Contact: Bevis Ingram, (01962) 847508

1 Summary

1.1 This report sets out the proposed Recreation and Heritage revenue budget for 2002/03 and reports on the revised budget for 2001/02. The Recreation and Heritage Executive Member is being recommended to approve for submission to the Cabinet:

· the base budget (as set out in Appendix 1 and Annexes 1 to 4)

· the efficiency improvements (as set out in Appendix 2)

· the proposals to increase charges (as set out in Appendix 3)

· the proposals for redeployment within budget guidelines (as set out in Appendix 4)

· the budget for 2002/03 and the revised budget for 2001/02 (as set out in Appendix 5)

· the summarised trading accounts for business units (as set out in Appendix 6).

1.2 Prior to the Executive Member considering the budget, this report is being presented to the Recreation and Heritage Policy Review Committee to provide the Committee with the opportunity to comment to the Executive Member on the proposals.

2 Introduction

2.1 At its meeting on 17 December the Cabinet set provisional budget guidelines which would result in an overall budget increase of 5.5% and an estimated council tax rise of 6.1%. The provisional guidelines are at the level of the base budget together with passporting of additional sums for Education and Social Services.

2.2 Other identified central pressures were not allowed for in the provisional guidelines because of a number of uncertainties affecting the budget. The Cabinet will take account of these pressures at their meeting on 11 February 2002 when considering the final budget to be recommended to the County Council. Taking these considerations into account a budget increase of between 6.2% and 6.6% might be the likely outcome. This would result in a council tax rise of between 8% and 9%.

2.3 The Cabinet resolved that when making budget recommendations to the County Council they will include:

· agreement of the base budget

· confirming the passporting of SSA percentage increases to Education and Social Services

· considering executive members' responses to the budget guidelines

· considering the results of budget consultation with partners (headteachers, governors, parent teachers' organisations, the voluntary sector, trades unions); business interests; residents' associations and council tax payers

· considering the outcome from any further public opinion polling and any comments received from other organisations such as Police, Fire and health authorities

· determining spending and council tax decisions within the flexibility available within the provisional projections and subject to the final revenue support grant settlement and the update of budget and council tax figures.

2.4 For this service, the provisional budget guideline is £25.4m.

2.5 This report sets out the Recreation and Heritage executive member's responses to the guidelines. The report:

· reviews the base budget which totals £25.4m

· identifies efficiency improvements which include £0.5m of pressures and costs absorbed in the budget

· reviews the charges made by this service

3 Revised budget

3.1 The budget monitoring report of 18 October 2001 identified likely overspendings due to income lost due to Foot and Mouth disease of £376,000 net. The position is largely unchanged although efforts will continue to be made to improve the position. Recently the Policy and Resources Executive member meeting earmarked corporate resources of up to 50% of the forecast overspending arising from Foot and Mouth. No final decision about the level of corporate support will be taken until after final accounts have been prepared.

3.2 The calculation of the cash limit is set out in Appendix 7. A detailed comparison of the revised budget against the cash limit is set out in Annex 1 to Appendix 7. The revised budget has been produced on the assumption that spending will match the cash limits for individual services. However, as indicated above, an overspending of £376,000 is currently forecast against this revised budget/cash limit.

4 Base budget 2002/03

4.1 A base budget has been prepared in accordance with the current financial policies of the Council, in order to provide a starting point from which decisions can be made. The base budget for this service is £25.4m.

4.2 Appendix 1 shows the make up of the base budget.

4.3 Overall, the base budget includes a net increase in expenditure at constant prices of £23,000. The main increases are:

· The inclusion of £43,000 for Museums' posts transferred from Policy and Resources.

· The inclusion of £33,000 for restructuring costs transferred from Environment.

· The inclusion of £19,000 for the revenue effects of capital schemes in the Libraries and Arts Services.

4.4 The base budget for 2002/03 includes the costs of the new Chief Officer and support. Apart from the £33,000 transferred from Environment (which relates to the Head of Countryside being currently charged to Environment), the costs of this are being found from within Recreation and Heritage Services.

5 Efficiency improvements

5.1 The Cabinet requested all services to identify efficiency improvements achieved in absorbing pressures and costs within the budget guidelines.

5.2 Details of efficiency improvements totalling £0.5m are set out in Appendix 2.

6 Review of charges

6.1 The service's 2002/03 revenue budget includes income of £6.2m from fees and charges. Details of the material headings are included in Appendix 3.

6.2 Discretionary charges are reviewed annually except when they are subject to agreements which cover longer periods when the review takes place at the end of the period of the agreement.

6.3 A separate report on the agenda reviews the charges. Increases over and above inflation are proposed for various specific charges.

