Council 'rainy day' savings criticised by union
A public sector union says Leicester City Council should not be building up its cash reserves while services suffer cuts.
In its official response to city council budget proposals for the next financial year, Unison said the authority is wrong to plan to increase its reserves from £5 million to £15 million.
In a document sent to the council, Unison said: "Is it right to be saving for a rainy day when that rainy day is here already?
"Is the authority spending money on what in the current economic climate might be regarded as luxuries?"
It also said that many of the cuts proposed in the budget were too vague to consider in-depth.
The letter said: "There remain a number of areas where the proposals, while drastic, are vague and therefore comment is difficult."
The city council must cut £70 million from its £500 million budget over the course of three years.
In the 2010/11 financial year, £30 million was cut. The authority needs to cut £20 million in both this and the next financial year.
It has proposed to hike council tax by 3.49 per cent from April, close some libraries and cut subsidies for some bus services.
The city council has insisted that building up cash reserves is responsible, because it cushions taxpayers from unexpected expenditure.
Both the city and county councils are due to rubber-stamp their budgets next Wednesday.







5 Comments
by New_Walk_View
Thursday, February 16 2012, 8:21PM
“Doh. Forgot to delete editings. Sorry!”
by New_Walk_View
Thursday, February 16 2012, 8:20PM
“Without a detailed knowledge of the Council's assets and liabilities, funding arrangements with central government etc etc it's virtually impossible for outsiders to give them meaningful financial advice.
We can identify obvious cases of waste, we can ask them to `spend less' or `spend more' in different areas but, in the end, we have to trust them to manage the City's finances on our behalf.
It isn't just about existing services, either. There are capital projects to think about - like the replacement for New Walk Centre. How is that to be paid for? I doubt that central government wil provide an unlimited capital grant. Perhaps some of the reserves are destined to go in that direction.
to cover any proposals the Council/Mayor come up with. any . They may not provide anything. cover everythingWill it all come from a capital grant from central governemt. new so as to how many people who comment on local government finance really have a clue of us really -Until this situation changes, most comments - like this one - that make newspaper headlines are just simple pleas to `spend more' or `spend less'.
will be If the central government wants ordinary folk to take more of an interest in what local governmetn does and how it runs, making wants us to get Spend more? Spend less? Depends Most comments - including this one - are just boil down to are just
to the Council owns, what their income-generating capacity is, what how much income is Might it be that some of this will be used to pay for the new Council buildings that will replace New Walk Centre?”
by djmuz
Thursday, February 16 2012, 2:27PM
“I love the way people comment on reserves as if they are just for a rainy day, like a bit of extra pocket money maybe. How many people look at the scenarios where reserves might be called in in case of disaster, emergency, etc but would be the first to criticise if the Council didn't do what was required or said they just hadn't planned for that. I wouldn't mind guessing that the Council self-insure quite a few large assets and save year on year as a result.”
by AFreeThinker
Thursday, February 16 2012, 12:45PM
“It's not about using up reserves, the council (according to this article) are planning on increasing their reserves by £10 million. That is taking £10 million from their budget and putting it in the bank instead of spending it. So, rather than 'propping up' outdated services, if they spent their budget and kept the existing £5 million in the bank, they could fund an additional £10 million of worthwhile services. If they save the £10 million, next year their coffers will have £15 squirrelled away. The year after that they'll have £25 million, and so on. I'm guessing you don't have cause to use too many council services, but vulnerable people in our locality will loose out substantially as a result of important and beneficial services being cut. I just don't see the logic in saving money for a rainy day when this is that day.”
by RuralOutBack
Thursday, February 16 2012, 11:21AM
“When will the Unions realise that the world is in recession including the Euro zone. Reserves can only be used once and with them promoting litigation councils need to have money to defend these actions.
So if the City Council use the reserves this year to prop up outdated services what happens next year and the years after that. The Unions always seem to side step the issue of sustainability and the changing model in service delivery.”