Brentwood Council facing crisis over huge funding gap

Brentwood Borough Council is facing significant financial difficulties with a funding gap set to rocket to an equivalent level of more than 20 per cent of its revenue expenditure.

By 2024/25, the borough council is set to see a net expenditure of £11.2 million with funding only accounting for £8.9 million.

The forecasted funding gap of £2.3 million by that point is £380,000 bigger than in 2023/24 and £898,000 bigger than in 2022/23.

Jacqueline Van Mellaerts, the council’s finance chief, said that the local authority is not at a position where a Section 114 notice – which effectively declares a council bankrupt – will be necessary, but conceded that it is not sustainable to rely on reserves long term.

“We have a minimum level of reserves,” she said.

“That is for significant situations like the pandemic and we will rebuild those reserves.

“It is not sustainable – but this is a snapshot in a point in time as we know it and decisions will be made as to fill that gap going forward.”

Brentwood Council’s balance reserves currently sit at £2.8 million but could technically be exhausted in three years if nothing is done to address the problem.

The council’s finances have been badly affected with a reduction of parking income, which has consistently stayed at 75 per cent of pre-pandemic levels since June 2021. Expectation is that parking income will remain at these levels as employers encourage its employees to work under hybrid models.

Councillor David Kendall (Lib Dem Pilgrims Hatch) said: “I personally think that looking at this report we should be very worried – all councillors should be very worried. Because on the face of it we are going bankrupt.

“If you looked at these figures you would have some serious questions.

“What we seem to have done is use the service reserves to manage the situation for this financial year but that can’t go on forever.

“People will ask how bad does it have to get before drastic changes happen.”

Cllr Chris Hossack, leader of the council, said: “The reason I am optimistic is we have had a health check in the way we approach this problem and the LGA are very satisfied in terms of the staff, the skills, expertise and the process we’re going through that we are doing the right thing.

“That’s in terms of the process and our actions to address the issue, actually addressing the numbers doesn’t belie the fact it remains a significant challenge.”

Piers Meyler

Local Democracy Reporter