I was very pleased to be elected Chair of the Honiton Town Council Finance Committee last month.
I have already written about my concerns about HTC’s low level of reserves and unbudgeted expenditure, so to be chair of the committee that monitors finance and makes recommendations about reserves is a privilege and a role I will take seriously.
The committee’s first financial decisions in the May 2025 meeting were about earmarking reserves.
Every year, the town council decides whether to “earmark” unspent amounts in its reserves for specific purposes. Usually this relates to money that has been budgeted for a project but not spent by the year end, which is sometimes for reasons outside of the council’s control.
If unspent money is not earmarked, then it will be added to general reserves.
Our town clerk had prepared an Earmarked Reserves report which identified a number of unspent budgets from 2024/25 that we might want to consider.
We discussed a number of these items including Election Expenses (£7,000), Honiton Sports (£15,000), Dowell Street Corner (£12,000) and Youth Council (£5,000) and decided to put forward two recommendations:
- to earmark £15,000 for Honiton Sports – this was a major project which had been held up by delays with related S106 monies for sports pitches from EDDC
- to earmark the unspent balance of £12,000 for Dowell Street Corner – the costs of making the wall safe were still uncertain and it would be sensible to earmark this money as the budget set for 2025/26 might not cover the full costs
There were a few other possibilities, but we decided to keep it at just those two. For example, there is a new budget of £5,000 for a Youth Council for 2025/26, and it seemed unlikely that the Youth Council project would need to spend £10,000, so we did not recommend earmarking the unspent £5,000 from 2024/25.
The final decision is made at the next full council meeting. The Finance Committee’s recommendations will be put forward, but councillors can suggest changes and may decide to earmark more or less than is recommended.
On reviewing the 2024/25 budget and actual expenditure, I noticed that the town council had underspent its total budget by about £150,000 – with several budget lines having amounts allocated but nothing spent, such as High St Regeneration (£10,000), Health & Wellbeing (£3,000) and Public Engagement (£7,000). These all sound like worthy ideas, but it seemed that there had been no projects running which would spend that money.
My lesson from this is to think really seriously about expenditure budgets, as it seems that most of the previous year’s increase in our budget (and therefore council tax) had not been spent!
All councils have a duty to manage public money wisely, and that includes setting budgets against realistic costs and for clearly defined purposes.