Thursday, 19 May 2011

Council Finances - Labour inherits financial woes

Back in 2002 Labour came to power for one year inheriting around £41 million of debts and a hidden report from city financial analysts Deloite Touche which said after 3 years of Conservative power, the Council would not be in a the position to pay the wages. Within weeks a taking power office Labour was forced to bring in a VR programme.

Labour got the Council back on track with a large emergency reduncancy programme and cuts across the board. Labour Councillors were unable to get on top fully of the poor financial management systems that we inherited.

In 2006 the Tories sold Council Housing for £32m which paid off some debts

Roll forward to 2011 and it's deja-vu. Capital expenditire election promises of £5.2million and only £2.6 available.

A revenue budget where spending is outstripping income by £300,000 and which the Conservatives balanced last year only by raiding reserves. A situation that cannot go on. £300,000 of savings that should have been found last year but now need to found this year.

Next years savings - starting from now -  are a huge £2.5million and Labour have been left no forward plan as to how this may be done. Clearly if you cannot balance this years budget, you will not have have begun balancing next years budget.

A one off paymet of £300,000 needs to go in reserve for this years budget and £300,000 of extra cuts added to the £2.5million next year.

The emergency Cabinet Action Fund has been been emptied as has the Big Society Fund in month one, April leaving 11 months with no contingency funding.

Given that the Government has funded the Council to the tune of over £100m in extra funding one can only wonder how the Conservatives created not one, but two financial messes.