District Council Going BROKE.

Promoted by R. Davidson on behalf of WHCA, Maynard House, The Common, Hatfield, Herts. AL10 0NF
The incoming Conservative administration were shocked to find out the finances of Welwyn Hatfield Council were in a worse state than we thought. The problem is Labour hasn't wanted to modernise Council services and were increase the number of services rather than cutting back. Labour were taking some £3 million from reserves and using some £2 million in interest from reserves to support Labours expenditure.

This causes two problems.
1. The reserves run out, where are we going find the money to continue those services.
2. No reserves = No interest. That is another £2 million of expenditure to find.

The Council raises around £5 million in Council Tax. No reserves and No interest will mean tax hike of 100% on the District Council Tax take from residents FOR NO BETTER SERVICES.
The information below has been copied from the Best Value Performance Plan 2002/03. Anything in ( ) EastWard.org.uk has added.
Financial Statement

This section details the Councils financial position by giving an overview of the Councils approach to financial management and showing the estimated revenue and capital expenditure for 2001/2002 and the budget for 2002/2003.

Finance Overview

The Council s objective is to maintain a financial strategy that is sustainable.

The budget for 2002/2003 reported to the Council meeting on 27 February 2002 was not prudent. The outgoing administration (Labour) approved a budget growth that effectively took £3 million from the revenue balance. This is not sustainable.
The incoming administration (Conservative) aim to have a sustainable budget over the next five years and has set a strategic review in place to achieve that objective.

The Council has revenue balances brought forward from 2001/2002 of £8.8 million, confirmed to the Cabinet on 25 June 2002 from the outturn figures. The capital balances are £38 million, however £11 million of these balances are unusable receipts. The unusable receipts cannot be used to fund the Council s capital programme. On 27 February 2002 the (Labour run) Council set out a three - year capital programme that would be difficult to fund within the current level of usable receipts. The Council is therefore reviewing the programme.

There is also continued concern for the Housing Revenue Account, which is currently running at an annual deficit. It is illegal to allow the account to reach an overall deficit. On current projections this would occur in 2004/2005. The controls placed on us by the Government make it difficult to increase income significantly. Indeed, the Government subsidy reduces annually and so expenditure will have to be reduced and kept under constant review.

The CIPFA best value accounting code of practice requires us to show financial information in a particular format that enables like for like comparison across authorities. This format defines the grouping of services and differs from our current committee structure. The revenue budgets for 2002/2003 are shown in the new format. The net operating expenditure is financed from government grant, council tax receipts and use of balances.