TORY county chiefs have been accused of hoarding reserves which have reached an “immoral”

£400m while cutting frontline services.

Lib Dem opposition group leader Cllr Keith House criticised the ruling Cabinet for sitting on massive savings – the equivalent of nearly a quarter of its £1.75bn budget, including schools.

The county council nearly doubled the sums held in reserves from £214m in 2011 to £419m last March while closing two libraries, three care homes for the elderly and slashing spending on Sure Start children’s centres and buses.

Hampshire chiefs admit there is cash in the coffers to fill the gap left by central government funding cuts over the next two years. But they argue it is more prudent to cut council spending than use savings to prop up services in the short-term.

Cllr House, who is also leader of Eastleigh Borough Council, said: “It is close to immoral that Hampshire is stashing away over £400m of local taxpayers'

cash. I think the reserves are excessive and can’t be justified.”

He made a plea for the council to use the cash more imaginatively than leaving it sitting in the bank.

“With the state of the economy we need to promote jobs and with very affordable building contracts now is the time for substantial investment in schools, roads and facilities for the future.”

Southampton City Council has also increased its reserves from £56.3m in 2011 to £75.7m in 2013 and has also cut services, including a unit for traumatised eight to 12-year-olds and support services for vulnerable and elderly people, with the loss of 234 jobs.

It is looking to find a further £40m savings over the next two years.

Local Government minister Eric Pickles said councils had significantly increased their reserves in recent years and should be prepared to use this money rather than cut services.

Unions have also called for reserves to be used to save services and jobs.

However, the county council says nearly half the money is already committed to projects such as road repairs, school building and street lighting.

The cash is held in reserves while the spending is spread over a number of years. The council’s reserves also include cash earmarked for specific purposes such as £22m for settling insurance claims and £44.8m for schools, which the council has no control over. That is the combined underspend on school budgets managed by governors.

A Cabinet report admitted, however, there was £80m available which could be used to bridge the gap in the council budget left by a 10 per cent cut in Government funding in 2014-15.

Council leader Roy Perry said: “If we used reserves simply to prop up the budget in the short term they would be exhausted very quickly.”

They plan to use savings to transform services, including care of the elderly and to set aside £5m for bigger payouts to staff who take voluntary redundancy to reduce the salary bill.

This week the Cabinet approved cutting the budget by £86m by 2015 on top of £100m saved over the past two years. Children’s services, adult social care, economy, transport and the environment are being asked to find savings equal to 12 per cent of their budgets in 2015-16.

Hundreds more jobs could go in addition to the 1,700 already shed over the last two years.

Peter Terry, regional organiser for Unison, said: “It is unbelievable the county council has nearly half a billion pounds in savings. The cuts are totally unnecessary.”