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Longparish Parish Council

Financial Reserves Policy

Policy Statement

Longparish Parish Council is required to maintain adequate Financial Reserves to meet the needs of the Parish Council. The purpose of this policy is to set out how the Council will determine and review the level of Reserves. Sections 32 and 43 of the Local Government Finance Act 1992 require local authorities to have regard to the level of Reserves needed for meeting estimated future expenditure when calculating the budget requirement.

The Council will hold reserves for three main purposes:

There is no specified minimum level of Reserves that an authority should hold, and it is the responsibility of the Clerk/Responsible Finance Officer to advise the Council about the level of Reserves and to ensure that there are procedures for their establishment and use.

Scope

Types of reserve - Reserves may be categorised as General or Specific.

GENERAL RESERVES are funds that do not have restrictions as to their use. These Reserves can be used to smooth the impact of uneven cash flows, or can be held in case of unexpected events or emergencies. The level of the General Reserve for the forthcoming year will be based upon the budget approved by the Parish Council, and should be equivalent to no less than six months’ expected expenditure for the financial year.  This amount will be adjusted annually in line with the approved budget (agreed in January annually).

Where the Reserve amount has arisen because of excess funds through cancelled or obsolete activities, the Council may elect to use these funds for another purpose for which no other budget is available.

GENERAL RESERVE 2020/21

AMOUNT

PURPOSE

£11,000.00

EQUIVALENT OF PC EXPENDITURE FOR SIX MONTHS AS PER 2020/21 BUDGET

APPROVED 13 JANUARY 2020

SPECIFIC RESERVES can be held for several reasons and shall be used only for the purpose for which they are created.

Where the purpose of a Specific Reserve becomes obsolete, or where there is an over-provision of funds, the excess may on the approval of the Council be transferred to other budget headings within the revenue budget or to General Reserves or to one or more other Specific Reserves.

 SPECIFIC RESERVE 2020/21

AMOUNT

PURPOSE

£5000.00

FOR PLAYGROUND REPAIRS/REFURBISHMENT

Procedure for adding to the Reserve during the Financial Year

  1. The Parish Council may decide to set aside further Reserve amounts for specific purposes
  2. All decisions to create a new Reserve will be voted upon at a full council meeting, and this will be Minuted by the Clerk
  3. The agreed amount will be transferred to the Parish Council Reserve account by the Clerk, and detailed in the accounts
  4. Details of new Reserves will be listed in this Policy
  5. All Reserve amounts will be reviewed annually

Procedure for removing funds from the Reserve

  1. The Parish Council may decide to withdraw Reserve amounts for specific purposes
  2. All decisions to withdraw Reserve funds will be voted upon at a full council meeting, and this will be Minuted by the Clerk
  3. The agreed amount will be transferred to the Parish Council current account by the Clerk, and detailed in the accounts
  4. Amended amounts of Reserves will be listed in this Policy

Details of Reserves held:

DATE

AMOUNT

PURPOSE/DESCRIPTION

BALANCE OF RESERVE ACCOUNT

28 FEB 2020

£1.00

TO OPEN RESERVE ACCOUNT

£1.00

12 MAR 2020

£11,000.00

FOR GENERAL RESERVE

£11,001.00

12 MAR 2020

£5,000.00

FOR PLAYGROUND RESERVE

£16,001.00

30 MAR 2020

£40,000.00

FOR PLAYGROUND RESERVE (CIL FUNDING)

£56,001.00