Agenda item

To consider the report of Cabinet recommending the Revenue Budget and Precept for 2024/25 and Capital Programme 2024/25 to 2026/27.

 

The Council considered the Revenue Budget and Precept for 2024/25 and the Capital Programme for the period 2024/25 to 2026/27.

In presenting the report the Leader opened by thanking the Hampshire MPs and many others from County Councils who had lobbied the Government in January for additional funding, which secured an additional £10m for Hampshire County Council. 

The Leader also extended thanks to the Chief Financial Officer and his team for the work they had done for what had been a very difficult task.

To illustrate the sheer enormity of the position the County Council faces, the Leader compared the budget position in 2011/12 to that of 2024/25 to highlight the stark comparisons:

·           the net budget along with the level of council tax has gone up by 50% in that time however,

·           the adult social care budget has doubled (£300m to over £600m)

·           school transport costs are two and a half times what they were 13 years ago, an (increase of over 260% over £65m for 24/25)

·           children’s social care is over three and a half times more – the County Council spent just over £70m on looking after vulnerable children in 2011/12 and next year it will be over a quarter of a billion pounds – an increase of over 360%

·           these three services alone accounted for 57% of the net budget in 2011/12 and now they represent 87%

·           in 2011/12 the County Council provided an allowance of £10m for adults’ social care growth on top of approximately £15m inflation given to services; in 2024/25 provision for £81m growth and £71m for service costs, which are subject to market forces, will be required, totalling £152m.

Regarding the County Council’s finances the Leader reflected on some key areas he is often questioned about, namely: making the council more efficient, lobbying for more funding and recent activity in this regard, selling assets to raise money, increasing income generation and use of reserves.  The questions and detailed responses are appended to these Minutes.

In looking to the budget and council tax for next year, the Leader recognised the pressure on stretched household budgets, however the Council had no choice but to increase council tax by the maximum amount permissible to avoid worsening the Council’s challenging financial position, as had been detailed.

In reflecting on cost and growth pressures and the problem this creates for the County Council, the Leader highlighted that it also translates into another vulnerable person requiring help, whether it be a child with special educational needs being transported to school, an older person requiring domiciliary care to help them live independently or a child being taken into care to protect them from harm.  The Leader was therefore proud that the County Council had prioritised its funding to services to protect the most vulnerable people in society.

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

The Chairman invited questions only at this point of the proceedings.

Regarding Revenue Budget recommendation A m) Councillor Kim Taylor asked for an explanation of the reference to legal minimum service provision.  As this was a technical question, the Chief Financial Officer confirmed that reference to starting a legal minimum service exercise was made in the Cabinet report in December when referencing the budget gap of £42m for 2025/26.  The next phase of work was to identify where further savings could be made to close that gap including looking at legal minimum service levels, and the Constitution and Policy Framework would be reviewed in light of the outcomes from that exercise.

The Opposition Group Leaders responded to the proposals, and all joined the Leader in acknowledging the work carried out by CMT, the Chief Finance Officer and his team.  All recognised the stark position the County Council was faced with, for which there was no easy answer. 

Although recognising the difficulties the County Council faced, Opposition Group Leaders raised concerns about the impact the proposals would have on services particularly if a legal minimum service level was introduced, questioned the level of support from Hampshire MPs, and reflected on the effect of the previous approach of maintaining a zero Council Tax increase for five years together with the current flawed council tax banding system.  Urgent reform of the current funding formula for local government was required, which linked to the Amendment proposed below and reference to a recently published report: Financial Distress in Local Authorities.  With the spring budget announcement due soon, the Leader was urged to write to the Prime Minister.  Although the £10m additional funding was to be welcomed it was not enough and there was no indication that this would be repeated in future years.  The prudent use of reserves to bridge the budget gap was not considered to be sustainable in the future.

Councillor Alex Crawford proposed the following Amendment to Recommendation A), which was seconded by Councillor Kim Taylor:

Insert after n) the following:

“o)     Taking into account the conclusion of the Deputy Chief Executive and Director of Corporate Operations that Council will still have a recurring deficit of over £30m in 2025/26 and will face the underlying issue that the funding system for local government is not fit for purpose, the CountyCouncil welcomes the Financial Distress in Local Authorities Report that the House of Commons Levelling Up, Housing and Communities Committee published this month and further approves the Leader of the Council  writing to the Prime Minister to support the Report’s conclusions and recommendations, including that the Government must include additional funding in future local government finance settlements to ensure local authorities bridge their estimated £4 billion funding gap.”

