These reserves provide a working balance to help cushion the impact of uneven cash flows, help avoid unnecessary temporary borrowing, and provide a contingency to cushion the impact of unexpected events or exceptional circumstances. The level of general reserves is set at approximately 6% of the Authority’s net revenue budget. The appropriateness of the level of this reserve is assessed on an annual basis, through a detailed risk assessment.
These are sums that are set aside for a specific purpose to meet future known or predicted expenditure or liabilities. Their use and purpose is clearly defined, with regular reviews to ensure their continuing relevance and adequacy. Detailed below is a brief explanation of each earmarked reserve:
This supports the funding of any additional costs that might arise due to an unavoidable interruption to business continuity or service provision.
Meets additional costs arising from the implementation of the Fire Control project.
A sum bequeathed to the Authority, the use of which must be agreed by the sole trustee.
This reserve is used to carry forward unspent government grants at the end of the financial year.
Improvement and Efficiency
This reserve will facilitate the pump priming of any new improvement and efficiency initiatives, including potential future redundancy costs.
Local Government Resource Review
This will fund any potential unforeseen loss in relation to the Authority’s share of Medway Council and Kent District’s collection funds on Council Tax and Business Rates.
This reserve will assist in smoothing out the cost of insurance claim volatility between financial years.
Meets the cost of back-dated employer contributions arising from the Norman v Cheshire FRA legal case.
This funds expenditure on infrastructure assets such as premises, IT and communications equipment, vehicles and operational equipment.
Performance Reward Grant
Resources that will be matched and utilised against defined areas of expenditure, usually in relation to Community Safety activity.
This reserve is used to roll forward resources that are committed in one financial year but received in the next.
General and earmarked reserves
|General and Earmarked Reserves ||01/04/2014 |
| General Reserves || 4,244 || 0 || 4,244 |
| Earmarked Reserves |
|Business Continuity ||500 ||0 ||500 |
|Fire Control ||575 ||-467 ||108 |
|Fire Museum ||46 ||0 ||46 |
|Government Grants ||729 ||-401 ||328 |
|Improvement and Efficiency ||938 ||0 ||938 |
|Local Government Resource Review ||700 ||300 ||1,000 |
|Insurance ||160 ||0 ||160 |
|Pension ||700 ||0 ||700 |
|Infrastructure ||19,775 ||-3,302 ||16,473 |
|Performance Reward Grant ||256 ||-211 ||45 |
|Rolling Budgets ||68 ||-52 ||16 |
| Total Earmarked Reserves || 24,447 || -4,133 || 20,314 |
| Capital Receipts ||4,217 ||400 ||4,617 |
| Unapplied Capital Grants ||1,501 ||-1,250 ||251 |
| Total Reserves || 34,409 || -4,983 || 29,426 |