Concerns raised over falling level of reserves at Rother District Council

Bexhill Town Hall SUS-160623-112311001
Bexhill Town Hall SUS-160623-112311001

Rother councillors have raised concerns about the amount of money being drawn from reserves to balance the 2019/20 budget.

The concerns were raised at a meeting of Rother District Council’s overview and scrutiny committee on Monday (January 28), where councillors discussed the budget plans for the coming financial year.

According to council papers, the authority intends to draw £5m from reserves in 2019/20 and predicts its earmarked reserves could drop from £16.2m (as of March 2018) to £6.2m over the next five years.

Cllr Susan Prochak (Lib Dem, Salehurst) said: “We have raided our reserves every year to actually support the Government’s policy on reducing the grant. This is never going to be replaced unless we do something pretty drastic.

“Now we’re going to use £5m of reserves this year to support the council tax. That is a big percentage.

“I would like to know what the implications are in dropping from £10m to £5m in terms of our reserves, because it seems to me this is a trajectory that is not sustainable.

“Do have a policy where we actually say ‘no more’ or do we just hold our hands up and say ‘what a shame.’”

In response, the council’s head of finance Robin Vennard said: “Generally reserves are there in order to support what the council wishes to do. Part of it would be supporting ongoing spend where it can and part of it is to support specific things the council wants to do.

“I’ve always set the minimum level for the authority at around £5m, in terms of us managing the normal day-to-day and picking up those things that are unexpected.

“As part of the overall financial strategy, we are looking at how we generate more income and make savings through efficiencies. That is what we need to do more of.”  

Mr Vennard also said more half of the money expected to be taken from reserves in 2019/20 (£2.6m) had already been earmarked for specific capital projects with the remaining £2.4m to be used to support day-to-day services.

However council papers warn that additional money may need to be drawn from reserves if council savings and income generation do not reach the £600,000 figure expected.

The savings come alongside an expected increase in council spending of £1.8m in 2019/20. Most of this increase is due to the additional cost of the new joint waste contract with Biffa, council papers say.  

The council’s spokesman for finance Cllr Lord Ampthill said: “I’ve been reflecting during the discussion on why we are in the state we are in. Of course the 2010 coalition government decided that they were in a hole and decided, amongst other things, to bear down on local government.

“They removed in the ensuing period all sorts of grants and subsidies for council services that we used to rely on. We have had to be more enterprising.

“Our reserves, over five years, are predicted to go down to about £5m but I suspect you will manage to achieve savings and investments which will work for us in the meantime to make that a figure which will be well beaten.

“We have made some [property investments] now and I’m sure we will be reporting to members before long what the income streams are going to be and how that will help to reduce this.”