Watford Borough Council spent £844,000 more than expected in 2024/25 – with their funding reserves the lowest in the county, according to the authority’s new chief financial officer.
Speaking at a finance scrutiny committee meeting on Tuesday (24 June), new CFO Isabel Brittain said: “I’m slightly concerned about the level of general fund reserves we’ve got.
“Those are the funds we keep for a rainy day or if something happens. The external auditors have raised that as well.
“I’ve been doing some work behind the scenes to look at capital financing and working with our treasury advisers to try and give us some headroom. It’s really important that we have that resilience.”
The council has around £2 million in its general fund reserves, which fund day-to-day council activities.
Ms Brittain, who joined the council in April, said the overspend in the last financial year “shouldn’t be a surprise”.
She said: “We know what’s going on, we just don’t have the ability to control some of the demand-led services.
“I can’t guarantee to you that we aren’t going to overspend in 2025/26, but I think it’s … about making sure we really understand our budgets in that granular detail.”
She said there were issues in “two main areas” – temporary accommodation for homeless families, and rental income from commercial properties.
The council spent £1.25m more than expected on housing last year, and the number of people it had to house increased.
The council has a statutory duty to provide accommodation for any eligible homeless family.
Council officers said that in the current financial year, an average of eight people have been moved into temporary accommodation each week.
Laura Marland, the council’s housing manager, said the authority was facing challenges with temporary accommodation due to rising rents and a lack of private-sector properties available for rent.
The council spends an average of £350 a week to house people in bed and breakfasts or similar accommodation.
Commercial rental income for the year was lower than expected, which officers said was largely due to Watford Business Park not being “fully let”.
Ms Brittain said the council needs to be “prudent” about what it can “actually” receive from rental income. Empty properties mean the council has to pay service charges and business rates, which is a “double whammy.”
Cllr Asif Khan raised the possibility of charities using the empty units, with Ms Brittain responding “Our partners … that are dealing with Croxley Park … have commissioned an organisation to put charities into the empty properties and that means that obviously we’re not liable for business rates and not liable for service charges which is a really good initiative.
“It has to be done in a really robust way because we have to be careful not to say ‘oh, you come in here, this is the best property, why don’t you take that for a little while’, because if somebody then wants to rent it and we have to kick a charity out, that makes us the bad guy.
“It has to be done in a really managed way, and those charities have to understand that this is a temporary solution … and that they might be moved from one unit to another.
“But on the whole, it’s a good idea because it obviously saves a considerable amount of money.”
The committee welcomed moves by the chief financial officer to look into improving the council’s general fund reserves.
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