Local Government Finance

Ministry of Housing, Communities and Local Government written question – answered on 7th March 2018.

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Photo of Rachael Maskell Rachael Maskell Shadow Minister (Transport)

To ask the Secretary of State for Housing, Communities and Local Government, whether his Department has issued instructions to local authorities to build up reserves.

Photo of Rishi Sunak Rishi Sunak Parliamentary Under-Secretary (Housing, Communities and Local Government)

Councils are free to determine the level of reserves they hold and are accountable to their electorate for the decisions they make. They are required by statute to hold a level of unallocated reserves commensurate with sound financial risk management.

No specific instructions have been issued to local authorities in relation to building up their reserves. Nor is there any national guidance on the minimum or maximum level of reserves, either as an absolute amount or as a percentage of the budget. To ensure prudent management, some authorities will maintain reserves at higher levels than others

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