Leader of Cornwall Council rebuffs the Prime Minister

The Prime Minster has recently made inaccurate statements in reference to Cornwall Council’s reserves. In an interview the Prime Minister said Cornwall Council has £200m worth of reserves that it could use to fund services. If Cornwall Council had this amount just lying around in reserves, it would be using the money to fund services. However, we do not.

The Leader of Cornwall Council, John Pollard has issued a statement ‘rebuffing’ the Prime Ministers statements. In this statement, the Leader spells out clearly the money Cornwall Council has and how it assigned.

“The Prime Minister obviously has a different view of the use of reserves than we do! I am keen to state the facts:

We are curious as to where the PM’s gained his figures because our financial accounts are audited by independent external auditors and as such our reserve balances have been validated and checked by them each year.  The movement since 2011 has been an increase of around £18m.  The majority of this increase is set aside for specific projects and capital investment. Once again the list is:

  • £17m held on behalf of others e.g. reserves held for schools, Tamar Bridge, Port of Penryn, Port of Truro
  • £64m held to meet long-term commitments e.g. repayment costs for assets like school buildings, PFI projects.
  • £37m held to deliver specific projects funded by government,
  • £9m held for the one-off costs of cutting the budget by £196m
  • £5m held for insurance purposes.(In some cases we self-insure.)

Reserves are our safety net for unexpected items and emergencies like bad weather, while the cuts in government funding are ongoing and happen each year. Reserves are only usable once. This should be contrasted with the £196m reduction in Government funding which sees the level of money given every year to the Council to spend on services, reduced by £196m.

So, this means that even if we were to spend all of our reserves next year to prevent services being reduced then the following year we would still have to reduce the services but we would also have no money to cover emergencies such as reacting to bad weather events. We have to reduce our running costs in line with our income in order to have a sustainable basis to run our services in the future. To put simply, it’s a bit like your mortgage at home, if you use all your savings to pay the bank one month, next month you are still in the same situation but have no savings to pay for the boiler if its breaks down. So you are in an even worse situation.

Cornwall Council has a proud record of careful and prudent budget management. Our finances have remained strong and  secure at a time of great turmoil. We are fortunate to be able to use this position to cushion some of  the impact on services and to plan for the future. The P.M may regard this as having lots of money available, I see it as good housekeeping and budget management.”

I am really pleased the Leader has issued a statement like this, as incorrect information needs to be addressed no matter if it is the Prime Minister or not. They very fact Cornwall Council is having to make swinging cuts to services is due to the Government cutting funding to many local authorities including Cornwall Council.

Maybe the Government should take the honest approach and say “yes we have cut funding to local authorities” I would personally have more respect, and it would stop Cornwall Council being blamed for everything….


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