MONEY raised through investments will be stored away for a “rainy day”, St Helens Council’s business support manager has said.

According to the latest corporate financial report, the council has investments totalling £93.2 million through a number of local authorities, banks and building societies.

Jon Ridgeon, business support manager for corporate services, presented the report to the audit and financial monitoring overview and scrutiny panel this week.

During the meeting, Windle councillor Mancyia Uddin asked whether it was normal practice among local authorities to invest money in this way.

“It is standard practice throughout local authorities,” Mr Ridgeon said.

“There’s statutory guidance that manages this process because it is standard practice.

“It’s not just standard practice for local authorities, it’s all public sector organisations. It’s good cash management of their balances. It’s also done by large corporations as well.

“Instead of having money just sat in a bank account not getting interest, if you can manage your cash flow then you are better off investing that for periods of time to make sure that you get a return on the investments that you have.”

Town centre councillor Michelle Sweeney said a number of issues has been raised as to why the money could not be invested into some of the borough’s services.

“I know a number of residents have asked that question,” the Labour councillor said.

“Why can’t some of that money be invested into the local authority and service provision for them rather than it going to other local authorities?”

Mr Ridgeon said the money invested was taken from the council’s cash balances from its reserves and not from its cash limited budgets, which is used to provide services.

He said: “Reserves are built up to kind of support the authority moving forward to cover any risks we might have moving forward.

“Decisions are taken about the use of these ear-marked balances to support priorities within services and they are used from time to time for that.

“But we also have reserves put a way for a rainy day if issues come up, and that’s what these balances are that are being invested.

“It is separate to cash-limited balances.”

Meanwhile, Thatto Heath councillor Richard McCauley, chairman of the panel, also asked whether a successful £1.5 million VAT repayment claim would be re-invested into sports facilities.

The claim, as reported by the Local Democracy Reporter Service, relates to VAT that was incorrectly charged by local authorities on supplies of closely linked and essential services to sport to individuals taking part in that sport.

Mr Ridgeon said the VAT was part of a fixed fee for residents – not an additional charge – which was then paid to HM Revenue and Customs (HMRC).

He said the money will be factored into balances in the council’s annual statement of accounts at the end of the financial year and a decision will then be taken as to where the money will go.

The audit and financial monitoring overview and scrutiny panel noted the corporate financial report.