Agenda item

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 in IT. It was noted that the current County Council subsidy for recycling gave no incentive to District Councils to improve and for that reason a review of project integra was required. It was felt that the £600k proposed spend on Robert Mays school should be agreed and the Executive Lead Member for Children’s Services and Young People indicated a willingness to consider alternative solutions.

An additional recommendation was proposed that:

Cabinet re-affirms the County Council’s offer to work collaboratively with our council partners, through Project Integra or other mechanisms, to boost recycling performance and improve waste collection and management arrangements and ensure that waste and recycling in Hampshire are environmentally and economically sustainable for all partners for the future, whilst also delivering the necessary financial savings for the County Council by 1st April 2021.

With the additional recommendation above and the amendments to the recommendations at paragraph 8 and 13 detailed in the addendum to the report, the recommendations in the report were agreed. A decision record is attached to these minutes.