New row over council's ‘rainy day’ fund (From York Press)

New row over City of York Council’s ‘rainy day’ fund

8:00am Thursday 28th February 2013 in News By Mark Stead, mark.stead@thepress.co.uk

CITY leaders have been accused of trying to stockpile “rainy day” cash at the expense of front-line services.

City of York Council’s budget for the next two years will be decided at a Guildhall meeting tonight.

The ruling Labour group’s proposals include putting an extra £1.1 million into the authority’s General Fund reserves, currently containing £6.39 million.

The Liberal Democrat group has proposed lowering this by £400,000 in 2013/14, and also highlighted £34 million held by the council in “earmarked” reserves for areas such as housing and service delivery.

Coun Carol Runciman, the group’s leader, said: “Many residents will find it shocking that Labour are planning to put this money into reserves while planning to increase council tax by 1.9 per cent and cutting services such as libraries, road repairs and adult social care.

“With £40 million in the bank, this does not make sense.

“While the council needs to maintain a certain level of reserves and some of these, such as schools, must be protected, Labour’s increase would take the General Fund level well above the recommended minimum.

“We should be saving for a rainy day, but it is raining now.”

But Coun James Alexander, the authority leader, said reserve funds for areas such as housing and schools could not legally be used for other purposes.

He said while they were in power the Lib Dems had “dwindled reserves” from £11 million in 2008 to the legal £6 million minimum and had since regularly shifted their stance over whether their levels were too high or low.

Coun Alexander said: “It is a serious risk to the council not to have adequate reserves to respond to events which cannot be predicted, and the Lib Dems’ management of this was grossly irresponsible.”