Issue - meetings

To consider the report of Cabinet seeking approval of recommendations in regard to the Medium Term Financial Strategy and Transformation to 2021 savings proposals.

The Council considered a report from the Cabinet (Item 9 in the Minute Book) providing an update on the medium term financial strategy for the County Council and Transformation to 2021 savings proposals together with detailed Equality Impact Assessments, as considered by the Cabinet on 15 October 2019. The Cabinet report outlined the feedback from the consultation exercise ‘Serving Hampshire – Balancing the Budget’ which had been instrumental in informing the proposals.

In presenting the report, the Leader confirmed that it dealt with some difficult recommendations as a result of the intense pressure the County Council is under and an £80m funding gap. This was against the backdrop of increased demand for adult social care services and rising costs, and the demands of delivering its statutory obligations for children’s services.

The Leader drew Members’ attention to the Cabinet’s additional recommendation set out at paragraph 1.5 (x) to work collaboratively with council partners to boost recycling performance and improve waste collection and management arrangements. 

In commending the Cabinet’s recommendations, the Leader referred to the County Council’s strategy of investing early, maximising opportunities and the targeted use of reserves which had served the County Council well during recent years.

Opposition Group Leaders responded to the proposals. During the course of a full debate, views in support of, or raising concern, about the proposals were expressed. No Amendments to the savings proposals were moved therefore the recommendations were put to the vote.  The majority of Members present voted for the recommendations and it was accordingly

RESOLVED:

That the County Council agree that:

a)    The mid-year report on treasury management activity at Appendix 2 be approved.

b)    Delegated authority be given to the Deputy Chief Executive and Director of Corporate Resources to make pre-payments of employer contributions to the Pension Fund (including any residual deficit) if it is considered financially favourable to do so.

c)    The savings proposals in Appendix 4 be approved, including proposal WD4 as amended, subject to further consultation and executive decision making where necessary.

d)    Recurring funding of £10m for Adult’s Health and Care is approved in response to a step change in costs, along with an additional £3.5m per annum to cover ongoing growth driven by complexity and demography.

e)    Up to £4m of one off funding for Adult’s Health and Care is approved to provide potential cash flow support that may be required given the current pressure on care packages.

f)     A sum of £6.8m for the forecast growth in the cost of Children Looked After in 2020/21 is approved, with further increases of £1.9m in 2021/22 and £1.2m per annum thereafter, along with up to £1m for growth in associated legal costs.

g)    Funding of up to £555,000 is ring-fenced within existing contingencies to provide resources to respond to the potential direct impact of Brexit on the County Council as set out in more detail in Appendix 3, with approval Page 24 delegated to the Deputy Chief Executive and Director of Corporate Resources, in the event that  ...  view the full minutes text for item 176

To consider a report of the Director of Corporate Resources regarding the Medium Term Financial Strategy and Transformation to 2021 Savings Proposals.

Cabinet received a report of the Director of Corporate Resources regarding the Medium Term Financial Strategy and Transformation to 2021 Savings Proposals.

The report was introduced and it was explained that this report related to the overall financial strategy to 2021/22 and that the process of budget setting for 2020/21 would be via separate reports to Cabinet in December 2019 and February 2020. Key points in the report regarding cash limits and the assumptions upon which anticipated budget gaps were based on were set out. Particular departmental pressures were detailed, the position on schools funding was highlighted and the need to make an adjustment to funding for the coroner was explained. With reference to the appendices, changes to the pension fund with respect to treasury management were explained, as was the proposal to set aside a contingency for Brexit related activity. The “Serving Hampshire – Balancing the Budget” consultation process and outcomes were highlighted and Cabinet’s attention was drawn to the Equality Impact Assessments in the appendices.

With regard to the savings proposals, an error in the report was noted and an addendum to the report circulated with the corrected text and a minor change to the recommendations at paragraphs 8 and 13 to acknowledge this. It was noted that the savings proposals would have a relatively low impact on staff and it was anticipated that staff reductions could largely be achieved through natural turnover. Proposals relating to economic development and investment were drawn out, as were reserves strategies and in particular the approach to the grant equalisation reserve. The strategy beyond 2021/22 was highlighted and it was noted that current estimates suggested a minimum of £40 million further savings would be required to meet a future Transformation to 2023. A possible mitigating factor in this was identified as the (initially one off) benefit derived from a re-valuation of the pension fund; a further revaluation would be needed to establish whether this could be regarded as a recurring benefit.

The report and presentation by the Director were welcomed by Cabinet, who noted the approach of re-distributing resources to the most vulnerable. Recognising the difficulty in setting achievable savings targets, it was felt that any objections to the proposals should be accompanied by viable alternative suggestions.

With the agreement of the Chairman, Councillor House addressed Cabinet, making a number of points about the impact of national fiscal policy and of Brexit on local funding pressures. He also addressed the approach of demand reduction to achieve savings and the potential impact on both residents and on partners such as District Councils and the NHS.

With the agreement of the Chairman, Councillor Glen addressed Cabinet in relation to the proposed spend on a safe route to access Robert Mays school, calling for more consideration to be given to the final solution.

Cabinet members discussed the content of the report, acknowledging the scale of the challenge and recognising the achievements with initiatives such as the supported living strategy, public health strategies and the investment  ...  view the full minutes text for item 148