C A R M A R T H E N S H I R E COUNTY COUNCIL has issued a lengthy press release that seeks to explain the council’s position in respect of the use of its reserves. “We appreciate why people were questioning why we are keeping £122m in reserves, which is forecasted to be £96m by the end of March, and then cutting our services,” said Cllr Jeff Edmunds. “But we cannot simply dip into these reserves, the vast majority of which is ring-fenced for a specific use.”
Cllr Edmunds continued: “Put simply – to compare with an average household – reserves are like our savings account which we use if we need to make home improvements, fix the car etc, and our revenue budget which funds services, are like our current account which pays our bills. If we raid our piggy bank because we can’t afford to pay our bills it will be depleted and when we need money for anything there will be none there. Reserves are for one-off expenditure or projects, it is unsustainable and would be a reckless use of funds to take money from them for day to day living.”
One Independent Group councillor suggested to The Herald: “The question begged by his (Cllr Edmunds’) remarks is whether he thinks it is better to have a million in the bank and sit in darkness because the electricity and gas have been disconnected.”
Chris Moore, the council’s head of financial services, was less absolutist than Cllr Edmunds; however, his words were still cautionary: “Reserves are set aside to meet future potential liabilities, and any use of the reserves for any purpose other than what it is earmarked for, should be considered with extreme caution.”
Leader of the council, Cllr Kevin Madge, said: “We want to be very clear about our use of reserves. We are planning for a sustainable future. Raiding our ‘piggy bank’ to see us through this financial year simply stores up problems for the future. It would be irresponsible to put ourselves at such risk.”
However, Cllr Madge’s view on the reserves and the irresponsibility of using them was not shared by Plaid Cymru’s group leader, Cllr Emlyn Dole.
He told The Herald: “It seems to me that what is being said about the reserves on the one hand is totally inconsistent with the way the executive board managed to approve switching £3m of reserves around not that long ago. My deputy, Dai Jenkins, attended a recent meeting of the executive board at which the board nodded through moving £3m around the reserves at Chris Moore’s proposal without any questions being asked. It worked out at a £1m a second to deal with the whole thing. Of course officers need input into decisions, nobody can dispute that, but they should only be advising councillors, not directing policy. That is what the executive board and the council are there to do. If you have a weak executive and strong officers it is a recipe for disaster. Our view that we should look at what we can do with the reserves cannot have come as a surprise to the council leader. He was told by Leighton Andrews – a Welsh Labour minister – that councils across Wales should look at what they can do with those reserves. That letter was sent in November. The council’s reserves are an essential part of the budget process. Those reserves are public money and should be used for the benefit of Carmarthenshire people. It really should have rung a bell in someone’s mind at County Hall that the reserves would need to be examined. It follows that they should be scrutinised. At the moment there is £15-20m sitting in a reserve just called ‘other’. I suppose there could be reserves marked ‘other-other-other’ just to make clear what they are for! Against a background of austerity, we should have looked at the reserves as the Welsh Government suggested. The way the council has dealt with the whole issue of reserves smacks of scare-mongering.”
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