Kingston Council has been forced to commit an entire £5m reserve fund to plug holes in this year’s budget - and could still end up £700,000 in the red.
The council has taken a string of blows to its planned budget because of the recession, while the desperate need to build a new secondary school in north Kingston means it has to find up to £9m in three years, to fund the bid for Government money.
More than £2m of grants designed for “14 to 19 projects” has already been used to fund the council’s bid for £280m of Building Schools for the Future funds, while another £2m has been taken from the strategic investment reserve.
Low interest rates meant £700,000 was wiped from the council’s predicted income for the year, while its “worst case” scenarios for providing home and residential care for adults would see the budget outstripped by more than £1.6m.
The council also had to stump up hundreds of thousands of pounds to retrain staff in the wake of the Baby P tragedy, replace vandalised ticket machines in car parks and help Coombe Boys’ and Holy Cross secondary schools manage their own financial recoveries.
Another £370,000 has been drained from the coffers since the council evicted squatters from Raven’s Ait island in May, through the clean-up operation, security and marketing to sell off the island.
Council leader Councillor Derek Osbourne said there had been some “slippage” in the budget, but added the financial pressures the council was feeling were “entirely predictable” given the recession.
He said: “It absolutely highlights the pressures we are under across the whole range of budgets. There’s nothing new there.”
The council plans to claw back much of the deficit thanks to a recent court judgement, which has allowed it to pursue VAT refund claims from as far back as 1973.
More than £1.7m has already been recouped following the judgement, with two further cases in line to net the council another £584,000 if successful.
The authority’s One Council programme to permanently reduce its base expenditure was supposed to save more than £1.6m this year, although actual savings now look to be less than a quarter of that sum.
Kingston Council hopes the project will slash £8.5m in costs in three years, by reducing IT costs, grouping local services in “community hubs” and working better with partner organisations.
The council still needs to slash £12m from its budget in three years though, to avoid further increases in what is already the highest council tax in London.
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