Hampshire reserves provide a crucial lifeline to local services

Careful management of Hampshire’s finances and prudent handling of reserves is providing the lifeline to enable the County Council to keep delivering high performing local services to the county’s 1.4 million residents in the short-term

Jul 10 2023

At their meeting on 18 July, members of the Authority’s Cabinet will hear how the County Council’s strong track record of using taxpayers’ money wisely, setting aside sums in reserve to use in emergencies and to tackle short-term budget pressures has proven a key strategy to shoring up vital services to the people of Hampshire up to 2025/26.  

Leader of Hampshire County Council, Councillor Rob Humby explained: “Cost-of-living pressures facing many household budgets across Hampshire are also impacting the County Council, as higher prices mean the money we do have, simply doesn’t stretch as far anymore. Our budgets are already under huge financial pressure too from years of underfunding from Government and growing demand for local services like social care for vulnerable children, and older people and adults with complex care needs, so the funding we have set aside in reserve over past years has been crucial to ensure we have enough in the bank to cover extra and unplanned costs as they’ve arisen.  

“These reserves have been fundamental in getting us through over a decade of national austerity, the impacts of the COVID pandemic, and now to deliver an urgent £22.5 million three-year programme of repairs on Hampshire’s 5,000 miles of roads – pitted with potholes and damage from successive winters of wet and freezing weather, and years of insufficient national funding for highways.  

“We’ve had to 'raid' our reserves to try to address these issues and must now use money previously earmarked for major capital investment in Hampshire to temporarily shore up our finances up until 2025/26 and fix the roads in the short term. This is not something we want to be doing but our strong financial management at least means we are able to do so – but many other local authorities are not so lucky. 

“Nevertheless, our reserves have now dropped by £38 million overall which shows that we have reached a tipping point and will start to see our reserves used up over the next few years. There simply won’t be enough in the pot to plug the anticipated £132 million budget gap we face by 2025/26, so this will need to be met in other ways, on which we are currently consulting Hampshire residents on a range of possible savings options.  

“As reserves can only ever be spent once, they are certainly not a viable long-term funding solution to what is a national problem for local government as a whole and on which central Government must take urgent action. On this point, we and other county councils continue to press the Prime Minister, Government Ministers, and our MPs for deep-rooted change that is vital for the survival of local services to our communities.  

“In the meantime, we remain absolutely committed to getting the most from every penny of Hampshire’s existing budget, using County Council finances wisely to keep serving the county’s residents – and spending £2.6 billion this year alone on continuing to deliver important local services each and every day to the people of Hampshire.