Agenda item

To consider the recommendations of Cabinet for the Revenue Budget and Precept for 2023/24 and the Capital Programme 2023/24 to 2025/26.

The Council considered the Revenue Budget and Precept for 2023/24 and the Capital Programme for the period 2023/24 to 2025/26.

In presenting the report the Leader opened by stating that the system of local government finance was broken, resulting in the County Council having to contend not only with cuts to government grants since 2010 but also having had to deal with largely unfunded social care pressures.  This position had been exacerbated over the past year with post covid demand pressures across children’s and adult services, hyper-inflation and workforce pressures across many of the County Council’s key services.  This had led to an unprecedented increase in Directorate cash limits over those set for 2022/23 - a total increase of nearly £300m in a single year.

A council tax increase of 4.99% was being recommended which was below the rate of inflation.  However, the Leader commented that he did not underestimate the impact this would have on household finances but there really was no choice against the pressures faced, now and in the future.

The Leader highlighted that the County Council could not continue to make savings to meet the growth in demand for social care services and he would therefore continue to lobby the government and Hampshire MPs very strongly in the lead up to the next Spending Review, which might be the last chance to address the fundamental flaws in a broken local government finance system.

Despite the difficult circumstances faced, the Leader highlighted that the County Council would continue to have one of the lowest county council, council taxes in the country.  Services had been transformed over the last decade and over £0.6 billion pounds had been saved.  The County Council continues to provide some of the best services in the country, as judged by residents and government inspectors.  The capital programme totalling £1.2 billion was creating investment, jobs and infrastructure to help grow the local economy.  Furthermore, the Leader reported that an ambitious and forward looking prospectus for a county deal had been produced and as referred to in his earlier Leader’s report, the County Council was now working with the Government and partners on a potential deal for the pan-Hampshire area.

Looking to the future, the Leader was optimistic that the position could be turned round.  With strong political leadership and the newly restructured Corporate Management Team, he expressed confidence that the County Council would get through this and maintain Hampshire as a place to be proud of.

The Leader commended the budget to Members and moved the recommendations.

The Opposition Group Leaders responded to the proposals and all recognised the challenges that the County Council faced and the unenviable task it was to prepare this budget in such difficult circumstances.  The Opposition Group Leaders took the opportunity to thank the Chief Financial Officer and his staff for the work they had done in what must have been a near impossible task.

Although recognising the difficulties the County Council faced, Opposition Group Leaders expressed concern about the cost of living crisis and the impact on the daily lives of residents of the loss of many discretionary services.  Retention of staff, budgetary pressures affecting social care, people’s mental health, rationalising tiers of local government and the effects of Brexit were also commented on.  The continued lobbying of the Government for a fair funding settlement going forward was welcomed.  No amendments were proposed.

During the course of general debate views in support of, or raising concern, about the proposals were expressed.  It was recognised that the proposals represented a balanced budget which the County Council had a duty to do.  The challenges faced by the County Council were a common thread throughout the debate and there was support for the action taken by the Leader in sending a joint letter with the Leader of Kent County Council clearly setting out their Council’s financial position.  Nonetheless concerns about the loss of discretionary services such as youth services were raised.  The importance of continuing to work together with partners and communities was highlighted as was having a focus on income streams and making more of the County Council’s assets.  The County Council’s prudent use of its reserves to provide flexibility was also commented on.

In responding to the debate, the Leader thanked all Members for their views, which he had made note of, and in particular the pressure households were under was recognised.  However, the County Council’s record of strong financial management and the flexible use of its reserves put the County Council in a better position now than many other Councils.  Despite the many challenges the County Council faced, the Leader’s outlook remained positive and he reminded Members of the excellent work carried out across the County Council’s many services.

The recommendations were put to the vote in accordance with Standing Order 22.2, the outcome of which was recorded as follows:

FOR (47):

Councillors: Nick Adams-King, Lulu Bowerman, Jackie Branson, Steven Broomfield, Pamela Bryant, Fran Carpenter, Roz Chadd, Rod Cooper, Debbie Curnow-Ford, Tim Davies, Christopher Donnelly, Barry Dunning, Liz Fairhurst, Michael Ford, Steve Forster, Jonathan Glen, Pal Hayre, Juliet Henderson, Edward Heron, Zoe Huggins, Gary Hughes, Rob Humby, Adam Jackman, Andrew Joy, Peter Latham, Mark Kemp-Gee, Keith Mans, Alexis McEvoy, Lesley Meenaghan, Derek Mellor, Arun Mummalaneni, Kirsty North, Phil North, Russell Oppenheimer, Sarah Pankhurst, Stephen Parker, Neville Penman, Stephen Philpott, Lance Quantrill, Stephen Reid, Patricia Stallard, Elaine Still, Tom Thacker, Michael Thierry, Rhydian Vaughan, Jan Warwick and Bill Withers.

