Contact: Bevis Ingram, ext 7508

1 Summary

1.1 The following decisions are sought:

(i) Approve for submission to Cabinet:

· the base budget for 2003/04 (as set out in Appendix 1 and Annexes 1 to 4 and Appendix 4)

· the proposals for efficiency improvements and for savings (as set out in Appendix 2)

· the proposals for new growth and redeployment of resources (as set out in Appendix 3)

· the proposal for viring £500,000 from the base budget to the capital programme for the first two years, 2003/04 and 2004/05 (as set out in paragraph 4.6)

· the summarised trading accounts for business units (as set out in Appendix 5).

(ii) That in finalising the County Council's overall budget proposals that consideration be given to the comments made by the Director of Recreation and Heritage in paragraphs 4.4-4.9 of the report.

(iii) Approve the following library fines on overdue books spoken work, CDs, cassettes and information videos; with effect from 1 April 2003:

Adult users 10p per day

Children (aged 5-17) 1 p per day

Children (under 5) Free

2 Reasons

2.1 Cabinet have requested:

· that service budgets be prepared in consultation with Executive Members within budget guidelines, as set out in the report for consideration by Policy Review Committees

· that Executive Members identify savings of 1% and a further 0.5%, including efficiency savings and cost increases absorbed by efficiency improvements

· that Executive Members identify other savings to offset all other growth proposals

· that Executive Members report back on their annual review of charges and maximisation of income.

3 Other options considered and rejected - not applicable

4 Conflicts of interest declared by the decision maker or a member or officer consulted - not applicable

5 Dispensation granted by the Standards Committee - not applicable

6 Reason(s) for the matter being dealt with if urgent (assume will say not applicable if papers can be sent out on time)

Approved by: (signature) Date: (date of decision)

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

Contact: Bevis Ingram, ext 7508

7 Introduction

The budget for Recreation and Heritage has been prepared on the basis of the budget guidelines approved by the Cabinet on 6 January. In outline the Cabinet:

· Approved the passporting of any increase in the grants settlement in excess of the increase in the base budget for social services and a budget guideline for the schools block.

· Asked services to identify how they would reduce base budgets by 1% and a further 0.5% (including schools and Social Services if the grant settlement is adverse).

· Asked services to make matching savings to offset any new growth not met from specific government grant

7.1 For this service, the provisional budget guideline is £27.3m.

7.2 This report sets out the Recreation and Heritage Executive Member's responses to the guidelines. The report:

· reviews the base budget which totals £27.3m

· identifies savings, including efficiency savings, of 1% (£262,000) and a further 0.5% (£131,000)

· identifies £352,000 of pressures and costs absorbed

· proposes the redeployment of £1,043,000 of resources

· proposes the virement of £500,000 from the base budget to the capital programme (for the next two years only)

· comments on the recent review of charges.

8 Revised budget

8.1 The calculation of the cash limit is set out in Appendix 6. A detailed comparison of the revised budget against the cash limit is set out in Annex 1 to Appendix 6.

8.2 A budget monitoring report was approved at the Executive Member decision day on 22 October. The forecast outturn remains the same as in that report, with all service areas expected to contain expenditure within the cash limit. The one exception to this continues to be Milestones. Management action is being taken to address the deficit; it is likely that this will not have a significant impact until 2003/04.

8.3 The report approved on 22 October included virement for previously agreed policy initiatives. These initiatives are continued in the redeployment proposals for 2003/04.

9 Base budget 2003/04

9.1 A base budget has been prepared which contains 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 £27.3m. Appendix 1 shows the make up of the base budget.

9.2 Overall, the base budget includes a net increase in expenditure at constant prices of £113,000. The main increase, £94,000, is the transfer of Tourism staffing from Policy and Resources.

10 Savings and redeployment proposals

10.1 Cabinet requires all services, other than schools and social services, to identify savings, including efficiency savings, of 1% and a further 0.5%, and to identify pressures and costs absorbed. Cabinet also requires proposals for new growth to be met from savings.

10.2 Details of savings totalling £393,000 are set out in Appendix 2, together with cost increases absorbed of £352,000. Redeployment proposals of £1,043,000 are included in Appendix 3.

