A Tees Valley council is in danger of running out of reserves within two years, according to auditors.
A report by audit firm Mazars on Redcar & Cleveland Borough Council said that it anticipates issuing a qualification on the value for money conclusion in respect of arrangements to secure economy, efficiency and effectiveness in the use of resources.
The council produced a balanced budget for 2019/20 by drawing on £8.9m of revenue reserves, “but this did not present a balanced or sustainable financial position over the medium term,” it said.
The report said: “After accounting for the use of reserves in 2019/20, the remaining revenue reserves available to the council are £16.1m, which includes the £5.1m general fund balance which the council has identified as the minimum needed to be kept aside for unforeseen circumstances.
“On the council’s current spending trajectory and without identifying and delivering savings, the council is in danger of exhausting its revenue reserves in one to two years.”
