As a result of changes in the law, the council has a unique opportunity to use the money it had previously been required to set aside to meet its debt management expenses to make significant savings against its budget forecasts over the next few years.
Councillors at next week’s (22 May) annual meeting will be asked to agree to put the savings made in 2007-08, estimated at £239,000, into the council’s contingency fund and that all similar sums up to March 2013, estimated at a further £2.6 million, be also transferred to the contingency fund.
The changes allow the council to keep and manage this element of its own money rather than be directed by the government on how to use it. In Basildon’s case, this money would be put to one side and used only for any unfunded exceptional expenditure.
The decision will not affect the actual level of debt outstanding or the actual repayment of any loans due. The proposed approach has been declared acceptable by the council’s external auditors.
Councillor Phil Turner, cabinet member for resources, said: “Here is another example of the council’s creativity and prudent financial management paying dividends. We have followed the regulations to the letter and taken great care in developing this initiative.
“This has now allowed us to take advantage of changes in the rules and use the extra funds released to help protect the council in the current uncertain financial climate, and help us produce prudent, balanced and affordable budgets over the next few years. This is good news for our residents as it gives us greater financial stability and will therefore help avoid any sharp increases in council tax levels from year to year.”
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