91Èȱ¬

Eric Pickles says it is time for councils to spend what they have saved.

In around a fortnight's time our councils will find out just how much (or how little) money they will be getting for the next few years.

It's a fair bet that our local authorities will be less than chuffed with what they get and many won't be shy in saying that.

So perhaps we should not be surprised that Eric Pickles has got his retaliation in early.

The Communities and Local Government Secretary has said councils should dig into their cash reserves to help themselves out.

And just to make his point, he's published a list of all the money held in reserve by local authorities in England.

The national figure is eyewatering - £10bn in total.

And the North East and Cumbria's 25 councils also hold what sounds like a huge amount in reserve - around £637m.

.

He compares them to householders who have to dig into their savings in tough times.

And the figures he's released also show some large variations in reserves amongst the region's councils.

On the face of it, it might sound like Middlesbrough and Hambleton in North Yorkshire hold similar levels of reserves (around £11m in both cases).

But actually that's misleading because Middlesbrough is a much bigger council than Hambleton.

Therefore, it's best to compare the reserves to the council's annual spending (or revenue expenditure) is held in reserve.

So while Middlesbrough only holds the equivalent of 4% of its revenue expenditure of £274m in reserve, Hambleton holds 93% because its annual spending is just £12m.

And some of our other councils do seem to have different approaches to reserves.

While Northumberland has a a very low level of less than 3% of revenue expenditure, Stockton has the equivalent of 23% of its annual spending tucked away.

Eric Pickles believes councils with reserves above 5% of their revenue expenditure should be digging into them (that's 20 out of 25 councils here).

But that message has not gone down well with most local authorities.

.

They point out that reserves are there for emergencies and contingencies and they're advised to hold them as good financial practice.

Councils like Northumberland have drawn on them in the past to help cope with the cost of flooding, others have used them to settle equal pay claims from workers.

.

It's also money you can only spend once, and so even if a council used its reserves to prop up a service this year, it would just have to be cut the year after.

But of course what's really going on here is the first salvo in a battle between government and councils.

You can make up your own mind whether Eric Pickles has a valid point in highlighting the level of reserves.

But one thing's for sure - Mr Pickles isn't going to just quietly accept the blame for the council cuts to come.

If you want to know the situation for your local council, I have collated a league table for the North East and Cumbria.

The percentage represents how big a proportion of their annual revenue expenditure is held in reserves. The figure in brackets is the actual amount of money each council holds.

Hambleton 93% (£11.2m)
Harrogate 56% (£16.1m)
Allerdale 43% (£7.6m)
Scarborough 40% (£9.8m)
Copeland 38% (£6.4m)
Eden 38% (£4.2m)
Barrow 26% (£4.7m)
Stockton 23% (£74.7m)
South Lakes 22% (£3.7m)
Carlisle 18% (£3.7m)
Richmondshire 18% (£1.6m)
Sunderland 16% (£85.8m)
Gateshead 11% (£40.6m)
Durham 10% (£92.9m)
Hartlepool 9% (£17.9m)
Cumbria 8% (£8.2m)
Darlington 8% (£13.5m)
North Tyneside 7% (£23.1m)
Redcar and Cleveland 7% (£20m)
South Tyneside 6% (£17.2m)
Newcastle 5% (£28.1m)
York 5% (£13.5m)
Middlesbrough 4% (£11.1m)
North Yorkshire 4% (£4.4m)
Northumberland 3% (£14.9m)

• Bookmark with:
• |
• |
• |
• |
• - What's this?