Suffolk: Councils defend huge cash reserves

COUNCILS across the region are holding hundreds of millions of pounds in reserve as they struggle to find savings, according to new government figures.

Secretary of state for communities and local government Eric Pickles has urged councils facing tough spending cuts next year to dip into their reserves.

He said: “Good financial planning is about putting a little extra away when the sun is shining so you have some cover during the rainy days.

“But building up reserves isn’t simply about turning town hall vaults into Fort Knox. These untapped funds exist to ensure councils can respond to unexpected situations like the pressing need to tackle the nation’s unprecedented level of debt.”

Suffolk County Council holds reserves of �68.8m – 7.1% of its revenue expenditure. That is less than the national average of 9.9%.

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Deputy leader Jane Storey, who is responsible for the county’s resource management, said the reserves were kept at a prudent level.

She said: “We do not have millions more than we need saved in reserves. We keep them at an appropriate level for the council.”

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Essex County Council has the highest level of reserves in the country after the Greater London Authority – but it is one of the larges counties and its �200m reserves represents 10.9% of its �1.8bn revenue.

The East Anglian council wilth the highest percentage of reserves to revenue is St Edmundsbury.

A spokeswoman for that council said the borough saved money so it was able to invest in new equipment or building maintenance when necessary.

The council had made efficiency savings over the years, and these combined with a sensible use of the reserves had enabled it to keep council tax rises very low or frozen.

She said: “We don’t know yet what the Government grant will be but if necessary we will use some of our reserves to make up any shortfall if our planned savings are not enough. Which is exactly what the Government is saying we should do.”

Ipswich council’s reserves of �4.1m represent 13.4% of its income. Deputy leader John Carnall said the borough had built up the reserves to protect it during the recession.

He said: “We knew things would get more difficult with, for instance, fees from parking and planning applications falling as the recession got deeper so we built up our reserves to enable us to keep our council tax reasonably low during the recession.”

Calls by Mr Pickles for councils to plough reserves back to keep down council tax bills did not please the GMB union which has many public sector workers.

Brian Strutton, GMB National Secretary for public services, said: “This year’s council pay freeze has contributed �750m to those reserves and last years 1% pay rise contributed another �500m.

“This is because councils were allocated this money from central government and budgeted for 2.5% pay rises but withheld it. This �1.25 billion should be paid back to council workers.”


County councils:

Revenue Reserves Percentage

Suffolk: �972.4m �68.8m 7.1

Essex: �1,840.2m �200.2m 10.9

Police Authorities:

Revenue Reserves Percentage

Suffolk: �123.1m �8.9m 7.2

Essex: �301.6m �18.4m 6.1

District/borough councils:

Revenue Reserves Percentage

Babergh �13.9m �2.5m 17.6

Forest Heath �11.7m �4.9m 42.0

Ipswich �30.4m �4.1 13.4

Mid Suffolk �14.5m �1.8 12.7

St Edmundsbury �16.3m �12.5m 77.0

Suffolk Coastal �19.7m �7.9m 39.9

Waveney �19.6m �2m 10.3

Braintree �22.5m �4.1m 18.3

Colchester �29.5m �6.9m 23.4

Tendring �27.4m �6.1m 22.4

Uttlesford �13.4m �3.0m 22.1

English authorities:

�105.7bn �10.5bn 9.9

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