No 'sustainable financial strategy' beyond 2025 for Hampshire County Council without funding changes

HAMPSHIRE County Council predicts an unsustainable financial future beyond 2025 without major changes to how it is funded.

The warning came in a report as it plans to dip into its savings to cover a black hole in its annual budget, writes Natalia Forero of the Local Democracy Reporting Service.

The authority plans to cover a £58m financial deficit by drawing on its budget bridging reserve (BBR), which holds more than £98m.

HCC could fill the whole gap deficit for 2023/24 by using the BBR if its budget and council tax rise is approved by full council on 23rd February.

The ruling Conservative cabinet is proposing an increase of 4.99% for band D properties from April – an increase of £69.45 per year.

According to a council report, the BBR could also be used to cover the deficit of 2024/25.

It said: "The increased deficit over and above the £80m accounted for in the 2023/24 budget and the predicted deficit in the 2024/25 ‘interim’ year will need to be met from the BBR.

"However, beyond this date the BBR will be insufficient to meet the forecast budget gap.

"Therefore, without a fundamental change in the way local government is funded, the county council does not have a sustainable financial strategy.

"In the short term, it may need to temporarily repurpose some of its earmarked reserves simply to balance the budget one year at a time.

"In such a scenario, it is difficult to see how those reserves will be replenished to achieve the planned service investment that is essential to maintain delivery of statutory services."

HCC receives 89% of its budget from council tax. The proposed increase for 2023/24 would generate an extra £37m.