Contact: Jon Pittam, ext 7400

1. Summary

1.1 The following decisions are sought:

· that no specific action is required to contain expenditure within the cash limit, based on current budget monitoring forecasts

· to approve the transfer of waste management budgets to Environment

· to approve the transfer of £43,000 to the Recreation and Heritage budget in 2002/03 in respect of Museums staff currently financed from the Defence Heritage budget.

2. Reason

2.1 To review whether any action is required in the light of monitoring of the budget and capital programme in the early part of the financial year.

3. Other options considered and rejected:

3.1 Not applicable.

4. Conflicts of interest declared by the decision maker or a member or officer consulted

4.1 Not applicable.

5. Dispensation granted by the Standards Committee

5.1 Not applicable.

6. Reason(s) for the matter being dealt with if urgent

6.1 Not applicable.

Approved by: Date:

............................................ .........................................

Councillor T K Thornber

Contact: Jon Pittam, ext 7400

1. Introduction

1.1 This report reviews spending against the 2001/02 budget based on spending to the end of October and considers whether any action is required to keep within the budget limit.

2. Revenue Budget 2001/02

2.1 The Committee's latest cash limit for 2001/02 is £59.684m, as set out below.

Table 1			£000
Budget approved in February 2001			58,651
Additional allocation from central provision for pay and recruitment			283
Carry forward of underspending in 2000/01			6
Grants transferred to Youth Service			-50
Capital/revenue virements			-5
Other transfers between services			15
Estimated 2001/02 use of £250,000 reserve for pay strategy consultants			100
Allocation from contingency provision for Dibden Bay inquiry (the remainder being earmarked for costs in 2002/03)			182
Additional spending in 2001/02 only approved at Policy and Resources Committee in July 2001
	-	Hampshire Training Solutions	100
	-	Community Development and Jubilee events	150
	-	Disinfectant mats in New Forest	200
Additional Emergency Planning grant			52
			59,684

2.2 The Committee's cash limit includes waste management budgets of £27.525m. When the Public Protection Committee was disbanded, the decision was taken to temporarily transfer responsibility for waste management to Policy and Resources Committee rather than to Planning and Transportation Committee. This was to avoid a situation in which the latter Committee would have been responsible both for determining planning applications for waste facilities and for the operation of the County Council's waste management functions. This issue is resolved in the new constitution as the Regulatory Committee is now responsible for determining waste management planning applications. To align operational budgets with the executive functions set out in the constitution, it is proposed that waste management budgets should transfer to the Environment service. This also has the effect of bringing together the highways, local transport and waste management functions undertaken by the County Surveyor within the Environment service.

2.3 Initial budget projections based on spending to 31 October 2001 suggest that there are no significant budgetary issues that have emerged so far in 2001/02.

The main identified variations are:

In addition, having agreed an addition of £40,000 to the Emergency Planning budget as part of the growth included in the budget, due to a successful challenge to the legality of the current cash limit grant system, additional grant of £52,000 has been received, which is unlikely to continue in future years. This should however provide some scope not only to meet additional one-off costs incurred by Emergency Planning relating to foot and mouth, but also extra spending pressures elsewhere, outside departmental cash limited budgets.

2.4 Given the relatively modest scale of the variations outlined in paragraph 2.3, it should be possible to contain expenditure within the cash limit for the year. This is assisted by the fact that the inflation allocation for pay awards in 2001/02 has been sufficient to cover actual pay increases, although non pay inflation, particularly on repair and maintenance of buildings, has been higher than assumed.

2.5 In addition to the budget transfers for waste management, it is proposed to transfer to Recreation and Heritage from 2002/03 the budget provision of £43,000 currently contained within the Defence Heritage budget towards part of the cost of a senior education officer in the Museums Service and the assistant curator at Aldershot Museum.

3. Business units

3.1 IT Services' trading account forecast for 2001/02 was based on an assumed cumulative deficit of just under £1m at 31 March 2002, associated with financing the roll-out of IT2000 across the whole network. More replacement of equipment has been required than assumed and this together with growth in demand might result in a higher deficit at the end of the current year than projected. However with the completion of the roll-out, costs will be substantially lower in 2002/03, enabling the accumulated deficit to be recovered.

3.2 The budget for the Property, Business and Regulatory services businesses shows a planned deficit of £72,000 arising from fewer trading days in the current year - a position which will be reversed in 2002/03. It is anticipated that overall performance will be at the budgeted level, but with the cleaning business unit making a lower contribution than forecast. Recruitment and costs associated with staffing (including advertising costs), continue to be key issues for the businesses.

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Appendix

Capital Programme 2001/02