Council faces finance setback due to cuts to its Central Government funding
Cuts in its central Government funding of “up to £24 million in the next few years” are facing Central Bedfordshire Council (CBC), a meeting heard.
Council leader and Independent Potton councillor Adam Zerny has vowed his administration will “take up this fight” with the Government, which he accused of being “comfortable to push local authorities to the brink of bankruptcy”.
A briefing was given to CBC councillors ahead of a full council meeting on September 25.
During his announcements, Zerny said: “All of you will be aware of the significant financial challenges this council will face in the months and years to come.
“We’re seemingly at odds with a Government which, while reticent to make difficult financial decisions on its own turf, is comfortable to push local authorities to the brink of bankruptcy.
“This council has been prudently run in recent years and made significant savings, as well as reduced its head count by 150 during the last 18 months.
“Apparently this isn’t enough for our Government. As you’ve heard earlier, we’ve been told by this Government to expect to see our financial settlement reduced by £24 million in the years to come.
“This administration won’t wait calmly for the Government to remove everything we’ve all worked for in these past few years. Neither will this administration sit idly while our hard-working residents have to pay more council tax and see the services they receive reduced.
“Neither will this administration allow our vulnerable elderly and young to be put at risk by the foolhardy financial decisions of Westminster politicians. We know already that many of you wish to work with us on this and take up this fight with the Government.
“I’ve written to the Government already highlighting our extreme concerns and will continue to do so. This fight is far from over.”
Presenting CBC’s treasury management report for 2024/25 Independent Aspley and Woburn councillor John Baker addressed the “prospective cuts”, saying: “The capital financing requirement, essentially the total theoretical debt of this council, will exceed £1bn by next year.
“We heard earlier the cost of borrowing, or servicing our capital, isn’t considered in the government’s calculations of how much money we should be provided with next year.
“The interest payable on the council’s debt is one of the fastest rising expenses in council revenue budget. The council’s debt financing cost will represent about ten per cent of our total general fund revenue spending this year.
“Just two years ago it was £16.5m. It’s £27m this year. During the next three years, the cost of servicing our debt will be £32m, £36m and then £40m. I asked officers how can we keep our debt levels at ten per cent.
“The three ways are reduce our capital programme by £20m, sell £49m of surplus assets or repay debt worth £40m. I don’t think the council can do any of those. It certainly can’t do the third,” added the executive member for finance councillor Baker.
“So the cost of our debt as a percentage of our revenue will increase. Officers are a little worried and think we need to get control of our debt. We’ll have to decide whether we can afford everything promised. It was just about possible to finance it before that news.”