Councils Facing 'Spiralling Fuel Costs'

Councils are having to draw millions of pounds from vital reserves to cover spiralling fuel costs, town hall bosses are warning.

Over the past 12 months, local authorities have had to spend about an extra £20 million at the pumps to keep their fleets of bin lorries, street cleaners, meals on wheels, buses and lawn mowers running.

The cash - the equivalent of running nearly 80 libraries or 100 indoor sports centres, or the annual salaries of 1,250 care workers, 1,172 bin men or 700 social workers - has had to be taken from other budget areas or siphoned from dwindling reserves.

Many councils have invested in money-saving initiatives over recent years such as fuel-efficient lorries, route-planning technology, LPG and electronic vehicles and driver monitoring, but rising fuel prices have wiped out much of the projected savings.


With pump prices due to rise again in April and the cost of oil expected to increase over coming weeks, town halls could find themselves having to fork out record amounts on diesel at a time when money for frontline services is more stretched than ever.

Cllr Peter Box, Chairman of the Local Government Association's Economy and Transport Board, said: "At this time of severe Government cuts, with town halls having to make savings of £6.5 billion over the next year, councils don’t have the luxury of spare cash to spend on fuel.

"Unallocated reserves only make up about 3 per cent of councils’ total revenue and are crucial to helping them manage their budgets at a time of financial constraint. With authorities striving to keep delivering vital frontline services like adult social care, child protection and refuse collection, while making tough decisions about closing libraries and cutting staff, to have to spend millions of pounds-worth of savings on fuel is very frustrating.

"This money is not limitless and can only be spent once. If fuel prices continue to spiral councils could cut deep into money which is supposed to be a buffer to fall back on in hard times.

"There are very good reasons for councils keeping money in reserves, the vast majority of which is set aside to fund long-term projects to improve local services, cover the cost of insurance, meet equal pay claims and redundancy payments, or help plug gaps in an emergency such as flooding. Using this cash continually to balance the books in the short-term is not feasible."

(CD/GK)