Tandridge DC has requested a capitalisation direction funded from capital receipts to restore its reserves, which have plummeted to £2.8m.
In a letter seen by The MJ, Tandridge leader Catherine Sayer told local government minister Lee Rowley of a ‘potentially ruinous depletion of reserves which took place prior to the recent transformation of the council’s finances’.
The council discovered in February 2020 that selected cost lines appeared to have been removed from Tandridge’s pensions-related budgets to the value of £920,500.
Cllr Sayer wrote: ‘Achieving an improvement to the level of our reserves is vital to the medium-term financial security of the council; it is needed to give members and officers confidence to set ambitious savings targets to deliver key services and protect the interests of residents and businesses, within the confines of constrained funding.
‘You will appreciate that with material uncertainty regarding funding levels for 2023-24, and the severe effect of inflation on the cost of delivering local authority services, the council’s financial position is far from secure.’
Tandridge is currently forecast to overspend its 2022-23 budget by 4% or £447,000.
In August then local government minister Paul Scully refused to grant a capitalisation direction for Tandridge for 2022-23.