Brighton and Hove is no longer the retirement haven it once was, according to the official figures.

The number of elderly people in the city is declining. So why is this happening and what does it mean?

The city council had a shock when the Government told it how much it should spend on services next year.

It got a rise, but a smaller one than the national average.

One reason was a fall in the number of elderly people, which bucks the national trend.

Office for National Statistics figures show the number of people aged 65 and over in the city in the middle of 2000 fell by 2.3 per cent in a year to 41,695, while nationally there was a slight increase.

The number of people aged between 65 and 84 in the city fell by 2.7 per cent. Nationally it was steady.

Those aged 85 and over declined by 0.5 per cent in the city, rising by 1.8 per cent nationally.

The proportion of elderly people claiming income support has dropped a little less than average.

Council chief finance officer Chris Taylor said: "This suggests the outward migration or death of elderly residents in Brighton and Hove is disproportionately among the better off."

The council believes there is evidence some of the more affluent elderly are moving to places such as Worthing and Eastbourne.

Some of them are taking advantage of the property boom in Brighton and Hove to create a nest egg and move into bungalows in quieter towns.

But this does not apply so much to the very old who are less likely to want to move.

More of them are staying put and they tend to be the ones who are costly for councils because of their infirmities.

Mr Taylor said full details would not be available until after the Government's final grant settlement next month.

But he added: "It is undoubtedly the case that these data changes have resulted in standard spending assessment losses of hundreds of thousands of pounds for Brighton and Hove.

"It is also the case that the structural population changes are part of an ongoing and increasing trend within the city.

"However it remains to be seen from the 2001 census, with its population data due to be published in the summer, whether the Office for National Statistics has got its figures right."

Councillor Gerry Kielty, lead councillor for adult services, said the figures were likely to be only a temporary blip.

He added that with people living longer, the council would have a greater burden of care in the years ahead.

This would be accentuated as people born in the baby boom at the end of the Second World War become pensioners.

He said: "In Brighton and Hove, unless we start to plan for this now, we are not going to be able to deliver services.

"The numbers may be dropping now but I am sure they will soon rise again."

He said one pressing problem for the council as it became closer to health services was the decline in the number of beds in private residential care.

Coun Kielty thought some of the active elderly were moving to Worthing and Eastbourne but this would not necessarily continue.

He added that there was also at present less of a trend nationally for elderly people to want to retire to the south coast. They would rather stay where they were.

Coun Kielty was worried about the drop in grant and said: "It doesn't reflect the level of care that is needed.

"We have to prepare ahead over a period of six years or more. It's not an immediate thing like mending roads."

Tory opposition leader Brian Oxley said the Government assessment covered the whole range of council services.

He added: "Even if the numbers of older people are reducing, the pressure on those services is not lessening. In fact it seems to be getting worse.

"Although the numbers may be declining, the problems are not going away and we need the resources to deal with that.

"I know the Government looks at the raw numbers but I cannot believe that one year's change can deliver such a bad settlement."

The poor assessment also means that Brighton and Hove has a less favourable grant settlement than the national average from the Government.

This means either council tax will rise steeply or big cuts will have to be made. It is likely that when the council fixes its budget next month, councillors will opt for a compromise between the two.