BACKGROUND• Comprehensive Spending Review 2010 marked the

beginning of the grant reduction programme• Local government anticipating a 28% cut in grant over the

period• HCC reduction is 43% over period (around £80M)• Further cut of £27M in 2015/16• Inflationary pressures of around £14M per annum• Social care demography and complexity pressures of

£11.5M per annum• Total savings requirement of £200M from 2011/12 to

2015/16• Net budget is around £750M

HCC RESPONSE• Aim to deliver 4 years savings in 2 - £55M in 2011/12 and

£45M in 2012/13• Based on original grant projections, this plus 1.9% council

tax increase pa would have balanced the budget by 2014/15

• Scale of grant reductions was greater than expected• Council Tax Freeze Grant meant no base council tax

income being generated each year• No savings target in 2014/15 to give time and capacity to

deliver further £93M by 2015/16 financial year• Early delivery of savings in 2014/15 will provide funding for

future transformation and change

BUSINESS RATE RETENTION

• 2013/14 estimate of £451M to be collected across Hampshire (excluding unitaries)

• 9% retained by HCC (£41M), £180M by districts• £225M goes back to Government• HCC receives £63M top up grant• Estimates for next year up to £465M BUT• Impact of accruing for potential appeals in current year

producing significant deficits• Many authorities at the safety net threshold (i.e. loss of

more than 7.5% of income)

BUDGET 2014/15 – FINANCIAL SUMMARY• £17.8M loss of Government grant• £12.4M inflation and base changes• £11.5M of social care growth• £6.3M of savings from Children’s for Early Intervention

Grant loss and £3M of slipped savings from Adults• No increase in Council Tax• Nothing assumed for New Homes Bonus but Government

have now confirmed that we will keep this• Net Deficit of £32.2M for the year - will be met by increased

investment income and £25M draw from Grant Equalisation Reserve

UPDATE FOLLOWING SETTLEMENT

• New Homes Bonus being retained in current form (funding for LEPs now through additional borrowing)

• Council Tax Freeze Funding ‘in baselines’ from 2016/17 - £28.4M for HCC

• Revenue support grant lower by £1.4M following further 1% cut to Departmental Expenditure Limits

• Council tax surplus offset by business rates losses and RSG reduction

• Still need £25M draw from reserves to balance the budget

TRANSFORMING THE COUNCIL TO 2015

• Programme based around corporate workstreams as in previous years. Key areas :– External spend

– Working with Health (Better Care Fund and Public Health integration)

– Integrated Business Centre

– Senior management and staff overheads

– IT Spend

• Target of £93.2M to be in place by April

CAPITAL PROGRAMME

2013/14 2014/15 2015/16

£’000 £’000 £’000

Adult Services 11,681 6,081 14,481

Children’s Services 89,968 89,357 73,497

Environment 49,656 41,807 38,000

Policy and Resources 56,290 39,560 30,310

Land and Site Purchase 746 746 746

Total 208,341 177,551 157,034

Total Programme 542,926

CAPITAL INVESTMENT – CONFIDENTIAL UNTIL 29TH JANUARY

• Broadband investment to deliver 95% coverage of super fast broadband - £13M HCC investment

• Replacement for project resilience - £12M per annum using new homes bonus funding

• £12M investment in Country Parks• Setting money aside for infrastructure investment to unlock key

development sites• Grants for ‘Investing in Hampshire’ – Tourism and Heritage• School places continues to be a pressure - £30M extra from

Government over next 2 years, £165M already being spent on providing 9,000 new school places across Hampshire

• £45M extra care housing programme• Reviewing impact of flooding and potential remedies