Suffolk: County defends finances as Pickles launches new attack on reserves
PUBLISHED: 10:17 03 January 2013
RESERVES at Suffolk County Council rose by more than 30% last year – as the authority cut its budget in an attempt to balance its books.
The “useable” reserves held by the county increased from £78.4million to £102.9 million – a rise of just over 31%.
When schools’ funds, and other money to which the county has no direct access, are taken in account the reserves went up from £131 million to £166 million.
The increase in reserves came despite a call from Local Government Secretary Eric Pickles for councils to use reserves to maintain services while not increasing council tax bills.
Mr Pickles was reacting to a call from the leaders of Liverpool, Newcastle and Sheffield city councils who warned that cuts to grants for cities in the north of England could provoke more riots like those which hit cities in England 18 months ago.
The local government secretary said: “Councils can protect frontline services and save the taxpayer billions in cash if they share back office services, tap into their healthy reserves and cut out the non jobs and waste.
“Councils that fail to do these things are letting down their hard-working residents.”
District and borough councils across the county have seen their reserves remain relatively stable – the overall reserves held by these councils in Suffolk went up from £114m to £116m between 2011 and 2012.
The county council is expecting to face more grant cuts over the next few years – between 2014-15 and 2017-18, it is expecting to lose about £70m.
When inflation and demographic pressures – especially an ageing population – the council fears it will need to bring in savings of up to £140m.
Jane Storey, Suffolk County Council cabinet member for finance, said: “As an organisation accountable for hundreds of millions of public money, Suffolk County Council has to manage its finances responsibly.
“Reserves are a part of that responsible management and are used to fund a number of specific large scale programmes as well as provide security in the event of a major incident which the council has to respond to.
“The important thing to remember about reserves is that they are a one off amount of money and once spent, can only be replaced from other sources of funding or reductions in spending.
“Reserves are kept at a prudent level given the financial climate we are in.”
Opposition Liberal Democrat finance spokesman Andrew Cann said the county did not need the level of reserves it currently held.
“As they build up reserves there are many important projects that are being cut by the Conservatives to save money.”
He would have liked to see the county spend more on improving schools after a government grant was reduced.
His comments were backed up by Labour leader Sandy Martin, who said: “I can see there is some merit in building up reserves for a rainy day, but you don’t get much more rainy that this!
“I would like to see them using some of the reserves to, for instance help pay people to go to training courses.
“The council could also have used some of this money to make up for some cuts to school improvement budgets that happened after ring-fenced grants were no longer ring-fenced by the government.”
Ipswich Conservative MP Ben Gummer said council taxpayers across the country would not be happy to see authorities increasing their bills while their reserves went up.
However Suffolk County Council had special issues to deal with, such as the ageing population, and like all the other authorities in the county it would not be looking to put up its council tax bills.
He said: “Suffolk is expected to see a much greater increase in its older population than the rest of the country in future years – and it makes sense to prepare for that now so it is not unreasonable to build up reserves.
“It is increasing its reserves, but this is not being done by increasing council tax bills but by increasing efficiency. I don’t think it is behaving unreasonably.”