At last Wednesday’s meeting of its Policy and Resources committee, the Town Council received the Medium Term Financial Plan, which was presented by Finance Manager Dan Austin.

Town Council finances are, actually, in a very healthy condition. The Council has recently achieved, yet again, an ‘unqualified audit opinion’ (i.e. the auditors found no issues with the Council’s accounts).

Even though council tax has been frozen for the last four years, the Council ended the year with very healthy balances just shy of £1 million.  Outstanding loans stand at only £223,150, and Council assets are worth £5.5 million. That does not mean, however, that the Town Council does not face huge difficulties in the next four years.

Last year, the government changed the way it settles Council Tax Welfare Benefit (CTWB) – which accounts for £350,000 of the Council’s £1.3 million precept.

For the first time in its history, the Town Council is now reliant upon a grant which the County Council has promised (but is not required) to pass on.  Moreover, the government has cut and cut again the amount of grant it is giving.

Last year the government made a 10% cut in the grant which (with the loss also of the double taxation grant) made a £100,000+ hole in the Council’s income. The Chancellor’s Spending Review last month cut funding by a further 10%, which is expected to reduce the Council’s income by another £100,000 over the next four years.

More cuts may be coming, and there is no guarantee that the County Council will continue to pass on the grant – by the worst-possible scenario, Council revenue could be cut by a disastrous 25% per year.

The Medium Term Financial Plan, therefore, presents a dark picture of the Council’s finances in the next four years.  Basically, even if there are no further setbacks, the reality is this:

• We can expect balances steadily to fall, since we will no longer be able to replenish unavoidable capital expenditure from income.

• We are going to have to raise council tax to maintain services.

• If the government puts a cap on increases in council tax, or if there are further cuts in CTWB funding, then the Council may have to consider cutting services as well.                      J.D. Clare