Basildon, Southend and Castle Point councils are sitting on huge piles of money

Last week, the Echo covered criticism of Castle Point Council after it emerged they had reserves of almost £6million, but still chose to raise council tax for its residents.

The council’s ‘safety level’ was only £2million, and residents queried why they faced increased council tax rates when the council had almost four million to play with.

And it seems other councils are in similar positions, with both Southend and Basildon raising council tax rates, while sitting on piles of cash.

Southend Council have £11 million reserves, with an £8 million safety level, while Basildon Council have £23 million, with the ambitious plans of adding £10 million to that total during the upcoming financial year.

Basildon Council has insisted the huge reserves are needed due to ‘uncertain times’ with central government funding.

Southend Council has insisted the huge reserves are vital, just in case of a major incident.

In the past, the fire on Southend Pier, and slips on the cliffs have seen the reserves hugely dilapidated, and the reserves are needed to ensure the council can cope in an unfortunate circumstance.

Southend Council leader, John lamb, said: “We have a much higher safety level, because we carry far more responsibility.

“We are at about the right level, where you can look at the number, see we are above the safety level, so we have a little bit to play with, but we do not have so much that people begin to ask why.

“We have to hold it, just in case, take for example, when we had the pier fire, or when the cliffs slipped, we have to be able to react, and we have to have the funding there.

“Unlike districts, we are not supported by a county, we are a unitary authority, and therefore need to be able to support ourselves.

“It comes down to us every time.”

Mr Lamb added it is always necessary to be above the safety level, so the council can contribute to projects in the community.

He said: “You always want to have that little edge, the little bit extra on top so you can contribute to projects when they present themselves.

“Its hard to forecast for what projects will come up, and it is even harder to forecast if we have a disaster, so you just have to be as safe as possible, and ensure that those reserves are always above the minimum level.”

Basildon Council is facing a 25 per cent cut in central government funding, one of the biggest cuts to any council in the country.

The council has still managed to close a huge £4.2 million budget cap, while still maintaining services,.

In an attempt to combat the loss of funding from the government, the council has increased investments in commercial buildings as well as investing more in building homes for private rent and sale to generate income.

Gary Canham, chairman of the audit and risk committee, said: “The problem is, we are going into unknown territory.

“There are a few huge issues hanging over our heads at the moment, everyone knows we are losing a lot of our central government funding.

“We missed out on the business rate retention scheme, the new homes bonus scheme is already being reduced.

“When we get to 2020, we would have lost all government funding, and compare that to 10 years ago, we need these reserves in place.

“Each year the screw is tightened further and further, and we need to be ready to plug gaps in case we lose funding.

“At our last funding audit, we were told we were at an ‘inadequate level’ so of course it was necessary to build our reserves up.”

Mr Canham claimed the huge reserves give the council a ‘buffer’.

He added: “At the same time, we have closed the 4.2 million budget gap, and we have closed that gap without cutting services which affect our residents.

“We looked to maintain our services in the face of increasing costs, but we need adequate protection against further central government cuts.We are in uncertain times, we do not know what money we will be receiving from central government so we cannot afford to take risks.”