Councils challenged over reserves

The Conservatives are stepping up the attack today on Labour councils cutting services while sitting on reserves. Local Government Minister Grants Shapps says some are even increasing their reserves.

The Daily Mail reports:

Today Mr Shapps will publish a list of ‘worst offenders’ which he says are reluctant to dip into their ‘rainy-day’ funds. They include Manchester, which Mr Shapps said was cutting libraries and street cleaning services while sitting on cash reserves of £95.2million.

Liverpool is accused of closing  nurseries, libraries and leisure centres while increasing reserves to £121.7million. Nottingham, the minister claimed, was increasing charges for adult social care, reducing highways maintenance and cutting support for jobseekers, while keeping reserves of £50.7million.

Lambeth, he said, was closing libraries while increasing reserves to £93.7million; Coventry was cutting learning services and support for disabled children while increasing reserves to £31.3million; Blackburn
with Darwen was cutting support for young problem children and families while increasing reserves to £12.7million; Camden was closing children’s centres with reserves of £84.3million; Durham was closing libraries and leisure centres with reserves of £80.6million; and Southwark was closing up to ten day centres with reserves of £86.8million.

This is probably an area where transparency rules should be extended. We have councils which have hefty bill for debt but also have reserves - some of which are ring fenced in various ways. So that does complicate matters. But the central point Shapps is making is surely reasonable. If there are redundancy costs in adjusting to a position where the budget is lower then it is justified to use reserves to pay for this. According to the Local Government Chronicle (£) many councils are doing so. Non-school reserves are set to fall by 8% this year - from 11.3 billion to £10.4 billion. Some may feel that £10.4 billion is still rather a lot of our money for Town Halls to be sitting on.