A reserves strategy to be proud of
Friday, 12 July 2013
Hampshire County Council has set out in detail how it is spending its financial reserves to benefit residents
With cuts of around 40 per cent to the grant received from Government over four years, the Council has had to reduce its budget by £120m over the same period and now faces more cuts to come. These changes in funding from central Government mean the Council's reserves are in constant use. They are absolutely vital in meeting the challenges of maintaining high quality services at the lowest cost to taxpayers in the face of increasing demand, particularly for social care.
Council Leader Cllr Roy Perry asked for the details to be laid out in the report that comes before Cabinet on 22 July to explain how the Council's reserves are used as part of a deliberate strategy for dealing with this extended period of austerity.
The report demonstrates how the majority of the reserves - which stood at £418.8M on 31 March - are earmarked. Around half are fully committed to existing spending programmes. Other reserves are being spent in ways that generate savings and improve services over the longer term; investments that allow the Council to modernise and develop new ways to provide services, while securing quality and value. Examples include the development of Extra Care assisted living or the new technology that will support shared back-office functions with other organisations.
Councillor Perry said: "We will be using some reserves to cushion the impact of grant loss over the next few years, possibly up to 2020, but will do so in a well-planned, controlled way that allows for real transformation in the way we provide services. If we used reserves simply to prop up the budget in the short term they would be exhausted very quickly.
"We would be faced with some urgent, unplanned decisions to address cash shortfalls that would simply keep on growing. If we had not reduced our spending, the reserves would have dried up and we would have no means in the long term to make those reductions.
"Hampshire County Council has consistently implemented efficiency and savings proposals ahead of time, as well as achieving the full planned savings programme. The risks to services, that residents rely on, have never been so high and that's why using our reserves to fund investment and transformation is exactly what we should be doing and are doing. This is what puts Hampshire in a strong position to tackle the further reductions in Government funding and that's something to be proud of."