DELEGATION OF EARMARKED RESERVES

Question

I have recently started several threads about "Earmarked Reserves activity" on my Council and believe that I have at last got to the bottom of what has gone on but still have a few outstanding questions.  Firstly, S101 talks of ability to delegate any of its functions to a committee or an officer.  I have from that made a leap of faith to say that, that principle can apply to individual year round budget sub  headings as separate entities? Any problems with that assumption?

What has happened in our case is the Full Council has taken individual Earmarked Reserves pots, allocated them to Committees but applied an upper limit to the current years spend.  In one case a limit of £20k (from a £100k pot) was applied and most observers thought this was to be a one off spend but I have at last got them to admit that the usual Budgetary Control limits apply i.e. it has to be 4 x £5k units.

My question to all of this is, is it possible to part delegate a function or should it be all or nothing?

Answer 1

If the reserves are earmarked, what exactly are they earmarked for? How vague or specific is the resolution on that?

Answer 2

I'm sorry but this is (in my humble opinion) very convoluted.  What are you trying to achieve?

Comments

The real problem is the lack of guidance available about how Earmarked Reserves should be authorised and monitored.  There is little advice within the Fin Regs and audit input is minimal.  As such for PCs who adopt a "you can never have too much money" culture it is easy to squirrel money away under EMR.  In our case EMRs increase every year and have risen in the last 10 years from circa £130k to nearly £500k.  In the absence of any direct advice many PCs have dedicated Reserves Policies.  We do not have one.   Most policies stipulate that all reserves decisions are reserved for the Full Council.    Now in order to get quick access to some these budgets our PC have part delegated control to Committees and originally did that with higher threshold rates ie committee can authorise up to £20k.  So yes I agree it is very convoluted and screams out for some control.    NALC simply quote S101.
Basically, some PCs are able to hold obscenely high amounts of reserves.  None of our EMRs have explanatory paperwork just a heading and the annual review usually takes about 2 minutes

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As I have said before, the reason why there is no separate guidance for the use of Earmarked Reserves is that those funds are no different from any other funds at the disposal of the parish council.  They are "savings" if you like that are being built up for identified projects so arguably should only be used for those projects.  In all other respects such as how these are spent, the need for comparative quotations, etc. etc. are as per your financial regulations.
A committee can have delegated power to make expenditure decisions if that is within your financial regulations and/or the committee terms of reference but the over-riding requirement for compliance with financial regulations cannot be circumvented simply by delegating authority to a committee.  If your financial regulations state that expenditure over a certain amount needs full council approval, then expenditure over that amount needs full council approval unless full council decides otherwise.

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I agree Delboys wife but the Fin regs stipulate budgetary Control limits for Revenue expenditure not EMR.  Still, I have written and asked that the PC considers setting a reserves policy. If it causes some Cllrs to think then progress will have been made