Council Facing Funding Year-On-Year Funding Deficit

The Town Hall

The Council will need to implement significant savings if it is to balance its books over the coming years.

That’s the conclusion of a draft report from Peter Lawrence, the Council’s Director of Finance and Resources.

The Medium Term Financial Strategy, which looks at how the Council’s finances will shape up over the next five years, shows that they’ll need to find around £300,000 per year to avoid having to dip into reserves.

And things could get worse. That figure doesn’t take into account any wage increases for staff, which have been frozen for the past 3 years. A 3% pay increase for staff, which is still significantly less than the rate of inflation, could result in a deficit of over £450,000 per year.

That money will need to be found through savings in services or by raising council tax.

With the reserves standing at £1.86m, Councillor Fred Ticehurst said this meant by 2018, we could see the Council “disappearing down the plughole.”

Vice Chair of the Policy and Resources Committee, David Pearson said the Isles of Scilly hadn’t been hit by cuts in Government grants as badly as some mainland authorities, but he was keen for the Council’s finances to be sustainable.

And he said they would need to be able to cope with any unexpected expenses that could arise in the years head.

Councillor Richard McCarthy said he was interested to see in the report some timescales for the clearing the waste backlog at Moorwell.

The report states that the weighbridge, which is currently not functional, will be up and running within two years, meaning the Council can charge for trade waste.

A replacement incinerator will also be required by 2015, at a total cost of £10m.

There could also be a new desalination plant as well as plans to ‘future-proof’ the airport, including the possibility of placing it into the hands of a private operator.

Peter Lawrence stressed this “wasn’t a forecast of doom” but by understanding the challenges that lay ahead, it would be possible to plan accordingly.

“But that’s clearly going to become more of a challenge,” he said.

 



2 Responses to Council Facing Funding Year-On-Year Funding Deficit

  1. Todd Stevens April 30, 2012 at 9:48 pm

    Reverse the decision to hike the pay for top officers- that will help alleviate this problem somewhat.

  2. Cassandra April 30, 2012 at 9:54 am

    How predictable was that? Council Tax rise – don’t even go there.