AN URGENT review of the finances of Gainsborough Town Council has revealed such serious over-spending that the authority is left with almost no money in reserves.
Councillors met last week to approve a revised budget and put a strategy in place to make various emergency savings.
This includes cutting staff hours, suspending community grants and reviewing every area of council spending to see where money can be clawed back.
The revelations emerged following scrutiny of the council’s accounts, with help from the finance team at West Lindsey District Council.
Councillors had become increasingly worried because they had not seen a full set of accounts for some time.
WLDC financial services manager Russell Stone gave a presentation to councillors on the current state of the books.
Although he said it was not clear how much the council had overspent, the dwindling of reserve funds highlights the seriousness of the situation, leaving less than £2,000 in contingency funds.
“The reserves the council has had have been depleted over the last four years or so through sustained overspending in that period to the tune of about £100,000,” he said.
He told councillors that immediate action was needed to prevent the authority sliding into a fifth year of overspending.
“The council should be holding reserves of around £50,000. That is not the level we have at the moment,” he said.
“At the start of the year it was about £8,000.”
“That raises concerns about what is going on around financial management.”
Mr Stone said weeks of work had already been done to present a balanced budget for the rest of the year.
But he stressed that any excess spending would alter the current position, and there is no contingency.
“If we get any unplanned spends like creditors we are not aware of or elections occurring, these figures will change,” he said.
“As a council you budgeted for one election and we have had three already which has cost an additional £10,000.”
A review will now look to remove non-essential council spending and find more ways of generating income.
Staffing alone costs the town council around £300,000 a year – by far the largest area of spending in its budget.
Mr Stone said the use of seasonal working and part time hours could create savings in this area.
And a review of how the town’s cemeteries are run will also cut costs.
Mr Stone revealed the council had been spending twice as much on its two cemeteries as it generates in income from them.
Amenities like Roses Sports Ground, Marshalls Sports Club and Richmond Park will also be reviewed.
And spending on grants, events, Christmas lights and the Town Centre Partnership might have to be reined in.
“There aren’t any quick fixes. You need to take action now,” warned Mr Stone.
“Hopefully in two or three year’s time we will be back on a sound footing.”
Coun Paul Key, who chairs the management and finance committee said: “Members have been very worried about the council budget over the last four years.”
“But previous administrations voted it in as a majority and so it went through.”
“It gets my goat when you read people on social networking sites pulling down the Lib Dem party, when it is not the Lib Dem party that was in control from 2008 – 2011.”
Town council chairman Lesley Rollings thanked WLDC for its support.
Especially for their governance and democratic advisor Sue Harrison who is acting clerk to the town council while clerk Paul Leeder is on sick leave.
Coun Rollings said: “We have all got to understand this budget and if we don’t we have got to ask.”
“It is very clear that our role over the next few years is going to be to take more robust control of our own finances.”
“There should not be an assumption that because there is money in a certain budget that that money is going to be spent.”
Tim Davies, who was mayor in 2007/8 and 2010/11 told the Standard he could not comment until he knew more detail.
Pearl Banyard, who was the 2008/9 mayor, said ‘everything was alright’ when she chaired the finance committee.
“The Lib Dems have had control of the budget for the last two years. They threw out the clerk’s budget in favour of their own.”