A revenue budget to address the massive funding gap left after £48 million was cut from Hampshire County Council’s Government grant for 2016/17, will top the agenda at the meeting of the Council’s Cabinet next week.
On 5 February, Cabinet Members will consider how to balance the County Council’s revenue budget to cover the cost of providing services, in the wake of deeper cuts in funding by Government. The recent provisional settlement was £29 million worse than the County Council had expected – compounding cuts in previous years which have already halved the Authority’s funding.
“We are facing the most challenging period of the prolonged national austerity measures,” said County Council Leader, Councillor Roy Perry. “In Hampshire, this means having to deliver savings of £98 million by April 2017, rising to a further £140 million of savings by 2019/20.
“We have a strong reputation for careful financial planning, which has delivered £240 million of savings since 2008, but it’s clear that having lost so much of our Government grant, future savings will become even harder to find. Our approach to date, has focused on running the County Council more efficiently by reducing the cost of back office functions; using savings to help protect front line services; and prudently using some reserves to manage the costs of change. We are proposing to continue applying these principles in the years ahead, as well as considering an increase in council tax for the first time in six years – an approach which was supported by the majority of people who fed back to us during our summer consultation.
“This option is being put forward because of the blow we received before Christmas when Government announced more drastic cuts to the local authority funding formula, which impact particularly badly on County Councils. This translates into a further £15 million gap in our budget by 2017/18 – and that’s taking into account the amount we could receive if we put up council tax by just under 4% each year, in line with the Government’s expectations. The percentage includes 2% to help specifically fund adult social care – even though this only provides £10 million against anticipated costs of £35 million in adult social care, next year.”
Under the proposals to be considered by Cabinet, the County Council’s council tax precept for next year would increase by 3.99% – generating around £20 million in annual revenue. For residents in an average Band D property, this would equate to an extra £41.40 for the year 2016/17 or just under 80 pence extra, per week. As a result, the council tax charge from Hampshire County Council for the year beginning 1 April 2016 would be a total of £1,079.28 at Band D.
Councillor Perry added: “While a proposed increase of 3.99% would contribute towards making up some of the lost grant and social care costs next year, we would still need to use £55 million of reserves to plug the remaining gap, leaving us with nothing for future years. We had always anticipated using some reserves to balance the budget next year to give us the time to reshape and modernise our business, but we had not expected to need to use so much – especially when proposing to put up council tax.”
Alongside the revenue budget, discussions at Cabinet will also include the capital budget, and proposals for significant investment in Hampshire’s economy, building plans and jobs, totalling £563 million over the next three years. The funding in Hampshire’s infrastructure and long-term assets, up to 2018/19 includes proposed £230 million investment in new and extended school buildings to provide a further 11,000 primary and secondary school places, and ensure a school place for every child in Hampshire – boosting jobs and the local economy, while maintaining Hampshire’s high position in parental choice. Over £180 million is also set aside for major repairs, maintenance and improvements to schools and other public spaces.
£129 million has been earmarked for structural maintenance of roads and bridges – building on the County Council’s commitment to invest in good and safe infrastructure which continues to pay off, as Hampshire retained its top spot in 2015 among all county councils in the National Highways and Transport Public Satisfaction survey for highway maintenance.
A proposed £123 million would be assigned for integrated transport schemes to improve access to key employment areas and smaller local projects to improve safety and traffic flow on the roads.
Organisations in Hampshire that bring economic and cultural benefits to the local economy would also benefit from £6.5 million in capital grant support.
It is proposed that almost £1 million is invested in new technology to support modern ways of working across the County Council – to transform the delivery of sustainable public services fit for the 21st century.
The Cabinet will discuss the total £1.9 billion gross revenue budget for 2016/17 and capital programme for the next three years, on 5 February, and make recommendations to the full County Council, for a final decision, on 18 February.