“Eric Pickles’ claim that Derby City Council should use its reserves to help reduce the impact of budget cuts is not only wildly misleading, but also gives a horrifying insight into the Government’s misunderstanding of local authority budgets.
The £81m quoted by Mr Pickles is pure fantasy. We are predicting that at the end of this financial year we will have around £18m of unallocated reserves. All other monies held are already allocated to on-going costs and managing financial risk; they cannot be used for any other purpose.
Is Mr Pickles, a former council leader himself, seriously suggesting it would be good financial management to spend that money on balancing the budget, leaving the council penniless should we encounter any unforeseen costs?
The council’s revenue reserves are at their lowest possible level without undermining the budget.
To spend them on standing up services now would be an unsustainable, one-year solution, which would not help to reduce the pressure on services next year but would instead place the Council at unacceptable risk.
The Council is pleased, however, that Mr Pickles has recognised that the Government’s cuts are ruining services and damaging communities.
We will be writing to Mr Pickles to clarify the financial situation, and would welcome any help his Government can give now he realises that the Authority is tens of millions worse off than he had evidently thought.”
Councillor Sarah Russell, Cabinet Member for Housing, Finance and Welfare.