The Conservative Group of councillors at the Isle of Wight council has raised concerns over the financial management of the current Alliance administration, claiming they have been “frittering away substantial reserves to support out of control spending”.
Following 14 years of Government cuts to funding and a rise in costs and demand, the Alliance Cabinet’s budget paper makes clear,
Local Government continues to suffer from exceptional levels of both price rises and demand increases across Social Care and Housing which is destabilising the sector to the extent that many more Councils are seeking Exceptional Financial Support from Government through the approval to borrow to fund their deficits and to increase their Council Taxes beyond the referendum thresholds.
Reserves, reserves, reserves
According to the Conservative Group, reserves of over £117 million were available when they left office in May 2021.
However, don’t be mistaken by thinking this figure relates just to General Reserves—which in years gone by, saw the minimum level as anywhere between £5m to £11m. The quoted £117m figure is actually made up from General Fund Reserves, Earmarked Reserves and Capital Reserves.
A spokesperson for the Conservative Group of councillors confirmed to OnTheWight,
“This figure includes includes designated reserves such as government grants for capital projects, the PFI, and already committed capital expenditure that had not yet been spent at that point.”
The Conservatives claim the current administration has since spent nearly all these reserves, including Covid reserves (which have been used to support additional pressures following the pandemic and cost of living crisis), while also reducing General Reserves to within £1.1 million of the legal minimum.
OnTheWight has asked the council leader what the equivalent total of all three types of reserves is today and will update when we hear back.
Housing spending questioned
The Conservative Group also criticises the administration’s approach to housing and social care.
The Alliance Group say in their draft budget paper that the council will see additional unexpected spending of £15.8m in Adult Social Care and Children’s Services in the next year simply to maintain services at existing levels.
The Conservative councillors referred back to the Conservative budget amendment in 2022 that saw Full Council approval to borrow £40 million for housing. However, IWC confirmed to OnTheWight in 2023 that, “the budget amendment reduced the likelihood that the council would be able to borrow money to deliver affordable housing scheme”.
Funding for housing refugees fleeing from war-torn countries
The Conservatives go on to claim that the administration “housed more refugees than Islanders last year”. OnTheWight has asked for more details on this claim from both the Conservative Group and the leader of the council.
A spokesperson for the Conservative Group confirmed funding for housing refugees comes from specific Government grants. They add,
“It is misleading to suggest that the Isle of Wight council is delivering social housing when it is acting as an agent for the Government to support refugees”.
Children’s social care
In the area of children’s social care, the Conservative Group argue that instead of investing in local facilities and staff, the administration has continued paying for costly off-Island placements, with weekly costs of around £4,500 per child.
The group believes that investing in local care infrastructure would have been a more sustainable long-term solution.
Structural deficit and future challenges
Further concerns have been raised about the council operating with a structural deficit, meaning it has been spending more than its income. The Conservative Group claims that this deficit has been masked by revising budgets mid-year and using reserves to cover shortfalls.
As the council prepares to shift from a Cabinet system to a Committee system in May, questions remain about how financial management will be handled under the new structure.
Uncertainty over devolution funding
The Leader of the council has expressed confidence that Solent devolution could provide much-needed financial support.
However, the Conservative Group remains sceptical, arguing that relying on devolution funding as a financial lifeline may be unrealistic.
As the debate continues, residents of the Isle of Wight will be watching closely on 24th February to see how the council addresses these financial challenges.
Article edit
12.41pm 12th Feb 2025 – Updates added to funding for housing
