Shropshire Star

Shropshire Council to put away £14m for rainy day

Shropshire Council is to increase the amount of money it puts away for a 'rainy day' to more than £14 million pounds for the coming financial year.

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Shropshire Council is to increase the amount of money it puts away for a 'rainy day' to more than £14 million pounds for the coming financial year.

And the authority plans to raise that over the next few years until it reaches nearly £19 million in 2015. The money forms the general balances fund – the cash needed to deal with any unforeseen circumstances that could arise.

The council should have about £13 million in the fund, but the actual amount could be as low as £1.8 million.

Shropshire is one of eight councils singled out in a recent Local Government Chronicle report for having reserves below minimum levels. The council also has about £30 million in earmarked reserves – money which is held for expenditure such as elections, school building maintenance insurance and fire liability.

This money can be used in the case of emergency, but it must be replaced.

The amount earmarked for general reserves over the next few years drew criticism from Labour and Liberal Democrat members at yesterday's Shropshire Council cabinet meeting.

Councillor Nigel Hartin, Liberal Democrat group leader, said the £14.2 million being put aside in the bud-get for 2012/13 was 'too high'.

Labour leader Councillor Alan Mosley said council tax-payers were seeing cuts at the same time as the council was 'putting this sort of money away in a piggy bank somewhere just in case a rainy day comes along'.

He also asked why the council had put £3 million into next year's reserves to cover redundancy payments, with another £1.5 million for the following year.

Kim Ryley, council chief executive, said there were no plans to cut council posts at present and the council had tried to minimise posts lost. But he warned that given the scale of the £40 million cuts faced, future job losses were 'unavoidable'.

He said the council was having to face up to a 'new world' of financial instability, and Shropshire's app-roach had been praised by the Audit Commission.

Councillor Ann Hartley, the council's deputy leader, said it was 'common sense to save for a rainy day'.

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