Councils had Money In Icesave... doh! Millions!

Tipples

As I work for a Local Authority, I was really concerned when this all came out. According to the list, the LA I work for hasn't got involved with Icesave, so am feeling a little better now. I sincerely hope that other LAs don't have to resort to job cuts or increasing Council Tax wildly, and that things remain stable, but I'm not convinced that losses can be 'swallowed' so easily. The only protection the public will have against radical C-Tax increases will be if Central Government caps proposed increases like they have done for the last two years, and of course it depends what %age they cap it at. I already have a queue of people wanting me to visit them cos they can't afford their council tax, and whilst this keeps me in work, I'd rather it was more affordable for people, as there are people out there still determined to struggle on rather than ask for assistance. And lets not forget Council Tax Benefit comes out of Central Gov't budgets not local.

Anyway, that's my two pence worth. Considering it's 1am, it probably makes less sense than investing in dodgy banks!

G'night all

Bismarck

OK - can someone explain to me gently why Kent CC needed to have £50m invested in the first place? Assuming they had other money elsewhere , isn't that a lot of rainy day money or is that their pot to last them through until the next financial year?

robpw2

why are councils allowed to have this much money stashed away , they charge every one huge amounts of council tax , they get money from the govt and yet they have so much stashed away , they should be using this to bail themselves out

beingjdc

robpw2 wrote: »

why are councils allowed to have this much money stashed away , they charge every one huge amounts of council tax , they get money from the govt and yet they have so much stashed away , they should be using this to bail themselves out

They're not just allowed to, they are required to by law.

Firstly, they have money because most people pay their council tax in at most 10 months, whereas the Council pays out wages over 12, so by January Councils are rich, then they have to spend it all.

Secondly, they have to keep quite a lot for emergencies - floods, foot and mouth, big fires, sudden doubling of the electricity price the week after the budget meeting, etc.

lynzpower

robpw2 wrote: »

why are councils allowed to have this much money stashed away , they charge every one huge amounts of council tax , they get money from the govt and yet they have so much stashed away , they should be using this to bail themselves out

Can you tell me what the alternative is to having money saved?

robpw2

50m kent county council and yet they have one of the highest council tax charges they should be plowing this back into the community not stashing it away in some foreign bank !

beingjdc

robpw2 wrote: »

50m kent county council and yet they have one of the highest council tax charges they should be plowing this back into the community not stashing it away in some foreign bank !

Thanks for repeating the same mistaken point you've already made.

If they spend every penny they get in the months when people are paying Council Tax, then;

* What do they do in the two months when nobody pays Council tax?
* What do they do if Dover ferryport catches fire and needs 800 firemen?
* What do they do if Romney Marsh flood from a tidal surge and needs 800 rescue workers?

robpw2

they do not beed 50million to stash for 2 months

Generali

robpw2 wrote: »

50m kent county council and yet they have one of the highest council tax charges they should be plowing this back into the community not stashing it away in some foreign bank !

Well the budget for 2008-9 for Kent is £2,235,800,000 so £50,000,000 is 2% of their spending for next year.

It could have been used to give a one-off 9% council tax cut (approx) but the next time the River Darent bursts its banks, the residents will have to look elsewhere for assistance.

beingjdc

robpw2 wrote: »

they do not beed 50million to stash for 2 months

I should add that Kent's Council Tax is actually significantly below the average for its type of authority, not "one of the highest" as you said.

Kent is a big beast in the local government world. They provide services for one and a half million people, over more than a thousand square miles - thousands of miles of road, hundreds of thousands of old people of whom a significant number are frail or disabled and needing care, and over six hundred schools.

I don't think emergency reserves of £35 a head are unreasonably high. In fact I think if that was all they had it would be dangerously low. The Council's total budget for a year for all those things is around the £2.5 billion mark.

£50 million would be enough to last a week. Logically, since they have no income in February and March, by the end of January they need to have stored up £400 million for those months.