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

The council piggy bank – the budget bridging reserve – will be emptied to cover the shortfall in 2024-25. In July corporate operations director Rob Carr told cabinet there was no other option.

He 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 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.

It will use the rest of the budget bridging reserve to plug the gap this year, and any savings from the programme will be transferred to that pot.

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

Because of the challenge faced by the council as it tries to meet its obligation of a balanced budget, departments were not given specific savings targets.

But they were asked to assess possible cost-saving measures that could be implemented if the council aimed for the minimum legal requirement of services.

The report said the total savings programme to 2025 was “insufficient” to meet the 2025-26 forecast budget gap  and, because of the timing of savings, a gap of £56.9m remained for 2025-26.

Since transfers to the budget bridging reserve reflect actual savings, 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.”