‘Healthy’ reserves data sparks row

Data published by the DCLG in December in a press release entitled “Councils still have healthy reserves for 2012-13” has evoked consternation among local authority treasurers following some disparaging coverage in The Telegraph.

Eric Pickles’ upbeat announcement congratulated the majority of councils for their “good budget management” pointing out that they had barely made a dent in their reserves one year into the Spending Review. “All told, councils still have over £10bn held in reserve to fall back on”, said Pickles.

Paul Woods, Newcastle City Council’s Director of Finance and Resources, writing in a letter to The Telegraph called the data “highly misleading”, countering that much of the £10bn was already earmarked for specific projects and while it technically still sits in the reserves it is by no means there to fall back on.

The Telegraph made no distinction between earmarked and un-earmarked reserves, said to be around 29% and 71% of overall reserves, respectively, preferring to cover the story in terms of councils hoarding cash on the one hand while slashing public services on the other.

In any event, given the current overwhelming levels of government and personal debt perhaps it isn’t such a bad thing that there are some local authorities out there who are managing to balance the books.