Council plans to use its reserves in 2021

The impact of the pandemic means Chichester District Council will have to use more than £2million of its reserves to balance its budget in 2021/22.

It is not a position the council is used to being in but the costs of Covid are likely to drag on for a number of years.

At a cabinet meeting last Tuesday, members agreed that several key principles laid out in its five-year financial strategy should be approved by the full council.

High on that list was the need to return to a position where the books could be balanced without the need to rely on reserves – though it was estimated that as much as £8m would need to be used by 2025/26.

The biggest financial loss during the pandemic has been the income from fees and charges, such as car parking. Between 2021 and 2026, those losses could total as much as £5.2million, though potential savings targets of £6.6million have been set for the same period. The strategy also assumes a council tax rise of £5 per year – 3.4 per cent – though that has not yet been decided.

Last month the Government decided to impose a pay freeze on some public sector staff.

John Ward, director for corporate services, said that staff earning more than £24,000 per annum would not receive a pay rise, savings the council £110,000 each year for the next five years.

Like every council, Chichester faces tough times but the coffers are by no means empty. A report showed that, of the £49.9million in reserves as of April, some £13.88million was still available for new projects and investment in services up to 2025.

The money taken from the reserves since April included the £8million set aside in July to counter the cost of Covid.

The cabinet recommended that at least £4m should be kept in reserves at all times.

There were strong words from cabinet member Tony Dignum as he anticipated criticism for the financial decisions made by the council over the next few years.

He said: “We don’t want to hear people say we should freeze council tax or freeze parking charges – or any other fees and charges over which we have control – without offering compensating savings.

“Too often it’s the easy thing to say we shouldn’t have this particular increase – but no one offering that solution has any idea as to what spending they would cut to match that.”

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