Road crash budget problems in more detail

28 January 2009

Here are some of the facts and figures setting the scene for the Lib Dem road crash budget:

- £9 million potentially lost in Icelandic bank Landsbanki and its subsidiary, extra direct interest loss of £342,000, part of a total of £1.4m overall interest income losses over 5 years. No signs of repayment prospects so far, particularly on the £5m in the Icelandic part of Landsbanki following the Icelandic Government collapse this week. Council overall investments down from £80m to £71m in last year as a result

- £618,000 lost from the Cambridge Folk Festival ticket fiasco, all the 2008 Internet ticket sales now written off as a 'bad debt' and no likelihood of recovery from company

- Council liquid cash reserves were at £14m a year ago and are projected to fall rapidly to £0.5m in 2010 without an emergency loan of £1m in 2010 to keep them above Council policy of £1.5m

- further £600,000 unmet gap in first Liberal Democrat budget published before Christmas being bridged by other cuts and savings

- £67,000 also just paid out by Council in penalties and lost interest for pulling out £4m from the insolvent Allied Irish Bank. Council still trying to recover its further £10 million investment in other Irish banks that only survive through current Irish Government guarantees

- On the £1m cuts to youth clubs, recreation facilities and city environmental improvements, the change will transfer £1m of interest added on the council's capital fund (section 106 monies from recent developments) to fill the £1m hole created by the Iceland bank interest and Folk Festival ticket losses: £500,000 transferred in 2008, and the other £500,000 in the next two years

- £103,000/year extra future costs added to the new budget also for the contract extension from 2010 with SLM to run council swimming pools and community facilities.

The Liberal Democrat replacement budget is being reported to the Council Executive later on Thursday at 6pm (29.01.2009). You can read the full details of the budget on the Council Website plus more in the city's 268 page 2009/10 'Budget Setting Report' including p83 charting the dramatic fall in council reserves.