ARGYLL and Bute Council, (ABC), have a cash reserve of almost £122M, a sum which appears to have doubled in size in just 12 months.
As constituents grappled with the news earlier this month that their council tax is to rise by 9.9 per cent, research by the Taxpayer’s Alliance, an independent body which campaigns for lower taxes, revealed that ABC was one of 16 Scottish councils which had increased their reserves in the 12 months to April 2024.
Last March, as the previous administration positioned themselves to raise council tax by 10 per cent, some councillors were vocal in calling out ABC for sitting on a £60M cash reserve. Back then the ruling administration claimed this was nonsense and those who suggested such were ‘gaslighting the public,’ even though it was later confirmed that there was £60M in reserve but that the money was ‘pre-assigned’ to projects.
Now it seems that those funds have more than doubled as the Taxpayer’s Alliance revealed earlier this month that ABC currently have a reserve of £121.7M.
In 2022 a report revealed that 28 councils across the UK had deposited taxpayer’s money into Qatar National Bank, (QNB), and that Argyll and Bute Council topped the list depositing almost £160M of taxpayer’s cash since 2017, the most of any local authority in the report.
At the time this was made public ABC and the other councils faced criticism over ‘ethical concerns’ regarding their investments due to Qatar’s human rights record and its stance on the LGBT community.
Its understood that a ‘healthy rate of interest’ was the main draw for the investment by these local authorities which was in line with their investment strategies.
Earlier this week this newspaper contacted Argyll and Bute Council to ascertain whether their investment with QNB was still ongoing and if they could confirm that the Taxpayer’s Alliance’s research on their current cash reserve was accurate.
An Argyll and Bute Council spokesperson said: “The council held specific funds and reserve balances totalling £121.7M as at March 31, 2024. This included a General Fund, (GF), balance of £115.7M, of which £107.4M, or 93 per cent was earmarked for specific purposes, including investment in regeneration, transformation, capital projects from bridges to buildings, ring fenced grants and other initiatives needed to run council services. From within the unallocated GF balance, a general contingency, set at two per cent of the approved revenue net expenditure budget (equated to £6M), was deemed prudent, to provide for both known financial risks and unforeseen circumstances or events adversely impacting the financial position.For example, the impact of severe weather events, such as Storm Eowyn, on local communities underlines the importance of the council having reserves to deal with unplanned demands, where significant costs to restore roads and bridges and get communities connected again may require to be incurred. It is considered sound financial management for councils to hold a contingency for emergencies and for most Scottish councils, this is set at two per cent of budgeted net expenditure.”
They added: “The movement in reserves has been closely monitored and reported to Members throughout 2024-25, with an update on the reserves position reported as part of the 2025-26 Budget Pack. Council agreed maintaining a general contingency at two per cent of the revenue budget continues to be deemed prudent for 2025-26, with due consideration of the council’s overall financial position and in light of the current known financial risks facing the council throughout the year ahead. This equates to £6.5M, an increase of £0.5M from the 2024-25 level. At the point of approving the revenue budget and setting the Council Tax for 2025-26, the residual unallocated General Fund balance as at 31 March 2025 was forecast to be £0.2M. However, subsequent to a review undertaken during the year, it was possible to release previously earmarked reserve balances totalling £1.6M – these resources have been applied as part of the measures to balance the 2025-26 revenue budget, effectively reducing the residual amount to be met by Council Tax.”
