Hampshire strikes deal with Portsmouth, Southampton and Isle of Wight in £1.3bn mayor plan breakthrough

A joint Memorandum of Understanding (MoU) ensures fair representation for Hampshire, Portsmouth, Southampton, and the Isle of Wight, while protecting councils from taking on unfair financial risk.

The deal comes after months of talks following a draft plan that would have given Hampshire 33 per cent of voting power but responsibility for up to 70 per cent of any overspend, reflecting its larger population.

It comes after the LDRS revealed government is set to fund the mayoral authority with £1.3 billion over 30 years.

Under the MoU, any spending proposals by the MCCA requiring extra contributions from councils must be approved by all four authorities

It also ensures that all costs associated with the MCCA, including core running costs, mayoral election costs, capital investment schemes, will come from MCCA funding, like government grants or the Mayor’s precept, rather than council budgets unless all other options are exhausted.

Funding currently received by constituent councils when routed in future via the MCCA, will be distributed to constituent councils in the same proportions as they were under existing arrangements.

At a cabinet meeting on Thursday, October 30, county council officers said that the MoU is not legally binding but represents an expression of intent, and that breaking it “would have political and reputational consequences.”

They added that all four upper-tier authorities are now following their own internal processes to approve the MoU.

Following approval by all four councils, the cabinet is asked to delegate authority to the chief executive and the leader to approve the final form of the statutory instrument and formally consent to the creation of the MCCA.

Council leader Nick Adams-King said the agreement resolves Hampshire’s main concern about disproportionate liability and ensures any extra spending is approved unanimously.

Cllr Adams-King said: “That was our issue. It has been resolved as a consequence of cooperation and the support of our colleagues in Southampton, Portsmouth and the Isle of Wight.

“We had a really good conversation about it. They understood our point of view and they were happy to come up with a solution that we have negotiated is that any decision that covers any increase over above the budgets that we would be approved needs to be unanimous decision of the combined authority.”

Cllr Stephen Reid welcomed the paper, calling it a “positive start” for regional reform.