After days of criticism that its cash reserves are too large, Bradford Council has now been warned they could very soon become too small.
And the Council’s finance chief has urged it to start planning more cuts this year to balance the books.
The authority has about £100 million of reserves, with about £30m of this not yet allocated for a specific purpose.
But fast-forward to three years’ time and it could be a very different story, its finance chief has warned.
The authority is planning to spend about £638,000 of unallocated reserves in 2014/15, £15.1m in 2015/16 and a further £7.76m in 2016-17, which would leave less than £7m in the bank.
In a report to the Council’s Executive, director of finance Stuart McKinnon-Evans said this level would be “inadequate” and the authority should aim to keep around £12m to £15m in the bank.
He warned a general reserve of about £7m represented just 1.9 per cent of the Council’s overall spend of £372m “in what will remain a highly turbulent environment, given the continuing difficult outlook for public finances”.
Mr McKinnon-Evans said it was “imperative” that the Council came up with further cuts to make sure its income matched its outgoings that year.
And he warned that because cuts took so long to come into force, they should start planning and consulting on these cuts this year.
Councillor David Green (Lab, Wibsey), leader of the Council, said: “He needs to be convinced in accountancy terms that the Council is going to be financially sustainable down the line.”
He said it highlighted the wider issue of what the Council would look like in years to come.
He said: “A £115m cut in three years is not going to be good for services and it’s not going to be good for the district.
“The reality is, it calls into question not just in Bradford but across the country the sustainability of local government in its current form.”
Coun Glen Miller, leader of the Conservative group, likened the Council’s projected budgets to an “out-of-control rollercoaster ride”.
He said they had only just been told that Labour were nearly doubling the unallocated reserves, from £17m to £30m, and now a report said in three years’ time the reserves would have fallen to “half of what is needed for the Council to be financially resilient”.
He said: “Overall it feels as if our political masters are haplessly riding the rollercoaster rather than carefully driving it, which worries me.”