Councils own over £22 billion in reserves

The Department for Communities and Local Government (DCLG) has published figures showing that England’s 444 local authorities hold £22.5 billion in non-ringfenced reserves. 

The non-ringfenced amount has increased significantly over the last fifteen years, by nearly 170 per cent in real terms. 

Communities Secretary Greg Clark insists he recognises the need for councils to be responsible with taxpayers’ money and save sufficiently for the future, however he argues they should also make efficient use of their assets and resources to best meet the needs of their local communities. 

Clark said: “With local government accounting for a quarter of all public spending, it is right that they are called on to play their part in dealing with the deficit. Today’s figures show how they are well placed to do so, with local authorities holding £22.5 billion held in non-ringfenced reserves – up 170 per cent in real terms over the last 15 years.

“As we continue to secure our country’s economic future and cut the deficit, now is the time to make efficient use of their assets and resources to provide the services local people want to see.”

The Local Government Association (LGA) has argued the figure did not paint an accurate picture of the council’s finances. 

Councillor Claire Kober, resources portfolio holder at the LGA said: “These figures are hugely misleading and the suggestion that they prove councils are able to absorb further funding cuts is wrong.

"Reserves can help councils manage growing financial risks to local services but what’s left after these earmarked reserves would only cover less than a month’s spending at a time when many councils are already struggling to keep services running."

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