County looks to its reserves to achieve a balanced budget

HAMPSHIRE County Council expects to draw around £86million from its reserves to balance the budget for the forthcoming year.

In this term the county council piggy bank, the budget bridging reserve, will be emptied to cover the shortfall in 2024/25.

Last July, director of corporate operations Rob Carr told the Cabinet that although it is a position they do not want to take, there is no other option but to use money in the reserve.

Mr Carr said: “We know that the September budget will face pressures. We are certainly concerned about our future forecast.

“We have no choice but to take these reserves to secure our legal, financial position.”

The full council has approved the medium-term financial strategy and savings programme to 2025, which will begin to address the budget gap of £132m to 2025/26. The county council will use the remainder of the budget bridging reserve to plug the gap this year, but any savings from the programme will then be transferred to that pot.

The council’s approach to planning and delivering savings over two years means the 2024/25 cash limits do not include any new savings proposals.

Due to the significant financial challenge faced by the county as it tries to meet its legal obligation of delivering a balanced budget, directorates were not given specific targets as part of the savings programmes like before.

However, they were asked to analyse and assess the possible cost-saving measures that could be implemented if they shifted towards providing the minimum legal requirement of services.

The report, which was due to be presented on Monday, indicated that the total savings programme to 2025 is “insufficient” to meet the forecast budget gap for 2025/26 and, taking account of the planned timing of savings delivery, a significant budget gap of £56.9m remains for 2025/26.

Since transfers to the budget bridging reserve will reflect actual savings delivered, the 2024/25 cash limits have yet to be adjusted in line with planned savings.

A council report said: “This early action in developing and implementing the savings programme to 2025 means that the county council is in the best possible position for setting a balanced budget in 2024/25, and that no new savings proposals will be considered as part of the budget setting process for the forthcoming financial year”.