For me having a reserve team is no different to putting out players on loan.
I think its not cost effective and loaning players out is a way of getting them properly match fit. Nothing better than playing in 'proper' matches and keeping expenses down?
Its not just the funding (somewhere to play, transport, etc) but the time taken to put another club in a league... Boring stuff like registrations to washing the kit and even fulfilling fixtures?, I understand why a reserve team would be beneficial but I don't think its a necessity at the moment.
The issue with loaning players out Gary, similar to that of 'placing' Youth team graduates is that the Clubs where we would send them are invariably, like us part time, probably training on the same nights as us and playing their midweek games on the same night as us as well.
So you have your player going to, for example, Ashton Utd. If he's going to play for them he has to train with them so he's not training with us, doesn't know the set pieces etc. Most footballers want to play I believe so surely the temptation, if you are say Sam Hewson and not getting a game at Moss Lane must eventually be to stay with the club who are playing you and with whom you are training. Also, the recipient club may (as may the player to be honest) use a player when they are not 100% fit, use them for longer than we would want them to when a player is coming back etc.
Sorry to labour a point but IMHO a Reserve team is imperative to increase the possibility of us keeping some of our better youth team players and also to allow our injured or unselected players to come back in a way which we control