A recession beating budget - doing more with less

Leader of Hampshire County Council, Councillor Ken Thornber, answers your questions about the county’s budget and council tax for 2009/10.

What your council tax goes towards	£
Social care for older people and adults with disabilities	£403.15
Non-schools children's services including social care	£221.87
Recreation and heritageincluding libraries, museums and other services	£101.09
Repair and maintenance of roads, public transport and planning	£99.90
Waste management	£75.68
Borrowing costs	£39.56
Capital costs paid for from revenue	£72.93
Future inflation contingencies and reserves	£3.99
Total band D council tax	£1.018.17

Q. How do you spend the money from council tax ?

We spend the money on a wide range of services. For example, each band D council tax payer makes a contribution to each service, as shown in the table above. We plan to spend £1,749 million on services this year, compared with £1,656 million last year. On top of this we receive money from the Government, plus further funding from fees and charges. Including grants and income, this gives us a budget of £657 million – an increase of £14 million - to spend on services.

Q. What about schools?

Although the Council is responsible for deciding how much schools get in their budgets, your council tax does not contribute towards the direct cost of running schools. The Government pays the full cost of schools through a specific grant.

Q. Does all the council tax go to the County Council?

As the largest local authority in Hampshire, the County Council receives the majority of the council tax money you pay. However, your money also goes towards the cost of services provided by Hampshire Police Authority, the Hampshire Fire and Rescue Authority and your local district or borough council. Where they exist, parish or town councils also receive funding. These are all separate organisations, each responsible for their own budgets and services.

Q. Why is council tax going up?

Hampshire is having to find extra money to cope with the growing demands of an ageing population. This means providing not only more social care, but more intensive care. The number of disabled young people living into adulthood is also rising, and we expect to care for growing numbers of vulnerable children.

Despite these challenges, the increase in council tax for next year is 1.9%, the lowest ever proposed by the County Council and more than 1.5% below the forecast national average of 3.5%. The financial forecast debated at a County Council meeting projects a similar rise in council tax in 2010/11. This will help us ensure that we continue to offer residents value for money.

Q. Aren’t these extra costs met by increases in funding from the Government?

This year our government funding will increase by only 1.75% - the lowest grant for all shire counties. This is equal to an increase of less than £2 per resident a year.

Q Is it true that £215 of my council tax is going towards filling a black hole in staff pensions?

No, there isn’t a ‘black hole’, as misrepresented in the press. And, there is no requirement for current council tax payers to cover the gap between the value of the Pension Fund and the value of future pension commitments.Council tax payers will pay an estimated £36 per household this year for the County Council’s employer’s contributions, not £215. This is just 3.5% of the County Council’s council tax for the year and council tax bills are not soaring as a result of the Pension Fund.

Q. How is the County Council responding to the recession?

Although we are not immune from financial pressures, we are working hard to limit the impact on services for residents. This includes constantly looking at ways of reducing our costs, such as ensuring we continue to drive  down sickness absense, although Hampshire is already the 4th lowest of all County Councils. We are making the most of the resources we have. We will do all we can to protect frontline services and ensure that we continue to help those most in need in these difficult times.Over the last five years we’ve made savings of £68 million, with another £20 million identified for next year. Last year alone, by identifying opportunities to save money, we have been able to use £8 million to help repair potholes in the county’s roads, reduce the rural speed limits in more than 60 of our villages and improve more residential homes. We are also putting £5 million towards cutting the increase in council tax over the next two years.

Further information For questions on our budget, contact: County Treasurer’s Department, Hampshire County Council, The Castle, Winchester SO23 8UB. Email: View the finance pages or email the corporate finance team. Claim the benefit For further information on Council Tax Benefit, Housing Benefit and Pension Credit, please see our Hampshire Expert article.