South Lanarkshire Council leader Joe Fagan has hit back at Rutherglen MSP Clare Haughey after she criticised the council’s use of financial reserves as communities face significant cuts to services.
Council reserves are used to plan for the future and finance capital expenditure and revenue, such as known risks, ringfenced, for a specific purpose, or for emergencies or events.
The SNP MSP claimed that the council had £13.4m in council reserves in 2014, with that figure rising to £150.3m in March 2024 – the highest percentage increase of all councils across Scotland at 753 percent.
However, the council note that the figure is wrong and almost all of the money has been committed to certain uses with only £13m being left in case of a proverbial rainy day.
Clare Haughey told how at the end of the last financial year alone, the Council transferred £26.35 million of underspent budgets to their coffers, which the council say was for specific purposes and, again, to help manage budget gaps.
Pointing towards South Lanarkshire Council threatening the closure of Eastfield Community Centre, Halfway Library, North Halfway Hall, the Peter Brownlee Pitch and Pavilion, and Cambuslang Library, whilst changing the qualifying distance for free school bus travel, Clare Haughey told Lanarkshire Live: “Of course, it’s prudent for a Council to have cash in reserves – that’s a key plank of sensible financial management.
“Despite local authorities receiving record settlements from the Scottish Government with inflation, spiralling energy costs, and the continuation of Tory austerity under a new UK Labour Government, they are undoubtably under extreme financial pressure.
“But our communities have been feeling the sharp edge of swingeing cuts from library and hall closures, to cuts to school bus services. They will rightly be asking difficult questions about exactly why the Council have been squirreling away this vast sum of money.
“The money that the Council have estimated they will save by slashing school bus services, £2 million per annum, is equivalent to a tiny 1.3 percent of the total amount they have in the bank.
“Every cut to vital services has been announced by the Labour Administration with much hand-wringing and finger pointing. Frankly, in the eyes of our communities that is looking increasingly disingenuous.
“If the prospect of closing of much loved community centres and libraries, or forcing children and young people to walk miles to school each day won’t force the Council to use some of their reserves, then what will?”
South Lanarkshire Council leader Joe Fagan hit back at Haughey, saying: “Clare Haughey’s turbo-charged hypocrisy on council cuts is matched only by her turbo-charged ignorance about the council’s accounts.
“It’s a fiction that our council is amassing reserves to the detriment of local services and it’s a fact that Clare Haughey has cut core funding to councils more than any other serving politician in Cambuslang and Rutherglen. If she’s genuinely opposed to council cuts then she needs to stop voting for them.
“The apparent jump in council reserves in past years largely reflects how the council must account for funds generated from major accounting exercises – exercises approved by Clare Haughey’s own government. Those funds are already being used to reduce budget gaps and fight back against the austerity imposed on South Lanarkshire – that’s why the most current reports show the council’s reserve position falling, as funds are released into current budgets. Under my Administration, South Lanarkshire Council is already drawing down millions from our reserves, year after year, to help us through the SNP’s council funding crisis but it is no substitute for a fair funding settlement from the Scottish Government.
“Clare Haughey should have checked her facts before making another typically flawed and false attack on a council that is moving heaven and earth to protect people from her council funding cuts.
“90% of council reserves are committed for specific purposes, including the considerable amount drawn down each year to offset the impact rising costs and Clare Haughey’s cuts. What remains is the equivalent to just 1.45% of the council’s total expenditure budget, as confirmed by independent auditors.
“Almost 80% of council funding comes from the Scottish Parliament. Those settlements involve real-terms cuts to core funding – the funding available for transport or libraries – and it’s disgraceful that SNP MSPs persist in blaming cash-strapped councils for having to make cuts due to decisions they take in Parliament. When it comes to council cuts in Scotland, all roads lead back to the SNP.”
Jackie Taylor, Executive Director of Finance and Corporate Resources, responded: “The figures quoted should be treated with caution. Fundamentally, they could be used to present an inaccurate picture of the amount of money the council has access to in its reserves.
“The correct figure for our general fund reserves, as published at March 2024, is £109 million, not the £150.3m quoted. It is important to understand that even this lower figure does not represent a sum of money that is available for use. In fact, only £13m of that total has not already been committed for specific purposes as part of the council’s budget planning.
“As was noted by the council’s auditor in this year’s audit report, £13m of uncommitted reserve is about 1.45% of the council’s total expenditure budget. I would contend that is a prudent proportion of our budget for the council to retain as a contingency.”
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