AGAINST (12):

Councillors Prad Bains, Peter Chegwyn, Adrian Collett, Mark Cooper, Tim Groves, Dominic Hiscock, Gavin James, Louise Parker-Jones, Jackie Porter, Roger Price, Martin Tod and Malcolm Wade.

ABSTAIN (5):

Councillors Alex Crawford, Alan Dowden, Marge Harvey, Kim Taylor and Andy Tree.

RESOLVED:

A. Revenue Budget and Precept 2023/24

That the County Council approve:

a)      The Revenue budget for 2023/24 as set out in Annex 1 of this Part I report.

b)      That the council tax requirement for the County Council for the year beginning 1 April 2023, be £781,761,571.99.

c)      That the County Council’s band D council tax for the year beginning 1 April 2023 be £1,460.25, an increase of 4.99%, of which 2% is specifically for adults’ social care.

d)      That the County Council’s council tax for the year beginning 1 April 2023 for properties in each tax band be:

   £

Band A                                                  973.50

Band B                                                1,135.75

Band C                                               1,298.00

Band D                                               1,460.25

Band E                                                1,784.75

Band F                                                2,109.25

Band G                                               2,433.75

Band H                                               2,920.50

e)      That precepts be issued totalling £781,761,571.99 on the billing authorities in Hampshire, requiring the payment in such instalments and on such date set by them previously notified to the County Council, in proportion to the tax base of each billing authority’s area as determined by them and as set out below:

Local Authority                                                           Council Tax Precept

Tax base                                    (HCC share)

Basingstoke and Deane         69,037.30                             100,811,717.33

East Hampshire                       52,581.28                                76,781,814.12

Eastleigh                                   48,510.23                                70,837,063.36

Fareham                                    44,139.40                                64,454,558.85

Gosport                                      27,056.00                                39,508,524.00

Hart                                            42,313.27                                61,787,952.51

Havant                                       41,898.30                                61,181,992.58

New Forest                                72,271.70                             105,534,749.92

Rushmoor                                 32,959.11                                48,128,540.38

Test Valley                                51,968.00                                75,886,272.00

Winchester                                52,626.87                                76,848,386.92

f)       That any early delivery of savings approved in November 2023 will be contributed to the Budget Bridging Reserve rather than Directorate Cost of Change Reserves.

g)      That the Treasurer’s report under Section 25 of the Local Government Act 2003 (Appendix 6 of the Cabinet report) be taken into account when the Council determines the budget and precept for 2023/24, including the update set out in paragraph 1.16 of this report.

h)      The Revised Budget for 2022/23 set out in Appendix 1 of the Cabinet report.

i)       The Capital & Investment Strategy for 2023/24 (and the remainder of 2022/23) as set out in Appendix 7 of the Cabinet report.

j)        The Treasury Management Strategy for 2023/24 (and the remainder of 2022/23) as set out in Appendix 8 of the Cabinet report, and the revised Tables 1 and 2 as set out in Annex 2 of this report.

k)      An increase to the allocation targeting higher yields from £250m to £320m (as set out in the Treasury Management Strategy in Appendix 8 of the Cabinet report) to provide extra flexibility given the forecast level of cash balances.

l)       The delegation of authority to the Director of Corporate Operations to manage the County Council’s investments and borrowing according to the Treasury Management Strategy Statement as appropriate.

B. Capital Programme 2023/24 to 2025/26

That the County Council approve:

a)        The Capital Programme for 2023/24 and the provisional programmes for 2024/25 and 2025/26 as set out in Appendix 1 of the Cabinet report, including the identified carry forward of resources.

b)      The revised capital programme cash limits for 2022/23.

c)      That the scheme value for the Botley Bypass project within the Universal Services capital programme is increased by £8m from £23.1m to £31.1m to be funded from a combination of local resources (£5.09m) and the corporate capital inflation risk reserve (£2.91m).

d)      That the scheme value for the Stubbington Bypass scheme within the Universal Services capital programme is increased by £2.2m from £42.0m to £44.2m to be funded from a combination of LTP grant (£1.23m) and the corporate capital inflation risk reserve (£0.97m).

e)      That the scheme value for the Uplands Development Infrastructure scheme within the Universal Services Capital programme is increased by £3.837m from £28.489m to £32.326m to be funded from the corporate capital inflation risk reserve.

f)       That the scheme value for the Hiltingbury Junior School SCOLA recladding project is increased by £2.265m from £1.546m to £3.811m to be funded from unallocated SCA grant (£1.765m), Universal Services climate change resources (£0.2m) and Salix grant (£0.3m).