The old chestnut about spending council reserves has cropped up again. It’s actually quite scary that David Cameron, supposedly in charge of running the country, thinks councils can simply pay for services with money they have put aside for other things. It’s a bit like having money for next week’s bills and spending it on a take away. Once it’s gone, you’re stuffed both ways.
I’m not one to quote Lib Dems very often but this statement from Cornwall Council is very clear. Shame the Tories governing us don’t seem capable of grasping basic local government finance. Mind you, they are pretty crap on national stuff too.
It could be possible that the government does understand but think that by presenting a simple and extremely stupid idea to the public, they will escape blame for cuts in essential services. Not sure which is worse: stupid or liars who think the public is stupid.
Here is the statement from Cornwall Council:
As of March 2015 Cornwall Council held £176m in usable reserves. Although this figure has increased over the past four years, £128m – 72% – of this is money we hold on behalf of others, or for a specific purpose such as PFI reserves, redundancy reserves, insurance reserves and money for specific building projects. The largest single element of this £128m is the £71m set aside to meet our long term commitments to PFI contracts (used to build new schools and fire stations ) which has increased by £20m since 2009/2010.
Only £48m of our total reserves is for general use – ie not committed to a specific project. This money is held for dealing with emergencies and unexpected spending pressures. This year £11m is being used to help meet spending pressures, most notably on Adult Social Care, leaving just £37m – 3% of our total budget – available to meet other pressures and emergencies. While this may seem like a large sum carrying out repairs following the 2013/2014 winter storms and flooding cost around £21m. Having this money available in reserves meant we were able to carry out the repairs immediately rather than waiting for Government funding. It also meant that had the Government decided not to provide funding to local councils we would have been able to meet the costs without having to make cuts in front line services.
The £37m is also being used to help cushion the impact of reductions in government funding on front line services. Next year we are planning to use £6m from our general reserves to help minimise cuts to front line services and this figure could increase over the next two years if we receive less money than expected in the local government funding settlement later this month.
All councils hold reserves to ensure that they can continue to provide statutory services and safeguard the elderly and vulnerable when faced with emergencies or unexpected spending pressures. The level of our usable reserves is in line with the level of reserves held by other councils.
It is also important to recognise that reserves can only be used once, while the reduction in Government funding and demand for Council services is ongoing. This means that the level of savings required by the Council from 2014/15 to 2018/19 is £196m.
Councillor for the Launceston North and North Petherwin Division
Cabinet Member for Resources