Agenda item

Medium Term Financial Strategy Update and Transformation to 2021 Savings Proposals

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




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 additional government funding is not provided.


h)   Recurring funding of up to £300,000 be approved from 2020/21 to provide additional resources and capacity for the Highways Service following a review of the existing operational processes, policies and of the management and delivery of the frontline service.


i)     Strategic land purchase up to £10m to be funded from prudential borrowing with approval delegated to the Deputy Chief Executive and Director of Corporate Resources, in consultation with the Chief Executive and the Leader be approved.


j)      Investment of £70m in Older Persons and Younger Adults Extra Care be approved to continue to provide high quality living environments at the same time as reducing the long term costs of care, to be funded from prudential borrowing, that can be approved by the Executive Member for Policy and Resources subject to a satisfactory business case being produced for each scheme.


k)    A sum of £590,000 is added to the Capital Programme for fire precaution works in EII South and approval to spend in 2019/20 is granted, to be funded from Policy and Resources repairs and maintenance budget.


l)     A sum of £600,000 is added to the Capital Programme for safe route to school works for Robert Mays School and approval to spend is granted, to be funded from Children’s Services cost of change reserve.


m)  A strategy of contributing savings arising from the favourable 2019 valuation to the Budget Bridging Reserve (previously the Grant Equalisation Reserve) for the next three years is approved.



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