The 'Provisional Outturn/Budget Estimates’ (POBE) return on which this article is based reports the projected position for 2014/15 and approved budgets for all Scottish Councils for that year at a point in time well before the end of the financial year.

The return shows that projected expenditure of £255.1m exceeded the initial base budget for the year of £252.2m; however, there are sound reasons for this variance.

The difference is wholly attributable to the established practice whereby specific budgets from previous years have been deliberately earmarked and brought forward to directly fund planned expenditure or where additional funding has been received during the financial year to fund spend, both of which 'top-up’ the original base budget.

The delivery of council services goes on year in year out regardless of financial year ends. The process of earmarking funding ensures the effective use of resources across financial years by enabling spending to be formally deployed from one year to the next and ensuring resources required to fund such spend remain available.

When the POBE return is examined, it would appear on the face of it, that £2.177m of General Fund reserves was being used to fund expenditure in 2014/15 and the council has therefore overspent. Yet, what this analysis does not explain is that these sums were only included in reserves in the first place so that they could be carried forward from prior years in order to fund additional specific planned expenditure in 2014/15.

This planned carry forward provides additional resources in year, it does not result in an overspend.

The other issue not explained by the article is that due to the timing of the POBE return, the analysis does not show the amount of earmarked budget from 2014/15 which will now go back into reserves to be carried forward in order to fund expenditure on specific areas in 2015/16 and beyond.

My point is demonstrated by unaudited outturn figures reported to the Council Executive on June 9, 2015 that show the level of General Fund Reserves carried forward to 2015/16. General Reserves at March 31, 2015 exceed the opening balance of £17.137m at March 31, 2014 by £0.63m so that the comparable reserves figure, which includes balances earmarked for specific purposes at March 31, 2015, actually increased to £17.767m.

I am, etc.

Councillor John Mitchell Depute Leader (Finance) Scottish Borders Council