The Council establishes a policy to maintain an appropriate level of financial reserves to protect the General Dental Council from a significant event or events which would have a substantial affect, such as a major loss of revenues or a sudden major increase in expenditure.
Reserves are classified as free reserves, reserves committed to fixed assets and pension reserves, as stated in the Annual Report and Accounts of the Council.
However, as our revenue comes mainly from statutory fees, we set the free reserves level having regard to:
the objectives of Council in pursuit of our statutory and regulatory responsibilities
funding working capital and management of day-to-day cash flows of the Council, where income is concentrated in summer and winter peaks
risks to the income and expenditure of the Council
planned major capital spending programmes.
The GDC aims to maintain the free reserves level at a level that is not excessive but does not put solvency at risk. Our policy it to maintain free reserves at a minimum of three months of operating expenditure, as adjusted for our current assessment of financial risk, with a target of four and a half months of operating expenditure by the end of the current strategic planning period.
The Council will review this Reserves Policy not less than annually.