Powys County Council to Allocate £700k to General Reserve Fund

AT THE start of the financial year Powys County Council had just under £68 million sitting in various “reserves budgets” with £9.333 million sitting in it’s “general reserve.”
The financial report on the position of the council’s budget at the end of June shows that by the end of March next year £13.916 million to be used to plug financial gaps that occur this year.
This will see the reserve pots reduce to £54.213 million.
The report said: “The councils reserves policy requires the general fund reserve to be maintained at a minimum of four per cent of net revenue budget.
“Due to the increased level of net revenue budget the level of the reserve is not now sufficient to maintain this minimum level.”
Due to this an extra £700,000 will be allocated to the general reserve from the “Powys recovery fund” reserve, which was set up to support the economic bounce-back from the Covid-19 pandemic can be closed.
This will ensure that the general reserve balance can be kept at the four per cent minimum level.
The report explains that a “specific pay” reserve was established from council underspends last year.
The council now expect the pay award increases to be more than the five per cent that they set aside in the budget to pay for the increase.
The report said “The current pay offer equates to around seven per cent and this means two per cent, circa £3.3 million would need to be funded from this reserve to manage the in-year budget gap.
“A recurrent shortfall must be addressed as part budget setting for next year.”
Head of finance, Jane Thomas said: “Financial resilience and sustainability can only be achieved by delivering a lower cost Council, effectively managing our collective resources, robust and transparent decision making, and actively managing risk supported by an appropriate level of reserves.”
Councillors are expected to note the budget position and approve in house money transfers between budget accounts. ‌​‌​‌​​​‍‌​‌​​‌‌‌‍‌​‌‌​​‌​‍‌​‌‌‌​‌‌‍‌​‌‌‌‌​​