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1 Summary

1.1 This report summarises the Committee's spending in 2000/01.

1.2 It recommends that the final accounts for 2000/01 be approved and that approval be given to carrying forward some of the overspendings and underspendings to 2001/02 including the Committee's 50% share of the overall underspending.

1.3 Overall, there is a net underspending of £30,000 (-0.1%) against the 2000/01 cash limit of £58.053m.

1.4 When the revised budget was approved, £190,000 was added to the cash limit to cover Hampshire Training Solutions' (HTS) forecast deficit. The actual deficit was £74,000 lower at £116,000 principally because of a contribution of £80,000 made by Social Services to compensate for varying the Service Level Agreement. A reduction of £74,000 has therefore been made to the cash limit to reflect the latest position.

1.5 Unbudgeted costs of £163,000 were incurred by the Committee on Foot and Mouth precautions in the New Forest. As these costs were not specific to any Policy and Resources Committee service it has been assumed in this report that approval will be given in the main report on the final accounts to treat these costs outside of the cash limit.

1.6 The table below summarises the net underspending:

1.7 This Committee's policy is that any unplanned savings achieved at the year end should be returned 50% to the originating committee with this Committee then determining whether to use the other 50% corporately or return it to the Committee. This Committee's unplanned savings amounted to £30,000 and on the assumption that 50% will be returned to this Committee, £15,000 is available to be allocated.

1.8 The scope for carrying forward more than £15,000 of underspendings is dependent on the extent to which it is realistic to carry forward overspendings and make savings on the equivalent budget levels in 2001/02. In any event it would not be possible to carry forward all underspendings because of the requirement in the revised budget to make savings of £123,000 to meet the cash limit.

1.9 Based on the most realistic assumptions, the following carry forwards are recommended:

1.10 The outturn positions on the Committee's business and trading units is:

1.11 All of the units have Financial Regulation 20 status which permits them to retain planned surpluses for purposes approved in their business plans or to take into account in setting future budget strategies. ITS' deficit is a result of the investment required in the new IT infrastructure IT2000 and will be recovered over the next few years.

1.12 On capital, schemes to the value of £34.6m started in the year and schemes to the value of £7.7m have been approved or are being recommended to be approved by this Committee to be carried forward to start in 2001/02.

1.13 In total, this amounts to just £8,000 less than the approved cash limit for the capital programme.

1.14 Further details on the main differences between the actual revenue expenditure and the revised budget are given in Part A below. The results of the trading units are reported in Part B. Part C deals with capital. Supporting information and details of revenue expenditure which is not included in the Committee's cash limit are contained in appendices at the end of the report.

2 Part A - Revenue Expenditure under the Committee's Control

2.1 Revenue expenditure under the Committee's direct control is subject to a cash limit. For 2000/01 the adjusted amount is £58.053m as set out in Appendix 1.

2.2 The final outturn was £30,000 less than the cash limit. The overall position is analysed in Appendices 2 and 3. Appendix 4 includes a more detailed statement of variations from the revised budget.

2.3 This is a small variation compared with the outturns in recent years:

The most significant elements within the total net underspending are explained in the following paragraphs.

Chief Executive (-£49,000)

2.4 The net underspend of £36,000 on the Chief Executive's Department reflects a combination of three main factors:

· underspending on staffing due to turnover and vacancy management

· additional income primarily from the award of costs where legal cases have been fought successfully.

Offset by:

· contribution to the cost of running Emergency Planning to compensate for the reduction in Home Office grant.

Director of Property, Business and Regulatory Services (+£14,000)

2.5 As in previous years, the Property, Business and Regulatory Services' expenditure was very close to budgeted levels and the businesses exceeded their financial targets. The repair and maintenance budget was overspent by £58,000 - 0.6% of the gross budget. This was due to storm and flood damage inflicted in autumn and winter. It was only as a consequence of very tight management of the repairs budget as a whole that such a favourable financial result was possible. The County Council's budget for 2001/02 includes a provision of £500,000 to help offset expenditure incurred on storm and flood damage by this Committee and Education Committee.

2.6 The overspending of £39,000 on the Coroners' Service represents a substantial improvement on the previous year's result; this is due to a change in the contractual arrangements for undertakers' services. As a result of this change, virtually all costs within managerial discretion have been significantly reduced and, in some cases, eliminated. In future, additional budgetary provision will be required to avoid a recurrence of the residual overspending.

