Contact: Nick Gibbins, ext 7544

(With the concurrence of the chairman, under S100(b)(4) of the Local Government Act 1972, this is included on the agenda to ensure that the report on 2003/04's budget is approved without delay)

1. Summary

1.1 The following decision is sought:

That the accompanying report which sets out the growth, redeployment and savings proposals for the Policy and Resources budget be approved.

2. Reason

2.1 The Cabinet in approving 2003/04 budget proposals requested executive members to consider plans for growth, redeployment and savings to provide a basis for linking budget and performance management more closely.

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 None

5. Dispensation granted by the Standards Committee

5.1 None.

6. Reason for the matter being dealt with if urgent

6.1 Not applicable.

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

Councillor T K Thornber

Contact: Nick Gibbins, ext 7544

1. Introduction

1.1 The report on the 2003/04 budget to Cabinet in February included a request for Executive members to consider plans for the growth, redeployment and savings proposals contained in the budget. The purpose of this request was to provide a basis for budget monitoring during the course of the year which was closely linked to performance management.

1.2 The Policy and Resources 2003/04 growth and redeployment proposals are summarised in the table below:

2. Planned 2003/04 growth

Chief Executive (£247,000)

2.1 Health and Scrutiny (£100,000) - the additional provision made in the budget has enabled the appointment of a Health Review Manager and the allocation of half the time of a Policy Manager to this area of work. This will enable the County Council to take up its statutory power of scrutiny of health trusts in Hampshire - through the new Health Review Committee - and respond adequately to the substantial change issues within the National Health Service.

2.2 Policy and Research officer (£50,000) - a new officer has been appointed to strengthen the policy unit's capacity to undertake research and provide support for the Leader of the Council on major UK and European initiatives.

2.3 New Milton Information Centre (£47,000 with £33,000 as a recurring cost) - staff have been appointed with a view to this `one-stop shop' facility opening in September to serve New Milton and the surrounding area, based on a partnership between the County Council, New Forest District Council, New Milton Town Council and the Citizens Advice Bureau.

2.4 Corporate Performance Work (£30,000) - the increase in budget has enabled the appointment of an extra Policy and Performance Officer to concentrate on improving performance on performance indicator collection, in response to the Audit Commission's comments on the 2002/03 Best Value Performance Plan, and ongoing support of Comprehensive Performance Assessment (CPA), work, designed to maintain the County Council's status.

2.5 Regionalism and CPA (£20,000) - continuing communication and research is crucial to the regionalism debate both in Hampshire and the South East. The Government have said that they will take into account research to inform their decision on referendums, and the County Council will need to maintain the flow of evidence and publicity to inform the case for county government in the South East. The County Council's `excellent' CPA ranking needs to be at the heart of both internal and external communications. Research shows that there is still work to be done in explaining the outcome to staff (over 60% have little or no knowledge) and preparing the organisation for further health checks. In addition research may be required to support the CPA action plan meeting the Audit Commission's recognition of the importance of evidence-based decision making in its assessment of local authorities.

Personnel and Training (£327,000)

2.6 Hampshire Training Solutions (HTS) (£150,000) - a deficit of £150,000 on HTS had been anticipated in 2002/03 as a result of restructuring costs and of moving from Winton House. An addition of £150,000 to balances in 2003/04 has enabled this deficit to be written off so that the restructured Hampshire Learning Centre team, based at Aquitaine House, is able to operate from a stable financial position.

2.7 Leading for Success ((£100,000) - Corporate funding for the leadership programme of £100,000 in both 2002/03 and 2003/04 had been agreed to supplement funding from the existing Management Development training budget and contributions from departmental training budgets, totalling £250,000 in both years. As the lead-in period was longer that had been assumed, the initial corporate contribution was not required in 2002/03, but costs are expected to be corresponding higher in 2003/04. The programme seeks to improve the skills of over 500 managers by creating individual development plans over a two year period and is critical to the delivery of improved levels of performance in line with the County Council's commitment to continuous improvement.

2.8 Pay and benefits project (£50,000) - corporate funding of £450,000 has been made available over the period since 2000/01 to support this major project to evaluate jobs across the whole of the County Council and to introduce a new approach to determining pay and benefits. The increased funding of £50,000 for consultancy costs in 2003/04 was designed to provide the capacity to keep the project on track for implementation from 1 April 2004.

2.9 Long-service award (£27,000) - long service awards are made to staff after twenty five years service in recognition of their service to the County Council. The awards have been set at a value of £125 for the last five years, and the increase in the 2003/04 budget will allow the limit to be raised to £200.

Property, Business and Regulatory Services (£750,000)

2.10 Repair and Maintenance of buildings (£500,000) - assessed inflation in 2002/03 for building repairs was 7.6% whereas the increase allowed for inflation in the 2002/03 budget was based on the general non-pay factor of 2.5%. The increase of £500,000 from within the increased formula spending shares for Schools and Social Services enabled the purchasing power of the repair and maintenance budget to be maintained in the 2003/04 budget at broadly the planned level for 2002/03.

