Hampshire councils told to use £217m savings to reduce job losses

Communities Secretary Eric Pickles revealed how much money councils have hoarded in their reserve accounts and insisted that they must use some of the stashed cash to plug funding shortfalls.

The figures reveal that Hampshire County Council is holding £131m in its vaults – the third-highest cash figure in the country, equivalent to 8.1 per cent of its revenue budget.

It comes as the council looks to save £30m over the next two years, and plans to shed more than 900 staff in the next 12 months through retirement and voluntary departures.

Southampton City Council, which has £15.5m of reserves, about 4.1 per cent of its budget, recently announced that all its 4,180 non-teaching staff faced a 5.4 per cent pay cut through reduced hours to help it balance a £62m budget black hole over four years. Up to 250 jobs will also be axed next year.

Staff were warned that 400 more jobs would have to go if they didn’t accept the pay cuts.

Councils in Hampshire are holding on to more than £217m between them.

Whitehall officials said that local authorities would be expected to have reasonable reserves of about two to five per cent.

Mr Pickles said: “I’m sure many residents would be shocked to find local authorities still have over £10 billion in their piggy banks when they are hearing weekly scare stories of service and job cuts.

“Just like any household facing challenging times, all good councils should be considering the merits of temporarily dipping into the money they have set aside as part of their plans to address immediate financial challenges.”

Southampton City Council leader Cllr Royston Smith said that his council had taken a “sensible and prudent stance” to give it enough cash “to cope with the unexpected, and at the same time demonstrate to residents that we are not storing up their money unnecessarily”.

Hampshire County Council was unable to comment last night.