Hampshire County Council 'heading for bankruptcy', meeting hears

Hampshire County Council’s annual budget debate centred around unprecedented financial pressures that could leave the council "unviable in two years".

The county council has recommended increasing council tax by 4.99 per cent each year to 2025/26 to tackle a budget gap amounting to £132m.

Conservative Councillor Rob Humby, leader of the council said the system of local government finance is broken and has been for a very long time.

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"Not only have we had to contend with cuts to government grants since 2010, we’ve also had to deal with largely unfunded social care pressures," he said.

"Those pressures have been exacerbated over the last year with post-Covid demand pressures across children and adult services, hyperinflation and workforce pressure across many of our key services.

"This has led to an independent increase in directorate cash limits over those set for 2022/23 – a total increase of over £300m in a single year.

"We are recommending a council tax increase of 4.99 per cent. While this is below inflation I do not underestimate the impact that this will have on household finances but we have no choice.

"We have to set an increase – not to do so would not be taking our financial responsibilities seriously.

"We’ve been saying to the government for many years that something has to change, we cannot continue to make savings to meet the growth in demand for social care services."

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The budget report said the council could "not be financially sustainable beyond 2025/26" without a "fundamental review coupled with multi-year funding certainty".

The report added it is unlikely that the council could make additional savings of more than £100m without affecting the council’s statutory functions.

In addition to the budget gap, a revised deficit of £57.7m is expected for 2023/24 which the council intends to meet through reserves.

Cllr Keith House, leader of the Liberal Democrat group, took aim at central government claiming the UK has become the sick nation of Europe’

He said: "With the fallout of Trussonomics, with 17 per cent retail inflation, fuel prices doubling, mortgage costs rising by 30 per cent for many and even the spectre of shops restricting the sales of vegetables, it’s clear the Conservative government has no real plans to save public services from policing, numbers still down, the NHS with record staff vacancies and the longest waiting lists on record and local government where even a historically robust council such as Hampshire has a report in front of it saying it could be unviable in two years.

"The real change we now need is not in any amendment me or you or our staff can put forward to this budget.

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"It’s an amendment to those who are taking decisions nationally by changing this tired and clapped-out government so burdened by sleaze, incompetence and infighting that even the third prime minister in six months could be under threat from his own backbenchers over the Northern Ireland protocol and the spectre of a wipeout in local elections.

"The accountability for this budget sits with Hampshre’s Conservative MPs. They are the ones that vote year-in, year-out: to cut local government in real terms; to fail to fund the NHS;  to allow private water companies to keep dumping sewage into our rivers.

"They are the ones who put Liz Truss on a ballot paper that enables Trussonomics and the crippling interest rates that have stoked inflation and the cost-of-living crisis.

"To all of Hampshire’s Conservative MPs, we on this side of the chamber say this: 'We’re onto you and we’re not going to let you get away with it again, time is up'.

"Our fate is only very partly in our own hands now – it is not the county council’s budget, it has become the government’s budget."

Cllr Alex Crawford, Labour group leader, said the council is now in a worse position than this time last year.

He said: "We can see how much greater the inflationary pressures have become including the cost of energy, salaries and materials.

"Also the government has failed to implement a viable plan for adult social care so the council costs are still subject to great uncertainty going forward.

"Almost half the social care providers in this area of England are said to be exiting the market as their costs rise to unaffordable levels.

"We are due to have a new government by the end of next year, we can therefore look forward to a new approach that devolves new powers over councils to run their own finances and gives communities a new right to request powers that go beyond even that."

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The county council leader, Cllr Humby addressed comments made in the debate before the vote.

In his closing comments, Cllr Humby said: "It’s very easy for everybody to sit there and look at all the doom and gloom. Go out and look at what some of our teams are doing with our children and our adults then you might be a bit more damn positive about what we’re doing as an authority.

"We live in an amazing county and we should all be really proud of that, we know the challenges that we’ve got. The only way we’re going to do this is by working in partnership."

At the meeting, 58 per cent of councillors voted to approve the revenue budget, 15 per cent opposed and six per cent abstained.