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Borough council's £10.5m 'rainy day' fund expected to be gone within three years

A stark warning has been issued that West Norfolk Council's £10.5million "rainy day" fund could be gone within three years.

The General Fund Reserve will be regularly raided to support the provision of essential frontline services in an increasingly difficult financial climate.

The balance stands at just under £10.5million, thanks to a £2.7m boost last year. However, it is expected to take a £4,657,349 hit this year, borough councillors have been advised.

Borough Council of King's Lynn and West Norfolk(6623377)
Borough Council of King's Lynn and West Norfolk(6623377)

And only taking into account £5.8m of annual pension payments anticipated over the medium term, the fund will be in deficit by £1.8m by the end of the 2023/24 financial year.

The coronavirus pandemic has badly hit the borough council's income streams while also enforcing extra expenditure to support vulnerable residents.

The total impact has been put at £5.5m - the bulk being £3m in loss of car parking income. And the total could rise by £1m to support Alive West Norfolk, which runs the district's culture and leisure venues on behalf of the borough council.

King's Court. Borough Council of King's Lynn & West Norfolk.. (34663047)
King's Court. Borough Council of King's Lynn & West Norfolk.. (34663047)

A small bit of good news was that officers have identified £231,000 of savings this year, largely from properties being closed and fewer expenses from employees' different ways of working.

The poor overall outlook was highlighted to cabinet members in a report on the revised revenue budgets.

Michelle Drewery, associate director resources, said: "As a result of Covid, we do have new and increased demands on the council, which has resulted in significant additional expenditure.

"At the same time we have also had an impact on our income streams and. in particular, our car park income has suffered greatly."

Cash (28158482)
Cash (28158482)

Ms Drewery warned that a second wave of the virus or a local outbreak would have a "significant" further strain.

Her report also said: "There will also be financial pressures in future years arising from COVID-19 as a result of reduced business rates and council tax. Moreover, a deep national recession will not only reduce income but also increase demand for valued public services which will be required in response to local residents and businesses affected."

West Norfolk Council deputy leader Cllr Elizabeth Nockolds (42381448)
West Norfolk Council deputy leader Cllr Elizabeth Nockolds (42381448)

Council deputy leader Cllr Elizabeth Nockolds, who chaired the meeting, said the pandemic and the council's response for vulnerable residents was still very important.

She added: "We have a reserve for a rainy day and obviously the pandemic is one of those such things.

"The budget is showing the impact on our frontline services we must protect, we must protect our community, we must protect our staff,

"Everyone has to be protected and we do need to take care of everyone using our budgets."

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