Local councils forced to dip into reserves
As the UK government looks to introduce a council tax freeze for the short to medium term, more and more councils around the UK will be forced to dip into their reserves which have been built over the years. It will be a surprise to many taxpayers in the UK to learn that such reserves do exist with many of them in the tens of millions and some of them in the hundreds of millions of pounds. So will this soften the blow for UK taxpayers?
Local councils are unlikely to give up these reserves without a fight and you will see a reduction in many services up and down the country. For some reason the vast majority of local councils in the UK had been reluctant to mention or discuss their reserve funds in public even though in effect these are the rightful assets of UK taxpayers. So as George Osborne continues to wield the axe we will likely see more mention and more news regarding local council reserve funds.
Whether taxpayers will feel the full benefits of these reserves remains to be seen but many will question why council tax has been rising year on year for some time while councils have been putting inside more and more funding for a "rainy day".
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