Derby City Council’s Budget Reserves have been dramatically depleted over the last few years under the Tory administration from £35.9m to £18.3m with a further significant reduction this year.
This subject was covered in a previous Derby News article in December 2020 “Council’s Financial reserves plummeting!”
The Cabinet meeting last week reported that the Council was expecting a further loss of ~ £12m in 2021/22. Sombre reports were made by Simon Riley ( Chief Finance Officer) and Cllr Nicola Roulstone (Cabinet Member – Finance).
Cllr Roustone attempted to explain this erosion. She didn’t blame Covid; the Council was generously compensated by the UK Government in 20/21 giving rise to a small surplus of £2m. She took the opportunity to repeat her previous false assertion that the main reason was due to the A52 overspend write-off.
The A52 overspend was covered by borrowing £24.699m and not from reserves. This was decided at the November 2019 Cabinet meeting attended by Roulstone.
This decision was brought to Cabinet in November 2019 by Paul Simpson who was then the Chief Finance Officer (Strategic Director of Corporate Resources) and is now the Chief Executive.
This was done deliberately to take advantage of low interest rate borrowing and to protect reserves.
Cllr Roulstone’s incorrect explanation of the plummeting reserves speaks volumes about her grasp of the Council’s Finances. It seems that she hadn’t recognised the consequence of significant in-year deficits on reserves.
At the Cabinet meeting last week, Paul Simpson and Simon Riley were present ; they could have been consulted to answer Cllr Shanker’s request to clarify Roulstone’s incorrect statement. The Leader of the Council, Cllr Poulter ( father of Cllr Roulstone) chose not to ask the Senior Officers to respond in the meeting – perhaps his recollection of the November 2019 meeting was better than his daughter’s and was keen to “save her face”.
If the City Council is going to be led out of this financial crisis it needs someone as Cabinet member for Finance who is competent and can actually remember borrowing £25m!
Categories: Derby City Council