Council budget shows useable reserves are set to fall for a second year under green led administration

Updated to reflect audited accounts 2023/24 position for usable reserves.

Last night’s full council meeting saw the term “reserves” mentioned sixteen times. The breakdown of its usage by councillors is as follows:

• Cllr Tim Prater (Lib Dem), Cabinet Member for Finance, used it six times.
• Cllr Alan Martin (Con) referenced it five times.
• Cllr Jackie Meade (Lab) mentioned it twice.
• Cllr Jenny Hollingsbee (Con), Cllr David Godfrey (Con), and Cllr Anita Jones (Green) each used it once.

Generally, council reserves fall into two categories:

1. Useable Reserves: These are available to fund revenue or capital expenditures. They arise from surpluses, postponed or canceled spending decisions, or other events that allow funds to be set aside. Usable reserves can be spent or earmarked at the council’s discretion.
2. Unusable Reserves: These are not available to finance revenue or capital expenditures.

This blog post focuses solely on useable reserves—the funds the council can draw upon.

According to the council’s accounts over the past ten years, the current level of usable reserves is slightly lower than those held in 2016/17.

 However, the trend has been concerning.

• Under the previous Tory administration led by Cllr Monk, the council had to use reserves to balance its 2022/23 & 2023/24 budget (see appendix 5), set in February 2023.
• Similarly, the current administration, led by Cllr J Martin, also relied on reserves to balance its 2024/25 Budget (see page 12 of the budget document) set in Feb 2024.

Ironically, Cllr Prater previously criticised Cllr Monk for failing to set a balanced budget while serving in Monk’s cabinet. Yet, a year later, Prater himself resorted to using reserves to balance the budget.

In presenting the budget for 2025/26, Cllr Prater claimed,

“This is a budget which does not use our general council reserves to balance it; it is a properly balanced budget.” 

However, similar assurances were made last year, which ultimately proved untrue.

The Mid-Term Financial Strategy 2025/26, presented to the full council on 26 February, states on page 17:

“In light of the Final Local Government Financial Settlement announced on 3 February 2025, the Council’s reserve balances will be further depleted for 2025/26, as the settlement was below inflationary levels.”

A future graph will illustrate the continued reduction in reserves for 2024/25 and 2025/26. Whether reserves will fall below the levels achieved by the Tory-led administration in 2014/15 remains to be seen, as only the accounts for the next two years will reveal the full picture.

While Cllr Prater is generally well-regarded, even he is not immune to spin, especially when council documents present a starkly different reality. Despite the rhetoric, the budget passed with 14 councillors voting in favour and 11 abstaining. This means reserves will once again decline—a fact that cannot be disputed.

The Shepway Vox Team

The Velvet Voices of Voxatiousness