Breckland council raids reserves to meet funding shortfall

Breckland's senior politicians have agreed to dip into council savings to bridge a funding gap created by government cuts.

The authority was bracing itself for an 8.9pc reduction in its revenue grant after announcements in the coalition's comprehensive spending review.

But chief executive Terry Huggins told cabinet members that the actual reduction for the coming year was closer to 10.5pc once precepts from other authorities on the district's council tax bills had been taken out of the equation.

A meeting on Tuesday also heard that, despite making �491,000 of efficiency savings in 2010/11, the reduction in Breckland's revenue grant would leave a funding gap of �156,000 in the coming year.

Council leader William Nunn was this week travelling to Westminster to lobby communities minister Baroness Hanham for a better deal before the revenue settlement is finally confirmed.

Meanwhile, Breckland's cabinet agreed to a draft budget that proposes using some of the council's �11m reserves to cover the immediate shortfall. But, with that shortfall due to rise to �1.3m in 2012/13, head of finance Mark Finch warned that a review would be needed to meet future cash constraints.

'We are left with a funding gap of �156,000 in the coming year, but I would suggest that we can find that with the reserves,' he said. 'That would be a one-off: it would not be prudent to do that after the first year as, clearly, our reserves would diminish. In 2012/13 it will require a more fundamental review of services under the new management team.'

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The new, shared management team with South Holland Council in Lincolnshire, agreed last month, is central to Breckland's efficiency drive.

Other councillors voiced concern that the council's previous good work in making savings and building its reserves could be undermined by the Tory/Liberal Democrat coalition government cuts.

Opposition Labour leader Robin Goreham said: 'All I can say is thank God for our reserves, and God help any local authority that does not have them. With all the work this council has done in terms of its prudential attitude to life and its pioneering work in the shared-services field, I would hate to see all that negated by this miserable and Scrooge-like government grant.'

Mr Nunn replied: 'That is exactly why I am going to London.'

Next year's budget calculations include a freeze in Breckland's share of the council tax charge, which is proposed to remain at �64.05 for a band D property. Breckland only sets its own proportion of the overall council tax bill, but it also collects sums set by Norfolk County Council, Norfolk Police Authority and town and parish councils in the area.