With all the discussion in the media on possible future public spending cuts, especially in view of the forthcoming general election, I found the information that arrived this week with my new council tax bill rather interesting.

Whilst the local council tax increase for 2010-11 was 1.4%, both the Police and Fire Authorities increased their precepts by 2.9%. Such disparity in the headline numbers was not really a surprise – last years increases were 1.2% for the council, 3.2% for the Police Authority and 3.7% for the Fire Authority and all three seem to have at least made some effort to control their budgets for the coming year. What did surprise me though was the leaflet explaining the precepts and levies along with the authority Chair’s statements.

Firstly, the Police Authority had this to say :

In the immediate short term, the Authority’s financial position is robust. However, beyond the next eight months, the future of Government funding is extremely uncertain, especially as we head towards a general election.

Although the economy is showing signs of recovery, we have to be cautious to ensure we are not in a weakened position if funding is reduced.

Although our reserves are currently healthy, we do need to ensure that we keep sufficient funds back to cover us against future financial uncertainties. We are planning to use reserves to ease the impact of the cuts we expect to see for 2011/12.

Secondly, the Fire and Rescue Authority :

For 2010/11 the Authority’s budget has been supported by a £36.7m Government grant, an increase of 1.8% on 2009/10. It is the second consecutive year that this increase has fallen below 2%.

The Authority is therefore keen to maintain and, where possible, increase reserves in the short term as a means of spreading the impact of future spending cuts over a longer period.

See the pattern here?

Both Authorities have raised their precepts by a higher rate than the council and both are intent on increasing their reserves to avoid having to make the scale of cuts needed in future years. Not only are taxpayers being gouged in advance to increase reserves, presumably as a way of avoiding running into any caps on increases in future years, they are also admitting that they will not be making the required cuts needed to match their future funding.

Now, whether all this is due to the perceived difficulties of what and where to cut in their area of control or, just possibly, in the vain hope that Labour will be back in control of the spending floodgates in a few years I don’t know. I do though find it rather interesting that they decided to spell out exactly what they were going to be doing in such a transparent way probably to reassure local voters that their police and fire services will be safe and secure.

It would be interesting to know how many other councils and authorities are playing this little game and how much the reserves pot actually adds up to across the country as a proportion of spending – maybe an exercise for another day.