Caution as Rother spending comes in £1.3m under budget

Rother District Council’s (RDC) final expenditure in 2015/16 was £1,199,753 against an approved budget £2,523,099 – a difference of £1,323,346.

The council also made £590,000 more than expected and the main reason for the under-spend is that more than £1m is due to be spent on buying the former Bexhill High School site, which was supposed to have gone through by now.

Any surplus made now would be put towards plugging the estimated £4.6m deficit the local authority faces over the next four years thanks to cuts to central government grants.

Service manager for finance and welfare Robin Vennard said the council needed a ‘war chest’ to guard against the foreseen appeals from business rates revaluations – another area of significant expected spending.

RDC leader Carl Maynard congratulated the authority’s ‘prudent’ financial management but warned it is ‘not out of the woods yet’.

“I want to highlight once again that whilst this seems like we’re cute, we can be mildly self-congratulatory in that a surplus has been achieved and that’s much better news than a deficit,” he said.

“This authority continues to be managed extremely prudently but we’re not out of the woods.

“Government grants to local authorities remain under-threat, they remain under review, and the £4m forecast deficit still looms large.

“And we need to be acutely aware of the issues around business rates both in terms of the revaluation and also in terms of the proposed changes that the government is going to bring forward in a way that local authorities are funded from central grants and the return of business rates to the local authority in which they are collected because we would still be in deficit.”

The ‘complex land issues’ with the former high school site, including site access, existing rights of access enjoyed by the Bexhill Academy and an existing tenant, are still to be resolved meaning £1,084,600 is waiting to be spent which is the main reason for the large under-spend, according to an officer’s report.

The report adds: “Depending on the outcome the land value may diminish if the site’s future development potential remains compromised.”

Other projects that came in less-than-expected included the IT essential maintenance programme, which cost £93,239 less – only £11,754 was spend of the £104,993 allocated as it was delayed. For the 2016/17 budget, £266,240 is marked down the for the maintenance project, which all comes from RDC’s reserves and is expected to be completed this term.

More than £59,000 was due to be splashed on ‘Egerton Park - EPIC’, but was not, and the total amount of disability facility grants handed out was £43,918 less than budgeted.

RDC’s community grants scheme’s £65,000 budget was not all spent as £22,857 was left to carry over for this year’s pot.

A replacement printing machine cost £34,500 instead of £49,000 – a saving of £14,500 – and £4,912 remained from the £10,000 allowance for the town hall roof refurbishments.

The calculated income for 2015/16 was as expected except for the extra £196,000 from government grants and £387,000 from business rates.

RDC’s grants cover additional duties that officers were not aware of when setting the budget, such as smoke and carbon monoxide alarm enforcement and changes to council tax administration.

Despite gaining £2,946,000 in business rates instead of £2,559,000, the net income was in deficit by £839,000, partly because of revaluation appeals, with Rother expected to pay £336,000.

The volatility of business rates means officers find it hard to estimate how much they expect the council to receive, making setting a budget even trickier.

“We haven’t got Rolls Royce, we haven’t got Nissan, we haven’t got Toyota, we haven’t got the big businesses in East Sussex or indeed in Rother,” Cllr Maynard said.

“But that’s why we’re doing all we can to bring in businesses as much as we possibly can to regenerate this area and to bring in new businesses to Rother.

“And that’s why there’s a huge amount of cross-working that’s going on to make that it’s a great place to live and work.

“But that needs to be set against the fact that generally this authority is punching above its weight in terms of the way that we successfully procure contracts but we also need to be cautious because sometimes within those contracts there can be curve balls and we need to make sure we have the financial resilience for the longer term.

“That means more joint-working, that means making sure that everything we do is subject to review because you can only spend the money you have, you can only spend capital once and the revenue budget continues as I say, to be subject, by scrutiny, so it should be, and subject to change.”

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