Reserves Policy

Great Longstone Parish Council

Reserves Policy

Background
(Guidance provided by Smaller Authority Proper Practices Panel – April 2025 (Page 38))

1. Policy Statement

Great Longstone Parish Council aims to maintain sufficient financial reserves to meet the needs of its operations and to ensure financial security. The Council’s policy on the establishment, maintenance and adequacy of reserves and balances will be considered annually.

The Council will hold reserves for three main purposes:

1. A working balance to help cushion the impact of uneven cash flows.
2. A contingency to cushion the impact of unexpected events or emergencies.
3. A means of building up funds, to meet known or predicted requirements.

2. Legal Basis

The Local Government Finance Act 1992: Section 31A(2) and 49A allows for the precepting and management of reserves.

3. Scope

Types of reserve – Reserves may be categorised as General, Earmarked (EMR) or Capital (CRR).

4. General Reserve

The use of this is not restricted. It can be used to level the impact of uneven cashflows, offset the budget requirement or used to manage unexpected events or emergencies. As a relatively small council it is intended to maintain the General Reserve at a level up to 75% of the usual annual income.

If the General Reserve is exhausted due to extreme circumstances, the Council may make an emergency borrowing from Earmarked or Capital Receipt Reserves, which will be replaced in the next annual budget. Any surplus on the reserve above the required balance may be used to fund capital expenditure, be appropriated to earmarked reserves or used to limit any increase in the precept.

5.  Earmarked Reserves

Earmarked reserves represent amounts which are earmarked for specific items of expenditure to meet known or anticipated liabilities or projects. They may be built up over a period of time. There is no statutory upper limit save that they should be held for genuine and intended purposes. The Council, when establishing an earmarked reserve, will set out:

1. The reason/purpose of the reserve.
2. How and when the reserve can be used.
3. Procedures for the management and control of the reserve including a process and timescale review of the reserve to ensure continuing relevance and adequacy.

6. Capital Receipt Reserves

Though permitted the Council doe not currently have a need for a Capital Reserve. This requirement will be reviewed annually.

7. Management and control

1. The level of reserves will be reviewed as part of the annual budget preparation in January of each year.
2. Any decision to set up an Earmarked reserve must be made by the Council.
3. Expenditure from reserves can only be authorised by the Council.
4. The Responsible Financial Officer will maintain a detailed schedule of all reserves which will form part of the quarterly financial summaries.
5. Reserves should not be used to fund ongoing expenditure. To the extent that Reserves are used to meet short term funding gaps, they should be replenished in the following year. However, Earmarked Reserves that have been used to meet a liability (or project) would not need to be replenished, having served the purpose for which they were originally established.
6. Where the purpose of an Earmarked 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 Earmarked Reserves.

8. Annual Review of Reserves – January 2026

8.1 General Reserve

The target is of 75% of projected income for 2026/27 (£27,458) = £20,594

Actual General Reserve 1^stApril 2025 = £17,558
Projected General Reserve 31^st March 2026 = £20,785
Target General Reserve 31^st March 2027 = £20,594

8.2 Earmarked Reserves

8.2.1 Elections Reserve: to hold a sum equal to the usual cost of elections, built up over the usual 4-yearly cycle.

Actual on 1^st April 2025 = £450
Projected on 31^st March 2026 = £450
Target for 31^st March 2027 = £450

8.2.2 Village Hall Repairs Reserve: for structural repairs to the fabric of the building. The long-term target is to build up a reserve level of £5,000.

Actual on 1^st April 2025 = £1,500
Projected on 31^st March 2026 = £2,100
Target for 31^st March 2027 = £2,500

8.2.3 Defibrillator Replacement Fund: GLPC owns 2 machines that are likely to need replacing before 2030

Actual on 1^st April 2025 = £0
Projected on 31^st March 2026 = £135
Target for 31^st March 2027 = £500

8.2.4  Tennis Court/MUGA Surface Replacement Reserve: The Tennis Court was resurfaced in 2025, and the aim is to build up a replacement reserve over the next 20 years, with a long-term target of £25,000.

Actual on 1^st April 2025 = £6,000
Projected on 31^st March 2026 = £2,086
Target for 31^st March 2027 = £3,000

8.2.5 Legal Reserve: Funds precepted in previous years for land registration work that has not yet been carried out.

Actual on 1^st April 2025 = £0
Projected on 31^st March 2026 = £830
Target on 31^st March 2027 = £0 – as expected to be used

8.2.6 Little Longstone Parish Meeting Sports Reserve – Balance of grant from Tennis Court project, to be held for future sports field related projects authorised by LLPM

Actual on 1^st April 2025 = £0
Projected on 31^st March 2026 = £804
Target on 31^st March 2027 = £0 – as expected to be used

8.2.7 Holme Meal Charity Reserve: these are unspent funds held by the Council, on behalf of the charity the Holme Meal Trust.

Actual on 1^st April 2025 = £215
Projected on 31^st March 2026 = £318
Projected on 31^st March 2027 = £0 – as expected to be used

8.2.8 Playground Equipment Reserve – It was agreed to add money left over in the transition from 2025 -2026 to a Playground Equipment Fund.

Approved 14th January 2026