Council Tax: reducing the impact of cuts

Over the past twelve months, Hampshire County Council has responded to the challenge of reduced government funding with an ambitious programme of savings and modernisation. We have kept down day-to-day running costs, merged departments and cut one in four senior manager posts. These efficiencies have allowed us to protect frontline services for those who need them most.

We understand that household budgets continue to be strained and have again frozen our part of Council Tax. This keeps it at the same level for the third year running. For a Band D property our part will remain at £1,037.88, which is one of the lowest county council rates in England.

This article focuses on the Hampshire County Council elementof Council Tax. Your Council Tax bill also includes amounts for Hampshire Police Authority, Hampshire Fire and Rescue Authority, your local district or  borough council and, in many areas, a parish or town council.

Questions about the budget and Council Tax

Councillor Ken Thornber, Leader of Hampshire County Council, answers your questions about the County Council’s budget and Council Tax for 2012/13.

What progress have you made in adapting to the Government’s funding cuts

We are now halfway through our two year programme to reduce costs by £100 million. The £55 million of savings required in 2011/12 have already been secured and we are confident that the ?45 million of savings required in 2012/13 will be realised.

How have you been able tofind funding to provide new infrastructure?

The success of our efficiency and transformation programme has released one-off resources to fund high priority capital investment in buildings and infrastructure.

One of our major projects is the construction of Extra Care housing. This enables those requiring care to remain in a home of their own as well as being more cost effective than residential care. We are also increasing school places to meet rising birth rates. This investment will allow us to efficiently meet the changing needs of Hampshire’s residents.

Why can’t you protect services by spending your reserves?

It would not be wise to use reserves to fund the ongoing cost of services as the County Council must live within its means. Once reserves are used up they are gone, but the annual costs of our services are still there unless action is taken to reduce them.

For example, someone who earns £20,000 a year may find their living costs are £25,000, 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.

So, what we are doing is using reserves to fund initiatives that will help us secure significant long term and continuing cost reductions.

How have you been able to freeze Council Tax again?

This has been funded through an additional government grant for councils that do not increase Council Tax in 2012/13. We will receive a one-off sum from the Government equivalent to the amount raised if Council Tax had increased by 2.5%.

This funding is welcome, but the one-off nature of it means that it will put pressure on the budget in future years. Town and parish councils do not receive this grant.

How have you found the financial savings required?

We have been concentrating on making savings in areas which will have the least impact on the public. Efficiencies made to help achieve these savings include a recruitment freeze, renegotiating contracts for supplies and services and reducing our office space.

The success of our first year savings programme means that we have already achieved ?23 million of the ?45 million savings needed for 2012/13.

What changes are proposed to services this year?

We will always seek to reduce costs first through making efficiencies and back office savings, but there will have to be some changes to services. These include the need to make a small reduction to the opening hours of some libraries and grants to other organisations will have to reduce.

We are committed to protecting the highest priority services, such as child protection and services for the most vulnerable. No changes will be made to the eligibility criteria for adult social care and an extra £11.5 million is being provided to meet increasing demand for these services due to an ageing population. There will also be no cutbacks to core road maintenance.

How is the budget is spent?

Social care for older people and adults with disabilities	£277m
Children’s services including social care (excluding schools)	£141m
Repair and maintenance of roads, public transport and planning	£76m
Culture, communities and other services such as libraries	£60m
Borrowing costs	£56m
Capital costs paid for from revenue	£39m
Waste management	£35m
Future inflation, contingencies and reserves	£28m
Hampshire County Council’s 2012/13 budget requirement	£712m