At the meeting of the full Hampshire County Council today (18 February), Members have backed plans which, despite the first increase by the Authority in six years, will see residents in Hampshire pay the lowest rate of Council Tax of all county councils nationally. The increase has been necessary in order to close a £81.5 million funding gap in 2016/17 in Hampshire – resulting from the Government changing its funding formula to local authorities.
The new formula announced just before Christmas saw a massive and unexpected reduction in Hampshire’s grant for the coming financial year, and assumed that local authorities would raise Council Tax to pay for the growing social care needs of elderly residents, and ease the burden on the NHS.
To help close the funding gap left in the County Council’s budget, its share of the Council Tax precept will increase by 3.99% from April (the first Council Tax increase in six years), and greater use will be made of the Authority’s reserves (£45 million). The Council Tax increase is the maximum amount permissible, and 2% of this total sum will support the delivery of adult social care. This financial strategy was supported by the majority of people responding to the County Council’s public consultation in the summer.
The Council Tax charge by Hampshire County Council for the year beginning 1 April 2016 will be £1,079.28 at Band D – or just under 80 pence extra per week.
Commending the budget to the County Council, Leader, Councillor Roy Perry said: “For around an extra 80 pence per week, or an extra £41.40 for the year 2016/17, the average Hampshire household at Band D, will continue to receive some of the best public services in the country. In my view, this is thanks to the County Council’s careful stewardship of public resources over many years.
“In October last year, we agreed plans to deliver £98 million of savings by April 2017 then we were dealt a funding blow from Government which increased this target to £113 million, with the extra £15 million having to be met from our reserves. In addition, a further £140 million of savings will be required by 2019/20 when Government no longer provides its revenue support grant to local authorities. Prudent management of our reserves to date has meant we can ‘weather the storm’ currently – albeit having been forced to use up virtually all of our ‘grant equalisation reserve’ to cover the funding shortfall over the next two years. The £9 million of temporary transitional funding we will receive each year for the next two years, as a result of our effective lobbying of Government, and support received from Hampshire MPs in the All Party Parliamentary Group for Hampshire, will help to rebuild some of that reserve to address future challenges.
“Without our history of careful financial planning we could have been in a very different position now – imposing unplanned and damaging additional cost reductions on our services and our community. I am very pleased and relieved that this won’t be the case, and in fact, for 2016/17, Hampshire County Council’s Council Tax precept will be the lowest of all county councils across the country.
“At the same time, we are in a fortunate position to be able to inject £563 million into Hampshire’s economy, building plans and jobs over the next three years through our capital budget. Capital projects include creating 11,000 extra primary and secondary school places; investing in Hampshire’s roads and bridges; providing new transport schemes to link key employment areas; and grant funding Hampshire organisations that bring economic and cultural benefits to the local economy.
“With around £240 million of savings already delivered in recent years, we will continue to adopt the same financial planning principles that have served us so well to date – reshaping the way we work, seeking yet further efficiencies in back office functions, prudently use some reserves to manage the costs of change, and protecting front line services. This approach has reinforced the excellent reputation of the County Council in difficult times, to continue to balance the books, deliver good services and support those who need us most. I am determined that Hampshire County Council will continue to sustain stable finances on behalf of the taxpayers of Hampshire, and we will sustain the best quality services, as we have done over many years on behalf of our community, and especially for the most vulnerable.”
A webcast of the full meeting of the County Council can be viewed online.