County Treasurer's

Hampshire County Council Budget 2005/06 questions and answers

What is the County Council's budget in 2005/06?

The County Council's budget in 2005/06 next financial year is £1,107.9 million. Of this, £685.6 million comes from Government grant, and the rest is made up from council tax.

What will be the increase in the County Council's portion of the council tax?

Council tax for County Council services will increase by 3.5 per cent, compared with 4.7 per cent in 2004/05. Overall, council tax in Hampshire is expected to increase by around 3.6 per cent when all local authorities have levied their charges.

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

Those living in a Band D property will pay £869.40 to the County Council in 2005/06, compared with £840.15 in 2004/05.

There is increasing disquiet among some sections of the community, notably pensioners, that they cannot afford to pay an ever-increasing council tax. What is the County Council doing to help them?

We're very much aware that those on low and fixed incomes - not just pensioners - are finding it very difficult to pay their council tax bills. As part of our council tax benefits campaign, we're urging anyone having difficulty paying their council tax to contact the County Council's Information Centres on 0800 028 0888 or their local district council to find out if they can claim financial assistance - many of those eligible are not doing so. We will also continue to press Government to fund the County Council properly.

Is the County Council looking at its own services and making efficiency savings?

Yes. The County Council has achieved savings of more than £5 million in 2004/05 and plans to achieve further efficiency improvements of £16 million in 2005/06. We take very seriously the need to use our budget prudently. We have to perform a balancing act, though, because consultation with residents has consistently told us that people don't want us to cut council tax at the expense of services - this exactly mirrors our thinking. The Local Government Minister has also said that it is ‘now vital that councils meet the expectations of their taxpayers and budget prudently to improve services at a reasonable cost’.

Couldn't the County Council make further savings by employing fewer people?

The County Council employs more than 30,000 staff, both full-time and part-time. The vast majority of these provide frontline services, such as teachers and social workers, directly delivering a range of important services to the community. The County Council was re-assessed at the end of last year by the Audit Commission, which reconfirmed its ‘excellent’ rating - one of only 26 authorities nationwide to receive this top ranking. We employ first class staff in order to continue to provide the first class services that Hampshire residents expect.

What sort of council tax increase can we expect in future years?

It is difficult to forecast because it depends upon the rate of grant loss. The best estimate is around seven per cent in 2006/07.

What do you think about the proposed changes to council tax in the future to make it fairer?

We have advised Government who are currently undertaking a review of the council tax system that council tax, as a form of property tax, is basically sound. However in its current form it places too great a burden on the council taxpayer to finance Government's spending plans culminating in the 15 per cent increase in 2003/04. Government has recognised this with its extra grant for 2004/05 and 2005/06 so that it meets a fairer share from its tax revenues.

We have suggested improvements to increase the number of council tax bands and the ratio between them so that they better reflect an individual’s ability to pay. We have also suggested that Government needs to review its benefits system and thresholds so more assistance can be given to those on low incomes who need it, including pensioners. Finally we have argued that there would be less strain on council tax, and less reliance on Government grant, if business rates were returned to local control with appropriate safeguards on the rate of increase.

Why does the County Council's council tax consistently go up by more than the rate of inflation?

There are a number of reasons for this. Pay inflation tends generally to be higher than retail price inflation. Other Government imposed cost increases have to be met, for example the increase in employers' national insurance contributions in 2003 and landfill tax last year and this year.

Price inflation in the private sector for residential care and other contracted services (such as repairs and maintenance of buildings) has also been much higher than the retail price index (RPI). Higher standards on waste disposal and increased volumes are another pressure.

There are also increased numbers of children in care, often requiring very costly individual placements, and increased numbers of frail elderly requiring care at home, and in residential nursing care to free up hospital beds.

Has the County Council consulted with the public over this rise, and what did they say?

We have consulted specific stakeholder groups - business interests, residents and council tax payer associations, voluntary sector, local strategic partnerships, and Schools Forum.  The message was to deliver the minimum council tax rise possible without cuts in services.  This has been achieved with a council tax rise of 3.5%.

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