Councils cut services despite having millions in bank

Councils in the Midlands are sitting on more than £100million of reserves while making massive cuts to services, the Express & Star can reveal.

Wolverhampton City Council has £41m in its accounts but is making £70m of cuts by 2015. Yet similar-sized authorities such as Dudley and Walsall have far less with £8.3m and £6.7m respectively.

The authorities have announced hundreds of job losses as they make tens of millions of pounds of cuts. Each council has different attitudes to using the cash.

Some are now insisting any use of the money be put to a vote of all its councillors. Sandwell has £13.5m but is able to dip into the reserves for one-off costs, such as repairing potholes.

Despite being the most cash rich of the Black Country authorities Wolverhampton City Council, which is axing 246 jobs and 12 of its highest earning staff, has now put a ban on spending the reserves without a vote.

Labour finance chief Councillor Andrew Johnson said reserves would be used to fund investment or income-generating measures but warned they needed to be used wisely.

He said that the reserves might be a one-off solution but that Government cuts of 26 per cent would continue to bite for years to come. He said: "Full council will have to approve any use of the reserves. We have to maintain services as far as possible for the most vulnerable in society."

Staffordshire County Council currently has around £45m reserves. The plan is to use just under £9m in 2012/13.

Cannock Chase Council's reserves are expected to be £1.7m at the end of the 2010/11 financial year, falling to £800,000 in 2011/12.

Lichfield District Council is set to use £2m of its £3m in reserves in 2011/12. Stafford Borough Council has £3.5m in reserves but cannot use any without a full council vote.

South Staffordshire Council has £4.3m in reserves but finance chief Phil Cooper said this would fall to just £236,000 by the end of 2012/13 if cuts were not made.

Wyre Forest Council has £2.2m in reserves but will have spent £2m of that by the end of 2013-14.

Communities Secretary Eric Pickles said local authorities should not shy away from opening their piggy banks in tough times.

But Councillor Chris Towe, Walsall's cabinet member for finance said: "This council only uses general reserves after all other actions have been taken."