THE council has warned of "difficult decisions" amid "incredible pressures" on council finances and an estimated budget black hole of £18 million.

Council tax for Brighton and Hove residents is set to increase again by 2.99 per cent, including a one per cent increase to cover adult social care, after the council's proposed budget estimated the scale of the budget shortfall for 2022/23 at over £18 million.

The report, to be presented to councillors later this month, said that the scale is such that "achieving the necessary savings next financial year, following on from many years of multi-million-pound savings packages, is very challenging and potentially destabilising."

It also warned of the threat of government intervention, as well as an impact on service delivery, should the council fail to effectively manage its finances. Pressures from increased costs and demands over the next year were estimated to cost the council £12.1 million, with expected short-term pandemic pressures totalling £2.2 million.

Among the "pressure points" the council faces listed in the document include an "increasing reliance on income from fees and charges, particularly parking and permit revenues," an impact on the rented income on the council's commercial property portfolio - which is geared toward the retail sector, and increased pay costs from inflationary pressures, including the cost of resolving the recent industrial dispute in the city.

The document also states the council's finances are still being impacted by the pandemic, including significantly higher numbers of council tax reduction claimants - which remain 1,000 higher than pre-pandemic levels.

Spending proposals for more than 700 city services and funding for key projects have been outlined in the budget, including £22,000 towards investment on the eastern seafront and the beautification of Madeira Terrace, £50,000 towards expanding the council's anti-graffiti pilot and funding additional clean-ups and more than £250,000 to refurbish the Victoria Fountain.

Councillor Tom Druitt, joint finance lead, said developing proposals for this year's budget has been "extremely challenging", particularly after more than a decade of cuts in funding to local government.

He said: "Since 2010, the government has reduced the annual funding available to the council by over £100 million, and against a backdrop of increasing demand for council services and all the responsibilities of dealing with the coronavirus pandemic, the situation is more difficult than ever before.

"Our priorities are the protection of services for the most vulnerable, supporting the city's recovery from the pandemic, and investing for the future.

"The council's budget for 2021-22 was £825.6 million, but with savings of around £16 million needed to ensure the council remains on a strong footing for the next financial year and can meet inflationary pressures and growing demands, there will be difficult decisions to make."

The proposed budget package will be presented to the council on February 24, where it will be put to all councillors for consideration to set the budget for the year ahead.

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