Issue - meetings

To consider a report of Cabinet seeking approval of the mid-year report together with financial decisions in relation to the capital programme.

The Council considered the report of Cabinet summarising the key points considered by the Cabinet at its meeting on 19 July 2022 for the development of the County Council’s Medium Term Financial strategy to 2025/26. 

In introducing the report the Leader took the opportunity to highlight that despite the challenges the County Council have faced, and would continue to face, both this and the previous report underlined the strong financial management exhibited across the County Council.  The Leader reassured Members that he was engaging with Hampshire’s MP’s, the Government, the Department for Levelling Up, Housing and Communities and Treasury officials to ensure the County Council’s forecast position is fully understood and what the consequences will be if they are not addressed in time.  The Leader handed over to Councillor Steve Forster, the Executive Member for Commercial Strategy, Estates and Property.

In expanding on the details of the report and looking ahead to 2025/26, Councillor Forster drew Members attention to the severe financial position the County Council faced.  Inflationary pressures in the current financial year were challenging however, due to its prudent financial management the County Council was able to take a longer-term view; supported by its level of reserves.  Options to close the funding gap that had been identified were being investigated.  Further pressures were on the horizon in the form of the proposed Local Government pay award, however the County Council welcomed the proposed award being targeted at lower paid employees at a time when household budgets were under strain. The Executive Member commented that the financial position was the result of a Local Government funding system that is no longer fit for purpose, particularly in the face of ever-growing social care costs which may have been exacerbated by the Covid pandemic.  The County Council is stepping up its lobbying and will engage with Government to push for fundamental changes to secure its future financial sustainability.  The Executive Member commended the report and its recommendations.

During the course of debate measures in the report such as commercialisation and embracing prudential borrowing where it makes sense and is safe to do so were supported, however some concern was expressed that these measures hadn’t been taken sooner.  Some concern was also expressed about inflation and the impact on services for the most vulnerable residents and on staff and contractors pay.

In reply to the debate the Leader highlighted again that the County Council was in the strong position it was in now due to prudent financial management, building up its reserves and the careful use of them. 

RESOLVED:

That the County Council approves:

a)        An inflation underwrite of up to £15m for the current capital programme and that approval of allocations from this sum are delegated to the Director of Corporate Operations in consultation with the Chief Executive and the Leader of the Council.

b)        That capital guidelines for 2023/24 and 2024/25 be increased by £6.75m and £6.8m respectively to meet the unavoidable capital priorities outlined in Section I of the  ...  view the full minutes text for item 106