THE Government is telling Derbyshire County Council to offset cuts to its budget by using money stashed away in its reserves pot.
It comes after the Labour-led council said cuts to frontline services were "unavoidable" as a result of £157 million being taken out of the authority's budget.
A spokesman for the Department for Communities and Local Government said the council could protect services by using the "£241 million" it has in reserves.
He said: "This Government's carefully considered reforms are helping councils achieve greater financial independence and deliver sensible savings while protecting frontline services.
"There is more councils can do such as recover the £2bn a year of uncollected council tax and utilise the £16bn sitting in reserves."
Council leader Anne Western said the suggestion her administration could use reserves money to offset cuts was "really silly", as the bulk of it is "already earmarked" to resolve outstanding matters such as backdated equal pay claims.
Mrs Western said: "There two types of reserves – there are earmarked reserves and general reserves.
"Earmarked reserves is money set aside to cover matters that we know may well materialise, such as equal pay claims. General reserves is money for when something unforeseen happens.
"We have £41 million in our general reserves, which is slightly above the recommendation.
"The rest has been earmarked or is schools money that we cannot touch.
"Telling councils to use their reserves is like telling a householder who has had a pay cut to carry on living as they are, because they can use their savings to pay the gas bill.
"But what about when the savings are gone?"
Chief executive Ian Stephenson also criticised the Government's suggestion.
He said the amount the council has in general reserves "would only be enough to keep the council going for two weeks".
Meanwhile, the opposition Tory group at the county council – which lost control of the authority in May – accused the new Labour administration of "reckless" spending that had made the financial situation worse.
Tory Mike Longden said: "Labour now talk of 1,600 jobs having to go and yet they plan to introduce the as yet uncosted Living Wage.
"The question needs to be asked, with a few more years of Labour running the council, just what staff will be left to benefit from it?"
Labour has also ploughed an extra £250,000 into the council's youth service in recent months – prompting Tory leader Andrew Lewer to accuse Labour of "spending money that isn't there".
In response, Mrs Western said increasing staff pay would lead to more cash entering the local economy.
She justified the £250k cash injection into youth services as an " investment in Derbyshire's future".
