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Reserves Explained

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Reserves are held by police forces across the country, either to fund one-off investments, or to cover unexpected demands. As they can only be spent once, they are unsuitable to spend on recurring costs such as staff wages.

My Chief Finance Officer is constantly monitoring the reserves strategy, in light of the changing real-time demands placed on the Constabulary. The information below is intended to offer transparency and openness on why they are being held, and any intended purposes for their use.

Types of reserve held

I hold two types of reserve:

  • Earmarked reserves (held and allocated toward a specific purpose)
  • General reserves (held with no allocated purpose, to deal with unexpected demands placed on the Constabulary)

Earmarked reserves

Earmarked reserves held on 31 March 2019 were £20.195m. These are set aside for specific purposes, including investment in new police equipment, and transforming the force so it is better able to deal with new and emerging challenges in policing. Those held break down as follows:

 

Earmarked Reserves 2018/19 (£m)
Proceeds of Crime Act reserves 0.846 Receipts from the proceeds of crime earmarked for specific grant allocations
Operational Policing reserves 2.592 Held to meet specific operational requirements including costs from major incidents
Road Safety reserve 1.974 Held on behalf of the Lancashire Road Safety Partnership (unavailable to the Constabulary)
Reserves to support operational transformation 14.783 Available to meet costs of transforming the organisation
Total 20.195

 

As these reserves are set aside for specific purposes, they are not available to support unexpected demands. They therefore should not be conflated with the General Reserves.

Under the current reserves plan, the Earmarked Reserves set aside for organisational transformation and investment in the capital programme will be fully utilised by 2022/23.

 

General reserves

General reserves held on 31 March 2019 were £10.175m (or 3.6 per cent of the budget). These are set aside to deal with any unexpected demand on the Constabulary.

This is in line with my published Reserves Strategy produced in line with Home Office guidance.

 

Reserves in context

To give some context as to the level of reserves held by my office, it is helpful to compare my reserve levels to Lancashire’s local authorities.

The reserves I held at 31 March 2019 were equivalent to just under 11 per cent of the 2019/20 annual revenue budget.

As you can see, as a proportion of overall budget, I hold by far the lowest reserves in Lancashire.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

*Figures in table relate to total reserves held (both Earmarked and General Reserves combined)

 

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