How much do we all really know about the finances at Eastbourne Borough Council?
Here is a recent copy of the correspondence from Councillor Robert Smart, Leader of the Conservative Group of Eastbourne Borough Councillors, to the editor of Bournefreelive.
Letter to the Editor, Bournefreelive
"Sir,
Eastbourne Borough Council's (“EBC”) debt mountain
You say that “it has been well documented this week that Eastbourne Borough Council is in a financial crisis” but appear not to want to debate the historical causes.
Eastbourne Borough Council's external debt now stands at £191 million including ever-increasing short-term debt of £80 million, and the attached graph shows its development over the past decade.
A year ago at Full Council I called for Cabinet resignations for approving a Treasury Management Report showing external debt of“only” £114 million, conveniently ignoring £46 million of additional short-term debt and its increase during the year.
Short-term debt has now increased by a further £34 million over 2 years. This short-term debt has no repayment plan but is just continually rolled over. Some longterm debt has been repaid with this debt, akin to repaying a mortgage on a credit card.
The latest tranche of short term debt has an interest rate of 6.5% pa with a total annual interest bill for EBC of over £5 million. The perilous financial position of EBC has been building over the last decade, but the homelessness issue is simply a recent contributory factor which may be “the straw that breaks the camel's back.”
We have supported EBC in its lobbying of Government for more assistance with providing emergency accommodation for the homeless but the shortfall is less than the annual interest bill and a fraction of the £34 million increase in short-term debt.
It is therefore no surprise that EBC is subject to yet another financial review by CIPFA (The Chartered Institute of Public Finance and Accountancy.) Given the critical importance of debt within EBC's financial position, CIPFA have confirmed that they were previously misled over the total level of debt. We await publication of the report on its most recent review.
EBC has failed to produce a cash flow projection for scrutiny despite our request: As I asked at Cabinet last month will EBC be solvent in early 2025?
Yours sincerely, Councillor Robert Smart, Leader of the Conservative Group of Eastbourne Borough Councillors"