During the debate views in support of, or raising concern, about the proposals were expressed.  Those Members speaking in support of the proposals recognised that hard choices had to be made but these were based on factual evidence and against the backdrop that the County Council has a responsibility to set a balanced budget.  The County Council was being listened to, there was still more to be done but the efforts of lobbying were paying off.  Attention was drawn to the significant service contributions made to residents such as services for adults, as well as the significant capital programme contribution that should not be overlooked.

Members not in support of the budget proposals referred to the effects of austerity resulting in some loss of local powers, the hardships being experienced by some residents, particularly those with complex needs and the unintended consequences arising from the proposals.  It was felt that some areas identified for savings in the public consultation would benefit from a deeper dive, such as school transport to find other ways of reducing costs, and the use of the County Council’s estate to move away from external providers for children in care.

 

In responding to the debate, the Leader thanked all Members for their views in what had been a full and open debate.  The County Council had been open and honest about the budget deficit position and had been lobbying about this since 2018.  The Leader expressed support for the proposed Amendment which was exactly what the County Council had been doing and had led to an improved financial settlement for 2023/24.  The recent additional funding of £10m referred to earlier was not enough but it would make a difference and provided some wriggle room.  All the work carried out previously on efficiency and making savings meant that the County Council was able to set a balanced budget and therefore still had choices, which would not exist if a S114 Notice was issued and Commissioners were called in.  The Leader understood comments about hardships being experienced by residents and highlighted the importance of making the position real for residents.  Growth in demand for the County Council’s services had grown significantly since 2011/12 and the County Council had only been able to cope with that demand because of the efficiencies it had previously made.  Regarding the comments on school transport and taking a different approach, the Leader confirmed that the County Council has worked hard with other County Councils in putting proposals together in this regard and submitting them to Ministers.  Work is also being done to look at what other countries do.  The Leader concluded by reiterating that the role of the County Council was to look after its most vulnerable residents and that would continue to be the priority.

 

In accordance with Standing Order 22.3, Councillor Keith House called for a separate recorded vote on recommendation A m).  The Chairman confirmed there would be two recorded votes: i) recommendations A a) to l) and n) to o), and ii) recommendation A m). 

Recommendations B a) to c) were put to the vote first and supported by the majority of Members present and were therefore carried.

The outcome of the recorded votes was as follows:

 

Recommendations A a) to l), and n) to o):

FOR (50):

 

Councillors: Nick Adams-King, Lulu Bowerman, Jackie Branson, Ryan Brent, Ann Briggs, Steven Broomfield, Pamela Bryant, Fran Carpenter, Roz Chadd, Rod Cooper, Alex Crawford, Debbie Curnow-Ford, Christopher Donnelly, David Drew, Barry Dunning, Liz Fairhurst, Michael Ford, Steve Forster, Jonathan Glen, Marge Harvey, Pal Hayre, Edward Heron, Zoe Huggins, Rob Humby, Andrew Joy, Mark Kemp-Gee, Peter Latham, Hugh Lumby, Keith Mans, Alexis McEvoy, Derek Mellor, Rob Mocatta, Arun Mummalaneni, Kirsty North, Phil North, Russell Oppenheimer, Stephen Parker, Neville Penman, Stephen Philpott, Lance Quantrill, Stephen Reid, Patricia Stallard, Kim Taylor, Tom Thacker, Michael Thierry, Jacky Tustain, Rhydian Vaughan, Jan Warwick, Bill Withers, and Seán Woodward.

 

AGAINST (16):

 

Councillors: Peter Chegwyn, Adrian Collett, Mark Cooper, Tonia Craig, Alan Dowden, Tim Groves, David Harrison, Dominic Hiscock, Keith House, Gavin James, Sarah Pankhurst, Louise Parker-Jones, Jackie Porter, Roger Price, Martin Tod, and Malcolm Wade.

 

ABSTAIN (1):

 

Councillor Andy Tree.

Recommendation A m):

 

FOR (46):

 

Councillors: Nick Adams-King, Lulu Bowerman, Jackie Branson, Ryan Brent, Ann Briggs, Steven Broomfield, Pamela Bryant, Fran Carpenter, Roz Chadd, Rod Cooper, Debbie Curnow-Ford, Tim Davies, Christopher Donnelly, David Drew, Barry Dunning, Liz Fairhurst, Michael Ford, Steve Forster, Jonathan Glen, Marge Harvey, Pal Hayre, Edward Heron, Zoe Huggins, Rob Humby, Andrew Joy, Mark Kemp-Gee, Peter Latham, Hugh Lumby, Keith Mans, Alexis McEvoy, Derek Mellor, Rob Mocatta, Arun Mummalaneni, Kirsty North, Phil North, Russell Oppenheimer, Stephen Parker, Neville Penman, Stephen Philpott, Lance Quantrill, Patricia Stallard, Michael Thierry, Rhydian Vaughan, Jan Warwick, Bill Withers, and Seán Woodward.

