20.1 Overview
Earmarked reserves are held within the accounts for future liabilities and earn interest for the General Fund which is credited to the Quality Services and Value for Money Portfolio, thus reducing the Council Tax requirement.
However, until they are required for the eventual liability that may or may not arise, they do not contribute to any other of the Council’s Corporate Objectives.
Given that, over the last ten years, the level of earmarked reserves has not dropped below £10M, it is reasonable to assume that there will continue to be a significant level of these funds in the future, and certainly over the shorter term.
It is therefore proposed that individual services are allowed to borrow from these funds for a period of up to four years.
20.2 Responsibility/Accountability
20.2.1 Directors (click here for all responsibilities for Directors)
Leading on the allocation of Borrow to Invest resources to achieve corporate objectives and service improvement priorities.
20.2.2 Section 151 Officer (click here for all responsibilities for the Section 151 Officer)
Deal with application in accordance with the scheme regulations.
Determine the annual amount available for the scheme.
Make all the relevant accounting entries to give effect to approved schemes.
Fix the interest rate applicable each year.
20.2.3 Business Unit Heads (click here for all responsibilities for Business Unit Heads)
Prepare business cases in accordance with the policy and regulations in this Framework and submit them to the Section 151 Officer.
Ensure proposals are consistent with Service Plans
20.3 Policy (click here for detailed procedures)
A sustainable comprehensive business case is produced for approval by the Section 151 Officer. The savings are deliverable, realistic, known and are not dependent upon other decisions. Real savings are identified in Base Budgets as part of the business case. Repayments of the loan with interest will be charged to the service account over an agreed payback period not exceeding four years.
Up to 25% of the Council’s reserves and provisions balance may be used at any one time to support Borrow to Invest to Save schemes. The use of Borrow to Invest Funds will be determined in accordance with corporate objectives and service improvement priorities.
A Borrow to Invest reserve has been established, funded from other resources to meet accounting requirements.
Guidance notes for the preparation of financial appraisals are provided in Section 120 Borrow to Invest to Save. (click here for the Borrow to Invest to Save application proforma.)
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