Minutes:
“Recently there have been references in both the press and on social media about the level of borrowing at Ashfield District Council.
These messages deliberately ‘paint one side of the story’ and unfairly damage the reputation of the Council, causing unnecessary unrest for our staff and residents.
For this reason, this joint message from myself and the Council’s Chief Finance Officer is to reassure our staff and residents that the Council’s finances are robust and in excellent order. We have a healthy financial position, and our future financial sustainability is not something anyone should be concerned about. Unlike other Councils we are not having to withdraw from our reserves to balance our budget.
Last Thursday evening our 2022/23 Accounts were signed off with an ‘Unqualified Audit Opinion’ which means that the Council’s accounts have been prepared correctly and give a true and fair view. The independent External Auditors report also confirms that Ashfield District Council is a ‘Going Concern’ and that they are satisfied that we have proper arrangements in place for securing economy, efficiency and effectiveness – the test used for determining Value for Money. This is something we consistently achieve year on year.
This is the most recent independent financial assessment of the Council assessment and aligns with the independent Financial Health Check undertaken by the Local Government Association (LGA) in December 2021 which confirmed that: ‘The Council is well managed financially and has consistently spent within its budget’.
Specifically in respect of Ashfield’s debt, our borrowing actually decreased by £6.5m (6.6%) from the end of March 2022 to the end of March 2023, and our level of borrowing is in line with other comparable Nottinghamshire District and Borough Councils of Bassetlaw, Broxtowe, and Newark and Sherwood.
Some of our borrowing is due to the investment properties we own. What is not stated in the press articles is that this borrowing, after paying interest costs, brings in a hugely significant amount of income for the Council to fund local services. In 2024/2025 this net income will bring in £3 million pounds. Without the investment properties we would not have this income, which would mean we would have to cut discretionary and non-essential services by £3 million pounds. This would be a huge loss to our residents. So, we are in an incredibly fortunate position, thanks to the forward-thinking approach of this Council investing, in a business-like manner, to make income which helps to run our services.
It is concerning that in recent months a number of Councils have found themselves issuing a Section 114 notice – essentially declaring themselves bankrupt – being forced to limit service provision to the statutory minimum. Furthermore, it is concerning that an even larger number of Councils have indicated that they too are on the brink of issuing a Section 114 notice.
Please be assured that Ashfield is not one of the Councils who need to consider issuing a Section 114 notice. This Council’s financial position is strong, as evidenced by 2 completely independent organisations – the Local Government Association (LGA) and Mazars, our External Auditors, as previously mentioned.
For years the Government has said it will introduce Local Government Funding Reform which we expect will result in some of our funding, (predominantly the growth in business rates which we have enjoyed in recent years due to our success of attracting businesses into the District) being diverted elsewhere to meet the huge national increase in costs of Social Care and Education, services which District Councils do not provide. To date this Funding Reform has not been implemented. It is now expected that 2026 will be the earliest this will happen. We know that Funding Reform is going to happen, and we have been responsibly planning for it. We have healthy reserves which we can draw on to cushion the loss of funding in the short term, but we do need to be on the front foot and forward plan for when the funding reductions are implemented.
This forward planning includes our:
· Ongoing Service Review Programme (including consideration of alternative delivery models)
· Identification of efficiencies from investment in our Digital Services Transformation Programme
· Delivery of procurement efficiencies
· Review of our Fees and Charges and the identification of additional income generation opportunities
· Rationalisation of our assets, where it is appropriate to do so; and Use of reserves in the short term to smooth the loss of funding as we identify and implement savings into the medium and longer term.
We will also look forward to the new opportunities, both financial and non-financial, which will come from the newly formed East Midlands Combined Authority.
We hope the above provides some reassurance regarding the Council’s healthy financial position; we are not one of those Councils who risk having to issue a Section 114 Notice. Our financial position is positive, unlike other local Councils we are not having to withdraw from reserves to balance our budget.
As a Council, we don’t want to settle for just providing statutory services, so alongside our recently approved ambitious Corporate Plan, we have secured over £100m of external funding to transform the District. This will allow us to create physical change by building even more social housing, investing in Community Safety initiatives, and regenerating our town centres, as well as a cultural shift by investing in skills development, creating employment, and inspiring the next generation. We have a vision of creating a great Ashfield, an Ashfield everyone can be proud of, and the future really is looking bright for residents, businesses, visitors, and this Council.”