Balances and Reserves

Balances

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

Financial
Year
Opening
Balance
IncomeExpenditureClosing
Balance
2010-2011£11,959£5,973-£5,680£12,252
2011-2012£12,252£7,706-£7,503£12,455
2012-2013£12,455£6,429-£3,964£14,920
2013-2014£14,920£6,075-£4,224£16,772
2014-2015£16,772£5,908-£8,480£14,200
2015-2016£14,200£6,942-£6,267£14,895
2016-2017£14,895£6,535-£7450£13,982
2017-2018£13,982£7,800-£8,779£13,003
2018-2019*£13,007£5,783-£6,581£12,209
2019-2020£12,209**£22,326**-£16,303£18,232
2020-2021£18,232
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

Reserves may be categorised as follows:

No.CategoryNotes
1GeneralIt is recommended that a Parish Council should typically hold between 3 and 12 months expenditure as a general reserve
2EarmarkedMoney is allocated for a specific purpose but may not be spent in that financial year
3Ring-fencedMonies or grants allocated for a specific project only that must not be used for any other purpose
4ElectionAll 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.

The Finance Sub Committee considers the reserve ratio when setting the budget and precept for the following year. The Reserves Policy may be viewed here and in the Document Library.

Reserves for the Current, Prior and Next Financial Years
Current Year
Prior Year
Next Year
Rate
Total Forecast
Budget
Rate
Actual
Rate
Actual
General
Minimum % of Income50.00%£2,915£2,91575.00%£4,27450.00%£3,177
Earmarked
Insurance Excess£1,450£1,450£1,450£1,450
Playground£1,000£1,000£1,000£1,000
Asset Management£4,000£4,000£0£4,000
Neighbourhood Plan£0£0£3,000£0
Total Earmarked£6,450£6,450£5,450£6,450
Ring-fenced
APLCHF Donations£4,415£0£0£0
Total Ring-fenced£4,415£0£0£0
Total Reserves£13,780£9,365£9,724£9,627
No Allocated Funds£6,762£8,514£9,067£10,995
Balance C/F£20,542£17,879£18,790£20,622

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.