The government has said there is “no possible chance” that Amber Valley Borough Council will go “bankrupt,” according to the authority’s leadership.
Last night (Wednesday, July 22) councillors discussed the council’s turbulent financial position in full for the first time since March, when its officers claimed the authority was on the precipice of a freeze on its finances and effective bankruptcy.
Amber Valley’s Labour leadership sought to distance themselves from these fears last night, claiming that neither they or the government feel there is a risk of a Section 114 notice being served (freezing spending on all but mandatory services).
Cllr Paul Lobley said that Labour had inherited a “ticking time bomb” from the previous Conservative administration but that with its budget saving proposals it could easily avoid its forecast deficit.
This is despite an expected third Covid-19 support cash windfall from government being half a million pounds short of what the authority expected.
The council’s current position, updated further shortly before last night’s meeting, will leave it £586,000 below the minimum legal level of reserves required by March 31, 2022.
This is a shortfall 13 times as large as it had said the week before, claiming to be £45,000 below the absolute minimum amount, itself a drastic improvement since March but with many “unknowns” such as government Covid support funding.
Cllr Lobley said plans for budget savings would “easily eliminate” the council’s forecast deficit.
Among the plans is an aim to scrap all discretionary grants for good causes – saving £260,000 – which Labour has already indicated it does not intend to follow through with.
A further plan for the council’s budget going forward will be presented in September.
Cllr Kevin Buttery said “this council is going bankrupt very quickly”.
He said: “This council must be accountable for its actions. To think the government will give the council a blank cheque every 12 months is deluded, which sums up Labour’s management of this council.
“The council’s true deficit continues to trundle along like tumbleweed in the wind.”
Cllr Chris Emmas-Williams, leader of the council, said all councils were receiving money from government to prop up their finances during the pandemic and that Amber Valley was not a special case.
He said the local government secretary Robert Jenrick was “backtracking” on his promises to “fully support” councils for added costs during the pandemic, leaving the council high and dry.
Cllr Emmas-Williams said the risk of a Section 114 notice was “scaremongering at its best” claiming “we have spoken to government and there is no possible chance of us being hit with a Section 114 notice”.
He said: “The government doesn’t have any concerns that a Section 114 notice will be triggered at this authority.”
The risk of a Section 114 notice was raised by the council’s executive director of resources, Sylvia Delahey, in March, when she also said: “This is an extremely serious position for the council both financially and reputationally.”
Cllr Emmas-Williams called Cllr Buttery a “complete joke” for raising the issue of the authority’s finances, claiming this also meant he was “criticising council officers working through difficult times” and that this was “disgraceful”.
Cllr John McCabe said more council services could be pushed into its joint venture business shared with Norfolk County Council, Amber Valley Norse, which recently took on the authority’s bin collection contract.
He said this could include ground maintenance and street cleaning and generate more income for the council.
The council has earmarked savings of £600,000 by March 2022 by doing this, which Cllr Gareth Gee claimed was “very ambitious”.
The council’s total budget reduction plan seeks to save £2.44 million with the last completion date being September 30, 2022.
It seeks to review all fees and charges for council services along with shared maintenance costs for council assets to save £440,000, also by March 2021.
This could include parking charge hikes and increased prices for pest control call outs. It could also increase fines it issues for dog fouling.
The council also aims to investigate the possibility of investing in building 180 properties for let or shared ownership to save £200,000 by March 2021.