Quote:
Originally Posted by Barrie Yates
Read this week that many councils are sitting on substantial amounts of cash - "savings for a rainy day"
Would be very interesting to hear from one of our councillors how big the Hyndburn Reserve Account is.
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Maybe I can help.
At the beginning of this year it stood at £3.1million, thanks to prudent financial management in recent years.
But before suggesting a spending spree, it should be noted that this is not a big amount for a Council with a multi million pound turnover, facing a multitude of financial threats from all sides.
Which threats? Well, let me quote the Council's Director of Resources in his budget report last year:-
The MTFS (Medium Term Financial Strategy) outlines the large number of potential claims on our expenditure from items that are not contained within the Budget.... Some of the potential calls upon the Reserves are listed below from the MTFS:-
* the Governments stated intention to significantly revise the distribution method for the allocation of grants to local authorities, this could lead to a further major reduction in our revenue source at short notice in 2013/14
* the threat of having to repay land charge search fees after a ruling from Europe that these fees have been levied contrary to European Environmental Law.
* the threat of substantial increased costs from Government proposals to transfer Council Tax Benefit to the Council.
* the increased threat of industrial action during a period of public sector pay restraint and job losses
* the Government’s stated intention to end paying Housing Benefit and the potential for large residual costs that may fall upon Councils in terminating this service
* the increased threat of employment tribunal awards during a period of staff reductions and employee relations tension
* emergency spend pressures in-year, due to one-off items of capital or revenue spend
* risks around the conclusion of the Housing Market Renewal Programme
* the continuing trading difficulties experienced by Leisure in Hyndburn
* financial pressures on partner organisations and the third sector in general.
* supplier failure during an elongated recession
* environmental warranties on our land and guarantees provided to Hyndburn Homes over land transferred to them
* the threat that Central Government will pass fines from Europe directly to Councils if the UK fails to meet its targets on climate change and environmental improvements.
* continuing reductions in our fees and charges income as the Recession continues.
This is not a fully comprehensive list of the all of the potential calls that could be made on the Reserves, however it provides some indication of the financial risks outside the core Budget that the Council could face.
So basically, it would be madness for the Council to substitute these reserves for core funding from central government. Both major parties at Hyndburn have, I believe, always supported this stance.