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Essex County Council sits on £300m reserves while cutting vital services
4:00pm Tuesday 25th September 2012 in Echo News
MORE than £300million is sitting unused in council coffers, at the same time money is being slashed from services.
Essex County Council has the cash stashed away in reserve accounts as it tries to reduce its annual spending by £123million this year. Chiefs said they were prepared to dip into the sum slightly to reduce the impact on frontline services, but emphasised most of the cuts would have to come through other means. A spokesman said: “The budget for 2012/13 requires savings of a further £123million.
“However, the carefully executed efficiency programmes through 2011/12 and into 2012/13, combined with robust reserves, will make this target more achievable without service reductions.” The council is legally obliged to keep a certain amount of money spare to cover the costs of unexpected incidents or existing budgets spiralling out of control. The reserves are split between “usable” reserves – money which can be deployed to plug gaps in an annual budget – and “unusable” reserves, which comprises cash stowed away by law to back up various accounting procedures. In total, the council has more than £1.07billion in the bank, but barely a quarter of that is money which could actually be used to save jobs or services.
The reserves are topped up at the end of each financial year if departments have not spent all their allocated cash.
The council spokesman added: “Further programmes of efficiency were developed in 2011/12 to ensure that the revenue budget was not overspent, some of which was achieved ahead of schedule.
“This has enabled the council to put some funding into reserves, to ease the pressure on future years’ budgets, and to support innovative programmes of work that will ensure that services are sustained as more funding reductions bite.”