Its usable reserves dropped by £45m - from £181m in March 2017 to £136m in March 2018 – the council’s draft statement of accounts has shown.
The council has said in the report that it must identify a further £52m of reserves for 2018-19 to help cope with the aftermath of the fatal fire, in which 71 people died.
Tony Travers, director of LSE London, a research centre at the London School of Economics and Political Science, told PF: “The unmediated pressure on [the council] to spend reserves on trying to improve housing pressure for the Grenfell residents has left the council with very little choice.”
Travers added: “It would be a radical change for any local authority [to lose this amount in reserves].” But, he added, because of scale of the tragedy the public would “demand nothing less”.
The council took reserves from various pots - such as economic development, property strategy and repairs and renewals - to set up a £90m Grenfell reserve, of which it has spent £50m, the draft accounts have shown.
The statement of accounts read: “Following the Grenfell fire, the council undertook a review to streamline its reserves.
“This has supported a significant element of the Grenfell expenditure but also resulted in tighter financial control and management of the council’s reserves.
“The council has significantly reduced it’s level of reserves.”
The draft statement of accounts will now be subject to an external audit.
The account’s statement also said: “Until the Grenfell public enquiry has been completed and the police have completed their investigation into possible charges of corporate manslaughter arising from the fire, the council is unable to quantify what further long term costs in terms of liability, if any, may arise from the fire.
“No provision has been made in the council’s accounts for any potential costs.”
The taskforce set up to examine the tragedy said in a report in November last year the council “failed its community” on the night of the Grenfell fire on 14 June last year and its response was “sluggish and chaotic”.
We also recently looked at the extent to which local authorities were dipping into reserves.
RBKC has been contacted for comment.