 

AGAINST (20):

 

Councillors: Peter Chegwyn, Adrian Collett, Mark Cooper, Tonia Craig, Alex Crawford, Alan Dowden, Tim Groves, David Harrison, Dominic Hiscock, Keith House, Gavin James, Sarah Pankhurst, Louise Parker-Jones, Jackie Porter, Roger Price, Kim Taylor, Martin Tod, Andy Tree, Jacky Tustain, and Malcolm Wade.

 

ABSTAIN: no abstentions.

 

RESOLVED:

 

A.      Revenue Budget and Precept 2024/25

That the County Council approve:

 

a)      The Revenue Budget for 2024/25 (as set out in Annex 1).

b)      The council tax requirement for the County Council for the year beginning 1 April 2024, be £826,354,662.42.

 

c)      The County Council’s band D council tax for the year beginning 1 April 2024 be £1,533,24, an increase of 4.999%, of which 2% is specifically for adults’ social care.

d)      The County Council’s council tax for the year beginning 1 April 2024 for properties in each tax band be:

 

	£
Band A	1,022.16
Band B	1,192.52
Band C	1,362,88
Band D	1,533.24
Band E	1,873.96
Band F	2,214.68
Band G	2,555.40
Band H	3,066.48

 

e)      Precepts to be issued totalling £826,354,662.42 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:

 

		Council Tax Precept
Local Authority	Tax Base	(HCC share)
Basingstoke and Deane	69,800.30	107,020,611.97
East Hampshire	52,599.43	80,647,550.05
Eastleigh	49,037.29	75,185,934.52
Fareham	44,188.90	67,752,189.04
Gosport	26,980.90	41,368,195.12
Hart	42,690.97	65,455,502.84
Havant	42,528.17	65,205,891.37
New Forest	72,371.50	110,962,878.66
Rushmoor	33,011.65	50,614,782.25
Test Valley	52,059.00	79,818,941.16
Winchester	53,691.65	82,322,185.44

 

f)       The Treasurer’s report under Section 25 of the Local Government Act 2003 (Appendix 6 to the Cabinet report) and take this into account when determining the budget and precept for 2024/25.

g)      The Revised Budget for 2023/24 set out in Appendix 1 to the Cabinet report.

h)      The revenue pressures set out in Section G of the Cabinet report.

i)       The Reserves Strategy at Appendix 5 to the Cabinet report.

j)        The Capital & Investment Strategy for 2024/25 (and the remainder of 2023/24) as set out in Appendix 7 to the Cabinet report.

k)      The Treasury Management Strategy for 2024/25 (and the remainder of 2023/24) as set out in Appendix 8 to the Cabinet report.

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.

m)     That the Council’s Constitution and Policy Framework are reviewed and updated in due course and where necessary to ensure that they align with the principles of legal minimum service provision.

n)      That the approved one-off funding for highways maintenance of £7.5m in 2025/26 be brought forward to 2024/25.

o)      Taking into account the conclusion of the Deputy Chief Executive and Director of Corporate Operations that Council will still have a recurring deficit of over £30m in 2025/26 and will face the underlying issue that the funding system for local government is not fit for purpose, theCountyCouncil welcomes the Financial Distress in Local Authorities Report that the House of Commons Levelling Up, Housing and Communities Committee published this month and further approves the Leader of the Council writing to the Prime Minister to support the Report’s conclusions and recommendations, including that the Government must include additional funding in future local government finance settlements to ensure local authorities bridge their estimated £4 billion funding gap.

 

B.      Capital Programme 2024/25 to 2026/27

 

That the County Council approve:

 

a)        The capital programme for 2024/25 and the provisional programmes for 2025/26 and 2026/27 as set out in Appendix 1 to the Cabinet report, including the identified carry forward of resources, noting that the locally resourced capital programme has been prepared in line with the changed treatment of capital guidelines from 2025/26 onwards as agreed by Cabinet in December 2023.

b)        The revised capital programme cash limits for 2023/24.

c)         An increase in the scheme value for the Bishopstoke Road scheme within the Universal Services capital programme from £5.3m to £8.1m to be funded by S106 contributions, DfT LTP Integrated Transport Block grant and Concessionary Fares budget.