TYDD ST MARY PARISH COUNCIL
Hedgeview, 231 Broadgate, Sutton St Edmund,
Spalding, Lincs, PE120LT
E mail tyddstmarypc@gmail.com
Reserves Policy
Introduction
The purpose of this
policy is to set out how the Parish Council will determine and review the level
of its reserves.
Sections 32 and 43 of the Local Government Finance Act 1992 require local
authorities to maintain adequate financial reserves in order to meet the needs
of the organisation and to have regard to the level of reserves needed for
meeting estimated future expenditure when calculating the budget and precept
requirement.
There is no specified minimum level of reserves that a Parish Council should
hold and it is the responsibility of the Responsible Finance Officer (RFO) to
advise the Council about the level of reserves and to ensure that there are
procedures in place for their establishment and use.
Types of Reserves
General Reserve
General Reserves are
funds that do not have any restrictions as to their use. These Reserves can be
used to smooth the impact of uneven cash flows, offset the budget requirement,
if necessary, avoid unnecessary temporary borrowing or can be held in case of
unexpected events or emergencies.
The primary means of
building General Reserves will be through an allocation from the annual budget
and the subsequent precept demand. This will be in addition to any amounts
needed to replenish Reserves that have been consumed in the previous year.
Earmarked Reserves
Earmarked Reserves can be held for several reasons and the amounts are
intended to be restricted for that agreed use. They are a means of building up
funds to meet known or predicted requirements; earmarked reserves are accounted
for separately but remain legally part of the general fund.
The ‘setting aside’
of funds to meet known future expenditure reduces the impact of meeting the
full expenditure in one year.
Earmarked Reserves will be established on a ‘needs’ basis, in line with
anticipated requirements. Any decision to set up an earmarked reserve must be
made by the Parish Council and reviewed annually when the budget is agreed.
Where the purpose of
earmarked Reserves becomes obsolete or where there is an over provision of
funds, the excess may, on approval of the parish Council be transferred to
other budget headings.
Management and Control
The Parish Council
shall approve the use of Reserves. The level of General Reserves shall be
reviewed on an annual basis during the annual budgetary review and agreed by
the Parish Council. The minimum level of General Reserves shall be recommended
to the Parish Council by the Responsible Financial Officer. This will form part
of the recommendations for the Annual Budget and Precept request by the Parish
Council. Earmarked Reserves shall be reviewed on an individual basis. This
review will also be undertaken as part of the Annual Budgetary Review.
Recommendations on creation, amendment, cessation, or continuation of Earmarked
Reserves will be given by the Responsible Financial Officer to the Parish
Council by way of a report forming part of the recommendations for the Annual Budget
and Precept request by the Parish Council. Approval for the creation,
amendment, cessation, or continuation of Earmarked Reserves will be given by
the Parish Council.
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Version
number |
Date
Approved |
Amendments
made |
Next
Review Date |
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V1 |
September
2023 |
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Sept
2026 |
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