Arguments over the amount of reserves?

SNTC needs reserves. That is a fact. The amount of reserves needed by the Town Council is debatable. Reserves are there for many different reserves. The main reason is if something unexpected happens. The Priory Centre burns to the ground or something major like that. The Town Council therefore has money to enable it to keep going during a crisis. The amount of reserves depends on a few factors.

1. The robustness of the budget. The longer the history of good budgeting the less reserves are needed.
2. The activities of the Council. If it is a very active Town Council with lots of staff it needs to have higher reserves.
3. How big is the budget/precept. The larger the Council the less reserves are needed. The smaller the Council the larger the reserves needed.
4. Precept payments aren't immediate. The Council tells HDC how much it needs (The Precept). Whilst the Council Tax is collected in various ways from April onwards, it is paid to the Town Council twice a year in May and November. So reserves are used enable cash flow.

The actual working out of reserves is not an exact science. I would suggest the minimum reserves needed is 20% of the precept (before use of reserves). This would equate to £171,000. The current reserves are forecast to be £211,000. This has been cast as adequate. I agree with that assessment.

In reality the Town Council needs more than just minimum reserves. It should be remembered the Town Council has other reserves which are allocated to specific projects.