County Hall’s money men have scooped a £52m windfall after a golden year playing the financial markets.
Yet council leaders have warned there will be no spending spree, despite a climate of painful cutbacks.
Councillors will be told today that the skill of the authority’s red hot investments team has put LCC in “quite a strong” position to balance its books for the next three years.
The cash bonanza will not reduce record cuts to services in Lancashire demanded by central government. But it should mean the Labour-run council is better-placed to ride out tough austerity measures which have brought a drastic downsizing of the authority.
“It is a very welcome windfall, but we have to treat it as if it’s a one-off,” said County Hall’s deputy leader David Borrow ahead of this afternoon’s executive scrutiny committee. “We are reluctant to go splashing it about. We have to be very careful what we use it for because of the uncertainties that exist in many areas.”
This is not the first time the council’s Treasury Management Team has come up trumps to the tune of tens of millions. Two years ago, under the Tories, the in-house investors conjured up another large prize pot and that money was spent on a list of small projects.
But this time, with the authority already strapped for cash and having to face further cuts of £176m by 2018, the Labour leaders are preaching caution. They are already forecast to be under budget by £4m in the current financial year and they are set on continuing that prudent approach.
“Basically this very welcome extra money didn’t happen last year and it is very unlikely to happen next year, so we have to regard it as a one-off,” explained Coun Borrow.
“We have a team whose job is to borrow money at the lowest rate they can and also get the maximum amount of interest on the cash we hold. Normally that roughly balances.
“These people are very skilful at it. But, because of the volatility of the money markets, the current projection is a surplus of £52m.
“We could be very close to balancing the budget for the next three years, which is quite a strong position to be in.”