Business South would like to share this official statement on behalf of Hampshire County Council Leader Cllr Rob Humby regarding recent media coverage:
Dear Business Leader,
You will have seen in the media this week that along with Kent County Council, I have written to the Prime Minister about the severe budget pressures we, as upper tier local authorities are facing in the run up to 2025/26, and calling for the need for fundamental changes in how local government is funded in order to address these pressures.
Some media, nationally and locally, have reported that Hampshire and Kent County Councils ‘could declare bankruptcy within months’. I would like to stress that this is not the case.
The local government services that we both provide are the backbone of communities and people’s day to day lives. We carry out many important functions on behalf of Government (as demonstrated by the COVID & Ukraine crises) and are well-placed to help stimulate and grow the economy and boost business – particularly in the South-East where we already contribute significantly to the Exchequer.
However, as my letter to the Prime Minister emphasised, the current system of local government finance is not fit for purpose, and urgent root-and-branch changes are needed to the funding model if the local government sector as a whole is going to survive this difficult period.
The purpose of the letter was to press the County Councils’ case to Government and MPs for critical changes to the way local government is financed – so the sector can be sustainable into the longer term. This sustainability requires long-term commitment from central Government that they value these services and will support the public sector to deliver for local people. We will be watching the Autumn Statement closely for its impact on local government when it is announced tomorrow (17 November), and, perhaps most importantly, await the Local Government Finance Settlement in December.
We are in a much stronger position than many other county councils currently. We have reserves which I believe will enable us to continue delivering to our residents to 2025/26, as we look at options for savings and await the changes to the system of local government finance that are so desperately required in the sector now. It is from this position that I am proactively engaging with Government early – to highlight our concerns.
Section 114 notices are a last resort and not something we would wish to use in well-run councils, such as ours in Hampshire and those in Kent, and it is only without some immediate help and long-term change, that such notices may need to be considered between now and 2025. However, I wish to make it clear to you that we are not looking at ‘bankruptcy within months’, as some reporting erroneously claims.
As we move forward through this exceptionally challenging time, I will endeavour to keep businesses and residents informed about Hampshire County Council’s financial position and how we are continuing to deliver our statutory services as well as helping to promote economic growth and local prosperity.
Cllr Rob Humby
Leader of Hampshire County Council
Executive Member for Policy, Resources and Economic Development