2.11 Office accommodation and County Farm rents (£140,000) - the budget increase compensated for the impact of office accommodation rent reviews in 2002/03 in excess of the 2.5% inflation assumption and for the effect of reduced County Farm rental income as a result of the depressed state of the agricultural market.

2.12 Coroners (£50,000) - underlying levels of activity have been considerably higher than budgeted resulting in overspendings against this budget, over which the County Council has only limited control, in each of the last five years. The increase is intended to establish a more realistic budget for the service.

2.13 Regulatory Services (£60,000) - new legislation and regulatory powers have been introduced creating powers to issue `'Stop Now' orders, new animal feedstuff regulations and additional work relating to under age alcohol sales. Temporary arrangements had been put in place to cover these areas, but at the expense of resources devoted more generally to Fair Trading. The increased budget will enable these arrangements to be made permanent without diluting Fair Trading services, which public consultation has shown to be a highly valued service.

County Treasurer (£300,000)

2.14 The increase in the County Treasurer's budget is essentially to help deal with the transitional costs of SAP implementation in the short-term and to create the capacity to deal with the increasingly complex financial environment brought about by recent Government initiatives. The department faces additional costs such as difficulties in achieving turnover savings due to market pressures preventing new appointments being made at the bottom of the scale, IT, advertising and training - the last two associated with the difficult current recruitment market. The growth will enable these to be met without having to generate vacancy savings by holding posts unfilled, which would make it very difficult to maintain current service levels. In benchmarking terms, this can also be seen as simply allowing finance as an overhead to keep pace to a limited extent with the increase in the Council's spending, which is of course an important driver of finance workloads. Since local government reorganisation spending to be dealt with has increased faster than the relevant finance costs:

Year	County Council budget	County Treasurer's gross spend
	£m	£m *	%
1997/98	854	6.9	0.81
2002/03	1169	8.6	0.74
2003/04	1293	9.2	0.71

* cost of Treasurer's functions excluding the effect of staff transfers from Social Services and creation of new financial assessment and benefits function.

2.15 Nonetheless there are measurable outcomes which this injection of additional funding should enable to be delivered by 2004/05:

· movement from `good' to `excellent' in the finance aspects of the Comprehensive Performance Assessment. This will require improvements in internal audit reporting to members, capital budget monitoring, asset accounting and construction of working papers for external audit in particular, along with the ability to maintain current levels of service and react appropriately to new legislative developments.

· improvement in the CPA score for prompt payment from the current one out of four to at least three and possibly four

· successful implementation of SAP, together with realisation of the associated benefits. These should eventually be worth over £1m per year (in either cash or enhanced service terms) over the finance function as a whole.

· ending of the Council's contract to send out advertising material with payslips, saving some 650,000 sheets of paper annually as part of the Council's action to improve sustainability.

Enterprise Project (£780,000)

2.16 The Enterprise Project to introduce integrated corporate business systems for finance, human resources, and procurement is due to reach the end of its major development phase at the end of August 2003. The roll-out of devolved functionality to schools and other services is due to commence in September, subject to the satisfactory outcome of the current trialling of the system, and to continue over the period to December 2004. Project costs, including the cost of the Development and Support team, will continue to be capitalised until the end of August. Initially an additional revenue budget provision will be required, estimated at £780,000 in 2003/04 to finance the cost of the support arrangements from September 2003 in advance of the achievement of operational savings, due to commence in 2004/05. The key outcomes for the project in 2003/04 are to deliver successfully the devolved system functionality and to train and support new users in accordance with the agreed roll-out programme.

Grants to voluntary organisations (£34,000)

2.17 The increase of £34,000 in the budget for grants to voluntary organisations will increase the County Council's ability to make an impact on the Hampshire community, by supporting initiatives linked to the Corporate Strategy promoted by a wide variety of voluntary organisations.

Increase in central support service sums delegated to schools (£50,000)

2.18 Legal, financial and property management services are delegated to schools and are subject to `buy back' arrangements. Though delegated sums have been increased in recent years based on corporate inflation assumptions, the volumes of activity generated by schools have increased significantly. An increase of £50,000 (3.5%) in the sums delegated to schools for these services will prevent a reduction in service levels occurring.

3. Redeployment proposals

3.1 Redeployment proposals financed £161,000 of the increases set out in paragraph 2. The savings were derived from the following sources:

None of these savings require plans to be put in place to monitor the achievement of the savings, as the savings derive from circumstances which have already occurred or decisions which have been made, enabling the resources to be redeployed.

Recommendation

That the growth, redeployment and savings proposals in the report be approved.

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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