Councils cut to boost reserves

Submitted by SJW on 1 May, 2018 - 10:11 Author: Colin Foster

Since 2010 local councils have had the tax money recycled to them by central government cut drastically, and their scope to raise more by council tax tightly restricted. Yet they have increased the financial reserves they hold.

According to government figures, the total of councils’ reserves is £8 billion higher than they were in 2010. Some councils — many of them Tory — dipped into reserves between 2015 and 2017, but even then 52% of councils increased reserves or kept them steady.

The Office for Budget Responsibility reckons that total reserves for councils in England peaked at £24.8 billion in 2014-15, and have fallen slightly since (on.ft.com/cou-r).

Of course running down reserves is no long-term answer to Tory cuts. But when Labour councils make cuts year after year so they can increase reserves, that can only mean that their leaders have given up on any long-term answer at all.

If only a few Labour councils refused to make cuts, as Poplar council did in the 1920s and as many Labour councils talked of doing in the 1980s, the Tories could be pushed back.

Even short of that, though, if Labour council leaders were serious about using their position to help force an early Tory exit and insist that a Labour government restore the funding that has been cut, then it would be plain common sense for them to run down reserves so as to minimise damage to services in the interim.

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