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  • Writer's pictureCllr Chris Sadler

Elmbridge Council finances

The last few years have seen a huge increase in the attention being paid to Local Authority finances. 4 Local Authorities – London Borough of Croydon, Thurrock Council, Slough Borough Council and Woking Borough Council have issued Section 114 Notices effectively declaring bankruptcy and an inability to pay all but essential bills. In addition there will be increases in Council Tax well above “referendum” levels – Croydon’s up by 15% and Thurrock and Slough up by 10%.

At least another six authorities – Guildford, Hastings, Kent County Council, Middlesborough, Kirklees and Derby, have issued warnings that unless they can make material savings in their Budgets, then they too may need to take the same course of action.

Could this happen in Elmbridge? Probably not, for a variety of good reasons.

1) Like many other authorities, we have made investments in commercial property over the last 10 years that will generate a positive income stream for the long term. However, we have been cautious in building a diversified portfolio and have limited purchases to properties within the Borough unlike other authorities who have bought properties at random right across the country. Discussion on purchases has been cross-party, recognising the long term nature of the portfolio.

2) A significant part of the portfolio, in excess of 40%, is funded from internal reserves rather than borrowing. Borrowings amounted to £52.4m as at 31st March, all lent by the Public Works Loan Board, long term, typically for 50 years, and fixed rate. Last year net income from the portfolio amounted to nearly £5million, over 10% of the funding needed to cover expenditure on services.

3) As far as is possible within the need for commercial confidentiality, we have been open about investments made and have produced an annual review on the performance of the portfolio, and current expectations for the portfolio in the near future. More broadly, we ensure that our Draft Accounts are available for inspection within the due date – this year 31st May, even though our auditors are unlikely to to be able to review them until much later in the year.

4) Day to day expenditures have been closely managed enabling us to set aside funds to reserves. Earmarked (revenue) reserves rose by £6 million in 2022/23.

5) We have invested in making our properties resilient against possible further increases in the price of energy, and more economic in the longer term through adding solar panels or improving their insulation.

6) We have continued to support our residents and local businesses who have been disadvantaged by the pandemic and higher rates of inflation, for example our Youth Hub joint venture with Brookland College and Runnymede Borough Council which has helped over 200 young people find employment or training opportunities.

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