Budget decision made amid financial disarray

Berwick Town Council has decided to raise its precept by £33,000 to cover an anticipated financial shortfall in the 2016/17 budget.

Thursday, 3rd March 2016, 07:20 am
Updated Saturday, 5th March 2016, 09:06 am
Berwick town hall

The contentious decision, agreed by eight votes to two, was made at an extraordinary meeting of the council in the town hall on Monday night.

A week earlier, councillors had rejected a call by Councillor Georgina Hill to stick to a decision taken last November to freeze the precept.

She has consistently argued that the council has sufficient money to ward off an increase in the precept, although she and others have found it impossible to put a precise figure on it.

Councillor Paul Hodgson, chairman of finance, admitted: “I am very much aware the financial position of this council is in absolute disarray.

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“It’s been extremely difficult to try and work out a budget based upon the figures we have and the previous administrative issues such as lack of financial controls but we have to move forward.”

He said money from the freemen, over £100,000 in the coming year, should not be used to cover the deficit.

“The deficit is in relation to running costs and revenue which is totally different to reserves,” he explained. “A council should not run itsbudget on reserves. It must use the precept to meet that expenditure.

“I’ve seen emails which suggest there is a massive reserve but there is not. You are being misled. The figure of £400,000 in the bank has to take into account money that has been sidelined for approved projects.”

He warned the council would be in breach of an act of parliament and local government regulations if it did not agree a budget and set a precept. He also advised that the decision to freeze the precept on the basis of a draft budget in November had been an error.

He tabled an amendment to raise the precept by £33,000 – just over £1 per household per month – rather than the £50,000 rise that was mooted.

“It’s a standstill budget,” he said. “It gives us some breathing space to move forward.”

Councillor Anne Forbes said the council should use its reserves to avoid an increase.

“You can’t ask the people of Berwick to pay a higher precept without at least letting them know what they are paying for,” she said. “We don’t have a plan and are taking money ‘just in case’.”