Harrogate Borough Council and Reserves

Ever since I became a councillor at Harrogate Borough Councillor in May 2012, I have asked repeatedly for both an up to date figure of: what our reserves are; where they are; and—most importantly–a reserves policy.  The policy should, at the minimum, indicate under what circumstances reserves can be moved from one account to another and whether capital can be moved to revenue and vice versa.

With the appointment of a new Finance Director earlier this year, I was hopeful that I would be getting the information.  And indeed, he flagged up that he would be looking into it as a matter of priority.  But I have now learned that the review will not be ready until at least March 2015–coming up for three years after I initially made enquiries.  Apparently this is due to the complexity of the task and the fact that reserves are in over 40 separate “pots”.

However, a chink of light came in the recent Annual Audit Letter 2013/14, issued by Mazars, our external auditor. You can find the link here: https://localdemocracy.harrogate.gov.uk/ViewSelectedDocument.asp?DocumentID=32957.  Here is an illuminating excerpt:

  • The Council has some £16.5 million in earmarked reserves, a housing revenue account general reserve of £15 million and a general fund balance of £5 million. The two general balances are equivalent to 117 per cent of the net cost of services; 

When questioned on what a normal position would be in terms of percentage for a council to hold on to in reserves, the representative from Mazars said it is something like 3-4%.  Quite a big gap between 3-4% and 117%.

Now I understand (though only from brief snatches of conversation–because there is no policy) that there may be conditions which mean that we have to hold on to some sums in earmarked accounts to meet Lottery requirements where we have received grant awards, but this does look like a big stash of cash–taxpayers’ cash.

Clearly there are challenges ahead in managing the reductions to central government grants that come to local areas.  But stockpiling money in reserves to respond to these challenges in the short term is not the answer.  Reforming the delivery of services, however, is the answer.

So what now?  Well, Harrogate taxpayers (and I am one of you as well), I would be pretty miffed if either a percentage increase in council tax is announced for next year, or if we have the usual heroic announcement from the Conservative administration that they have somehow managed to find savings to ensure your taxes do not go up.  There is loads of cash there.

But at least I have finally got some information about the reserves figure–albeit from a third party.  I increasingly struggle to get the simple and direct information I need from both the administration and officers at Harrogate Borough Council, and over a two year wait for what should be a simple adding up exercise, is unacceptable.  I continue to be concerned about lack of transparency at the council and face barriers in getting the information I need to do my job properly.  So, if you are a member of the public, good luck in getting the information you need to hold the administration to account.

I will, however, fight on.