An external audit of Penrith Town Council has concluded the town council is holding excessive amounts of public money in its reserves than accepted levels.
The annual external audit of the town council was carried out with the findings and certificate issued by the auditors in August concluding the town council's reserves totalling £744,785 including along side a further £968,353 in investments is higher than generally accepted for a small council such as the town council.
The reserves and funding of the town council come from money raised each year as a precept charged by the town council to households in Penrith.
Then Town council increased its annual council tax precept this year and revealed plans to increase its precept year on year for the next 4 years.
Council tax data published by the UK Government via the Department for Levelling Up Housing and Communities (DLUHC) showing council tax levels and precepts set by councils in England for the council’s financial year 2023/24 shows that the precept set by Penrith Town Council is 5.4% above the national average among town and parish councils in England.
The Band D precept set by the town council for Penrith council tax payers is £83.09 5.4% higher than the average town and parish council in England.
Other town and parish councils in the new Westmorland and Furness area like Ulverston town council have a Band D precept of £55.89 putting Penrith Town councils precept almost 60% higher.
The external auditors Moor said “On review, the council's general reserves are higher than the generally accepted level for smaller authorities.
General reserves are the level of reserves after adjusting for any earmarked or ringfenced funds. The council informed us that the build-up of reserves is because of an annual underspend against the budget. Per Paragraph 5.33 of JPAG Practitioners' Guide, better practice suggests that general reserves should cover at least 3 months of expenditure and anything greater than 12 months of expenditure is considered excessive.”
The town council has said at the Council’s reserves policy will be reviewed during the council's budget process in November and that a member workshop is proposed to invite ideas, schemes of work and projects to commit a proportion of the Council’s General Reserve.