Council leaders have defended stockpiling £200m of cash in County Hall’s coffers at a time when services have been axed.

To send a link to this page to a friend, you must be logged in.

New figures have emerged which show, over the past year, an extra £50m has gone into Norfolk County Council’s usable reserves, hiking the amount in the bank from £155.8m in March 2011 to £205.1m by March this year.

The increase in those reserves, revealed in the council’s statement of accounts, comes at the same time as the county council is in the midst of making £135m worth of savings over three years.

Hundreds of jobs have been lost because of the cuts, which also saw the authority scrap its own youth service, reduce subsidies to rural buses and spending slashed on maintaining public rights of way.

But council leaders have insisted it makes sound financial sense to keep money in reserve, the cash could not have been used to save jobs and that it would ultimately be used to boost Norfolk’s economy.

They say the increase in the reserves is mainly down to the government providing more one-off cash for capital projects, such as highways maintenance and schools projects.

Derrick Murphy, leader of Norfolk County Council, said: “Much of the increase is due to a big rise in government money received by the county council for capital spending - this is funding for schemes which were not ready to proceed in the previous financial year, but which is now allocated to be spent in the current year and will largely be spent on improving facilities at our schools.

“Other significant spending increases which will be taken from reserves in the current year includes £3.5m of extra spending in highways maintenance, £3.5m from the Norfolk Infrastructure Fund, £3.5m to fund the ongoing transition of changes in adult social services and £2.5m put into a reserve for the Northern Distributor Road so that we won’t have to borrow as much money should the scheme go ahead.

“In essence, the rise is extra ‘one-off’ funding which cannot be used for recurring revenue spending such as on staff or services.

“Instead, it will be spent on a range of capital projects which will benefit Norfolk people by providing items such as road maintenance, improved school buildings and better broadband. This will provide a welcome stimulus and employment for construction companies at the same time.”

Mr Murphy added: “It is also prudent to have some money set aside to meet unexpected costs. The level of reserves is kept under ongoing review by councillors and reported regularly to them. Norfolk holds below average levels of reserves when compared to other shire authorities.”

While the county council has £205.1m of usable reserves, which is money which can be used to fund expenditure or reduce council tax, it also has £271.5m of unusable reserves. Unusable reserves comprise cash stowed away by law to back up various accounting procedures.

But Mike Brindle, leader of the Liberal Democrat opposition group at County Hall, said: “We think that some money needs to be made available to be spend.

“We would support the use of a proportion of the reserve to help the worst hit members of the community. At a time when most of us are feeling the pinch, they have absolutely nothing to spare.

“It is incredible to think that in the 21st century, we have people relying on food banks to eat and that’s before the changes to council tax benefit are brought in.”

But Jonathan Dunning, branch secretary for trade union UNISON at Norfolk County Council, said it was too simplistic to think the cuts his union had criticised could have been avoided by dipping into the reserves.

He said: “We do keep a watch on what they do and you can clearly say that, in hindsight, they cut deeper than they needed to do.

“But when they say these are usable reserves, that does not mean they can spend it on anything they like. Some of it will be tied up with capital projects and match-funding which they are committed to.”

Suffolk County Council has £158m in its reserves, which opposition Liberal Democrats earlier this year criticised as being “quite excessive”.

The government says determining the level and use of reserves is a matter for individual local authorities and there is no prescriptive national guidance on the minimum or maximum level of reserves.

However, in 2010, communities secretary Eric Pickles said that when times are hard, councils must not turn their cash vaults into “Fort Knox”, but use reserves to soften the blow of spending cuts.

But, last month, the Local Government Association warned councils’ cash reserves, which add up to £17bn across the country, would run out in five years if local authorities were forced to use them to cover the expected cuts in the money they receive from government.

19 comments

  • It's not limited to the council, most large companies are obsessed with stockpiling their cash during hard times.

    Report this comment

    KeithS

    Tuesday, October 2, 2012

  • bet the offices are heated up nicely at the moment. they "lush" themselves up with one eye on the clock and the other on their pension pots.

    Report this comment

    bookworm

    Tuesday, October 2, 2012

  • What? An "increase in funding that will largely be spent on improving schools"? Poppycock - I'll eat my own hat when it happens!

    Report this comment

    User Removed

    Tuesday, October 2, 2012

  • John, who knows what kind of other investments they have entered to the secrecy only ever gets broken when they foul up. These risky investments of the past could happen again with no change at the top, they will feel as if they can get away with anything now.

    Report this comment

    ingo wagenknecht

    Tuesday, October 2, 2012

  • I am completely puzzled. We were told not long ago that NCC has long term borowings of over £500m on which it is paying interest of over £30m each year. i.e. about 6%. What sense does it make to sit on usable reserves of £200m which are probably producing less than a 2% return. Can someone explain this to me, please?

