Fears over county cash reserves

Coming at a time when the council is aiming to cut expenditure on services by 5m, there are concerns that any overspending in the future could wipe out its entire reserves.

A select committee meeting was told that the county council had already made hundreds of staff redundant, as part of a major review of services aimed at reducing its budget by 50m over the next two years.

On top of this, services have been asked to reduce spending by 5m in the current financial year, partly to counter risks of overspending in adults' and children's services.

No figures have yet been released by County Hall disclosing how much has been paid out, or how many staff have taken voluntary redundancy this year.

The committee heard that concerns about overspending were greater because its total revenue reserves, from which any overspending at the end of the year would have to be covered, were at a relatively low level.

Any overspending could take the reserves below the minimum level acceptable for the financial stability of the authority, or potentially could even wipe out the reserves completely.

A committee report also warned about the risks of 'severe reductions' in national public spending.

Cllr Irene Richards, chairman of the adults' services select committee, said 'loads of staff' had been lost in home care services.

Adults' services was the second biggest spender among county services, and was taking some of the 'biggest hits' in the service review.

"It impacts upon the greater part of the population of West Sussex," she added.

The policy and resources select committee was told that savings of 20m were planned for next year as a result of the service review, and 30m the year after.

Cllr Peter Jones said he was concerned about the problems the county council could face if these savings were delayed in coming through.

He added: "Are we wise to go forward with a 2.5 per cent increase on council tax at this stage rather than turning round and saying all our cupboards are bare - the redundancy cupboard is bare, and the revenue reserves are at an unhealthy low."

The possible knock-on effect of not achieving the savings should be considered.

Cllr Louise Goldsmith, cabinet member for finance and resources, said an ambitious target was being set, but this reflected what residents expected of them.

"The expectation of residents is good service and low council tax," she added.

Everyone was in a difficult economic situation, but they were trying to achieve the targets, and a 2.5 per cent tax increase.

"I don't have any issue in asking officers to meet challenging targets," she declared.

They were well on the way to achieving the 20m savings target for next year. And she believed additional savings would be found as the work went on.