County Treasurer (-£49,000)

2.7 The department's underspending of £49,000 can be attributed to increased income due to gaining additional work and the staff savings incurred through not backfilling all the secondments to the Enterprise Project. These were offset to some extent by additional IT and equipment costs.

Personnel and Training (-£24,000)

2.8 The revised budget figures for the Personnel and Training Department showed an anticipated deficit of £190,000 for HTS arising from significant changes to the requirement for Social Services training at both local and national levels. Ongoing negotiations with Social Services about their service level agreement have resulted in additional payments of £80,000 being made to HTS which has reduced the expected deficit. A full financial review of the service and the council's training and development requirements is now underway.

2.9 The Personnel Policy Unit have incurred additional expenditure in the production of personnel documentation relating to corporate initiatives, exceeding budgeted levels. Vacancy management arrangements within the team (including the continued vacancy of a senior post) have helped reduce the overspend. Recruitment to this post is essential in the near future.

2.10 The corporate training budget is £34,000 underspent because of a variation from the anticipated delivery in year 2 of a 3 year health and safety training programme. In year 1 the underspend was £110,000, because of a late start to the programme and poor attendance. Significant progress has been made in year 2 reducing underspend to its current level.

County Surveyor (-£31,000)

2.11 The outturn for the waste management service was, as expected, dominated by the costs specific to the long term waste disposal contract and related budgets which, in total, account for 93% of overall expenditure. During the year, expenditure against this element of the service amounted to £25.235m. This includes the overall call (of £891,000) on the central contingency for higher waste management costs.

2.12 Actual expenditure incurred against the contract and related budgets was, as expected, contained within the overall 2000/01 budget provision. In total, £719,000 or 45% of the contingency sum was not required. This welcome year end position principally resulted (£674,000) from the outcome of the long running site rent dispute with Portsmouth City Council.

2.13 Expenditure on the other directly managed budgets was contained within the adjusted budget provision for the year. Further pressures incurred by District Councils in relation to the disposal of abandoned vehicles meant that the budget for this heading was exceeded by £40,000. However, savings against Hampshire Waste Recycling Centres (HWRC) management (£32,000) resulting from the negotiations to extend the existing contracts, facility maintenance (£20,000) due to the deferral of non-essential maintenance works to the new year and administration (£20,000) as a consequence of staff secondments, turnover and delays in recruitment, more than offset the abandoned vehicles excess and meant that an overall underspend of £31,000 resulted for this area of the budget.

3 Trading Unit Balances

3.1 In aggregate, the businesses managed by Property, Business and Regulatory Services have again exceeded their financial targets for the year, with another particularly encouraging result for County Supplies. The level of surpluses in Hampshire Printing Services reflects the one-off costs associated with the introduction of a Variable Data Printing process which will enable greatly improved computer output to be produced in future. Hampshire Caterers' surplus was achieved despite the impact on their costs of the introduction of single status, which will need to be reflected in future pricing levels. Planned surpluses earned by the businesses are retained by them for investment in, and development of, the businesses.

3.2 The accumulated surpluses of these business units need to be held in reserve to contribute towards the likely costs of replacing the County Supplies and Hampshire Printing Services' accommodation at Bar End, Winchester.

3.3 IT Services budgeted for a deficit of £1.368m in order to meet the costs of the roll-out of IT2000. The actual deficit was £947,000 (£421,000 lower) mainly due to £360,000 of additional IT2000 levies paid in advance by departments. £502,000 of the deficit can be met from the surplus brought forward from 1999/00. The balance will be recovered in future years starting in 2002/03 following the completion of the roll-out of IT2000.

3.4 Further details of the trading accounts are shown in Appendix 6.

4 Part C- Capital Expenditure 2000/01

4.1 The outturn for 2000/01 is set out below with details of the total resources and details of the individual schemes started in the year appearing in Appendix 8.

4.2 The major schemes started in 2000/01 were £15.8m of capital repairs including £4.4m on the Government's New Deal for schools and £12.5m on the Enterprise Project. Other schemes started included infrastructure to facilitate land disposals at North Binfields (£2.7m), Lymington library and register office (£1m) and contributions towards improvements to older person's homes (£0.9m).

