COUNCIL BORROWING REQUIREMENT UNCERTAIN
The Council of the Isles of Scilly will need to borrow in order to top up their reserves but the exact figure they intend to borrow remains uncertain.
At the recent meeting of the Finance Audit & Scrutiny Committee, Councillor Colin Daly asked Senior Officer Diana Mompoloki for a likely level of borrowing requirement and was told that the Authority would not borrow more than it needed to put itself "back into the position we need to be in”.
She said: “Considering we said we were going to borrow over £4m over the last five years that we never borrowed you could say it’s up to that amount.
"But you can only borrow where you have legitimately increased your asset base.”
A final decision on how much to borrow will be taken at the end of March, which will resolve the expected £400k budget deficit for the past year.
It seems likely that the amount will be around £1.5m to capitalise on the road resurfacing project, given the historical reluctance of the Council to borrow. This was further evidenced when Diana told Members that the Council had very little borrowing.
With regard to the overspend, she said: “We are looking at an overspend of around 400-450k because of the way certain aspects were treated in the budget last year, of which £100-£120k is owed to waste services."
She added: “We must also make sure the budgets we set for next year are totally realistic and have no surprises.”
Chairman of the Finance, Audit & Scrutiny Committee Steve Sims told This is Scilly: “The reserves position is redeemable and I don’t think the public should get too hung up about it.
"The £400k overspend is a much more significant problem as are finances going forward and members will have to make some unpalatable decisions over the coming months."