The Vale of Glamorgan Council may consider using some of the council’s existing “Council Fund Reserves” to stave off large increases in next year’s 2019/20 Council Tax.
By March 31st 2019, these reserves (the equivalent of “cash under the mattress”) are projected to stand at a total of £13,632,000.
Some sources say that councils should hold in reserve a “minimum level 5% of net budget” – which, in the Vale of Glamorgan Council’s case, is the equivalent of around £11,000,000.
However others say there’s no need for the cash reserve to be so high as £11,000,000 – and this amount could be prudently reduced , as long as a minimum of £7,000,000 is held in reserve.
If it was trimmed back to £7,000,000 (rather than the current £11,000,000) that would mean that up to £6,632,000 could conceivably be used to avoid having to impose a large increase in Council Tax on local residents in 2019/20.
The Vale Council recognises that the existing reserves are “not inexhaustible” and have taken years of careful financial management to develop to their current level.
However there’s a warning that if some of this standby cash IS used to balance the revenue budget for next year , there would need to be “a higher level of savings” in future years.