Council cut £40m from borrowing as reserves dwindled

Dudley Council cut more than £40m from its long-term borrowing in the last full financial year as it fought for financial survival.

The council’s audited accounts for 2024/25 have been finalised and are set to be debated by the authority’s Audit Committee on June 24.

The council was dangerously close to effective bankruptcy in the previous year as reserves dwindled to a fraction of what a healthy amount would look like.

In her introduction to the audited accounts, Dudley interim finance director. Lisa Kitto, laid bare the situation in early 2024.

Ms Kitto said: “Taking control of our financial sustainability was a key priority for 2024/25. The council set the 2024/25 revenue budget with a net spend that required the use of £5.5m of reserves, with a forecast that by the end of the year reserves would reduce to only £6.1m or 1.8 percent of the net budget. 

“Action was taken during the year to address this through identifying further savings and putting in place various spending control panels.”

A report on the accounts shows the council spent £17m less in its general account than forecast which helped boost the authority’s usable reserves at the end of March 2025 to £116.8m

Long term borrowing, which can date back many years and is used to fund capital projects, was reduced from £661.9m to £617.3m.

The deadline for the audit of the 2024/25 accounts was due at the end of February 2026 but had been delayed due to what Ms Kitto called a ‘governance issue’ which was reported to the committee.

The audit committee in February was told there had been delays in the completion of an external auditors’ report on the failed sale of the derelict Wellington Road Leisure Centre which was delaying the completion of the final accounts.

According to the committee’s proposed schedule for the year The Wellington Road report from external auditor Grant Thornton will be presented behind closed doors to a meeting of the committee on Wednesday July 22.