I’ve had lots of questions about Wokingham Borough Council’s Finances and I would like to repeat a few of them here. The First question is, if the Council does not have enough money, why does it not sell some of its property or shops? Most of the property WBC has, was purchased by the previous Conservative administration using massive loans from the Treasury. We are not allowed to sell assets to pay for revenue items, such as staff or services and even if we could sell these properties, it would only serve to pay back the loans.
Most of these kinds of loans would not be allowed now, due to the problems experienced by other Councils such as Slough and Woking who borrowed more than they could afford to pay back. As it is, our property investments are paying back a small income in rents – so it would not be sensible to sell these properties anyway.
The good news is, over 96% of Wokingham Borough Council’s retail property has a tenant in them who is paying rent. Peach Place is positively blooming with success and is a popular place for concerts and other events in town and while Elms Field has taken longer to fill, it has certainly picked up more interest recently.
The second question I get is, where does the money come from for the loans that we make to other Councils? Well, WBC get money from various sources, such as government grants and funding from developers. This money is ringfenced for particular projects and infrastructure such as building roads and schools. We cannot spend this money on anything else, but it does not arrive all at once and we cannot start the projects until we have all the money.
However, we can lend this money to another council in a short term loan and we get more interest on this than we would from just leaving it in a bank account. Council’s are government backed and cannot go bankrupt, so lending to another Council is safer than leaving it in a High St bank and it is common practice across all councils. That interest is money we can use for anything we like, including running services for our residents.
Wokingham Borough Council is not in imminent danger, but it is having to squeeze £17.6M in revenue, next year, from its existing services – this is more than 10% of its overall budget. We are being hammered by inflation and rising demand for our services and are eating our way through our reserves, just to carry on as we are. These reserves were put aside to protect us from emergency situations and to protect the taxpayer from fluctuations in costs and central government has only offered us a tiny increase in our grants from last year which no way makes allowances for the costs of running our services. While, the government has announced some extra funding, they have not yet told us how much it will be and it is likely to be a small drop in the ocean compared with what we really need.
All Councils are struggling, especially where they have to support Children and vulnerable Adults and we cannot carry on being starved of funding like this for too much longer, but I know we are not alone in this situation and we are doing everything we can to generate income and reduce our spending – this we must do in order to protect the most vulnerable in our society.
Imogen Shepherd-DuBey - Executive member for Finance