4.3 Schemes approved to be carried forward to start in 2001/02 included £4m of capital repairs including £2.5m on the Government's New Deal for schools, contributions towards improvements to older person's homes (£1.5m) and redevelopments/relocation of household waste recycling centres at Alton, Alresford and Winchester (£1.1m). There are three further schemes (£223,000) which require approval to be carried forward to start in 2001/02. Details of these are included in Appendix 8.

4.4 The combined value of schemes which started in 2000/01 and those carried forward to 2001/02 is just £8,000 less than the cash limit.

Recommendations

That:

1 The final accounts for 2000/01 be approved.

2 Underspendings and overspendings amounting to a net £15,000 as set out in paragraph 1.9 be carried forward to 2001/02.

3 Approval be given to the carry forward of the following capital schemes to start in 2001/02:

- Office accommodation schemes £30,000

- Coastal Conservation - Saltmarsh project £5,000

- Contingency provision for Enterprise Project £188,000

Section 100 D - Local Government Act 1972 - background papers

The following documents disclose facts or matters on which this report, or an important part of it, is based and has been relied upon to a material extent in the preparation of this report.

NB the list excludes:

1. Published works.

2. Documents which disclose exempt or confidential information as defined in the Act.

TITLE

1. Policy and Resources Committee own accounts closing file

2000/01

tc1003

Summaries of Actual Spending 2000/01

Appendix Contents

1 Construction of the cash limit

2 Summary of revenue expenditure

3 Analysis of cash limited revenue expenditure over services

4 Major variations in cash limited expenditure

5 Trading Units - summarised accounts 2000/01 (where appropriate)

6 Revenue expenditure 2000/01 not included in the cash limit

7 Capital expenditure 2000/01

(name of) Committee Appendix 1

Revenue Expenditure 2000/01

Construction of Cash Limit

(name of) Committee Appendix 2

Final Accounts 2000/01

Summary of Revenue Expenditure

(name of) Committee Appendix 3

Revenue Expenditure 2000/01

Analysis of Cash Limited Expenditure over Services

(name of) Committee Appendix 4

Revenue Expenditure 2000/01

Major Variations in Cash Limited Expenditure - Over/Underspendings (as appropriate) £

(Note to Accountants - please do not deviate from the above layout as this appendix will be included in the report to Policy and Resources Committee. To the left of the £'000 columns show as appropriate division of service and item. To the right of the £'000 columns give a brief explanation for each item. Ensure that the width of the page is what can be included in Hantsnet, ie 69 characters).

(Show the total budget amount, so the significance of variation can be judged)

(name of) Committee Appendix 5

Revenue Expenditure 2000/01

Trading Units - Summarised Accounts 2000/01

(names of units) operate as trading units within the Committee, under Financial Regulation 20. The statements set out below show the actual performance for 2000/01 compared with the revised budget. The effect of Financial Regulation 20 is to allow these units to carry forward planned surpluses and deficits.

(for each unit show total income, total expenditure, net surplus or deficit transferred to or from Reserve Account. Also show summary of movements in the reserve account over the year).

(name of) Committee Appendix 6

Revenue Expenditure 2000/01 not included in the cash limit

1. Capital charges (£ )

Capital charges are made to committees for capital assets used in the provision of services. The budgets for capital charges have been increased/reduced by £ to reflect the final charges. This will have no direct effect upon the overall budget requirements of the County Council as the capital charges are replaced by actual financing costs in the central asset management revenue account.

2. Central support services, repairs and maintenance of buildings (£ )

These items are within the control of the Policy and Resources Committee. The Buildings, Grounds and Contracts Panel control the budget for repairs and maintenance of buildings by the nature of work and where it is most required, rather than by committee.

3. Corporate and democratic core (recharge £ ) and unapportionable overheads (recharge £ ) (This section does not apply to Education)

These items cover management and support costs that relate to member support and advice and to pension costs for added years and early retirements. They are within this Committee's control and so are charged against this Committee's cash limit. But they are then recharged to Policy and Resources Committee outside of the cash limit as the Best Value Accounting Code of Practice requires these to be excluded from the cost of services.

(name of) Committee Appendix 7

Capital Programme 2000/01