Reform councillor demands millions spent on communities in 'desperate' need

A Northumberland Reform councillor has demanded the local authority plough millions of pounds from its reserves into communities he claims are in 'desperate' need of funding.

Coun Barry Elliott, representing the Newsham ward, challenged council finance officers during a heated audit committee meeting.

The authority's draft accounts for 2024/25 reveal a staggering £294.06 million was stockpiled in usable reserves at the close of the previous financial year in March.

For local authorities, usable reserves function as a "savings account" which councils can tap into for effective financial management, covering both daily operations and potential future requirements.

This contrasts sharply with unusable reserves, which are off-limits for everyday expenditure, reports Chronicle Live.

The council amassed £728.62 million in unusable reserves by year-end.

Coun Elliott also raised alarm over the council's Section 106 holdings, which total £24.83 million.

These funds come from developers during the planning process for infrastructure enhancements required, such as funding additional school places when new housing developments are constructed.

During the meeting, Coun Elliott declared: "Why not use the usable reserves? We have a reserve fund to protect the council from a rainy day, but why are we keeping hold of that money when communities are so desperate for money?

"What I have felt, and other people across Northumberland, is that there is huge amounts of Section 106 money sitting for years. Is it for the benefit of the community to keep it on the balance sheet?.

"Is it better for the finance officer to keep the accounts propped up, and not use it in communities?."

In response to Coun Elliott, finance chief Jan Willis stated: "Usable reserves are held for specific purposes - it can be grant money. We set out the planned use of these reserves for the next three years in the budget.

"Drawing down from these reserves is one of the funding sources for the Medium Term Financial Plan (MTFP).

"In virtually all cases, there are plans to use that money - it is not just sitting there."

Regarding section 106 funding, Coun Willis added: "Any unused section 106 money is in the balance and we earn interest until the money is drawn down because an agreed scheme hits an agreed milestone.

"There are trigger points attached to the payments. Until we reach that point, we hold that money in reserve. I think it's a policy discussion and as a policy matter I would say it's not for this committee - it might need to be taken elsewhere."