Questions and Answers on the County Council's budget 2012/13

Q: What is the County Council's budget in 2012/13?

The County Council's budget for the financial year 2012/13 is in the region of £698million for all services excluding schools. Of this, £164million comes from general Government grant.

Q: What will be the County Council's portion of the council tax for a Band D property?

Council tax is to be frozen. People living in a Band D property currently pay £1037.88 to the County Council and will continue to pay the same rate for 2012/13. The amounts paid to districts, parishes, Fire and Police which make up the total bill, may change.

Q: How much Government funding will the Council lose this year?

In 2012/13 the County Council will see a reduction in its Government grant of £19 million or 10.4%. This comes on top of the reductions in 2011/12 of 14.3%, or £30.9m, the largest percentage cuts for county councils. The final two years of the Government's spending review period are subject to the outcome of the Local Government Resource Review that is looking at the formula that determines the distribution of funds between councils. The Council is planning on the basis of losing a further 17% of revenue grant from Government over 2013/14 and 2014/15.

Q: What is the Council doing to reduce its costs?

The Council is in the middle of an ambitious two year £100m efficiency and cost reduction programme; one that will provide quality services at least cost to the taxpayer and divert more money to meet frontline pressures.

The County Council’s focus in tackling its budget gap has been to reduce its running costs and transform the way services are delivered.

We are set to make the cost reductions required last year and this has been achieved through a number of measures including reducing senior management by 25%, cutting IT and communications costs, renegotiating contracts, sharing services and reducing our office space. Some of these key workstreams will continue into 2012/13 securing further savings for the Council.  

The Council has seen a reduction in its workforce of around 1,400 staff with the majority of people choosing to leave the Authority. The Council has minimised the need for compulsory job losses through its voluntary redundancy scheme, recruitment freeze and redeployment process. This year there will need to be further reductions to the Council’s workforce but on a lesser scale.

The structure of the Council is also changing, but not only to save money. We want the Council to be in a strong position to deliver public services in the future. Last year we merged two of our departments and over the next year we will be integrating our support and professional functions.

In addition we have had to make changes to the way some of our services are delivered including modernising learning disability services to improve choice and offer better value for money and introducing a streamlined mobile library service.

Q: You said you would protect services for the vulnerable. Will you be cutting social care?

Social care is the Council's biggest area of spend outside schools and therefore the Adult Services and Children's Services departments need to make savings. Along with the rest of the Council they have been asked to seek savings of 8%.

The aim is to reduce the impact on services to the most vulnerable as much as possible and the Council has been exploring ways to modernise services and find alternative ways of delivering them so that they continue to meet the needs of residents but at a lower cost of delivery.  At the same time, securing improved outcomes for people who use the Council's services.

It is not just the reduction in funding that is putting pressure on social care, the Council is seeing growing numbers of older people, adults with learning disabilities and families needing support and the complexity of their needs increasing. The Council has found an extra £11.5m to help meet these costs in 2012/13.

Q. If you say you can make millions in savings and still minimise the impact on essential frontline services doesn't this show that Hampshire County Council has been wasteful and overstaffed in the past?

No. The Council has a good track record in securing efficiencies and has continually striven to achieve value for money for the residents of Hampshire. In order to meet the financial challenges of last year, next year and beyond, the Council has undertaken a comprehensive review of how it operates and of all its services. It is in the middle of a change programme that is of unprecedented scale. As part of this, many services will be protected but the way in which these will be accessed may be different and we are asking fewer staff to do more.

Q: How many job losses were there last year. How many will there be this year?

The Council introduced its recruitment freeze and voluntary redundancy scheme to minimise the number of compulsory job losses.

The Council has seen a reduction in its workforce of around 1,400 staff with the majority of people choosing to leave the Authority.

Next year we expect to see further reductions in our workforce of around 230 full time equivalents. This figure excludes any that may be the result of our Corporate Services Review, which will see the integration of our professional and support functions, and where work is currently taking place to finalise the new structures.

Q. What about schools? Will they see their funding reduced?

Schools are funded via a direct grant from Government. The Government has offered some protection to schools who will receive the same level of funding per pupil in cash terms as for 2011/12.

The Government also provides a pupil premium allocating additional funding for those children who are eligible for free school meals, or are children in care. This is being increased from £488 per pupil to £600 per pupil. There is also the premium for Armed Forces families that was introduced in 2011/12 and this is being increased from £200 per pupil to £250 per pupil.

Q. The Council has huge reserves why not just use these to fill the funding gap?

A significant amount of the Reserves level is ringfenced for specific purposes, for example the County Council self-insures and therefore has a reserve, the value of which is assessed and recommended by an independent expert. There are also a number of reserves which are set aside to be used for ‘invest to save’ purposes, these investments result in on-going revenue cost reductions. Reserves can also be used on a one-off basis to provide investment in infrastructure, which improves the services provided, for example investment in schools, Extra Care facilities for Adults, Children’s Homes, libraries etc.

Reserves can be used to help ease the pressure on services and the council taxpayer in these tough times, but not by funding ongoing annual costs. Once reserves are gone, the recurring expenses remain and we have simply deferred the day when hard actions need to be taken. For example, someone who earns £25,000 a year may find their living costs are £30,000, so they use up their £5,000 savings in one year. This may cover their extra costs for that year but it does not solve the problem of the shortfall in their living costs in following years.

What Hampshire County Council is doing is using reserves to fund capital spending and initiatives that will help secure significant long term and continuing cost reductions.