County Hall to create new reserves after £10m underspend
NOTTS County Council has been slammed for creating new reserves in which to put millions of pounds of unspent money – while planning cuts to frontline services.
The authority underspent by £10.4m this financial year and is now looking to bank part of the remaining cash, despite calls for it to be used to maintain public services facing the axe.
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'It's BONKERS': Coun Jason Zadrozny
The council said it expected the under-spend to fall to £5m by the end of the financial year.
But it is planning to put more than £3.7m into reserves – some for things like "external experts" and "any large, unaffordable school deficits that may arise".
Unison and councillors say there is no clear picture why the savings needed to be made.
Details were revealed as the council said it needed to find £85m in the next three years to balance the books, putting 1,400 jobs in doubt. The under-spend is partly made up of:
£2.2m found through "higher than anticipated reserves", delays in capital spending, better than expected investment rates and reduced interest payments.
More than £1m due to staff not being replaced in several departments.
A decision to axe the "weeks of action" programme.
£300,000 from a VAT refund for libraries.
£100,000 from a refund on a mobile phone contract.
Unison regional officer Ravi Subramanian claimed that putting the money into reserves made the council's financial situation appear worse than it actually was.
He said: "We will be asking some serious questions about why they created additional reserves when there are such budget pressures."
Coun Glynn Gilfoyle, Labour spokesman for finance, said the council's reserves already appeared healthy at more than £24m. He said: "There is no clear picture of what they are trying to do. Staff will be asking why they are going to lose their jobs when they have such a large underspend."
And Labour leader Coun Alan Rhodes said: "I find absolutely astonishing that this is happening at this time.
"There are massive cutbacks in services and yet they are squirreling money away instead of spending it on vital services that people come to rely on."
Liberal Democrat leader Coun Jason Zadrozny said: "It seems bonkers to me.
"I am certain we don't need to make these cuts. They are talking about making £33m of cuts but have found £10m.
"They should be using that money to protect services."
But Councillor Reg Adair, cabinet member for finance and property at Notts County Council, said: "Currently, the expected under-spending at the end of the financial year next March is £5m.
"However, the previous administration had planned to use £3.7m of the council's reserve fund to support the 2009/10 budget, which is included in this £5m figure.
"Due to the current year's under-spending, the council will no longer need to use the £3.7m which will remain in our reserves.
"That leaves an overall under-spend of £1.3m, £800,000 of which will be carried forward to next year's budget to help protect services with the remainder being allocated for reserves.
"Like all local authorities, we need to maintain adequate reserves in difficult times in case of emergencies such as floods and pandemic outbreaks."
chris.birkle@nottinghameveningpost.co.uk
65 Comments
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by Javid, Beeston
Sunday, January 03 2010, 7:49PM
“Barry - Iraq was an oil war. Nothing else. It was wrong but we've not had an oil shortage as a result.”
by Javid, Beeston
Sunday, January 03 2010, 7:46PM
“"Cutts cannot, and to my knowledge has not ruled out, council tax rises in forthcoming years."
Yes she has. She's said no council tax rises for 3 years.
Mind you she also said she'd get rid of the Gedling bus plug and stop the tram but has had to go back on those.”
by Joan, Southwell
Sunday, January 03 2010, 1:28PM
“Do any insiders know what is happening? I hear rumours about a leadership issue with regard to the County Council but then nothing seems to materialise. Clearly the current disarray is not helping local chances in the forthcoming national election.”
by Barry, Stanz
Sunday, January 03 2010, 11:04AM
“Sensible, tax rises and public service cuts are inevitable as a result of the illegal war in Iraq which we will be paying for for decades and decades. Kay Cutts, who I am nop fan of, can rule out council tax increase this year but Ken Clarke was talking in terms of 4/5 year periods, Cutts cannot, and to my knowledge has not ruled out, council tax rises in forthcoming years.”
by Mr. Sensible, The Real World
Sunday, January 03 2010, 9:04AM
“Interesting this; Ken Clark goes on record in the Sunday Telegraph saying that it would be "folly" to rule out tax rises.
Guess that makes the Tories' County Hall pledge to freeze council tax, which they are now sticking to at all costs, to the detriment of our elderly, "folly" then?
And bearing in mind that the County Council is controled within Ken Clark's own constituency...”
by Mr. Sensible, The Real World
Saturday, January 02 2010, 10:07PM
“The sole reason why this council needs to make these cuts is nothing to do with increased service costs; it is to do with the council tax freeze and their ridiculous policy on the tram, which over 3 years will end up costing local taxpayers more than double the cost of funding its share of the tram in the first place.”
by Grenville Green, Nuthall
Saturday, January 02 2010, 6:08PM
“New leadership is talking about making £33m of cuts but have found £10m.
Labour leader Coun Alan Rhodes said: "I find absolutely astonishing that this is happening at this time.
Unison say there is no clear picture why the savings needed to be made.
Lets re-cap
Conservative council leader Kay Cutts needs to find £85m in the next three years to balance the books, putting 1,400 jobs in doubt. The under-spend is partly made up of:
£2.2m found through "higher than anticipated reserves", delays in capital spending, better than expected investment rates and reduced interest payments.
More than £1m due to staff not being replaced in several departments.
A decision to axe the "weeks of action" programme.
£300,000 from a VAT refund for libraries.
£100,000 from a refund on a mobile phone contract.
My observation
The above break down is proof conclusive, there are too many incompetent councillors and council officers,
As for more than £1m saving due to staff not being replaced in several departments.
Perhaps Cllr Rhodes would like to offer an explanation as to why there has been a two thirds increase in public sector jobs being created over £50, 000 when his group was in charge of the council.
And our new leader Kay Cutts, would like to let us know how many of the jobs that were created by the last administration, and not re-placed by this one, are enjoying a lucrative retirement deal with a last salary and index linked retirement pension.
Selling council assets off to the Private Sector at a give away price for a quick fix is not going to work in the long term.
Penny wise and pound foolish springs to mind.
Leave front line council staff alone Kay and look in County Hall for your savings.”
by Albert, In the Bunker
Friday, January 01 2010, 9:39PM
“JW,
Kaiser Cuts thinks it would be better spent at Farm Foods on their £1 meal deals - would save a few bob on the Meals on Wheels budget.
Seriously, and to put some perspective on this, if they really wanted to come over as caring for the old and vulnerable, that £3.7M would negate the need to increase Day Care charges, close Day Care centres, increase the cost of Meals on Wheels and Community Care charges, and still have £1M left to spare. And all without touching the £24M they still have in the reserves.
Like I said earlier, though, their dogma wouldn't allow a U-turn. Maggie didn't so Kaiser Cuts won't. She'd sooner spend it on consultants and PR-gurus.”
by JW, Nottingham
Friday, January 01 2010, 9:05PM
“My mate in the pub says they would be wise to bank it in Iceland.”
by Just pointing out, the Truth!
Friday, January 01 2010, 8:13PM
“Or, NuLabour losing control of immigration; doing minimal background checks on applicants to clear backlogs. Puts massive strain on health, housing, jobs, transport, etc.
The overwhelming majority of the British public are unhappy as a result, but NuLabour and their apologists blame it all on the BNP.”