7 Summary of redeployment proposals

7.1 The Recreation and Heritage Services have a number of pressures which cannot be met from within existing resources. It is proposed to meet as much as possible of these by increasing charges. This will generate a sum of money for reinvesting in services as outlined in Appendix 4. A report elsewhere on the agenda outlines the proposed increases.

7.2 A further major pressure identified which cannot be met from existing resources is the cost of implementing the Countryside and Rights of Way Act. This will be phased in over a number of years. Funding for the first phase is subject to agreement by the Cabinet in February, when the final budget recommendation will be made.

8 Other expenditure

8.1 The budget includes some items which are not counted against the cash limit. This includes budgets for central departments' support services, except where they have been given to departments to buy services, and repair and maintenance of buildings. It also includes costs of member support within this budget which are rechargeable to Policy and Resources budget for corporate and democratic core services. These have been excluded at this stage as Policy and Resources control them and they have not yet been agreed, they are being agreed in the same cycle as this report. In the original budget they totalled £1.6m.

9 Capital charges

9.1 Capital charges for 2002/03 for the use of assets amount to £6.2m, an increase of £1.3m. This increase covers charges for new assets and revaluation of existing assets.

9.2 Capital charges are made to services in order to show the full cost of providing services. They impact on the charges set by services and trading units but they do not affect the County Council's total gross expenditure as they are reversed in the asset management accounts in the Policy and Resources budget and accounts.

10 Staffing statistics

10.1 The average number of staff in the base budget is 916. This compares with the original estimate for 2001/02 of 909 which is an increase of 7. The increase is two additional posts at Milestones for Museums; the new posts of County Recreation and Heritage Officer, Head of Countryside and Head of Resources; the new post of Recreational Cycling Co-ordinator, and an additional post at Calshot with the appointment of the new Outdoor Activities' Officer and the new Director of Calshot, both jobs used to be done by one person.

11 Business units

11.1 The trading account of Arts Marketing Hampshire is summarised in Appendix 6.

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 FILE

Appendix 1

Recreation and Heritage Services

Revenue Budget 2002/03

Calculation of the Base Budget 2002/03 - Summary of Cash Limited Expenditure

The following table shows the progression from the original budget for 2001/02 which was prepared at outturn prices 2001/02 to the base budget 2002/03 at outturn prices 2002/03.

Annex 1 to Appendix 1

Recreation and Heritage Services

Calculation of Base Budget 2002/03

Parameters used in the compilation

Annex 2 to Appendix 1

Recreation and Heritage Services

Calculation of Base Budget 2002/03

Significant costs of inflation

Annex 3 to Appendix 1

Recreation and Heritage Services

Calculation of Base Budget 2002/03

Significant variations

Major variations between the repriced budget 2001/02 and the base budget for 2002/03 at November 2001 prices contributing to the increase of £23,000 (0.1%) are set out below:

Annex 4 to Appendix 1

Recreation and Heritage Services

Base Budget 2002/03

Analysis of variations

Excluded at this stage are recharges from Policy and Resources not met out of services' cash limits for central support services and for repair, maintenance and redecoration of buildings. Also excluded are the costs on member support within this services' budget which are rechargeable to Policy and Resources services' budget for corporate and democratic core services. These will be added later after their consideration by Policy and Resources.

Appendix 2

Recreation and Heritage Services

Revenue Budget 2002/03

Proposals for efficiency improvements

Appendix 3

Recreation and Heritage Services

Revenue Budget 2002/03

Review of income

Appendix 4

Recreation and Heritage Services

Revenue Budget 2002/03

Proposals for redeployment of resources

Appendix 5

Recreation and Heritage Services

Revenue Budget

Reconciliation of the original 2001/02 budget on the following pages with the 2001/02 budget in the budget book.

Appendix 6

Recreation and Heritage Services

Base Revenue Budget 2002/03

Business Units - Summarised Trading Accounts

The budget for Arts Marketing Hampshire is outside the cash limited budgets of the Recreation and Heritage Services as it operates on a trading basis. Arts Marketing Hampshire is a business unit under Financial Regulation 20. The following statement shows its summarised trading position and movement in its earmarked reserve accounts.

Appendix 7

Recreation and Heritage Services

Revised Budget 2001/02

Calculation of the Cash Limit for the Revised Budget 2001/02

The following table shows the progression from the original budget for 2001/02 to the cash limit for the revised budget 2001/02. Both are at estimated outturn prices 2001/02.

Annex 1 to Appendix 7

Recreation and Heritage Services

Revised Budget 2001/02

Summary comparing the Revised Budget with the Cash Limit

Note:

Forecast overspend £376,000 due to Foot and Mouth Disease, compared to revised budget.

The Policy and Resources Executive member meeting earmarked corporate resources of up to 50% of the forecast overspend arising from Foot and Mouth. No final decision about the level of corporate support will be taken until after final accounts have been prepared.