressure our Housing teams are under.

 

Over 150 families per week are presenting at the Civic Centre as homeless, and this report sets out a further £10m overspend on Temporary Accommodation. The housing crisis did not begin in the council – and until there is fundamental change; things will only get worse before they get better.

 

We have many housing schemes that remain shovel ready, but without an increase in subsidy, the borrowing required means the numbers simply don’t stack up, even over the multiplier of decades. In the meantime, i4B and our New Council Homes Programme remain our only shot, but with over 30k households registered on the housing wait list, it will take a generation to put right.

 

We also continue to be subjected to macro-economic factors outside of our control. The challenges facing any incoming government will be stark – from a public sector in managed decline; to the ongoing conflicts in the Middle East and Ukraine, and the climate crisis which will continue to alter our way of life forever.

 

Compared to our European counterparts, councils in the UK have significantly fewer powers over local spending and taxation. It can perhaps be of little surprise that over the past 15 years the average British household has become £8,800 poorer than its equivalent in five comparable countries, according to research prepared by the Resolution Foundation. Sluggish growth and a “toxic combination” of poor productivity and a failure to narrow the divide between rich and poor has resulted in a widening prosperity gap with France, Germany, Australia, Canada and the Netherlands, leaving us struggling to compete internationally.

 

Without a wholesale reset, our hands remain tied, and the status-quo will prevail. We should never forget, Council Tax is based on values that are now more than thirty years out of date, and the rate structure is so heavily regressive that Buckingham Palace pays less council tax than a 3-bed semi- detached home in Blackpool. That is the reality we exist within in.

 

At time of dispatch, we will not know who will form the next government. If we are to avoid more reports like the following, something has to give. Given the opportunity, Brent Council stands ready to rebuild and renew our public services. Until then, we will use our voice wherever we can to fight for the reform’s we desperately need. For now, officers and members will continue working hand in hand to protect our residents – breathing life into the services we offer and the change we can make today.

 

A 'wholesale reset' appears unlikely at present.