    Report this comment

    John Martin

    Tuesday, October 2, 2012

  • Despite telling us about hard times the truth is that they have money to burn, don't they?

    Report this comment

    John L Norton

    Tuesday, October 2, 2012

  • They'll have to pay their friends at Cory-Wheelabrator £20m after the planning enquiry has thrown out the King's Lynn incinerator plans, as well as their own costs to keep pushing this ill-fated project. So they only really have less than £180m to spare, poor dears. I wonder if the millions they have already squandered on this project has been taken into account. Presumably, to our trusted leaders, this is chicken feed.

    Report this comment

    Barking

    Tuesday, October 2, 2012

  • I'm missing the 3.5 million allocated to more than 300 apprenticeships, a poor return for that kind of money. NCC has failed to revitalise Gt. Yarmouth during the last 15 years, they are occurring large liabilities, some 20 million compensation for a company that has outstanding court cases and a dubious record, not forgetting the Iceland saga. their unethical investment portfolio is seemingly carrying on and the pension pot of the upper echelon at NCC is very well catered for. Any rises in the tax precepts should be conducted in total openness of NCC finances, that includes the pension funds information.

    Report this comment

    ingo wagenknecht

    Tuesday, October 2, 2012

  • I don't expect we will hear from Murphy as he would appear to be keeping low profile at the moment, wonder why?

    Report this comment

    John L Norton

    Tuesday, October 2, 2012

  • we must remember this council has to keep a reserve to pay for thier heating and repairs on thier buildings oh and we must not forget the exspenses bill SHAME ON YOU disgusting is not a strong enough word!!!!!

    Report this comment

    i am mostly wrong??

    Tuesday, October 2, 2012

  • Although Norfolk County Council claim to be cash starved and have cut vital service to the old and vulnerable, the true fact is that they are rolling in money. You only have to look at the £millions they have thrown away at their useless favoured projects. Then we have this stockpiling of money, Just who are this dictatorial lot trying to kid?

    Report this comment

    Unemployed and Luvin it.

    Tuesday, October 2, 2012

  • NCC are sitting on all this cash whilst services are being cut left, right and centre. They appear to have no idea how to run the county but plenty of good ideas about how to waste our hard-earned wages. Off with their heads!!....

    Report this comment

    Sandy.L

    Tuesday, October 2, 2012

  • Council tax has reached punitive levels and it has got to a state where it is causing real hardship to many people of modest means. Perhaps a refund and a careful look at public service jobs within the council might restore the balance,after all this money is not really theirs but extracted from the long suffering taxpayer.

    Report this comment

    Harry Rabinowitz

    Tuesday, October 2, 2012

  • Here's a novel idea-how about council tax payers being allowed to hang on to their share of the £200 million and boost the economy by spending how they want. I don't mind paying my council tax for essential maintenance and services-including things like free transport for sixth formers etc but I very much object to my share being handed over on a whim to charities and groups which have restricted membership or appeal eg churches, football clubs and the like. Use the money on essential services or even restoring council owned properties but don't give it to people who should be funding their own hobbies.

    Report this comment

    Daisy Roots

    Tuesday, October 2, 2012

  • Hmm...I assume all this money over £400m in reserves is making interest and is adding to the amount in reseve? so why is this not being used to provide services etc? Oh and I hope this time this money is actually in a safe place unlike the Icelantic issue!

    Report this comment

    City Boy

    Tuesday, October 2, 2012

  • Although Norfolk County Council claim to be cash starved and have cut vital service to the old and vulnerable, the true fact is that they are rolling in money. You only have to look at the £millions they have thrown away at their useless favoured projects. Then we have this stockpiling of money, Just who are this dictatorial lot trying to kid?

    Report this comment

    Unemployed and Luvin it.

    Tuesday, October 2, 2012

  • It was shown that councils have no real need for the huge quantities of money charged under council tax when their financial adventures in Iceland were exposed a few years ago. Much better to simply cut council tax by 50% by instigating a proper ethos of "no-one getting rich in public service". A maximum income for any council employee of £50,000 pa should do it.

    Report this comment

    johnheppell

    Tuesday, October 2, 2012

  • Plenty to serve their pensions methinks.

    Report this comment

    Marigold

    Tuesday, October 2, 2012

  • "...........Norfolk County Council defends stockpiling £200m in cash pot". But, can they defend the unaffordable, ripoff ,council tax that they levy ??.

    Report this comment

    "V"

    Tuesday, October 2, 2012

The views expressed in the above comments do not necessarily reflect the views of this site

ADVERTISEMENT

ADVERTISEMENT

Norfolk Weather

Partly Cloudy

Partly Cloudy

max temp: 10°C

min temp: 8°C

Five-day forecast

loading...

ADVERTISEMENT

ADVERTISEMENT