Local authorities have been commended for ‘managing their finances well’ after new figures reveal that the sector’s reserve fund has increased by £2bn.
New figures from the Ministry of Housing, Communities & Local Government show that the total of all councils’ general fund revenue account reserves increased by £1.75bn from £23.75bn at 1 April 2018 to £25.5bn at 31 March 2019.
Much of this increase is driven by a net increase of £776m in the Greater London Authority’s revenue reserves, largely due to Transport for London’s refinancing of rolling stock for the Elizabeth Line.
When the GLA is excluded, total net additions to non-ringfenced reserves was £1.1bn in 2018-19.
Rob Whiteman, chief executive at the Chartered Institute of Public Finance and Accountancy (CIPFA), praised local authorities for their managing their finances well.
‘These figures show that councils are topping up their reserves where they can, reflecting the absence of a long-term funding settlement for the sector, continued uncertainty around the spending review and Fair Funding Review and an expectation that the long hard winter of austerity is set to continue,’ he said.
‘Increases of more than 5% in spending on adult and children’s social care show that cost pressures in these areas are still very real.
‘The majority of councils are managing their finances well and should be commended for their efforts. It’s crucial that authorities maintain a focus on strong financial management given the uncertain future for funding and service demands.’
