THE council should have a longer-term financial plan and centralise reserves, according to a review by other local authorities.

This will make it easier to manage the impact of the challenging financial period ahead, the peer review said.

The comments from a Local Government Association peer review of Bolton’s corporate plan come as the council announced plans to use £8 million of its reserves in the next budget.

Despite this, the local authority still needs to find savings of £23.5 million in the 2019-21 budget.

The review, led by the Doncaster Council chief executive and the Barnsley Council leader, acknowledges that council has maintained a healthy level of reserves compared to other local authorities while managing an increasingly difficult funding position.

However, it recommended centralising reserves which are held in individual departments, noting that the “high level” of departmental reserves compared to other councils was “unusual”.

It said: “A greater proportion of reserves should be held and applied corporately in line with practice elsewhere in the sector. This […] presents a more transparent picture of financial performance and also allows for reserves to be targeted towards the key priorities for the council.”

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Conservative leader David Greenhalgh described the issue as complicated but agreed that centralising reserves would lead to more effective prioritisation and greater value for money.

He said: “Many departmental reserves are built up through vacant posts that departments will still receive the salaries for, despite there being no one there to receive that money.

“Then allowing departments to depend on those reserves to prop up their budget is very dangerous, because it leads to a false understanding of what is actually needed to run the day to day front line service. The whole system shows a lack of transparency and needs an overhaul.”

The review also recommends that financial planning should be aligned to the 2030 vision and the priorities in the corporate plan.

It said that a longer-term plan covering a period up to five years will help deliver “realistic” and “robust” saving options and minimise the negative impact on local community.

Council leader Linda Thomas said the council would take the recommendations forward but added that this would not change the way reserves are spent any time soon.

She said: “Six months of adult social care is all we’ve got in reserves if things went seriously wrong - this is within the best advice of our auditors to make sure there is money there to buffer against further Tory cuts and pressures. We have a record for most effective use of taxpayer’s money and these recommendations are driving how we look at efficiency which is crucial while the Tories are taking local money and handing back crumbs to already deprived local services.”

READ MORE: Have your say on the council's budget proposals

Members of the public can read about the 2019-21 budget and complete a questionnaire online as part of a consultation until January 14.