Councils hoarding cash and playing politics

Daily Mail ?

They probably think that reserves are for 'freak' conditions like weeks of flooding, sub zero temperatures, months of heavy snow, hurricanes, comets smashing into the town hall great fires, pandemics etc, etc, etc.
Probably not so the Tories can plunge the country into no growth/deep triple dip recession
and reserves can be wasted to paper over the cracks.

Wouldn't wipe my ass with the paper and as for not believing the figures no I don't wouldn't believe a word the mail prints.

I imagine he thinks there is no deficit. 

I'm sure Liverpool council (and others) have done stranger things in the past!

Utter garbage - it is you who is financially illiterate.  How a council classifies it's expenditure is irrelevant.  They have one pool of money.  If they want to prioritise self insurance and put it in "reserves" as opposed to keeping it in the "current account" and keep a library, that is their decision. 

The bare facts are they are moaning about "savage cuts" and closing frontline services while at the same time ferreting money away for expenditure of their own choosing.  Their smoke and mirrors of distinguishing "current" and "reserve" expenditure is done purely to confuse morons like you.

oh Java you just don't get it do you
let me put it at the most simplist i can for you

I was told i had to replace my roof in five years as it would cave in and be beyond repair so i put £1000 away each year so it wouldnt be a £5K hit in the 5th year
It appeared i had a lot of money in may savings account but it was already committed so i couldnt pay my monthly gas bill out of this account otherwise i would be bankrupt in year 5

do you get the difference now?

With the current economic position any council that fails to increase its reserves is being irresponsible. You can't use reserves to

pay for current services - the councils would put themselves in danger of going bust which would help nobody.

Karla - Is Rothko claiming that this increase in reserves is because the councils across the UK are all saving money for building work in the future?

Does he have any figures to back up this claim or is he just making it up?

As there are so many council buildings across the UK as opposed to his silly childish example of just one property, is there a reason why the maintenance cost would not be similar year on year?
Are they saving money to rebuild the town hall after Northernlads this comet hits it?

Businesses are sitting on huge cash piles that they refuse to invest, councils are building up reserves, even the dear old British consumers are paying off their mortgages and credit cards and trying to shove a few quid under the mattress.

Why? Because we're all helplessly watching Dave and Gideon driving the economy into the ground and we want to have something left to buy a few cans of beans and a tent (or possibly a large bottle of Tesco vodka) when the fat lady stops singing.

Well rethko I'm glad you were not trying to suggest that this increase in reserves is because the councils across the UK are all saving money for building work in the future?

Your grant example only holds any water if councils are getting more grants & projects off the ground now that they were 2 years ago. Is that the case?

Across the whole of the UK Councils are spending money on various projects. For some they may get the grant now and not spend it until 2014 but there are others they may have got a grant in 2011 and spending it now.

Is there any evidence to suggest UK councils are getting more grants now for future projects than they were in the past.

"With the current economic position any council that fails to increase its reserves is being irresponsible."

Nonsense Wurzel.  Councils aren't given taxpayer money to hoard it away for a rainy day in case they can't pay for their vanity projects.  They need to cost a basic service and then provide it keeping only modest reserves for cashflow.

They should be run as lean as possible.  Your way of thinking leads to the kind of situation where council plays at being banker and loses all the taxpayer cash in Icelandic banks.

Java - it has got nothing to do with 'vanity projects' it is about a council ensuring that it can meet its statutory obligations ( which are many ).

If a council spent its reserves and then hit a crisis it would have to go to central government in order to fund its legal obligations - you would be the first]

to start howling if this came to pass.

OK one last go for Jiva and Moxico from Rethko

My mate works in a Council who have a high level of reserves and i once quizzed him why that was the case
He said that the Council had been putting money aside each year because they had an outstanding legal case in court that had been dragging on for years ( think it was some Government employee legislation around equal pay or something like that)
Anyway the potential bill ran into 10's of millions so instead of waiting for the outcome of the court case they had prudently set aside an amount each year  so that it didn't bankrupt the Council when the case was settled
So to be clear they knew they had a liability but were trying to minimise the extent of the liability by defending the legal action and the fact by dragging it out over a number of years they knew they could spread the cost and not take a one year hit

I cannot think of one sensible organisation, either private and public, with a budget that does not have a contingency fund.  I would be interested to know of what experience Java has of such a decision making process.

Mexico - that's a fair point but all councils hav been affected by th same issue to do with equal pay and it's very very expensive.  So it could be a factor.

The reserves issue is a bit of a red herring.  The big question for councils is how they've managed to slash millions off their budgets and sacks tens of thousands of staff without a significant reduction in core services.  It leads me to the conclusion they had become massively bloated and inefficient in all those years when money was pouring in during the 2000s. 

Remember those 'essential' inflation busting council tax rises year on year during this period?  It was a scam, verging on fraud.