10.3 The requirement to make savings of up to £393,000 on the base budget would be absorbed in the main by increasing the income generated by services, particularly by introducing a wider range of recorded and other material for loan or sale in libraries. Some savings in operational expenditure are also possible, but meeting the full requirement would involve scaling back arts and sports development programmes, making reductions in the maintenance of the rights of way network and reducing the scope to pursue a dynamic events programme designed to reach out to those who do not use our services.

10.4 There are two main elements to the redeployment proposals. Firstly, there is a need to provide for the continuation of the wide range of initiatives detailed in the budget monitoring report considered by the Executive Member in October last year. These stem directly from the strategic objectives for the Recreation and Heritage services approved in May 2002. In October, the Executive Member approved the transfer of funding in the current financial year to create a Policy Fund to take these projects forward. The Policy Fund requirement in 2003/04 totals £846,000 and represents a major shift of resources in line with the overall objective of making the Recreation and Heritage services more attractive and more accessible to a much wider range of people. The report approved by the Executive Member included details of these initiatives as follows :

10.5 The second part of the redeployment proposals is to meet identified budget pressures totalling £197,000. This includes provision for an increase of £40,000 in the revenue support for Milestones. The level of support will need to be reviewed in the light of the new business plan being prepared for the museum.

10.6 The accompanying report on the capital programme identifies the need to undertake significant investment in the capital infrastructure of the services. In particular, there is an urgent need to address the backlog of library maintenance and improvement (particularly disability access) and to fund the work necessary to take Discovery Centres from the drawing board to reality. This is not possible within the constraints of the current capital guidelines and it is therefore proposed to vire £500,000 from the book fund in each of the next two years to augment the programme. This work would be carried out in conjunction with planned repair and maintenance activity undertaken through Policy and Resources programmes.

10.7 The library service needs to make strategic choices about the use of the resources available to it, if it is to move forward. Improving library buildings and creating an environment and a range of services within them that attract new users is seen as a clear priority that, in the short term, comes ahead of the traditional high level of spending on books and periodicals. The service has had a longstanding stock policy of buying widely in an attempt to meet the objectives of comprehensiveness, self sufficiency and local responsiveness. This needs to be reviewed in the light of emerging trends in the publishing industry and changing reading habits. Diverting funds from book purchasing for a limited time can take place without eroding the high standard of service currently enjoyed by users. This will be possible through:

· making book selection more responsive to reader needs

· treating the book fund and book binding budgets as a single resource to ensure that value for money is achieved

· working the stock harder by managing it on a county wide basis

· improving layout and display

· greater use of the inter library lending system

· exploiting the potential of the Peoples Network as a means of access to reference resources

10.8 Appendix 3 shows how the redeployment and virement proposals, together totalling £1,543,000, would be funded.

10.9 A number of other pressures have been identified, which cannot be funded from existing resources. These include:

· any further need to increase the level of support for Milestones

· the second phase of implementing the new duties of the Countryside and Rights of Way Act, which would significantly improve access for recreational use (£185,000)

· dealing with fair pay issues in the services for appropriately qualified and experienced staff (£200,000)

· meeting the costs associated with the expanded use of corporate ICT facilities to support e-government targets and meet changing user expectations about accessibility to services and means of communication (£250,000)

10.10 In addition, the County Council falls well below national standards on library opening hours. Selective extension of opening hours alongside the development of Discovery Centres would improve the position, but this inevitably requires a higher level of staffing. The Department lacks the resources to make this possible beyond the current experiments in one or two locations.

11 Review of charges

11.1 Following an extensive consultation with the Recreation and Heritage Policy Review Committee, including a members' seminar, the Executive Member for Recreation and Heritage has approved a new framework for setting charges for Recreation and Heritage services. All charges will be reviewed in accordance with the framework with the aim of achieving an increase in income or to further the specific objectives discussed. An example of this will be to waive loan charges to retired users borrowing spoken word cassettes and compact discs.

