Brighton & Hove, 17 September 2025 — Brighton & Hove City Council is facing a projected £40 million shortfall in its budget for the next financial year. The warning comes from Deputy Leader and finance portfolio-holder Jacob Taylor during a recent council meeting. The gap is attributed to multiple pressures — many driven by inflation, increasing demand for services, and rising costs.
Factors Fueling the Budget Shortfall
Several interlocking causes have led to the projected deficit:
- Inflation — The rising cost of goods and services has eroded council budgets. The council estimates that inflation alone will add nearly £10 million in additional costs. These include utility bills, supply contracts, and wages.
- Temporary Housing Needs — Brighton & Hove is seeing growing demand for emergency and temporary housing. Costs associated with temporary placements are significantly higher, especially when “spot-booked” housing (properties arranged at short notice) is used. The council had to block-book about 400 places nightly and spot book an additional 200 in some periods. The excess demand and higher unit costs are projected to contribute around £12 million to the gap.
- Social Care Pressures — Both adult and children’s social care are major contributors. Adult social care is expected to cost about £9 million more, while children’s services face an extra £4.7 million in expenses. Increased care needs, rising staffing and provider costs, and higher expectations post-pandemic have played a role.
- Home-to-School Transport — The cost of transporting children to and from school is rising, particularly for those in outlying parts of the city. Home to school transport has been forecast to add about £1.2 million to council costs.
- Higher Pay Awards & External Provider Costs — Pay settlements for council staff have exceeded earlier budget assumptions. On top of that, services delivered by external providers (such as contractors for housing, maintenance, social care) are seeing inflated costs, further squeezing the council’s financial plans.
Current Year Strains and Overspend Risks
Brighton & Hove City Council also warned of a current year overspend of approximately £15.5 million, exceeding earlier forecasts. That risk is linked to some of the same cost pressures now forecast for the following year.
Temporary housing demand and spot housing arrangements are a big part of this overspend: because demand exceeded expectations, “spot-bookings” (which are often more expensive) have far outpaced earlier projections. Additionally, recruitment pressures (paying more to retain or attract staff), inflation in supplier and contractor charges, as well as revenue shortfalls in income streams, have all combined to make savings targets harder to hit.
Local Government Facing Tough Choices
The council has begun considering which services it may reduce or reshape to close the gap. Possible measures include reviewing contract arrangements with external providers, renegotiating temporary housing contracts, seeking efficiencies in social care delivery, increasing fees or charges where legally possible, and prioritizing essential services.
Deputy Leader Jacob Taylor emphasized that cutting services is a last resort. He stressed the importance of protecting vulnerable residents and maintaining standards in adult and children’s social care, transport for disadvantaged children, and homelessness support.
Wider Context: Councils Under Pressure
Brighton & Hove is not alone. Local authorities across England are facing severe financial constraints: rising costs for social care, housing, utilities, and transport are combining with inflationary cost pressures, while central funding has not kept pace. Many councils warn of cuts or reduced services unless additional funding is secured from central government.
Councils are also dealing with increased demand. Economic uncertainty, rising housing costs, and nationwide cost-of-living pressures have pushed more residents to require temporary housing, social services, and council support than was originally budgeted.
Impact and Implications
For residents, the budget gap signals potential disruptions in local services. Some residents worry about reduced public transport options, delays or cuts in leisure services, possible fee increases, or scaling back of non-statutory services. Vulnerable populations — the elderly, those needing social care, or families in housing distress — may feel the effects most sharply.
Council staff may face pressure as well; pay award demands, hiring challenges and extra workload to maintain services under constrained budgets are likely outcomes. External providers may also see renegotiation or payment delays.
What’s Being Done and What’s Next
Brighton & Hove Council has begun to explore options to narrow the shortfall:
- Efficiency and savings in contracts with providers
- Reviewing temporary housing arrangements and reducing reliance on costlier spot-bookings
- Lobbying for more funding from central government
- Prioritisation of services so that essential ones — health, social care, homelessness support — are protected first
The council’s budget is to be set in early 2026, meaning decisions need to be made in the intervening months. The leadership has underlined that setting realistic assumptions (for inflation, pay awards, demand for services) is critical, given uncertainties in the national economy.
Conclusions
With inflation still running high, demand for social and housing services increasing, and costs rising faster than budgets can adjust, Brighton & Hove City Council confronts a formidable challenge. The projected £40 million deficit for the next year is a stark reminder that councils are operating under tight margins and volatile conditions.
For residents, local government leaders, and service users alike, this moment calls for difficult choices — greater efficiency, realistic forecasting, and possibly for central government to step in with additional support. As the council decisions unfold, many will be watching closely to see how the city balances fiscal responsibility with maintaining essential services for those who depend on them.
