PRESS RELEASE : Welsh Conservatives urge the Labour Government to review the huge levels of usable reserves held by some councils [November 2022]

At Finance and Local Government Oral Questions today, Peter Fox MS pointed out that the formula for funding councils is out of date and unfair, seeing some councils able to stack up colossal useable reserves, whilst others struggle to meet their needs.

Commenting on the exchange, Welsh Conservative Shadow Finance Minister, Peter Fox MS said:

“I asked the Finance Minister whether it was right that some councils have been able to accrue substantial useable reserves, while others are really feeling the pressures of global events. There needs to be a review and a thorough analysis of these reserves. The Minister was dismissive and clearly does not share my concerns.

“The Labour Government also need to be forthcoming in allocating the £1.2 billion that the UK Government have provided in Barnett consequentials, to ease these pressures.

“Additionally, Labour need to ensure that any and all diktats and cumbersome programmes levelled on councils are fully funded, so that our hard-pressed council taxpayers aren’t left to foot the bill.”

Councils saw an increase of over 35% in usable reserves held at March 2021 – to £2.1bn. Useable reserves at March 2022 increased by over 30% again, a further £600m, which will take the total to almost £2.75bn.

Peter Fox MS argued that this is not a fair distribution. Some councils at March this year held well over £200 million, whilst others hold minimal useable reserves. Councils face considerable pressures over the coming months, including in social care and school staffing issues with Labour’s recruitment and retainment efforts faltering. As council tax continues to rise despite reserves rising, Welsh Conservatives believe that something needs to change.