Council on the brink of bankruptcy

PUBLISHED: 08:54 27 November 2008 | UPDATED: 10:48 12 July 2010

A Norfolk council is teetering on the brink of bankruptcy and may have to treble its parish precept to make ends meet.

If declared insolvent, Redenhall with Harleston Town Council could become the first town council in the country to go bust.

A Norfolk council is teetering on the brink of bankruptcy and may have to treble its parish precept to make ends meet.

If declared insolvent, Redenhall with Harleston Town Council could become the first town council in the country to go bust.

Emergency moves are now under way to try to rescue the council which is understood to have spent reserves of around £70,000 in just over 18 months.

A source said that one suggestion being considered is to double or even treble the parish precept to bring in more cash - currently £60 a year for an average band D property.

If this happens, it is understood that Harleston and Redenhall residents would pay the highest parish precept in the country.

The source said budgeting problems were to blame and the situation was being exacerbated by new commitments the town council had taken on and the economic downturn.

Without financial assistance it is understood the council could be look-ing at insolvency as early as January.

The town council's finances are facing further strain as it has struck

a deal with the district council to lease the town's car parks to ensure that free parking is continued.

In order to do this, the community has to find £20,000 annually on a 50:50 basis through the parish precept paid by residents and donations from traders - and, so far, local businesses have only raised about £4,000.

Furthermore the town council has taken over the running of its leisure centre after Gorleston-based BWell health club ended its contract, which it is said will cost them around £90,000 a year to run.

Brian Harding, Redenhall with Harleston town clerk, is understood to be on sick leave. He declined to comment last night.

Last night, Sue Kuzmic, chairman of Redenhall with Harleston Town Council, said no decisions had been made regarding the parish precept.

It is understood the issue will be discussed at a town council meeting on Wednesday.

Ms Kuzmic said: “The town council is working hard on a rescue plan, using advice from financial experts at South Norfolk Council.

“We are having to consider very tough decisions to secure our future, now and for the long term, and we are confident the rescue plan will succeed. The people of Redenhall with Harleston are our priority in these discussions as we move forward.

“The town council has made mistakes in the past by eating into financial reserves in an effort to keep the council tax down for local people.

“The council's financial manage-ment arrangements have not been robust enough. And we have been hit by unexpected costs in areas like burial grounds, allotments, street lighting, car parks and the leisure centre.

“The town council now needs to be realistic about its budget, not just to cover these costs, but to build up our financial reserves again. The recession has added to our diffic-ulties. We must now agree a budget that we can realistically deliver.

“We are getting help from the district council and from the clerk of Loddon Parish Council. They are assisting in our review of the financial management arrange-ments. South Norfolk Council officials are also attending next week's town council meeting on December 3.”

South Norfolk Council leader John Fuller said last night: “These are wholly unexpected and sensational developments. I have asked officials to look at what would happen should the council go bust. Clearly we want to avoid that if at all possible.

“Harleston Town Council is part of the local government family. South Norfolk Council's monitoring officer is preparing some advice, which I expect to be available in a day or so.

“We are in unchartered territory. Harleston Town Council is a sovereign democratic body. There can be no question of South Norfolk Council taking over another council, but there are provisions under the Local Government Act under these circumstances. I have asked officials, at this early stage, to advise me what happens next and whether South Norfolk Council might have to get involved.”

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