Recession Lead To Council Overspend

PUBLISHED: 10:53 25 June 2009 | UPDATED: 10:56 04 May 2010

ACCOUNTS released to the public this week revealed that the district council overspent its budget by more than £300 000, thanks largely to the recession. The figures, which were presented to councillors at a committee meeting on Tuesday evening (June 23),

ACCOUNTS released to the public this week revealed that the district council overspent its budget by more than £300'000, thanks largely to the recession.

The figures, which were presented to councillors at a committee meeting on Tuesday evening (June 23), showed a sharp fall in revenue gained from council tax while also showing a marked drop in interest earned from savings.

The problem of the drop in revenue was made somewhat worse when combined with a series of repair and upkeep bills on council properties which arose sooner than expected, forcing the council into a budget overspend of some £322'000.

The effects of the recession also spread to the value of council properties which took a hit of more than £700'000 thanks to the plunging in value of property markets.

In order to help cover the deficit, the council had to draw on its savings, with more than £500'000 being debited from the council's account, set aside as a contingency for emergency events.

Alex Colyer, executive director of finance at East Cambridgeshire District Council, said: "We have suffered a drop in income of around £1.5million and it was disappointing to see a big hit in the reserves as a result.

"We will of course be looking to build those reserves back up in the coming years but to do so through huge tax increases is not a policy we will be pursuing."

Chairman of the Policy and Resources Committee Fred Brown, said: "I think we have to bear in mind the effects of the unusually low interest rate on the accounts but hopefully we will see a positive change in that and the economy as a whole in the coming months."

Despite the sharp fall in the council's income, officers moved to assure councillors that they would not be seeking to recoup the money with cuts in public services, and would also not be cutting funding for any of its projects including the new leisure centre and the county park.

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