Reading Borough Council earns £264k more than expected

The council's financial officers report its accounts on a quarterly basis to councillors in meetings to uphold the principle of open government and inform the public of how their taxes are spent.

While some good news has come out from the start of the year, there are looming challenges due to the escalating cost of providing services.

The positive news is that the council has earned £665,000, as it gained a better return on investments made from its general fund, which is used to pay for day-to-day services like bin collections.

A report by Stuart Donnelly, the council's financial planning & strategy manager explained that interest received from investments was up  £264,000 million on its forecast return of £401,000.

The figures were presented at the last meeting of the council's audit and governance committee, providing a treasury management review for quarter 1 of 2024/25, from April 1 to June 30, 2024.

Although the earnings are positive, doubt has been cast on their impact due to the escalating cost of providing services and the challenges the council faces.

Last month, Jackie Yates, the chief executive of the council announced that driving fines in areas of the town had been issued to drivers in error, costing £360,000 from the council's reserves.

Commenting on the £665,000 earned from investments, councillor Josh Williams (Green, Park), the chair of the audit and governance committee said: "My guess is sadly that it is a drop in the ocean compared to the many millions which the council finds itself behind on the budget.

"Budgeted for savings haven't materialised, and costs have risen."

Josh Williams (centre), with fellow Green Park ward councillors Sarah Magon and Rob White. Credit: Reading Green Party

According to a report by Mr Donnelly in July, the council was able to make £4.202 million (52 per cent) of its hoped-for savings in 2023/24.

However,  £2.768 million (34 per cent) of desired savings were not delivered in 2023/24 (the last financial year).

The council's policy committee agreed that these savings should be undertaken in future years during a meeting in July, and that the remaining £1.148m (14 per cent) of unmet savings be taken out of the council's budget.

Cllr Williams also raised concern that the Labour government could be putting more pressure on finances as councils will not be exempt from employee national insurance contribution rises, which will increase from 13.8 per cent to 15 per cent from April 2025.

There are hopes that the Labour government will provide funding for the council over multiple years in the future.

Since 2017/2018, councils have been given one-year funding settlements, and is likely to get another one-year funding settlement for 2025-26.

However, councillors remain hopeful that the government will be able to provide mutli-year settlements in the future.

Cllr Liz Terry (Labour, Coley) the council leader said: "The Labour manifesto gave a commitment to multi-year funding settlements and that commitment remains now that we have a Labour Government."