Worthing Borough Council not 'weeks away' from effective bankruptcy

At the joint overview and scrutiny committee meeting on Thursday, November 30, committee members went into a closed session to discuss the council’s revenue budget, with some raising concerns about transparency with public money.

The session involved discussions about savings, community organisation accounts and changes to fees and charges – which account for 40 per cent of the council’s revenue income.

Dan Humphreys (Con, Offington) told the Local Democracy Reporting Service (LDRS) after the closed session that it was ‘very clear’ the council had ‘no idea’ where savings were going to come from in time for the 2024-25 budget.

He said the council was likely ‘weeks away’ from having to issue a section 114 notice, putting it into effective bankruptcy.

Mr Humphreys said that £3million to £5million in savings described by Emma Taylor-Beal (Lab, Heene) to the LDRS as being ‘in the pipeline’ would most likely not be found for this budget.

According to council leader Beccy Cooper (Lab, Marine), the council ‘narrowly’ avoided bankruptcy in the 2022-23 budget after a £2.1million overspend.

Council reserves were used to fund the budget shortfall, reducing them to £300,000 – which is now being used to fund a £1.54million forecast overspend in the 2023-24 budget. This was down from £1.83million in September, according to an announcement made in November by the council.

Dr Cooper told the LDRS: “We are not in a position where we are going to issue a section 114 – this financial year or next financial year. For our current budget, we are looking at savings that have been made in the in-year budget.”

She said the council was balancing its budget with ‘no resilience’, and that 14 years of national government cuts and previous Tory administrations had contributed to an ‘ongoing’ budget problem.

Cabinet Member for Resources John Turley (Lab, Gaisford) said decisions were still being made on budget changes and the closed session was to avoid sending ‘mixed messages’ to the public.

He said the proposed budget changes were developed before the chancellor’s autumn statement, adding: “We’re hoping that the government settlement will be better than last year, then some of the fees could be dropped.”

Mr Turley noted that, if issued, a section 114 would have to come from the council’s chief financial officer and not the Labour administration itself.

Hillary Schan (Lab, Tarring) said the consultation of third parties involved in the report on whether they wanted transparency on their accounts had not been sought, saying it could cause them ‘undue stress’.

She said: “People who we’re discussing about have not been [consulted] with on this. There are things here that could seriously distress people, [who] would not want to be hearing about it first from the press.”

Five members of the committee voted to oppose the closed session, with Mr Humphreys saying never in his time at the council had they held a budget meeting behind closed doors.

Talking about past budget meetings held in public he said: “We have been doing that every year since I have been on this council. We should not be going into closed sessions unless we absolutely have to, I did not see anything here that is new – we should be doing it before the press and public.

He also said it ‘beggars belief’ that the scrutiny committee was being given changes to scrutinise that were not yet fully decided.

Heather Mercer (Con, Salvington) said it had been an ‘extraordinary’ year and as such was not necessarily comparable with previous years when the committee had needed to discuss budgetary changes and savings.

Elizabeth Sparkes (Con, Offington) also opposed the motion for a closed meeting, saying it was in the interest of transparency to have it open to the public and press.

She said: “As this is public money, there is nothing in this proposal that should not be discussed in a public forum – we need to be transparent.”