Contact: Jon Pittam, ext 7400

1. Summary

1.1 This report deals with the arrangements for holding a community workshop and undertaking a telephone survey as part of the County Council's budget consultation process. The basis of the budget options on which consultation will take place is also outlined. The initial budget strategy for 2004/05 is based on the roll-forward of the 2003/04 strategy which in turn was linked to the Corporate Strategy and the outcome of community consultation which led to the four member priorities for development.

1.2 The following decisions are sought:

· to approve the appointment of MORI to conduct a Community workshop in July and a telephone survey of 1,000 residents in September, met from the Corporate Communications consultation budget

· to approve as the basis for public consultation the options set out in Table 2 of the report.

2. Reason

2.1 To agree the basis for commencing a budget consultation for 2004/05 and 2005/06.

3. Other options considered and rejected

3.1 Seeking tenders from other market researchers and carrying out a smaller telephone survey.

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. Reasons for the matter being dealt with if urgent

6.1 Not applicable.

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

Councillor T K Thornber

Contact: Jon Pittam, ext 7400

1. Introduction

1.1 The Cabinet considered reports on budget planning and consultation at both its April and May meetings. The principle of holding a community workshop in the summer and a subsequent structured survey of taxpayers was agreed in April and this report recommends the appointment of MORI to conduct a community workshop in July, followed by a telephone survey in September.

1.2 The report also makes some recommendations about the basis of the budget options on which consultation would be based, within the framework of the assumptions on budget planning considered by the Cabinet in May, which in turn are related to the Corporate Strategy, the roll-forward of the budget strategy and the four member priorities for development derived from previous community consultation.

2. Budget consultation process

2.1 In addition to consultations with a range of special interest groups, it is proposed to carry out a wider public consultation with the Hampshire community by holding a community workshop in July to provide a qualitative dimension and by means of a telephone survey to obtain a quantitative dimension in September.

Community workshop

2.2 A community workshop is a qualitative research exercise, typically lasting a day. Due to the complexity of the budget material to cover, a 5-6 hour `full day' workshop would allow residents to develop some understanding of the issues. The depth of information which can be obtained from a workshop would be greater than from a series of focus groups, as respondents have time to think about the issues and become comfortable articulating their views. As well as providing a series of views and opinions on budget issues, the main advantage to this type of work is understanding why respondents hold the views they do. The County Council has used this methodology for other complex service and political issues, such as:

· changes in political management

· highways

· Countryside service best value review.

2.3 This approach would help the County Council to:

· give residents information on the budget setting process

· raise awareness amongst Hampshire residents of the difficulties in budget setting

· demonstrate to residents that the County Council wants to listen to their views

· inform and add to the knowledge that Cabinet and members already have from constituents

· inform Cabinet and County Council members how residents prioritise and make trade-offs when budget modelling.

2.4 A day long workshop would involve recruiting 30-35 respondents in order to have 25-30 present on the day. The whole group would come together in the morning for the introduction, at lunchtime for a presentation, brief discussion and lunch, and later in the afternoon when each group presents its key findings to other respondents. The presentation in the middle of the day will require input from a key officer from the Treasurer's department who is able to explain the funding issues and the difficulties the County Council faces each year. The recruitment would be undertaken by the research agency. Participants would be drawn for the known profile of the County. This ensures a mix of respondents paying varying levels of council tax. The group sessions will be guided by a moderator with the aid of a topic guide. The content of this will be fashioned by the County Council. It is an aide memoire and allows the moderator to allow relevant discussion without departing on to irrelevant issues.

Telephone survey

2.5 The qualitative research will provide an in-depth understanding of people's views and opinions in terms of budget issues, but the findings will be illustrative rather than statistically representative of the population as a whole. The recommendation, to optimise both reliability and cost effectiveness, would be to undertake a telephone survey with 500 or 1,000 respondents, lasting ten minutes. The sample size is an important issue. A sample of around 500 would be adequate and representative to assess general views across Hampshire, but does not allow for sub-group analysis. A sample of 1,000 residents would allow for sub analysis on a number of variables, such as social class, age, district etc. Considering this is the first time that the County Council has undertaken both a qualitative and quantitative approach to this important issue, the sample of 1,000 residents would yield much more information, and is recommended.

2.6 The proposal is to commission MORI to undertake both the community workshop and the telephone survey in view of their national reputation in this field and the quality of the surveys they have previously undertaken for the County Council. The cost of the community workshop includes set up costs, recruitment and incentive payments, venue, refreshment, three moderators, reporting and presentation. The cost of undertaking a ten minute telephone survey amongst 1,000 residents is only slightly more than if the sample was limited to 500. The cost of both consultations would be met from the Corporate Communications consultation budget.

3. Budget consultation options

3.1 The main elements of the 2004/05 and 2005/06 financial forecasts were reported to the last meeting of the Cabinet. The report highlighted the potential impact upon school budgets of the withdrawal of the damping element of £22.2m within the schools formula spending share and the sensitivity of the forecasts to the assumptions made about floors and ceilings in future grant settlements. Despite the difficulties of forecasting the council tax implications of specific spending options, it was agreed that a further report would be prepared looking at the spending implications of council tax increase in 2004/05 of 5%, 7% or 9%.

3.2 In order to avoid having an unmanageably large number of budget options to consider, based upon different assumptions about uncertain factors, a number of assumptions have been made to form the basis of the suggested options. These include assumptions about the priority given to protecting school budgets at the expense of growth in other budgets and about the priority given to avoiding cuts in other budgets at the expense of growth in school budgets above the passported increase.

3.3 As compared with the budget projection for 2004/05 based on the current budget strategy, the reductions or increases in spending required to generate tax increases of 5%, 7% or 9%, assuming schools damping options of either 2.5% or 3.2% are:

Table 1 - Spending variations

3.4 This shows that the higher the floor for Education the more spending has to increase to effect the required Government passporting to schools assumed in the current budget strategy, leaving less available for growth for other services or for further allocation to schools (at higher levels of council tax) and the greater the cuts required in services for lower levels of council tax. The opposite picture is true if lower amounts are passported to schools, before taking account of the effect on schools budgets.

3.5 The options for consultation based on a 2.5% schools damping assumption are as follows:

Table 2: Possible consultation options

Tax increase	Variation on 2004/05 projection		Comments
5%	Grant equalisation reserve	-4,000	Provide schools with an increase to cover inflation but not the loss of Standards fund grants
	Other services - reduction of 1.3%	-2,150
	Social Services - allow only half passported increase above corporate inflation assumptions	-3,300
	Schools	+4,200
	Option 1	-5,250
7%	Schools	+6,800	Covers inflation and replaces £2.6m of lost Standards fund grants
	Grant equalisation reserve	-4,000
	Option 2	2,800
9%	Schools	11,000	Sufficient to cover cost of inflation and replace Standard fund grants
	Growth in Schools/in Social Services above passport increase or above base budget for other services	3,900	Some scope for other inescapable increases
	Grant equalisation	- 4,000
	Option 3	10,900

3.6 Consultation on these options at the community workshop does not bind the Cabinet to any of these in settings its budget strategy or final budget decisions because of the continued uncertainty around the grant settlement for 2004/05, particularly for schools budgets.

3.7 However it does form the basis for:

· developing the Cabinet's response on the choice and balance between service and council tax levels

· developing the communications strategy for explaining to the Hampshire community the issues faced in preparing the budget for 2004/05

3.8 The results of the community workshop can be developed during the budget consultation meetings being arranged in September 2003 with

· schools forum

· business representatives

· voluntary sector

Recommendation

The recommendations are contained on the summary decision sheet.

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:

Published works.

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

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