Agenda item

To consider a report from the Treasurer, which provides an update of the current financial position for the 2019/20 Revenue Budget and an update on the 2020/21 budget setting process.

Councillors Chris Carter and Jonathan Glen declared a non-pecuniary interest as Members of the Hampshire County Council Pension Fund Panel and Board. Councillor Roger Price also declared a non-pecuniary interest as a deputy Member of the Hampshire County Council Pension Fund Panel and Board.

The Authority considered a report from the Treasurer, (item 9 in the minute book) which provided an update to members of the current financial position for the 2019/20 Revenue Budget and an update on the 2020/21 budget setting process.

Members learned that the precept increase was forecast at 1.99%, which was in line with the limits set out in the Spending Round.  Given the continuing uncertain financial future it was recommended in the report that the precept be increased by the maximum allowed in 2020/21. Table 15 was highlighted on Page 43 of the pack as showing the budget monitoring for 2019/20 as of 30 September 2019.

Under reserve funding, it was proposed that an annual contribution of £0.5m be made to the ICT Reserve and depending on the overall budget position for next year that this is built into the revenue budget from 2020/21 onwards, as ICT becomes more important to the operational effectiveness of service.

Looking at the Hampshire Local Government Pension Scheme (LGPS), it was confirmed that initial high level results for the 2019 valuation indicated that for ‘scheduled bodies’, the fund was almost 100% funded following an improvement in investment returns over the period and a slow down in the increases in life expectancy. This would be revaluated in 2022.

During questions from Members it was confirmed that the £240,000 overspend listed in paragraph 16c of the report was primarily down to legislative change for the replacement of tyres on vehicles.

In paragraph 24 of the report it stated the extra costs to the Fire and Rescue Service as a result of the delay with Combined Fire Authority creation. Members queried whether the Service would receive any reimbursement for the extra costs and it was agreed that this would be looked into by the Chief Finance Officer.

RESOLVED:

1) Hampshire Fire and Rescue Authority agreed with the principle of setting the precept at the maximum level without breaching the referendum limit, subject to final decisions by the Authority in February next year.

2) Hampshire Fire and Rescue Authority approved an annual contribution of up to £0.5m into the ICT Reserve dependent on the eventual budget position in February.

3) Additional funding of up to £305,000 was approved from the Transformation Reserve for CFA preparation costs as a consequence of the additional years delay in implementation.

4) The estimated net annual saving arising from the 2019 Pension Fund valuation be contributed to a new Grant Equalisation Reserve in 2020/21 and future years (subject to review following the Spending Review next year)

5) The mid-year review of treasury management activities in Appendix B were noted.

6) Delegated Authority was granted to the Treasurer to make pre-payments of contributions (up to three years’ worth) into the Hampshire Pension Fund or pay off any residual deficit amount if it is considered financially beneficial to do so.