Millom Town Council
Millom Town Council was formed in 1974 when the parish boundaries changed from Cumberland.
Reviewed: 28 January 2026
Review Date: January 2028
Millom Town Council is required to maintain adequate financial reserves to meet the needs of the organisation. This policy sets out how the council will determine and review the level of reserves.
The Local Government Finance Act 1992 requires local authorities to consider the level of reserves needed to meet estimated future expenditure when calculating budget requirements.
Legislation does not specify minimum reserve levels, therefore the Responsible Financial Officer must follow best practice and advise the council accordingly.
The Joint Panel on Accountability and Governance Practitioners Guide advises that authorities must hold sufficient General and Earmarked Reserves to fund operations and future plans. Reserves should be reviewed and justified at least annually and published transparently.
Reserves fall into two categories: General Reserves and Earmarked Reserves.
General Reserves are unrestricted funds used for cashflow, contingency, unexpected inflation, unforeseen events and emergencies.
They may be used to smooth uneven cashflow, offset budget requirements or respond to unexpected circumstances.
JPAG guidance recommends General Reserves be maintained between three and twelve months of Net Revenue Expenditure.
Net Revenue Expenditure is precept income less loan repayments, capital project funding and transfers to Earmarked Reserves.
Larger authorities should plan toward six months of equivalent reserves.
General Reserves are built through project underspends and annual budget allocations and must cover identified financial risks.
In extreme circumstances, Earmarked Reserves may be used temporarily if General Reserves are exhausted.
Earmarked Reserves are held for specific future expenditure, known liabilities or planned projects.
They help smooth significant costs over time.
Typical purposes include:
Earmarked Reserves must be created by council decision and used only for genuine purposes.
Expenditure from reserves must be authorised by the council.
Reserves must not fund ongoing expenditure unless replenished the following year.
Earmarked Reserves used for specific liabilities do not require replenishment.
All Earmarked Reserves must be clearly identified, justified and reviewed annually.
The level of reserves will be agreed annually during the budget-setting process.
The current minimum General Reserves target is three to six months of predicted expenditure.
This policy will be reviewed annually to ensure reserve levels remain appropriate.
Signed: Chair
Date: 28 January 2026
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APRIL 30TH: Methodist Church meeting room
MAY 28TH: Methodist Church meeting room
JUNE 25TH: Methodist Church meeting room
JULY 30TH: Methodist Church meeting room
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the agenda.