Council prepares for potential authorities bailout

East Sussex County Council is getting ready to herald outdoors accounting firepower because it confronts a mounting fiscal disaster.

The native authority is contemplating commissioning the Chartered Institute of Public Finance and Accountancy (CIPFA) to conduct a £40,000 overview as a part of its efforts to stabilise its monetary place — and presumably pave the way in which for a proper request for Distinctive Monetary Help (EFS) from central authorities.

The council faces a forecasted deficit of over £37 million in 2026/27, with officers warning that monetary dangers have grown considerably amid nationwide funding uncertainty and inflation-driven price pressures.

Councillor Nick Bennett, lead member for assets and local weather change, is because of resolve on the proposal on Tuesday. The choice would authorise a CIPFA-led assurance overview — a transfer that, whereas not but tied to any official request for EFS, alerts the seriousness of the state of affairs.

In a press release, the council clarified its rationale:

“CIPFA have been approached to undertake their assurance overview early, to supply the council with a report that can assist the work that the council could have to undertake with MHCLG.

If EFS proves to not be required, or an choice, the CIPFA overview will present exterior assurance as to the actions the council is taking to deal with the monetary challenges the council faces.”

The backdrop is a rising development of native authorities edging nearer to monetary tipping factors. With adjustments to central authorities grant formulation on the horizon and inflation placing sustained strain on social care and power budgets, councils like East Sussex are more and more exploring assist routes beforehand seen as a final resort.

If pursued, Distinctive Monetary Help would allow the council to borrow cash for day-to-day spending — a departure from customary apply.

Below regular guidelines, councils can solely borrow to fund long-term capital investments, similar to infrastructure or property. EFS, nevertheless, opens the door to borrowing for operational prices like salaries and companies — a sign that core features are below actual pressure.

The council’s personal report notes that ought to the Ministry of Housing, Communities and Native Authorities be approached formally for EFS, a CIPFA overview would possible be a mandatory prerequisite.

CIPFA, for its half, has indicated that any assurance overview would come with drawing up an enchancment plan in partnership with the authority. Council officers say the findings would additionally feed immediately into the annual budget-setting course of, probably influencing future coverage and funding choices.

For now, East Sussex hasn’t formally dedicated to requesting authorities assist. However with a £37m cliff edge on the horizon, the presence of CIPFA — and the £40k price ticket connected — suggests the council is bracing for powerful choices forward.