Bromley Council to set aside more than £13m of extra cash into reserves
PUBLISHED: 07:00 01 June 2018
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More than £13 million of extra cash is going to be put into savings and investments as Bromley Council works to plug a £38M budget gap.
Bromley Council has delivered a balanced budget, which it is required to do by law, despite dwindling grants and cuts from central government.
At a special meeting last night, councillors agreed to set aside just over £13m of extra cash into reserves and investment funds.
Labour Cllr Ian Dunn criticised the plans, and said: “We need to look at what we are being asked to do, and that is to agree the five recommendations [set out in the report], which are to set aside just over £13M from our 2017/18 budget – this is on top of the £3.5m allocated for the investment fund in December.
“This isn’t money budgeted to be set aside in last year’s budget – it’s an underspend on the money we budget to provide services for the people. This may be brought out of the contingency – but it’s an underspend – in other words, we made a profit last year.
“The past four years the council has set aside just under £70m from underspends and put it into investment and growth funds. All the time this was happening we were cutting services to the vulnerable.
“I appreciate we get a return on these funds, £70m is a lot to set aside when we are cutting services in the name of austerity. ”
Bromley Council has achieved savings of £90m since 2010, as it prepares to plug its budget gap which is currently estimated to be £38.7m by 2022.
The budget gap is caused by social pressures including welfare reform and increasing homelessness, as well as big cuts to funding from central government.
To balance the budget, cash must be available as a buffer and deal with future financial issues.
Tory Cllr Simon Fawthrop said: “We know to be a sustainable council we need to plan for the long term. We know that when we do have a shortfall, we need to invest that so we can provide for residents in the long term.
“The worst thing this council we can do is to squander that opportunity by spending it.”
Despite Labour protests, councillors voted to earmark the cash, including £5m for financial planning and risk reserves and £2.3m for growth, into funds and reserves.
The Labour party members proposed using the cash for children’s centres, housing, and to be used for extra environmental cleaning – but they were accused of spending money “hand over fist” on too many different projects.
Cllr Nicholas Bennett said: “The reality is that when money is tight – and it’s been tight for ten years – we have to make sure it is spent where we can do the most help.
“For example, just to tell Labour- we have a real problem in the children’s area. Just last week we had an increase of 84 children, some only babies, being taken into care.
“That’s a budget you cannot plan for – you have to meet demand as it arises. That’s the reality – you have to keep a contingency fund for when problems arise. You cannot splash money around.”
Councils across the country are looking to raise cash through investments and cuts because of central government slashes to funding available for local authorities.