Title

COVID

The importance of reserves

Coronavirus is going to place an unparalleled strain on local government services, says Rob Whiteman. The instinct of many councils not to plunder their reserves has been entirely vindicated by the arrival of this most rainy of ‘rainy’ days.

It's more a case of saying ‘well done' to the many than ‘told you so' to the few, but if recent weeks have not put paid forever to the foolishness of raiding reserves to balance day-to-day spending, then nothing will.

As the Chartered Institute of Public Finance and Accountancy (CIPFA) always advises, once you spend them, they are gone. Local authorities have experienced often massive cuts to their budgets and councils have been sensible to seek to replenish their reserves where they can.

However, at a time when local authorities have experienced devastating cuts to their budgets, they are not being replenished to the extent that is needed. Dipping further into reserves for anything but emergencies leaves councils vulnerable to financial shocks.

We have now entered one such shock. The instinct of many councils not to plunder their reserves over recent years has been entirely vindicated by the arrival of this most rainy of ‘rainy' days.

Coronavirus is going to place an unparalleled strain on local government services, such as public health and social care, as all public services work alongside the NHS during this medical emergency. A recent letter from NHS England to NHS trusts outlined the need to urgently discharge all hospital inpatients medically fit to leave. For those needing social care, emergency legislation will ensure that eligibility assessments do not delay discharge, meaning a sharp uptick in demand is hurtling down the tracks.

Unprecedented though it may be, this is exactly the kind of unexpected financial shock reserves are designed to help councils absorb.

So, while right now we must deal with the present crisis, I implore both Government and the public alike, to always in future consider the valuable role of reserves.

Encourage councils to be building their reserves up rather than spend them down. You never know when that rainy day will come.

Rob Whiteman CBE is chief executive of CIPFA

COVID

Let outcomes not just effort be the measure of your council's legacy

By Tony Munton | 20 October 2025

As the sector awaits the finalisation of the Local Government Outcomes Framework, Tony Munton looks at how to steer local government toward measuring communi...

COVID

Putting good relationships centre stage

By Dr Jo Casebourne | 20 October 2025

New ministers have urged councils to lead reforms for children and young people by investing in relational support, strengthening kinship care and embedding ...

COVID

LGR could be what adult social care needs

By Cllr Daniel Cowan | 20 October 2025

Cllr Daniel Cowan says reorganisation offers an opportunity to reimagine adult social care, and a five-unitary model for Essex would reduce reliance on the h...

COVID

Reorganisation financial risk warning

By Martin Ford | 17 October 2025

Local government reorganisation has been highlighted as a key concern by the Public Accounts Committee.

Rob Whiteman

Popular articles by Rob Whiteman