On 27 February 2018 council funding was discussed at Treasury Questions. The amount of money local authorities’ hold in their reserves was debated as part of this session. This briefing sets out the LGA’s key messages on the subject and our analysis which is based on the Ministry for Housing, Communities and Local Government data.
Key messages
- Local authority reserves have been subject to debate in Parliament. Critics of local government have suggested that the funding challenge facing councils could be resolved if we drew down on our £23 billion of reserves.
- The £23 billion figure quoted for local authority reserves includes councils, fire authorities, schools, national parks, the Greater London Authority (GLA) and combined authorities. Councils do not have control over the entirety of this money as for example schools reserves can only be used by the schools that have put the reserves aside. Therefore any decision on them will be down to each school’s governing body.
- Councils’ own reserves are, in fact, much less, at £16.7 billion. Of this £13.3 billion is ring-fenced or earmarked for specific projects and to cover known liabilities. This leaves £ 3.4 billion of general and unallocated reserves that can be used to cover any unexpected events and to protect councils’ financial integrity.
Download the full briefing
Local authority reserves, March 2018