A senior officer at Sefton Council said he had “no idea” what the government’s energy announcement means for the borough’s finances.
The comments came following the government’s recent announcement of a package of support for non domestic organisations in the light of huge energy price rises looming next week.
At a meeting of Sefton Council’s overview and scrutiny committee held tonight (September 22) at Bootle Town Hall, councillors discussed a nearly £8m budget black hole which has left the council with “no flexibility left” to deal with further financial pressures.
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A report produced into the financial situation at Sefton council revealed an extra £4.3m to be spent on energy costs.
Liberal democrat councillor Simon Shaw asked whether the government’s announcement would impact positively on the council’s budget. The answer, from executive director Stephan Van Arendsen was: “We don’t know is the honest answer.”
Mr Arendsen said: “The government announced yesterday a package of support to non domestic sectors which includes charities, public sector organisations and so forth but we need to work through the detail of that.
“The council gets its gas and electricity off two providers. We tendered for those a number of years ago and have been on long term contracts with providers who buy energy in advance. So that’s the best practice and really positive.
“We’ve been asking them over the last 24 hours what info they have been given by government and how to work through that to understand the principle of what that scheme will be. The providers support major government departments and councils, we don’t know the principles that will be applied.”
He added: “It is positive that the government has introduced the scheme but what it means for Sefton at the moment we just don’t know.”
As well as the extra £4.3m spending on energy costs, £3m more is set to be spent on children's social care placements and nearly £1m to transport children out of the borough to learn, the report depicted a council budget stretched to its limit.
Other pressures are coming from operational in-house services and a higher payroll bill, according to the report which totals £7.74m.
Drawing from reserves and emergency funds to plug the gap, the report warned that any further shortfalls would have to come from existing budgets as there is “no flexibility left” in the council’s coffers.
The report detailed a remedial action plan to draw down nearly £2m of emergency funding and raise nearly £3m by reducing the council’s general fund balances to 5% with a further £3m being pulled from earmarked reserves to make up the deficit.
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