DORSET Council has found itself cash rich – with no immediate plans to spend it.

The authority currently has £90million, effectively in cash, and another £90m tied up in investments.

Councillors were told on Monday that because of low interest rates the most prudent course of action, currently is to keep the money, should a need arise.

The council’s audit and governance committee was told that because of low bank rates the £90m was earning relatively little interest, although there are predictions of a likely upturn in rates in the New Year.

Overall the council has around £205m in external borrowing and had recently paid off a £40.5million loan which had matured, deciding not to replace that borrowing at the current time as it has healthy balances.

The authority is currently paying out £9.5m in interest on its borrowings and earns around £3.6m on investments. 

Councillors were told the council’s financial situation was generally improving as the local economy continued to pick up following the dearth of activity during the worst months of the pandemic. Both council tax payments and business rate payments had improved and there has been an increase in other income, including from planning fees and car parking.

Many activities have still not improved as much as hoped, notably leisure centre income where many people were still reluctant to return to the gym and formal classes, although swimming was almost back to pre-Covid levels in most centres.

The council’s own predicted savings from bringing services together and increasing efficiencies following local government reorganisation in the spring of 2019 has also slowed and is now thought unlikely to meet the £10m a year savings target, although this is predicted to improve again from 2022 onwards.

The meeting heard that there had also been problems with some of the council’s capital projects, suffering from the national shortage of skilled workers and some construction materials while the council itself has been losing HGV drivers and other staff as an increase in wages in the haulage industry and elsewhere tempted some to give up their council jobs for better pay.

There remains concerns about the predicted budget shortfall of £9m for adult services and £3m for both children’s service and place services – although Government Covid funding of around £8.6m will help with some of this.