Essex's cash reserve of £225million

ESSEX County Council should hand back some of its £225 million of reserve cash to residents struggling to pay bills during the credit crunch, it has been claimed.

Elliot Furniss

ESSEX County Council should hand back some of its £225 million of reserve cash to residents struggling to pay bills during the credit crunch, it has been claimed.

Tom Smith-Hughes, leader of the council's Liberal Democrat group, said the Conservative-led administration had underspent its budgets and should now re-distribute some of its vast savings.

The council currently has about £225 million in the bank, with much of it ring-fenced for specific services.

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Just under £53 million of Essex's cash has been earmarked for future spending on education and £86 million is in reserve for long life projects.

Neighbouring Suffolk, meanwhile, has less than half - £102.4 million - the reserves of Essex.

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Council leader Lord Hanningfield said he was already looking at ways to provide financial support to the needy and said much of the council's reserves were earmarked for investment in frontline services.

But Mr Smith-Hughes said it was now time for the council to give something back.

He said: “The county council has increased council tax by over 100% over the past few years, too much of which has ended up in reserve funds as a result of underspends of budgets.

“However, whilst we would like to see taxpayers money returned to residents on low and middle incomes, we would not expect that to be at the cost of cuts to basic services the council offers, particularly for the young, the elderly and other vulnerable groups.”

Paul Kirkman, leader of the council's Labour group, said Lord Hanningfield was looking to “bribe” council tax payers with their own money in the run-up to an election.

He said: “He has over taxed people in years one, two and three (in order) to appear like superman in year four. It's dishonest, and hopefully people will see that.

“I'm not entirely sure that the way to deal with the issue is to hand the money back. No one sane would argue that people should have less money, but if we entered erratic activity then it makes it very difficult for people to budget over a period of time.”

Matthew Elliott, chief executive of the Tax Payers' Alliance, said it was “totally wrong” for the council to be sitting on millions of pounds while ordinary Essex taxpayers suffered in the economic crisis.

He said: “Council tax has reached unsustainable levels, and this money should be given back to people in rebates and tax cuts as soon as possible.”

Phyllis Webb, chairman of Braintree Pensioners' Action Group, said it was a good idea that could help out many vulnerable people in the community.

She said: “The elderly and vulnerable people need help and extra money. It's the heating cost - that's the main problem. When they say they're going to put the prices up it does frighten people.”

Lord Hanningfield said the council had started talking about the options available to help vulnerable people “months ago”.

He said: “Sound financial management is at the heart of Essex County Council's determination to deliver the best quality of life for its residents, and it is this financial management that sees us in a much different position to many other authorities during this economic crisis.

“As anyone who runs a business will know it is simply good practice to ensure there are sufficient reserves available to meet all possible contingencies; those that do not understand this run the risk of jeopardising this sound financial security.”

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