WOKINGHAM Borough Council’s reserves have dropped by more than £7 million as a result of the coronavirus pandemic – but the picture might be less bleak next month.
At a virtual meeting of the Executive, held on Thursday, September 24, opposition leader Cllr Lindsay Ferris asked for details of the council’s financial picture in the wake of the coronavirus pandemic.
The council has had to spend additional, unbudgeted sums as it helped maintain essential services while also running a community hub providing emergency help during the initial stages of the Covid-19 emergency.
Responding, Cllr John Kaiser said that council does not keep a running balance of its reserves throughout the year, but would produce forecasts “at year end to assist with future budget setting”.
He added: “Balances on reserves as at March 31, 2020 are on page 18 of our draft accounts, which are available on the Council’s website. These show a General Fund reserve of £12.43 million and Earmarked Reserves of £91.52 million.”
However, this does not include spending since then.
“The forecast General Fund reserve balance at the end of this financial year (March 31, 2021) as reported in Quarter One revenue monitoring to Executive in July was £5.01 million.
“The main reasons for the drop was approved carry forwards of £2.7 million and the impact of the Covid-19 pandemic.
“A revised estimate at Quarter 2 will be reported to Executive in October which should see an improved position expected due to additional funding from Government for Covid-19 costs and a better understanding of the financial pressures.
“The 2020/21 annual budget includes a net contribution to the Earmarked Reserves of £1.5 million.”
When pushed for more details, Cllr Kaiser told Cllr Ferris that “where we are, at the moment, we are in a good place compared to other councils” and pledged that the October update would give a clearer picture as what the reserve balance will look like.
This financial theme was picked up by fellow Lib Dem Cllr Sarah Kerr, who said: “There still appears to be a lack of clarity and commitment from the Government to long-term funding for Council Covid-related expenditures.
“Some of these vital activities that the Council has funded from its own resources are particularly important for less economically well-off members of our Borough.”
She wanted to know if it was possible to avoid any cuts “forced upon the Council by insufficient Government support?”
Responding, Cllr Kaiser said that the Government made available £4.3 billion to local authorities, with Wokingham receiving £8.3 million.
“In addition to this the Government have announced a variety of other measures, some offering financial support, such as the ‘75p in the £’ compensation for lost income, to passported grants to local businesses and care providers and also deferred payments to assist with cash flow issue,” he said.
However, he said that the council has had to pay up front for some support. “this will impact on the Council’s General Fund Balance (the money it holds to cover such crises); whereas every effort is being made by the Council’s officers to secure funding to cover these pressures and manage down costs, it is still anticipated that the Council’s general balances will be depleted at year end.
“Furthermore, the impact of Covid-19 does not fall neatly into one year and as such its impact will be felt strongly as we formulate our budgets for 2021/22 and beyond.”
He continued: “I can assure the Councillors and the residents of the Borough that we will continue to make our representations to Government for the funding we need in both this year and future years. In addition we will need to continue with our diligent measures of financial management.
“Officers are working to maintain a financially sustainable Council with a balanced budget whilst minimising the impact on residents. Inevitably, as with all Councils at this time, it is will mean having to make some difficult decisions.
“As stated previously, a second wave of the virus will only make matters worse. We are nowhere near out of the woods.
“If we do not control our costs, we will be broke and we will be no good to anybody.”
Responding, Cllr Kerr wanted to know if services would face increased costs.
Cllr Kaiser said that the council does make money through investements and council tax, which was limited to a percentage rise each year.
“We understand everybody will be in the same situation, and where possible we will make concessions,” he said.
