THE region’s town halls were accused yesterday of planning to slash services while hoarding cash in huge reserves that would “shock” local residents.

Communities Secretary Eric Pickles turned his fire on local authorities that hold tens of millions in pounds, ahead of savage cuts that will close libraries and leisure centres and hit care for elderly people.

He said: “Building up reserves isn’t simply about turning town hall vaults into Fort Knox.”

The minister said there was no reason for any authority to keep back more than five per cent of its budget – yet many hold three or four times that much and total reserves are £10.5bn.

In North Yorkshire, sums held include 93.1 per cent (£11.2m) in Hambleton and 56.1 per cent (£16.1m) in Harrogate.

Reserves in the North-East include 23.3 per cent (£74.7m) in Stockton and 10.4 per cent (£92.9m) at Durham County Council.

Mr Pickles said: “I’m sure many residents would be shocked to find local authorities still have over £10bn in their piggy banks when they are hearing weekly scare stories of service and job cuts.

“Just like any household facing challenging times, all good councils should be considering the merits of temporarily dipping into the money they have set aside, as part of their plans to address immediate financial challenges.”

Mr Pickles’ attack is certain to be seen as an attempt to divert criticism for cuts to local council budgets that could top 25 per cent in many areas.

Council leaders have already warned of “real pain and anxiety for millions of people”, with up to 140,000 posts expected to be lost and services slashed.

Councillor Alan Napier, deputy leader of Durham County Council, said it was a common misconception that reserves are available for dayto- day spending and councils had to set aside reserves to pay severance costs that would come with future cutbacks.

The county council had a general reserve of £16m to £20m, which was line with good practice, a strategic reserve of £27m to ensure financial stability over the next four years and earmarked reserves for specific purposes, Coun Napier said.

Coun Neville Huxtable, leader of Hambleton District Council, strongly defended the authority’s financial position.

“We have been spending our reserves in a sustainable way for a number of years in order to support necessary investment in services and maintain the third lowest council tax in the country for a shire authority,”

he said.