County council chiefs have bucked a national trend by giving a boost to budget reserves.

The Tory-run authority ended the 2023/24 financial year with £181.1m in its main reserve account – £15.9m more than had previously been expected.

The increase strengthens a safety net which would already be the envy of many local authorities, amid dire warnings about the state of local government coffers across the country.

A study earlier this year by accountancy firm Grant Thornton found 40 per cent of councils were at risk of seeing their reserves drop to less than five per cent of their annual revenue expenditure within the next five years – a position the firm described as “financial failure”. One in five local authorities faced that fate within the next 12 months.

County councillors have attributed the boost mainly to the effect of pooled budget arrangements the authority has entered into with the NHS.

The overall £14.3m uplift in the amount previously held in the reserve came in spite of the fact money had also been withdrawn in 2023/24, including £8.9m to bridge a gap in the revenue budget, a contribution of £6m to support staff pay rises and the transfer of £5.2m to cover overspends.

A report recently presented to cabinet members confirmed reserves remained sufficient to support the county council’s budget beyond its medium-term financial strategy, which ends in March 2027.  The transitional reserve is forecast to fall to £159m by the end of 2025/26.

The authority has previously stressed its intention to find the savings required to set a balanced budget without having to rely on reserves in future years.

Phillip Woolley, of Grant Thornton, said of his firm’s report into local authority reserves back in January: "There have been calls for councils to use reserves to plug budget gaps, but this is not a sustainable solution – reserves can only be used once and are intended to be a safety net, used only in exceptional circumstances.”

In addition to the transitional reserve, the county council has seven other pots available to it – including £23.4m in its County Fund, set aside to cover the authority against a serious emergency situation, such as widespread flooding.  It could also be used in the event of a “critical and unexpected loss of income to the authority”, as well as for general cash flow purposes.

The county council also held £112.2m in 'service reserves' at the end of March and £326.8m across all eight of its reserve funds.  That tally is expected to drop to £223.4m by the end of March 2026.