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

Just like the weather, councils are rarely stable

By Blair McPherson | 20 April 2026

It is tempting to think the local government system is fundamentally stable, but this is seldom the case, says Blair McPherson. Leadership is learning to lea...

COVID

Fiscal devolution: A test of seriousness for government and places

By Mike Emmerich | 20 April 2026

If government and mayoral strategic authorities are willing to match fiscal responsibility and the retention of the proceeds of growth within agreed paramete...

COVID

Does the public care about local government reorganisation?

By Michael Burton | 20 April 2026

So far, the public has been pretty disengaged from consultation over the future shape of LGR, but as the new councils are announced residents may rapidly cha...

COVID

LGA interim chief revealed

By Heather Jameson | 17 April 2026

Former Camden LBC chief Jenny Rowlands is to take on the role of interim chief of the Local Government Association (LGA), as current chief Joanna Killian rem...

Rob Whiteman

Popular articles by Rob Whiteman