Millions of pounds are being raided from the reserves of Norfolk County Council to help balance its budget - with fears dipping into those coffers is not sustainable.

Latest figures show County Hall's reserves will shrink by more than £65m over a five year period, at a time when some councils have effectively declared bankruptcy.

Thetford & Brandon Times: Norfolk County Council is using reserves to balance its booksNorfolk County Council is using reserves to balance its books (Image: Mike Page)

Leaders at the Conservative-controlled council say they are having to take money from reserves to deal with cost pressures in adult social care and children's services. They say the use of the money is carefully considered.

But critics say it is not sustainable for the council - which is making £42m of cuts and savings this year and needs to find £44m more next year - to keep plundering reserves to pay for day-to-day services.

Thetford & Brandon Times: Steve Morphew, leader of the Labour group at Norfolk County CouncilSteve Morphew, leader of the Labour group at Norfolk County Council (Image: Denise Bradley)

Steve Morphew, leader of the Labour group at the county council, questioned the council's use of reserves at a recent meeting of its scrutiny committee.

He said: "Spending reserves on day-to-day services shows County Hall Conservatives don’t have a grip on council finances.

"Their government systematically underfunds but Norfolk Tories have made no serious effort to overhaul how the council works.

"Labour put forward radical plans for a more efficient way of achieving better value for money, but the Tories wouldn’t even discuss them and so we stagger on haemorrhaging money."

Pointing to how the council's cash balances - which includes earmarked reserves - dropped from £293m in March 2023 to £177m at the end of March this year, he said: "Spending reserves at this rate means there will be nothing left by the end of 2025."

Thetford & Brandon Times: Andrew Jamieson, deputy leader of Norfolk County CouncilAndrew Jamieson, deputy leader of Norfolk County Council (Image: Norfolk County Council)

But Andrew Jamieson, the council's deputy leader and cabinet member for finance, hit back, saying the use of reserves was carefully considered.

He said: "The county council holds earmarked reserves for a range of purposes.

"As I have frequently been on record as stating, despite agreeing to a robust and balanced budget for the forthcoming year, reserves are utilised to ensure services are maintained."

Mr Jamieson said the medium-term strategy - up to March 2028 - planned for a reduction in earmarked reserves from £175.2m in March 2023 to £110.8 in March 2028.

He said: "To say that reserves would be used by the end of the next financial year is therefore incorrect."

Thetford & Brandon Times: Norfolk County Council needs to find £44m of further cuts and savingsNorfolk County Council needs to find £44m of further cuts and savings (Image: Archant)

Mr Jamieson said the council also adds money to reserves when possible.

He added: "When considering reserves, there is a balance to be struck between ensuring that the council’s reserves and provisions are adequate, while also ensuring that council taxpayers’ contributions are not held unnecessarily."


Reserves consist of money which the council hold so they can plan for the future.

 They are split into earmarked reserves which are set aside for known risks to the council, those ringfenced for a specific purpose and those unallocated to be used in emergencies or for budget gaps.

Some reserves build up because the government gives councils grants for spending over more than one year.

When a council sets its balanced budget, its chief financial officer has to be sure it has sufficient reserves to cover it. 

Birmingham City Council last year declared it could not balance its books, while councils in Hackney, Northamptonshire, Croydon, Thurrock and Woking have previously issued section 114 notices - effectively declaring them bankrupt.

Councils cannot actually go bankrupt, but a section 114 notice indicates predicted income is not enough to meet its forecast expenditure for the next year.

Most councils then pass an amended budget reducing spending and the government can intervene.

Some councils have sought the government green light to use their capital funds - for example by selling property or assets - to top up service spending.

Councils have relatively few options when it comes to bringing in more money - but higher council tax bills are one method.

While the government generally caps council tax increases, Croydon, Slough and Thurrock were all allowed to impose higher hikes  - 15pc, 10pc and 10pc, respectively - for 2023/24.