The amount held in local authority reserves in England has increased to £29bn by the end of 2020-21 from £19bn in 2019-20, the latest figures have revealed.

However, the 2022 financial resilience index put together by the Chartered Institute of Public Finance and Accountancy (CIPFA) warned that the long-term outlook was less positive as only £4bn of these have been left unallocated.

CIPFA pointed out that Government payments to councils were made late in 2020-21, which left insufficient time for local authorities to use the funding before the end of the financial year.

Chief executive officer of CIPFA, Rob Whiteman, said: 'While the reserves position gives the appearance of health this masks a much more complicated picture.

'The short- and medium-term outlook still remain unclear so we need to be cautious.

'Reserves that have already been allocated are likely to be depleted extremely quickly when demand returns.'