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District council reserves plunge from £30m to £16m

Concerns have been raised by opposition councillors over South Kesteven District Council planning to run down council reserves to help fund its economic and social ambitions.

Draft budget proposals for the Conservative-run council show the council reserves will halve from just over £30 million last year to under £16 million in 2022.

Independent councillor Ashley Baxter said it meant the council will have “less money for a rainy day” and if this continued, the money would run out by 2027.

SKDC Logo_Stack_CMYK (6602395)
SKDC Logo_Stack_CMYK (6602395)

Labour group leader Phil Dilks said the figures showed the council was not replenishing reserves as some Conservative councillors had earlier claimed.

Grantham Labour councillor Charmaine Morgan also raised concerns over the level of risk in an uncertain financial environment. She cited Brexit, high street closures and the impact of Universal Credit as factors in this, adding she wanted an impact analysis on SKDC concerning Brexit.

In response, committee chairman Robert Reid said no one had a crystal ball, and while he shared Coun Morgan’s concerns, such uncertainties could not be planned for.

Instead, ruling Conservatives were keen to stress the revenue generation from their ‘investments’ funded by taking money from council reserves. They said money earned from this would be far greater than what they would receive from council money sitting in the bank “doing nothing”.

Plans include a £15 million capital investment programme to buy land for housing, with a similar amount spent on top to build them.

To help with this and other plans, £10 million would be taken from the regeneration reserve in 2019/20, aiming to repay this in around three years.

Council leader Matthew Lee accepted “we do live in uncertain times” but such spending would also fulfil social ambitions such as creating jobs and helping with the district’s “housing crisis”.

He assured members that whatever happens, SKDC has the money to empty the bins and to suggest otherwise was scaremongering.

Earlier, Coun Lee described the council as having gone through a period of financial transition.

He said: “The focus on the year ahead is to consolidate. We now have our strategy and structures in place to deliver our ambitions.”

Other parts of the budget include the council tax rising by £5 for a band D property.

Council tax revenue will increase from £7.146 million in 2018/19 to £13.173 million in 2020/21. Grants from central government are due to fall nine per cent from £6.425 million in 2018/19 to £5.862 million in 2019/20.

SKDC will have a net spend of £13.78 million in 2019/20 compared with £15.376 million in 2018/19 and £13.173 million in 2020/21.

Budget savings to fund growth will be found, including £900,000 from a ‘fundamental review’ and £200,000 of ‘tranformational savings’.

The budget also includes the freezing of car parking, car parking penalties, market rents, building control charges, green waste charges, fixed penalty charges, alcohol and gambling licences.

But inflation-based rises are proposed for charges covering the use of arts centres, planning and pre-planning charges set locally, outdoor recreation and cemeteries.

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