CASH-STRAPPED local authorities who are being forced into using their own reserves to plug huge funding gaps to the tune of millions have been warned continuing doing so is not a solution - after a report revealed Barnsley Council had to spend more than £18m in a year.
The Local Government Association spoke out after a spending watchdog - the National Audit Office - refused to sign off the government’s books for the first time in history.
The NAO said just one in ten councils had provided reliable data relating to income and expenditure on time, although Barnsley’s was handed in.
However, having been revealed at an audit and governance committee earlier this month before being signed off at yesterday’s full council meeting, it was confirmed that the council overspent by £18m.
To cover the sum, finance bosses used £18.1m of council reserves - and an additional £11.8m on top of the £5.5m they had already planned to use to plug the forecasted holes.
A spokesperson from the LGA said: “Councils often come under pressure to use reserves/ to plug ongoing budget gaps,/ but/ using reserves is not the solution to the financial/ pressures/ councils are facing./
“Reserves can only be spent once and, for some councils, having to meet this level of pressure may wipe out all their available reserves and potentially place them in severe financial difficulties.
“Even for councils with otherwise healthy reserves it could mean using funds earmarked for projects such as capital investment in infrastructure that will not now take place.
“We’re calling on the government to provide adequate funding for councils, more clarity on financial reform and a move away from one-year finance settlements so councils can continue to provide services their communities rely on.”
The council’s 2024/25 net budget of £256.6m was agreed by full council in February but a report revealed the year’s first quarter cost £4.3m more than anticipated to deliver.
Coun Robert Frost, cabinet spokesperson for core services, said: "Our finances have always been well-managed.
“While the council had to use reserves to balance the 2023/24 budget, this was in line with our forward financial planning assumptions, and specific reserves were set aside in anticipation of this."
