Hampshire County Council has moved to dispel concerns it is cutting services while holding more than £200m of cash held in reserve.
The authority is pushing ahead with around £55m of cuts to services, which include cuttings 1,200 jobs at the council, by 2015. This follows the £30m reduction in Government funding to the council announced last year. But county council leader Ken Thornber said he wanted to set the record straight on why the council's extensive reserves could not be used to fund children's centres or other services.
He said: "It is important to remember that it would be foolish to use reserves, which are essentially the local authority’s savings, for continuing annual recurring costs. We must live within our means and once those savings are used up they are gone, but the annual recurring costs of our services are still there unless action is taken to reduce them."
Councillor Thornber said that on top of the £45m gap in funding, the authority expected a £45m shortfall next year as well. “Against a background of the most severe cuts in living memory to tackle the national debt, Hampshire County Council has protected adult services by not reducing eligibility thresholds to critical care only; we have not cut concessionary bus fares for the elderly; we have protected education and the 1,100 children in our care and we are not cutting back highway maintenance," he said.
The reserves include £21m put aside to help with cash flow problems and unforeseen circumstances, £16m for future capital investment and liabilities against future private finance (PFI) schemes. A further £16m is being saved to help fund redundancies, and a whopping £65m - equivalent to six years back pay - that may have to be paid out under Equal Pay legislation, and employment tribunal rulings.
“By the end of 2011/12, Hampshire County Council reserves will have decreased by £84million as we use our 2010/2011 savings and once we have established if we have any equal pay liabilities," said Cllr Thornber. “Our strategy on the use of our reserves has also been praised by Government ministers with acknowledgement of how we are using our reserves both to fund invest-to-save, and to help ease the financial pressures on our budget, and on services and council taxpayers.”
