Councils across the country are spending £200m of the £2.6bn they collectively hold in spare cash. But analysis by the FT reveals that councils facing the strongest ballot box pressure on May 5 are planning to spend the spare cash at more than three times the rate of those with no election. “ Drawing on reserves to try and win votes could well mean disappointing voters later as that can’t be a sustainable way of funding services,” Matthew Sinclair, director of the Taxpayers’ Alliance, said. “They could easily just be delaying a more severe reckoning when it becomes clear tough decisions were ducked ahead of a vote.” A fierce dispute has broken out between Labour and the Conservatives over the use of council reserves, with local government minister Grant Shapps accusing Labour councils of “stashing away” billions while making harsh cuts to services to score political points. However, the FT analysis suggests a stronger determinant of whether a council is spending or hoarding its reserves is the timing of its next encounter with the electorate. Government data on planned council spending for 2011-12 show those with elections in May are spending their reserves at the fastest rate. Those councils who have “all-out” elections, where all councillors, as opposed to just half or a third, face the vote, are on average dipping into 8 per cent of their reserves. The figure falls to 2 per cent at the 83 English councils, controlled by one of the three main parties, where no election is taking place. The trend is starkest at Labour councils, where the party’s 18 councils with elections in May plan to spend an average 6 per cent of their reserves this year. The majority of the 35 without elections plan either to add to their reserves, or leave them untouched. Conservative-run councils are, on average, raiding their reserves the most and even those with no election this year plan to spend on average 5 per cent of their reserves. David Sparks, vice-chairman of the Local Government Association which represents more than 400 councils across England and Wales, defended the spending. “ Politicians have always managed finances to win elections,” he said. “If they are coming up to elections, they will do everything they can – that’s what politicians do and we might as well recognise that. “ They will marshal their financial reserves so they will coincide with the electoral cycle.”
