Setting Rutland County Council's budget has not been easy and there have been disagreements, the authority's cabinet member for finance has said. 

The council's cabinet members and senior officers were questioned by its scrutiny committee last night (Thursday, January 30), ahead of plans to increase council tax by 4.99 per cent and make savings as the cost and demand for services continues to grow. 

The full council will decide whether to agree to the proposed budget at a meeting on February 27. 

At the meeting, portfolio holder for finance Cllr Andrew Johnson (Lib Dem) said: "It has not been an easy budget. It has caused disagreements in terms of who gets what and how and we are in an evolving situation where funding over December reduced by £1.5m just as we were finalising. There have been a lot of challenges and yet we have produced a budget which is very logical and deals with all the priorities and deals with a balanced budget for the second year running." 

Councillor Andrew Johnson says it has been difficult agreeing the budget (Photo: Rutland County Council)

Leader of the Conservative Group Cllr Lucy Stephenson took issue with the term 'balanced budget' as the authority is planning to spend money from its reserves next year to balance its books. She also said that cabinet members needed to brief councillors on what cuts would be coming as it was not clear from the broad headlines of the proposed budget. 

She said: "There are going to be changes in terms of what our residents are receiving on the ground and so therefore individual portfolio holders really need to be able to brief members on what that looks like, so we are ready for those resident emails coming in." 

Independent Cllr Kevin Corby, who represents Ryhall and Casterton, asked whether the council considered itself to be 'financially sustainable'. He said his concern was that in the forecast for the next few years tens of millions needed to be saved. 

Independent Councillor Kevin Corby is concerned current plans aren't financially sustainale (Photo: LDRS)

Cllr Johnson responded: "Whether we are or not financially sustainable will partly depend on outside decisions. As it stands at the moment, the answer is, we should be, because we have produced a plan that demonstrates we are. Reserves are going down because we are using them for what we believe are the right reasons. 

"In terms of the fact that Rutland can control its own future, the answer is yes, but what we are finding is the funding envelope is changing all the time. So what we have to do is plan with what we have, rather than what we think we might have." 

The new Labour government has changed the funding formula and cut back grants to councils in rural areas. Rutland residents pay the highest amount of council tax anywhere in the country and the majority of the council's spend comes from local taxation. 

The council's chief finance officer Kirsty Nutton told the committee that 'the future is challenging and risky'. She said unlike education and health, local governments were not protected from funding cuts and she did not think a 'rosy picture for Rutland' lay ahead. 

Another problem at the door of many local authorities is an overspend on the schools budget. Currently, there is an over-ride which means councils do not have to pay it back, but that ends in March next year. It is predicted this could bankrupt some councils. 

Rutland's schools budget is estimated to be £7m overspent by March next year and the finance chief said if the money had to be paid back it would have to come out of reserves. This would leave around £2.6m in the council's reserves as it stands. 

She said: "In local government it feels that we are caught in the middle of two apartments, we have MHCLG [the ministry of housing, communities and local government] and the DFE, which the dedicated schools grant is within. By default, accounting wise it sits with us. We have heard this has been escalated to the treasury because it is so significant to the sector, for the risk. 

"But at this moment I don't know how the cash that has been spent [DSG], how we would fund it and would have to assume it is from reserves and that would decrease our reserves significantly, so it is a financial sustainability issue."  

Also making Rutland's budget setting difficult is the local government reorganisation, which could see it replaced with a Leicestershire-wide authority. 

Independent Cllr Oliver Hemsley asked whether the authority should be looking at spending its money in different ways to 'support Rutland' ahead of the changes. 

Chief executive Mark Andrews said: "We would not be advising members to start brand new schemes with reserves but equally we would not be advising you to stop schemes even if they will not get through to completion before transition. It is important in some cases to get schemes to a particular point so that they are viable. 

"There is a meeting of the core leadership team and cabinet to go through the work programme for the next couple of years and beyond to understand which ones are the priority delivery and which ones will need to be stopped because they will be a distraction through the process of local government reorganisation, because we need to ensure we get the best deal."