The Grey River Argus MONDAY, August 5th, 1940 BOROUGH FINANCES

Grey River Argus, 5 August 1940, Page 4

The Grey River Argus MONDAY, August 5th, 1940 BOROUGH FINANCES

Ju the estimate that the finances of the Boi-ough Council during the past three years had gone back, we had in mind on Saturday not* the fact that a previous Council had been represented as slipping to the extent of over £BOOO, but the fact’ that, despite Stale aid, reduction of hospital levy, and a paper curtailment of maintenance outlay, the Council finds itself obliged to propose a continuance, of borrowing. It is unite feasible to make'a show of recovery when money for balancing the budget is obtainable by loan, but the previous Council did not adopt such an expedient to anything like the extent it has since been used. To begin with, the flavor expresses the anticipation that the final figures for the past year will show that any drift has been stopped. The mainten-

I ance stimate is being written I down a couple of thousand, but the financial year already has I elapsed to the extent of one-third, and there is not much sign of a I curtailment. Councillors often have spoken of the necessity of a costing system, and it is at anyrate doubtful whether, up to this stage, an exact idea of the expenditure this year is obtainable. The previous Council received by way of subsidy on labour employed something like £5OOO in a year, whereas the latest balance sheet shows receipts from the Unemployment Fund at more than twice this' amount. Surely the | difference ought to have reflected itself in the financial position, and should have obviated the pre sent need for additional borrowing. Then the reduction in the hospital levy to the extent of another couple of thousand pounds should have likewise been the means of affording- finance for such works as it is now proposed cither to curtail or to carry on

with borrowed money. Then there are the gasworks accounts, which are something of a mystery. Originally, we understand, the Council estimate was that the revenue would be £15,352, whereas in the 'revised estimate it is put down a! only £1.4,752. On : ] ie oth-u--hand, the final estimate of expenditure on the service is £14,875, whereas the earlier estimate showed a sum of £16,875, indiea ing a ioss of £2125. Why there should be any loss is hard to understand. The gross revci no a? (milt for the past year ihows a favourable balance of £s7i.i(} odd, and the netl revenue accou n t reveals a profit of nearly £4,400. The question is just whether the Council is quite sure about the position, or at anyrate whetheri it is at any pains to make the finances of this utility quite clear to the ratepayers. It ought to be, if it actually is not, practic able to carry out certain works that are grouped under the heading of maintenance with labour which is subsidised, and the necessity <;f raising a further loan be Ilins avoided. II is a. doubt fui claim that any drift has been stopped when a comparison is drawn between the borough in-

debtedness now and that of three or four years ago. As at March 31, 1936, the debt was £79,000, whereas on March 31 last it stood at £120,000. It is a case like that where it was said that the operation was a complete success except that the patient died. In addition to the items we have mentioned that should have made for a budget balance and a rate easement, there is the point that the Council should have considered the effect of an increased debt since 1936 of £42,000 odd, and set its sails to do earlier what the Mayor promises it is doing later, and that is to stop a drift. An increase of debt is not such a stoppage, especially when the. increase is continuing. We note that the Auditor-General’s tag on the past year’s balance sheet is to the effect that the. overdraft [exceeds the limit imposed by the Finance Act. That is, of course, merely incidental, but it does indicate that economy in the matter of interest' is not being practised to the extent that it might be. We do not claim to be able accurately to judge just how far the financial drift, in the sense of a heavier burden for the ratepayers, has gone, but £BOOO is not outside the mark. Until the Council has a costing system, it is doubtful if it will itself be able to state actually the position at any given time when various works are in an uncompleted state. At anyrate, it would appear that the gasworks position could be made to look even different to the way in which the Council left it in its final estimates.