Welsh Conservatives blast council reserves – “local authorities in North Wales can only dream of having that much money kicking about”

UPDATE: The Welsh Conservatives have been in touch about this article noting that had not specifically questioned Wrexham Council’s reserves (Welsh Conservatives blast Wrexham Council’s “£80m reserves stashed away”), stating “We are questioning why some Labour-led councils, such as Rhondda Cynon Taf, Caerphilly and Swansea, are sitting on so much money”.

Wrexham.com requested the full data as offered yesterday, and worked out roughly the reserves per head of population in the highlighted areas to normalise the data for some context:
Rhondda Cynon Taf population 241,873 / reserves £207m which equates to very roughly £850 per head of population
Caerphilly 181,731 / £180m = £1000 per head
Swansea 246,217 / £183m = £750 per head
Wrexham 137,000 / £80m = £600 per head
Flintshire 156,000 / £75m = £480 per head

Wrexham is currently an Independent / Wrexham Independent / Conservative council, and Flintshire is Labour run.

In a further comment to us today Welsh Conservative Shadow Minister for Local Government, Sam Rowlands MS, said: “It is absolutely vital that councils keep some money in reserve to deal with any unexpected challenges, but the levels of cash being squirreled away by some Labour authorities is excessive.

“Some local authorities in North Wales can only dream of having that much money kicking about as they have been consistently neglected and underfunded by Labour ministers in Cardiff Bay, who choose to look after councils in the South instead.

“At a time when people are struggling to make ends meet due to the ongoing cost-of-living pressures, councils should be using any extra cash to help ease the burden on residents instead of saving it for a rainy day.”

Original article below…

Wrexham Council’s reserves have been questioned by the Welsh Conservatives – a group that has been part of the ruling administration who agreed budgets and oversaw the reserves over the last few years.

The issue of council reserves across Wales was highlighted by the Welsh Conservatives, who referred to “vast sums of money stashed away” in Labour led councils.

They highlighted:

• With nearly £208 million in its bank account in 2020/21, Rhondda Cynon Taf had more useable reserves than five Welsh councils combined.
• Merthyr Tydfil, Conwy, Monmouthshire, Torfaen, and Anglesey councils had £169m in usable reserves between them, but Rhondda Cynon Taf had £208m all to itself.

The party noted, “The top three councils in Wales with the most amount of money squirrelled away according to the 2020/21 statement of accounts were all controlled by Labour. They were Rhondda Cynon Taf – which has historically had large amounts held in reserve- with £208 million, Swansea with £183 million and Caerphilly with £180 million.

“It is vital that councils use any extra cash to help residents with the cost-of-living crisis instead of saving it for a rainy day.”

The below table was provided to demonstrate the sums involved:

Wrexham Council’s statement of accounts was referenced for the source of the figures, with the below grab giving more context to the overall figure including cash for the Housing Revenue Account that regular readers will know is ring-fenced, as well as grant funding that is not yet spent:

Welsh Conservative Shadow Minister for Local Government, and North Wales MS Sam Rowlands, said of other councils – as Wrexham is currently run as an Independent / Wrexham Independents / Conservatives coalition – : “The big question on everybody’s lips is do these Labour-run councils still have these vast sums of money squirrelled away?”

“If not, where has that money gone, and if so, what will it be spent on? Those are just a few of the questions which residents deserve answers to.

“From where I am standing, it looks as though many Labour authorities have simply been sitting on a small fortune instead of pumping the cash back into communities, and at the same time hiking up residents’ council tax bills.”

Welsh Conservative Senedd leader and MS for South Wales Central, Andrew RT Davies, added: “These vast sums of money will be eye-watering for residents to see, especially as we are facing serious cost-of-living pressures at the moment as a result of huge global demand for energy and Russia’s barbaric invasion of Ukraine.

“Many residents have been struggling to make ends meet for a while now, and to learn their local authority had enough money in the bank to ease the burden but didn’t will feel like a major kick in the teeth.

“Labour ministers in Cardiff Bay must now work with local authorities and look at using any extra cash to keep council tax low, create opportunities for local communities and support those who need help the most.”

Plaid Cymru MS Peredur Owen Griffiths also raised the issue in First Minister Questions yesterday – although was accused of local council electioneering and “reading out a question that was clearly written by the leader of the Plaid Cymru group on Caerphilly County Borough Council”.  Mr Griffiths asked, “From speaking to council leaders in my region, it’s fair to say that many were pleasantly surprised by the latest financial settlement.

“It must therefore be disappointing, from your perspective, to see your party colleagues in Caerphilly county borough sitting on a reserve of £180 million, an increase of £40 million between the financial years of 2019 and 2021.

“This is £22 million more than the much larger Cardiff Council has in its reserves. Whilst this cash is hoarded, we see leisure facilities closing, street lights have been turned off and day-care centre provision for profoundly disabled adults being slashed.

“Cash is not the only solution to these problems, but, in almost all cases, it would help alleviate the situation and restore some services.

“First Minister, do you get frustrated when you provide adequate financial settlements for your party colleagues in local government only for them to sit on these piles of cash, like some council version of Scrooge?”

The First Minister Mark Drakeford replied: “Well, there are a series of reasons why councils hold cash in reserve. A great deal of that money will be earmarked reserves. In other words, it’s not money available to the council just to spend.

“It’s there because they have a twenty-first century schools programme, for example, and that money is allocated already to make sure that that programme can go ahead.

“There is money that, because the UK Government provides settlements to us so late in the year, we end up having to pass to local authorities later in the year as well, and, rather than using it in an ineffective way along the lines of the shared prosperity fund, they hold it so that they can plan to make the best use of that expenditure.

“So, there are reasons why local authorities hold money in reserve, and that is true of local authorities of all political persuasions in many different parts of Wales.”

“I see that the Finance Committee, of which the Member is, of course, the Chair, is looking for a review of reserves held by local government, and, of course, we’re happy to make sure that local government only holds the reserves it needs for the proper sorts of purposes.

“What I don’t think is sensible, Llywydd, and I’ve looked at the Plaid Cymru manifesto for the Caerphilly area, and was lucky enough to be in Caerphilly yesterday—. I see that the manifesto commits a Plaid Cymru-run Caerphllly council to freezing the council tax next year—a really irresponsible course of action as it seems to me—and then to dip into reserves for recurrent expenditure on youth services.

“Again, not a course of action that I thought any Chair of a Finance Committee would be willing to recommend to his colleagues.”