Financial Context

Our priority in delivering services is to ensure that Hampshire is a safe and secure place to live. This is a time of unprecedented demand on our services and constrained Government funding. The goal of ensuring that all council taxpayers and especially those residents most reliant on our services are protected from these budget pressures is the biggest challenge facing the County Council today.

The County Council continued to be a floor authority in 2007/08, which means that the County Council received the lowest increase in government grant of 2.7% paid to upper tier authorities. Services were required to achieve savings of £18.9m from increased efficiency and from reviewing priorities and these targets have been met.

2007/08 was also the second year of the Adult Services financial recovery plan, based on the modernisation of services, in response to overspends above budget of £11.1m in 2005/06 and £7.5m in 2006/07. The plan has been successfully implemented and also achieved a planned carry forward of £3.5m to 2008/09. In conjunction with improvements in five of the national indicators for adult social care, this demonstrates increased effectiveness in the use made of resources. Spending has continued to increase by 5.1% on the waste management contract in 2007/08, but this has been accompanied by a further increase in recycling levels and landfill diversion of household waste.

For the first time, the Government has agreed its funding levels for individual authorities for a three year period. It has given us a 2% increase for 2008/09, well below the current rate of inflation. The increase in the following two years will be even lower: 1.75% and 1.5%. This is the smallest percentage increase for any county council in England. We receive only a third of the Government funding per head of the best-funded county council in England.

The main budget pressures for 2008/09 result form changes in life expectancy and landfill tax:

An ageing population and an increasing number of young people with disabilities living into adulthood are adding progressively to the demand for care

·Our waste disposal costs are under pressure as a result of national policies to increase taxes to reduce the use of landfill

·The demand for the numbers of children to be looked after by the Council increases, despite a declining child population.

In 2008/09 increased spending on services above the level of inflation is mainly being financed from efficiency improvements, from savings within service budgets, or on a non-recurring basis from reserves or improved council tax collection performance. The County Council is however investing an additional £6.5 million primarily to meet increased demand for social care, and an additional £1.2 million on children’s services.

For 2008/09 the County Council's budget increase was 4.4% and the council tax increase was 4.5% ensuring that the council tax remained one of the lowest amongst county councils in England. Future council tax increases and service budgets are still provisional at the moment, but the best estimate for future council tax increases is around 3.0% for 2009/10 and 3.0% for 2010/11.

We aim to provide council taxpayers with high-quality services, while maintaining one of the lowest council tax rates. To do this we are continually looking at new ways of doing business and saving money. We are planning another £15 million efficiency savings for 2008/09, on top of the savings identified in previous years. We are looking at how our buildings use of technology and support services can help us make savings. For example, we are carrying out our biggest ever review to match the number and location of County Council buildings with the changing needs of residents and service users. We will sell or lease any surplus land and buildings identified in the review, generating capital that can be used to fund improvements in service delivery and pay for maintenance of the remaining property.

We are also changing the way we deliver our services to make sure we meet your changing priorities and needs while ensuring cost efficiency and effectiveness. When fully operational our new Contact Centre, Hantsdirect, will save £1 million a year and make it easier for you to contact us. As more residents need more services, our challenge is to adapt and innovate so we can continue to provide high quality services and support within our resources.