11.2 Responsibility for setting the statutory charge for library fines on overdue items remains with the Executive Member. Currently fines for adult users are 7p per day for the first five days and 10p for six days onwards; fines for users who are children (aged 5 - 17) are 3p per day for the first five days and 4p per day for six days onwards. It is proposed to simplify this by introducing a uniform charge to adult users of 10p per day, and to reduce charges to users who are children (aged 5 -17) to a uniform 1p per day, both with effect from 1 April 2003. No fines are charged to children under five years old.

12 Other expenditure

12.1 The budget includes some items which are not counted against the cash limit. This includes capital charges and 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 £8m.

13 Staffing statistics

13.1 The average number of staff in the base budget is 914. This compares with the original estimate for 2002/03 of 924 which is a net reduction of 10. This includes 9 fewer posts at Milestones Museum.

13.2 Proposals to redeploy resources (Appendix 3) include a net increase of two posts.

14 Business units

14.1 The trading accounts of Arts Marketing Hampshire are summarised in Appendix 5.

14.2 This shows that Arts Marketing Hampshire continues to operate at, or around, break even.

Recommendation

That the Executive Member approve for submission to Cabinet:

· the base budget for 2003/04 (as set out in Appendix 1 and Annexes 1 to 4 and Appendix 4)

· the proposals for efficiency improvements and for savings (as set out in Appendix 2)

· the proposals for new growth and redeployment of resources (as set out in Appendix 3)

· the proposal for viring £500,000 from the base budget to the capital programme for the first two years, 2003/04 and 2004/05 (as set out in paragraph 4.6)

· the summarised trading accounts for business units (as set out in Appendix 5).

That in finalising the County Council's overall budget proposals that consideration be given to the comments made by the Director of Recreation and Heritage in paragraphs 4.4-4.9 of the report.

That the Executive member approve the following library fines on overdue books spoken work, CDs, cassettes and information videos; with effect from 1 April 2003:

Adult users 10p per day

Children (aged 5-17) 1 p per day

Children (under 5) Free

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

(complete) (complete)

Appendix 1

Recreation and Heritage Services

Revenue Budget 2003/04

Calculation of the Base Budget 2003/04 - Summary of Cash Limited Expenditure

The following table shows the progression from the original budget for 2002/03 which was prepared at outturn prices 2002/03 to the base budget 2003/04 at outturn prices 2003/04.

Annex 1 to Appendix 1

Recreation and Heritage Services

Calculation of Base Budget 2003/04

Parameters used in the compilation

Annex 2 to Appendix 1

Recreation and Heritage Services

Calculation of Base Budget 2003/04

Significant costs of inflation

Annex 3 to Appendix 1

Recreation and Heritage Services

Calculation of Base Budget 2003/04

Significant variations

Major variations between the repriced budget 2002/03 and the base budget for 2003/04 at November 2002 prices contributing to the increase of £113,000 (0.4%) are set out below:

Annex 4 to Appendix 1

Recreation and Heritage Services

Base Budget 2003/04

Analysis of variations

Appendix 2

Recreation and Heritage Services

Revenue Budget 2003/04

Proposals for efficiency improvements and for savings

Appendix 3

Recreation and Heritage Services

Revenue Budget 2003/04

Redeployment of resources

Appendix 4

Recreation and Heritage Services

Revenue Budget

Reconciliation of the original 2002/03 budget on the following pages with the 2002/03 budget in the budget book.

Appendix 5

Recreation and Heritage Services

Base Revenue Budget 2003/04

Business Units - Summarised Trading Accounts

The budget for Arts Marketing Hampshire is outside the cash limited budget 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 6

Recreation and Heritage Services

Revised Budget 2002/03

Calculation of the Cash Limit for the Revised Budget 2002/03

The following table shows the progression from the original budget for 2002/03 to the cash limit for the revised budget 2002/03. Both are at estimated outturn prices 2002/03.

Annex 1 to Appendix 6

Recreation and Heritage Services

Revised Budget 2002/03

Summary comparing the Revised Budget with the Cash Limit

Note

The Milestones deficit has been carried forward and it is anticipated there will be a further deficit of £156,000. Milestones is run jointly with Basingstoke and Deane Borough Council and it is expected that the accumulated deficit will be funded jointly by both authorities (50% each).