Financial reserves would keep council ticking over for 86 days
Powys County Council could operate for just under three months if it had to just depend on its reserves, a finance chief has said.
At the end of March, the council had a total £73.160 million that it holds in various reserve accounts, and it is predicted that it will use £25.777 million during the course of this year.
At a Cabinet meeting on Tuesday, July 30 the reserves came up for discussion as councillors received an update report on the council’s financial planning.
Cabinet member for a connected Powys, Liberal Democrat, Councillor Jake Berriman said: “I have a question and I think the answer might help some of the discussion I pick up on Facebook and other bits of social media.
“It’s around reserves. It’s clear in the report that maintaining reserves at the present level is prudent.
“Why are we holding this money and why can’t we spend it.
“How quickly would we spend it, if we just released it to our services?
“I fear it would not be very long.”
Director of corporate services and s151 officer Jane Thomas said: “Every authority needs to hold a level of reserves to be able to respond to those unexpected things that may come our way.
“In terms of our usable reserves they stand at around £50 million.
“If we were to look at how long they would keep the council ticking over, when we look at what we spend on a daily basis that £50 million would keep us going for 86 days.
“Our reserves are not huge; we are not an authority that holds an excessive amount of reserves by any means.”
Ms Thomas explained: “We hold some specific reserves that have been set aside to deliver on things we already know are likely to come our way and by using those reserves particularly for one off elements that does limit the impact on our Council Taxpayers.
Cabinet agreed report.
According to the Welsh Government’s guidance on reserves an “adequate level” can only be assessed at a local level, there is no prescriptive guidance on minimum or maximum reserves in Wales.
Local authorities should look at their own local circumstances and potential risks when determining how much to keep in reserves.
Official figures from the end of March 2023 show that five of Wales 22 local authorities held reserves of over £200 million while the lowest amount held was £39 million by neighbouring authority, Merthyr Tydfil County Borough Council.
