At Eastbourne Borough Council’s Cabinet meeting of 15 July, Meads Conservative councillor Robert Smart welcomed a modest reduction in the Council’s external debt following recent asset sales but warned that Eastbourne residents still face a very large debt burden under the Liberal Democrat administration.
Cllr Smart referred to the Council’s latest Annual Treasury Management Report, which confirms that the sale of the David Lloyd Centre and the Hampden Park Retail Estate, at a book loss of over £7 million, has provided funds to repay part of Eastbourne’s long term Government borrowing at low interest rates. He described this as a sensible use of sale proceeds, while stressing that it does not amount to a long term strategy for fixing the Council’s wider financial problems.
He reminded Cabinet that three years ago Liberal Democrat Cabinet members approved a report which conveniently ignored £47 million of short term debt and misled Government advisers into reporting that it had been repaid. The error was serious enough that Government later had to issue a corrected report with the borrowing classified as “temporary borrowing”.
Cllr Smart warned that this “temporary borrowing” has now ballooned to £70 million, with interest rates close to 6 per cent and no repayment plan except to continue rolling the debt over. He highlighted that, even after the recent asset disposals, Eastbourne Borough Council’s total external debt still stands at around £151 million. On the Council’s own figures, that level of debt is equivalent to over £3,400 for each of Eastbourne’s 44,000 households.
Looking ahead to proposed changes to local government structures in East Sussex, Cllr Smart noted that current plans would see Eastbourne combined with neighbouring boroughs and districts in a new council. He cautioned that Eastbourne’s significantly higher debt could easily be folded into a single headline figure, conveniently hiding the past mismanagement of Eastbourne Borough Council’s finances and making it harder for residents to see how much of the problem stems from decisions taken here in Eastbourne.
Cllr Smart said: “Using the proceeds from selling off valuable assets to reduce our debt is better than doing nothing, but it does not fix the underlying problem. Eastbourne still owes around £151 million, and that represents a very substantial debt burden for every household in our town. Residents have a right to clear, accurate information about how we reached this position, how much it is costing them each year, and what the plan is to get us back on a sustainable footing. Any future reorganisation of local government must not be used as a way to conveniently hide the past mismanagement of Eastbourne Borough Council’s finances under this Liberal Democrat administration.”
