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RESERVES AT ROCK BOTTOM ESSEX CC LEADER WARNS

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A major emergency could leave Essex CC struggling to pay the bill as the council's reserves could hit an all-time l...
A major emergency could leave Essex CC struggling to pay the bill as the council's reserves could hit an all-time low by the end of March.

The news comes less than a month after the council said it could be facing a£30m shortfall next year. A report to its corporate strategy

committee says the council is facing 'very difficult' financial

prospects in 1999/20.

After handing over about£2.3m to Southend and Thurrock, and covering the costs of other pressures, the council will have only£4.9m left

in reserves. This could pose problems if the county is hit by a major

emergency.

Lord Hanningfield, the leader of the council, said: 'This figure is far too low for an authority the size of Essex. It concerns us that the figure has fallen so low. We cannot allow our reserves to fall any lower without risking serious difficulties in case of a major emergency. Despite the financial pressures we are facing, we will do our utmost to restore our balances while giving the people of Essex the best services possible.'

The government is due to announce the local government finance settlement by the end of November. An initial report by county council finance experts says the county needs to spend£911m in 1999/2000 to stand still.

However, even if its standard spending assessment (SSA) rises in line with national forecasts, the county's SSA will only increase to£881m. Education will probably win an increase, but central government funding for other services may not keep pace with inflation, leading to cuts in services and higher council taxes.

The county council could also lose up to£32m if the government

overhauls part of the grant system. Ministers are expected to announce by the end of November whether they will abolish the area cost adjustment (ACA) which is paid to south east councils to help offset the higher costs they face.

All councils hold balances to cover the costs of emergencies or unexpected demand for services.

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