COUNCIL leaders have hit back at accusations that local authorities are slashing services and cutting jobs while hoarding cash in huge reserves.

Communities Secretary Eric Pickles has questioned why local authorities are holding tens of millions of pounds in reserve, ahead of savage cuts that will close libraries and leisure centres and hit care for elderly people.

In North Yorkshire, reserve sums held include 93.1 per cent of the budget (£11.2 million) in Hambleton, 56.1 per cent (£16.1 million) in Harrogate and 46.7 per cent (£4.5 million) in Ryedale.

Mr Pickles said: “I’m sure many residents would be shocked to find local authorities still have over £10 billion in their piggy banks when they are hearing weekly scare stories of service and job cuts.

“Just like any household facing challenging times, all good council should be considering the merits of temporarily dipping into the money they have set aside, as part of their plans to address immediate financial challenges.”

The minister said there was no reason for any authority to keep back more than five per cent of its budget.

But Coun Keith Knaggs, leader of Ryedale District Council, strongly defended the authority’s financial position.

He said: “There are reserves for things we know we’ll have to pay but not precisely when, for example repairs, some restructuring costs, and pension contributions.

“The genuine revenue reserves are nothing like the figure quoted and it’s sensible to hold a bit for the unexpected such as the cost of a severe winter, or flooding or other civil emergency. You wouldn’t be very pleased if your council said no we can’t do any pavement clearance at all, or help victims of flooding after a thaw, because we’ve run out of cash.

“Like all organisations, if cash out exceeds cash in, eventually it ends in tears.”

Paul Cresswell, corporate director at Ryedale District Council, said most of the council’s reserves would be used to fund capital projects and only £632,000 was unallocated – less than eight per cent of the authority’s net budget.

Meanwhile, Coun Neville Huxtable, leader of Hambleton District Council, said: “We have been spending our reserves in a sustainable way for a number of years in order to support necessary investment in services and maintain the third lowest council tax in the country for a shire authority.”


Council reserves

North Yorkshire, £36m, 4.4% of budget.

Hambleton, £11.2m, 93.1%.

Harrogate, £16.1m, 56.1%.

Ryedale, £4.5m, 46.7%.

Scarborough, £9.8m, 39.6%.

York, £13.5m, 5.4%.