Council to use reserves to maintain services - but jobs are still at risk

A report will be put before the county council’s Cabinet on July 22 to explain how the reserves will be used for dealing with the 40 per cent central government grant cut.

But the funds, worth around £418.8m, will not be used to preserve staffing levels.

As reported by the Daily Echo, hundreds of posts across the authority look set to be axed as it looks to cope with a ten per cent grant reduction next year.

However, leader Cllr Roy Perry will detail how the majority of the reserves will be earmarked at the Cabinet meeting next week.

The council says around half are “fully committed” to existing spending programmes while other reserves will be spent to generate savings and improve services in the long term.

Other reserves will be spent on investments in developing and modernising services, including the development of extra care assisted living, or new technology that supports shared back-office functions with other organisations.

Cllr Perry told the Daily Echo: “Our reserves are being used to fund investment and transformation, to enable the council to modernise and develop its services.

“Whilst it might seem tempting to use reserves to sustain staffing levels, used in that way, reserves would soon dry up and the council would have no means, in the long term, to cover the cash shortfalls – which would simply keep getting bigger.

“We are expecting to make further savings, with more reductions in senior management posts, as well as through sharing capacity and costs with partners.

“We will seek to do that as sensitively and wherever possible, by voluntary agreement.

“We may need to recruit in some specific areas to develop services which other public sector organisations may wish to purchase from us – thereby, generating additional income to the county.”

He added some of the reserves will be used to “cushion the impact” of grant loss, possibly up to 2020.

“If we used reserves simply to prop up the budget in the short termthey would be exhausted very quickly”, Cllr Perry said.

“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.”