Council reserves rise despite budget cuts, WAO finds

According to a report by the Wales Audit Office (WAO) Welsh councils have increased their financial reserves by £244 million between 2009-2014, despite cuts to their main source of income.

Statistics showed the total reserves held by the 22 Welsh local authorities rose by nearly a third, from £780 million in 2009 to £1.024 billion in 2014. The report maintained that while the figures showed ‘strong financial resilience’, ‘building up reserves with no clear purpose is not an effective use of resources’.

Commenting on the report, Aaron Shotton, Flintshire council leader and Welsh Local Government Association finance spokesman, said: “It recognises an improvement in financial planning at a time when funding for local councils in Wales has contracted by nearly a fifth over recent years.

"These reserves can only be spent once, and will directly reflect the success local authorities are having in planning beyond single-year budget horizons. Local councils must now continue to seek ever greater consistency in their approach.

"We will continue to work with our members, finance professionals and the Welsh government to improve and to deliver the reforms we so desperately need in how local councils are funded."