Warwick district council ‘in enviable position’ despite effects of recession

THE EFFECTS of the recession were evident in Warwick district throughout the last financial year, according to chief financial officer Mike Snow.

In his foreword for Warwick District Council’s statement of accounts for 2011-2012, the council officer said that the current economic climate has continued to impact negatively on the district’s economy, communities and the authority itself with income from some of its services, such as car parking, and investment returns still being depressed.

Demand has also increased for some council services, notably housing and council tax benefit.

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Mr Snow has said: “With the effects of the recession continuing to impact upon local government, the public sector and the whole economy it is important that the council maintains adequate reserves.

“Despite these challenges, the council finished the year in a more favourable position than expected, having been able to allocate £500,000 more to reserves than planned for when the budget was set last year.

“This reflects the many savings that were made throughout the year.

“The council has been in the enviable position of not having to cut services.”

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Spending on capital projects totalled £11.5 million with £9.2 million being on housing schemes and £2.3 million on other projects.

At the end of March the authority held £1.5 million in its general fund balance and £21.2 million in earmarked reserves of which £8.6 million is in respect of the housing revenue account.

The housing revenue account subsidy has now been replaced by a self-financing system.

The previous process involved the council having to pay up to £8 million per year to the Government by way of negative subsidy.

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The council has now bought its way out of this system by making a one-off payment of £136.2 million which involved taking out this debt with the Public Works Loan Board.

Being self financing will allow the authority more freedom to manage its housing stock and reinvest in new homes for the first time in many years.

Concerns continue over limited public sector finances with the council’s revenue support grant being reduced by 34 per cent to £5.9 million by 2015.

But as part of its fit for the future programme, the council has plans to ensure its financial position is sustainable in the future by reducing costs.

Mr Snow said: “The council is in a strong financial position thanks to its level of reserves.

“This is enabling it to make the savings necessary without reducing services.”

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