Our hands are tied on £25m pot – Lancaster City Council

�391,000 will be spent on regenerating Bold Street in the West End of Morecambe.
�391,000 will be spent on regenerating Bold Street in the West End of Morecambe.
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Lancaster City Council has £25m in the bank but will only spend a fraction on protecting vital services.

The Visitor can reveal that only £2.4m of the money held in council accounts – known as reserves – can be used because the rest is earmarked for council housing or other specific projects.

The figures were revealed as the Lancaster and Morecambe district budget for 2014/15 was announced and showed a 6.4% year-on-year reduction in spending.

The council budget was set at 18.54m plus another £10.17m ‘capital expenditure’.

This includes £2.3m on housing regeneration schemes in the West End, £356,000 on sprucing up the Euston Road precinct/Market Street area in Morecambe town centre, and £1.18m on the ‘Square Routes’ scheme designed to improve Lancaster city centre.

Venues such as The Platform and Salt Ayre will remain open, despite initial fears they were under threat as the council faced an early battle to balance its books.

Coun Eileen Blamire, leader of the council, was bullish about the finished budget.

She said: “Lancaster City Council is still the only district council in Lancashire that has not cut council tax relief.

“We have not closed any of our buildings or taken away any grants to organisations that we value.

“We have even (kept) our support for Police Community Support Officers (PCSOs) that our communities value so much.

“We should be proud to have achieved these advantages and we owe a huge debt of gratitude to our officers and to our workforce who have done a wonderful job .”

But £2.5m in spending cuts are still forecast over the next two years at least.

“(In future years) we will need to look seriously at reducing the overall range and quality of services provided and to increase charges if we are to balance budgets,” said Coun Blamire.

“Reviews, efficiencies and innovations will continue,”

Councillors approved the budget by 32 votes to 21, with one abstention, during a meeting at Morecambe Town Hall last Wednesday.

Tory leader Coun Peter Williamson said Conservatives would not back the budget due to a near-2% rise in the city council’s share of council tax.

But Coun Blamire said this increase equates to just 7p less in the average homeowner’s pocket.

Morecambe Bay Independent councillors except mayor of Lancaster Coun June Ashworth, who abstained, also voted against the budget.

By law, the council must keep a minimum of £1m in its ‘general fund’ account and must also keep a separate ring-fenced account to provide council houses.

By the end of this financial year, the council will have £3.4m in the general fund, £10.9m in earmarked reserves and £10.7m in its housing account.

A council spokesman said: “Reserves and balances can be held for three main purposes: a working balance to help cushion the impact of uneven cash flows and avoid unnecessary temporary borrowing, a contingency to cushion the impact of unexpected events or emergencies, and a means of building up funds, commonly referred to as earmarked reserves, to meet known or predicted liabilities.”

The reserves are put aside to cover items including a possible fall in business rate income through any successful appeals, an ‘invest-to-save’ renewable energy scheme, help for homeless people, the Youth Games and the cost of pay or grading reviews.

Last year’s main revenue budget was set at £19,8m. The council blamed the reduced spending on Government funding reductions which have cut the council’s income by £1.7m.