Councils sitting on billions?

[Hugh Spencer]

Apparently, many councils are slashing services to the public while having billions in emergency funds. For example, Manchester are cutting libraries and street cleaning services while having £95.2 million in cash reserves. Liverpool are closing nurseries, libraries and leisure centres while having £121.7 million in reserve. I hope their residents take up this problem with them promptly. More examples are going to be released later today. A Tory council in Bromley is refusing to spend its reserves while carrying out £33million in local jobs and front line services. What a "cock-up"!

[sandyRoe]

Why do they say they need to hold these reserves?

[tamborine]

Here's how they use our hard-earned monies

http://www.dailymail....--Prescott-blame.html

http://www.dailymail....crucial-services.html

[Hugh Spencer]

The reserves exist to ensure councils can react to unforeseen circumstances. A Labour official said these funds include "committed reserves", money already committed to road repairs and school buildings, etc. Isn't the present situation throughout the country warrant using some of these reserves to help the people in their communities?

[Maydup]

Reserves do seem excessive. They need a certain amount to cover themselves for things like poor investments in Iceland, inappropriate expenses procedures and flooding when building on flood plains etc; but they really could afford to release some back to the people who gave them the money in the beginning, surely.

[Huderon]

lol .... Oh this is just the government trying to avoid being blamed for cuts in the local elections.

Councils are required to act prudently in their accounting, and auditors seem to expect councils to hold between 5 and 8% of their annual turnover in reserves. Add to this that there are two forms of reserves - reserves based on day to day monetary turnover - cash in hand if you like - and reserves which are the result of, for example, selling off large assets. The latter are only allowed to be used for spending on major capital projects, not to cover day to day running costs.

Now there are sure to be some councils which have higher, usable, reserves than required for accounting purposes, but that won't be all councils. And if figures being released by HMG include the reserves councils are not allowed to spend on normal running costs, someone in Whitehall is fudging things.

Oh, and just to add a bit of spice to the mix, it seems that spending those reserves will actually increase the deficit HMG is so concerned to reduce.

That information was gleaned from in interview on Radio 4 today - http://www.bbc.co.uk/...mes/b010dhd0#p00gfl32 is the link if anyone is interested.

[DTCwordfan]

And how much sits in Iceland going up in volcanic smoke.....why politicans should not dabble in Finance perhaps - with Brown selling off the gold reserves as the epitome of this sad performance.

[rojash]

"many councils are slashing services to the public while having billions in emergency funds"
So which councils have billions in emergency funds?
The largest that you have listed is 121.7 million, just a wee bit less than a billion.

[welshlibranr]

All councils do this, it's in case of emergencies they say!........not true, it's to preserve their coffers!..........

[MickeyTheBrick]

'Councils sitting on billions'. Bloody typical! Why can't they use chairs like the rest of us?

[Hugh Spencer]

Yes, Rojash, but isn't £121.7 million just a little too much? Many councils have billions between them.