Council reserves were revealed to be at an all-time low at a meeting of the Finance Audit & Scrutiny (FAS) Committee this week.

When pressed on what reserves will be on March 31, Senior Officer Diana Mompoloki said they would be significantly less than half a million pounds, which is below the threshold that Members have set.


It transpired that officers had taken money out of general reserves when Members had agreed to borrow, one example being the resurfacing of the roads in 2014 at a cost of around £1.5m


Mrs Mompoloki said: “We often took a decision to borrow to do things, such as the roads, but we didn’t borrow so it’s about catching up with the decisions Members made previously.


“The Authority now needs to put money back into the reserves through borrowing."


Asked why this problem had occurred, FAS Chairman Steve Sims told This is Scilly: "The Council historically has been overly cautious when it comes to borrowing and from what I can gather, going back decades, taking money from reserves has been the norm.


“Reserves are in effect a rainy day fund and not for capital projects. The roads were clearly a capital project and an expensive one, which should been funded as a capital project. Because it was fully funded internally it’s now come back and bitten us on the backside. 


“As to why this happened, disappointingly no-one seems to know. I suspect that essentially this comes down to 'It was someone else’s job'. I know that sounds trite but it has been and still is a problem within the Authority and one which is now being addressed.”

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