Financial Information

Reserves Explained

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 Reserves2018/19 (£m)
Proceeds of Crime Act reserves0.846Receipts from the proceeds of crime earmarked for specific grant allocations
Operational Policing reserves2.592Held to meet specific operational requirements including costs from major incidents
Road Safety reserve1.974Held on behalf of the Lancashire Road Safety Partnership (unavailable to the Constabulary)
Reserves to support operational transformation14.783Available to meet costs of transforming the organisation

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.

Reserves as Prop Budget bar graph

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

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