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0 votes
I have  a real problem justifying our reserves  where we have  an AGAR figure of almost twice our annual budget . Our EMR  sub heads consist of

a third for projects which are agreed being planned and will happen

another third consisting of wish list projects used to park money in which will probably never happen and finally

another third of contingency pots that might happen once every 5 years

Meanwhile every year we are receiving advice saying we should really increase our General Reserves just in case x or y happens .  I don’t buy into all the scare mongering here as PCs cant be forced to do anything .  If we had to provide extra services then surely the money would come with it.?   I see it that the electorate are nearly paying double up front for some things that might never happen.   So here are my thoughts.

I would establish our General Reserve at a set fixed amount of say circa 6 months  of the year round budget (say £150K) ,   I would then remove all the wish list and contingencies sub heads from  our EMR and if they happen get them paid from General Reserves .  Then in order to “compensate” for any spend I would have a sub head in the following year round budget for “top up general reserves” (to the fixed figure) .   I have no clue as to how our accounting package work  but is this logical and would it work? .   I feel this is a better deal for the electorate who would in effect pay after the work is done rather than before .  Views  please
by (4.6k points)
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1 Answer

0 votes
Councils are encouraged to have an agreed reserves policy.  If you don't have one, I suggest you put this to your council and look at local councils to see what theirs says (usually available on the council website).
by (17.5k points)
The problem with most Councils is that they look to put any project contingency etc into EMR  and then "because its there"  grab as much as they can for General Reserves a fund that is seldom used .  This provides poor VFM for the electorate .  My view is that only restricted funds (S106) should be held in EMR and everything else drawn from General Reserves which would set at a fixed amount and would be topped up each year by the amount forecasted to be spent in the previous year .

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