Fenland Council switches 'spare' £56k into Brexit fund ahead of possible no-deal as debate rages over whether council tax should be frozen for 2019
PUBLISHED: 13:35 11 February 2019
A surplus of £56,000 in one of its accounts was used by Fenland Council to support a newly created Brexit fund in the event of a no deal over leaving Europe.
Chief executive Paul Medd said the problem with Brexit was not knowing the impact it might have on the council but it would be “prudent to put aside reserves if they are required”.
The transaction was revealed at an overview and scrutiny committee considering whether Fenland should opt for a council tax rise and if so how much should it be asking its residents to pay.
Many councillors are pressing for a council tax freeze this year and a decision will be made this month; unusually the Tory controlled authority will allow its members a free vote.
A growing number of councillors believe the council has sufficient cash to maintain front line services without a local rise in council tax. Others argue that 1.9 per cent is necessary although most now agree that a 3 per cent rise, hinted at by finance director Kamal Mehta, is a non starter.
The ‘spare’ £56,000 was revealed as being a surplus from the business rates levy account with Mr Medd warning that extra money might be needed by the council to handle regulatory changes or procurement.
But Councillor Chris Boden, who chairs the scrutiny committee, argued that a no-deal Brexit could be beneficial to the council. Fenland Council would no longer have to deal with the EU’s framework and therefore costs could come down.
Cllr Boden broadened his argument for a council tax freeze by pointing out that in recent years Fenland had shown an overall surplus much greater than that forecast during budget time.
He quoted for example figures showing an estimated surplus for this year of £139,000 and queried if this was realistic when compared to previous years where it had averaged £900,000.
Finance portfolio holder Councillor Anne Hay said previously these surplus figures included one-off savings.
She warned that if members chose a council tax free this would create a deficit of £800,000 cumulatively over coming years.
However Councillor Steve Tierney said the evidence indicates the council should freeze council tax – and it is that argument now being played out within the Tory group.
The final decision will be taken on February 21.