Paul Dossett 13 September 2018

Reserves are not the answer

Reserves are not the answer

In February 2018 Northamptonshire CC issued a Section 114 notice banning all new expenditure on non-statutory services. This announcement has been a catalyst in bringing the ongoing financial issues facing local authorities to light.

The sense that local government finances are on the brink is firmly entrenched within local government after a decade of austerity but, until Northamptonshire, the issue had failed to attract much attention outside of the sector.

Analysing councils’ use of reserves is key to starting to understand their financial position and sustainability. Data recently released by the Ministry of Housing, Communities & Local Government (MHCLG) shows that, of the 439 authorities analysed, reserve levels have actually increased by £460m in the past year.

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