POLICE cash reserves are set to dwindle over the coming years.

In a report, Steve Freeman, chief finance officer for Lancashire Police and Crime Commissioner Clive Grunshaw, warned the PCC and the force could be in trouble if "adequate" general reserves were not maintained.

And writing in the report, Mr Freeman added: "The amount of funding for future years' capital programmes will be significantly reduced as reserves are utilised and alternative investment strategies will need to be developed."

But the general reserve fund currently stands at about £12m and Mr Grunshaw's office said there were no plans to dip into the pot between now and 2020/21.

The warning was laid out as part of the Police and Crime Commissioner for Lancashire's Reserves Strategy 2018/19, which was approved by Mr Grunshaw last month.

The worst case scenario could leave Lancashire’s police and crime commissioner facing government intervention and sanctions if the general reserves were to dwindle.

According to Mr Freeman, increased demand faced by the force, as well as a real terms reduction in government funding, could have a significant effect on already-stretched financial resources.

Uncertain central funding after 2018/19 due to proposed changes to the police funding formula could also contribute.

"There have been a number of statements from Home Office ministers in recent weeks that have led to a belief that the level of reserves held by some PCCs can be used as a means to meet additional ongoing cost pressures," Mr Freeman said.

"This is considered a risk as the PCC's plans to employ reserves could be disrupted by any intiative from central government to rely on our reserves.

"It is also a flawed argument as it can only ever deliver over the short term and cannot provide a sustainable position."

£84.6 million has already been slashed from the force's budget since 2011/12 and a further £18m must be cut over the next four years.

And Mr Freeman raised the possibility the situation could worsen as councils also continue to be squeezed.

He said they could continue to withdraw funding because of their own financial plight.

As of the end of March, the general reserves stood at £12m - 4.5 per cent of the 2018/19 revenue budget.

Meanwhile, a number of earmarked reserve funds - which can only be used for specific projects - are expected to run dry by 2020/21.

Among the earmarked reserves are funds set aside for operational policing, road safety and protective clothing, as well as forensic partnership, strategic investment and vehicle repairs.

Mr Freeman said: "These funds enable the commissioner to meet the funding commitments that have been made for the capital investment programme.

"This means that the operational policing reserve will need to be used for this purpose and therefore leaves only general reserves from 2020/21 to meet any extraordinary demands on resources."

Mr Grunshaw said: "As I have said consistently over a number of years, we have got a plan around the reserves, which are there after years of good management of our finances in spite of almost eight years of austerity in policing.

"This means balancing the need to maintain reserves at a level which protects the force's ability to respond to unexpected events, whilst delivering the best possible service day in day out.

"A portion of the reserves are allocated to projects over the next three years, with much of this being invested in new technology.

"Lancashire Constabulary have had to make over £84m of savings and still have to make an estimated £18m more by 2022, meaning the police are having to do more with less.

"The Government needs to properly fund policing and start to address the impact that years of austerity has had on the service.

"The demands being placed on the force continue to put a strain on frontline policing.

"Time and again I have said that the only viable, long term solution is for the government to address this need, instead of rehashed policies and no extra resources."