Rutland County Council finishes year with balanced budget amid fears of funding cut in Government settlement

Rutland County Council finished off the most recent financial year with a balanced budget, but the authority’s leadership has warned that as a rural council it could face funding cuts.

The financial out-turn for the council for the most financial 2024/25 was signed off by the cabinet, with the authority managing to come in on budget.

But the authority, which is led by Coun Gale Waller (Lib Dem), is concerned that the Labour government could reduce the amount it gives to the authority in grants, with money diverted to more deprived rural areas.

Chancellor Rachel Reeves has announced her spending review this afternoon, with the finer details of how this will impact local authorities due to become clear in the coming days after council finance officers have crunched the numbers.

Speaking at the meeting held yesterday (June 10) at the council offices in Oakham, Coun Waller said: “The funding settlement is unlikely to be good news for Rutland. It is unlikely to be particularly good news for local government, which makes it worse for local authorities because the government’s intention is to shift funding towards areas of concentrated deprivation, which of course is urban areas. So I think we have to be very careful about that in terms of our financial thinking. This out-turn is going to give us a bit of a buffer.”

The authority spent just £148,000 over the £52m it had originally budgeted when it set the plan back in February 2024.

Cabinet member Andrew Johnson (Lib Dem) said this was due to good financial management and said the authority was one of only a handful in the county which had finalised its accounts by the original deadline of May 31. (The government has given councils some extra time until end of June to get their financial books finalised).

Coun Johnson said there were ‘three key reasons’ for the good result.

He said: “Good treasury management. We received greater investment returns on cash balances due to careful selections of investments and the effects of the reduction in borrowing of some £2.6m in the year will reap the rewards in lower interest payments in 205/26.

“Good wastage management. A significant reduction in the tonnage of waste and better recycling rates following behavioural changes from residents which in turn reduced disposal fees and increased recycling income.

"Good knowledge of the system with a myriad of grants available. This provided additional income from gov grants, planning app fees despite the risks in reduction of key government grants.

"This has ensured that the council has been able to use this additional income rather than drawing down investment from reserves.”

The authority has also held a number of vacancies which has saved the authority at least £500,000 in 12 months.

He said, however, the year was not all ‘plain sailing’ as there were extra costs in home to school transport for children with special educational needs and the cost of care packages for adults was also more than had been predicted. He said the ‘largest single risk’ to the authority was the overspend in the schools budget, which was just under £6m at the end of March. Currently the government allows councils to carry this deficit forward to the next financial year - but this is due to end next March, with authorities expected to pay it back.

He said: “We do not know of any plans the government has to help us weather these significant pressures for providing support to send children.”

Fellow cabinet member Rosemary Powell (Ind) asked Coun Johnson to explain how the authority operates its reserves, as she had been asked by many residents about it. Reserves are cash the authority keeps aside to cover unexpected costs or future projects.

The authority currently has £21m held in reserves.

Coun Johnson said: “Residents may think £21m is an excessive number but they need to put that in context with a council operating at over £80m in terms of the money it moves over the year and the risks arising. Our financial director has a role in ensuring these are appropriate and has to certify the level of reserves being appropriate. We are lucky in that we do have sufficient reserves and we are not asking for any help to cover our expenditure. I hope if residents look at the plans we have got over the period through to March 2028, they will realise that we are planning that the reserves position reduces. What we are doing is utilising the reserves in a way that will benefit residents.”

According to the report, the authority is planning to spend £18m of its reserves by 2028. The authority could, by then, be in its final year if local government reorganisation goes ahead as planned.