The Parish Council’s general financial position may be illustrated by the closing balance of its accounts each year and the amount it holds in reserves. The table below shows the closing balance of our accounts for each financial year since 2010-2011.
Annual Account Balances
|Notes||* +£4 correction||** Includes APLCHF Grant|
The above figures show that the Parish Council has consistently held its total reserves at an approximate ratio of 2:1, where the amount of reserves is twice the average income/expenditure.
Reserves may be categorised as follows:
|1||General||It is recommended that a Parish Council should typically hold between 3 and 12 months expenditure as a general reserve|
|2||Earmarked||Money is allocated for a specific purpose but may not be spent in that financial year|
|3||Ring-fenced||Monies or grants allocated for a specific project only that must not be used for any other purpose|
|4||Election||All reasonable costs of holding parish council elections can be fully recharged by the district to the local council. This covers that possibility.|
Parish Councils have no legal powers to hold revenue reserves other than for reasonable working capital or for specifically earmarked purposes, therefore the year-end general reserve should not be significantly higher than the annual precept.
|Minimum % of Income||50.00%||£2,915||£2,915||75.00%||£4,274||50.00%||£3,177|
|No Allocated Funds||£6,762||£8,514||£9,067||£10,995|
It is rare for a Parish Council to hold its reserves other than in the form of easily accessible bank deposit or other short-term savings accounts. These short-term investments are often used to maximise income from cash balances during the financial year. We follow this practice.