NOTTS County Council has been slammed for creating new reserves in which to put millions of pounds of unspent money – while planning cuts to frontline services.

The authority underspent by £10.4m this financial year and is now looking to bank part of the remaining cash, despite calls for it to be used to maintain public services facing the axe.

The council said it expected the under-spend to fall to £5m by the end of the financial year.

But it is planning to put more than £3.7m into reserves – some for things like "external experts" and "any large, unaffordable school deficits that may arise".

Unison and councillors say there is no clear picture why the savings needed to be made.

Details were revealed as the council said it needed to find £85m in the next three years to balance the books, putting 1,400 jobs in doubt. The under-spend is partly made up of:

£2.2m found through "higher than anticipated reserves", delays in capital spending, better than expected investment rates and reduced interest payments.

More than £1m due to staff not being replaced in several departments.

A decision to axe the "weeks of action" programme.

£300,000 from a VAT refund for libraries.

£100,000 from a refund on a mobile phone contract.

Unison regional officer Ravi Subramanian claimed that putting the money into reserves made the council's financial situation appear worse than it actually was.

He said: "We will be asking some serious questions about why they created additional reserves when there are such budget pressures."

Coun Glynn Gilfoyle, Labour spokesman for finance, said the council's reserves already appeared healthy at more than £24m. He said: "There is no clear picture of what they are trying to do. Staff will be asking why they are going to lose their jobs when they have such a large underspend."

And Labour leader Coun Alan Rhodes said: "I find absolutely astonishing that this is happening at this time.

"There are massive cutbacks in services and yet they are squirreling money away instead of spending it on vital services that people come to rely on."

Liberal Democrat leader Coun Jason Zadrozny said: "It seems bonkers to me.

"I am certain we don't need to make these cuts. They are talking about making £33m of cuts but have found £10m.

"They should be using that money to protect services."

But Councillor Reg Adair, cabinet member for finance and property at Notts County Council, said: "Currently, the expected under-spending at the end of the financial year next March is £5m.

"However, the previous administration had planned to use £3.7m of the council's reserve fund to support the 2009/10 budget, which is included in this £5m figure.

"Due to the current year's under-spending, the council will no longer need to use the £3.7m which will remain in our reserves.

"That leaves an overall under-spend of £1.3m, £800,000 of which will be carried forward to next year's budget to help protect services with the remainder being allocated for reserves.

"Like all local authorities, we need to maintain adequate reserves in difficult times in case of emergencies such as floods and pandemic outbreaks."

chris.birkle@nottinghameveningpost.co.uk