Telford & Wrekin Council gets £2.6 million VAT back

The council’s finance chief Ken Clarke said the authority expects to have nearly £8 million in hand by the end of the financial year.

This was boosted by the “successful claim to HMRC for a refund totalling £2,673,000, relating to a change in VAT regulations for leisure services”, his report said.

Council leader Shaun Davies said it was a “sign of the times” that getting wrongly-paid money back from the Treasury was a cause for celebration.

Presenting the council's 2018-19 financial management report to the cabinet, Councillor Lee Carter said: “The report details that the current in-year estimate will see the council with £7.96m. That is largely as a result of a VAT refund and unused contingencies.

“Given the level of underspend predicted at this time it is only right that we invest some of that back into the communities.”

Councillor Carter, who is responsible for finance in the Labour-run administration, said the Pride in Your High Street and Pride in Our Community initiatives set up by the authority would each get an extra £1million.

Mr Clarke’s report said the council “faces a high level of uncertainty relating to its financial outlook from 2020-21 onwards”, and reductions in the Revenue Support Grant from the government was a contributing factor.

In light of this, Councillor Bill Tomlinson, the leader of the Liberal Democrat and Independent group on the council, welcomed the VAT refund and said: “It’s a pity we can’t do one of these every year.

“It’s going to be a tough few years coming up, but I’m pleased we got a solid year under our belts.”

Conservative leader Councillor Andrew Eade said: “It’s always good to get money back out of the VAT man, and a considerable amount as well.

“I’m sure it took quite a bit of doing over a large bit of time.”

Labour leader Shaun Davies said: “Well, isn’t it a sign of the times when the biggest positive of this is having some money back from the government that we’ve already paid to them, wrongly, and we’re all celebrating it.

“That sums up the government’s policy in regard to local government.”

By Alex Moore, Local Democracy Reporter