Contact: Bevis Ingram, 01962 847508, email [email protected]

Stuart Dorward, 01962 846110, email [email protected]

1 Summary

1.1 The following decisions are sought:

Approve for submission to Cabinet:

i) The base budget for 2004/05 (as set out in Appendix 1)

ii) Proposals for redeployment of resources, efficiency savings and cost pressures (as set out in Appendix 2)

iii) The annual review of income and charges (Section 6)

iv) The detailed budget prepared within the guidelines set by Cabinet (as set out in Appendix 3)

v) The summarised trading accounts of business units (as set out in Appendix 4).

2 Reasons

2.1 Cabinet has requested that:

· Service budgets be prepared in consultation with Executive Members within budget guidelines for consideration by Policy Review Committees, and approved by the Executive Member

· Executive Members identify efficiency savings to offset cost pressures not allowed for in the base budget.

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

2.2 Decisions on the revenue budget will support the aims of the Corporate Strategy and the Cultural Strategy, improving quality of life by:

· creating a thriving cultural life in the County which celebrates diversity and fosters local identity,

· increasing participation in a wide range of cultural, recreational and sporting activities,

· broadening access and tackling the barriers that leave people feeling excluded from these activities,

· using cultural resources for learning and skills development, and

· increasing the benefits to the local economy flowing from cultural activities.

3 Other options considered and rejected - not applicable

4 Conflicts of interest declared by the decision maker or other Executive member consulted - not applicable

5 Dispensation granted by the Standards Committee - not applicable

6 Reason(s) for the matter being dealt with if urgent - not applicable

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

Councillor J. Waddington

Contact: Bevis Ingram, 01962 847508, email [email protected]

Stuart Dorward, 01962 846110, email [email protected]

1 Introduction

6.1 This report sets out the proposed Recreation and Heritage revenue budget for 2004/05 and has been prepared in consultation with the Executive Member, for review by the Policy Review Committee before the budget is considered formally by the Executive Member. It will be reported to the Leader and Cabinet on 12 February 2004 to make final recommendations to County Council on 25 February 2004.

6.2 The revenue budget for 2004/05 provides the financial resources for all Recreation and Heritage services and makes possible the contribution these services make to the aims of the Corporate Strategy and the Cultural Strategy. Increasingly, resources are being focused on improving quality of life by:

· creating a thriving cultural life in the County which celebrates diversity and fosters local identity,

· increasing participation in a wide range of cultural, recreational and sporting activities,

· broadening access and tackling the barriers that leave people feeling excluded from these activities,

· using cultural resources for learning and skills development, and

· increasing the benefits to the local economy flowing from cultural activities.

7 Budget strategy

7.1 The Cabinet has confirmed its budget strategy that Recreation and Heritage will have a base budget increase only and have to meet all costs and other pressures within this limit, including the redeployment of existing resources to higher priorities as necessary.

7.2 In arriving at the base budget it is assumed that:

· Income will be maximised.

· Efficiency savings will be achieved to absorb costs not budgeted for (increments etc).

8 Budget guidelines

8.1 These are based on an overall budget increase of 5.4% against a grant increase of 5.9% resulting in a projected council tax rise of 4.7%. This is in line with public preference put forward during the budget consultation process, adjusted for the additional Government grant announced on 11 December 2003 designed to reduce council tax increases in 2004/05.

8.2 The budget guidelines were set by the Cabinet on 15 December 2003. For this service, the provisional budget guideline for 2004/05 is £28.245m.

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

· reviews the 2004/05 base budget which totals £28.245m. (as set out in appendix 1)

· proposes the redeployment of £915,000 of resources and identifies £451,000 of cost pressures absorbed (as set out in Appendix 2), and

· reviews the charges made by this service (Section 6).

9 Base Budget 2004/05

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 £28.245m. at outturn prices.

9.2 Appendix 1 shows the make up of the base budget. In line with the decision taken last year, this allows for the transfer of £500,000 from the Library and Information Service revenue budget to the capital programme to fund further improvement schemes in library buildings in 2004/05 (see report on the capital programme elsewhere on the agenda).

9.3 Overall, the base budget includes a net increase in expenditure at constant prices of £159,000. The details of this variation are shown in Annex 4 to Appendix 1.

4.4 The original 2003/04 budget (shown on a service basis in Annex 4 of Appendix 1) reflects the spending plans approved in May 2003. These plans consolidated in the Policy Fund the £635,000 of additional funding provided for inescapable pressures, legislative commitments and service developments, £846,000 redeployed from service revenue budgets and £393,000 of retained savings. The initiatives supported by the Policy Fund are designed to make the Recreation and Heritage services more attractive and accessible to a much broader range of people and to extend the ways in which they contribute to the aims of the Corporate Strategy and the Cultural Strategy for Hampshire. Subsequently, some further adjustments have been made to service budgets to reflect permanent commitments arising from Policy Fund initiatives (e.g. where these involve changes to staffing).

10 Redeployment proposals, efficiency improvements and cost pressures

10.1 The Cabinet requires all services to consider and report on:

· efficiency improvements achieved in absorbing pressures and costs within the budget guidelines,

· the redeployment of any resources required to offset any new spending priorities, or inescapable budget pressures, or legislative requirements which otherwise cannot be met within their budget guidelines, and

· the annual review of charges and the maximisation of income.

In addition, a reduction in this service's cash limit for SAP benefit realisation will be considered by the Executive Member Policy and Resources on 23 January 2004. The reduction and consequent action required will be included in the County Council's budget report to the Cabinet on 12 February 2004.

10.2 Details of cost pressures of £451,000, which will be absorbed through efficiency savings, and redeployment proposals of £915,000 are included in Appendix 2.

10.3 The redeployment proposals for 2004/05 arise from earlier decisions about reorganisations in the Countryside Service and the Library and Information Service. In total, £550,000 from the Policy Fund will be used to support these developments.

10.4 The outcome of the review of the Countryside Service was reported to the Policy Review Committee in November 2003 and proposals for restructuring the service were subsequently approved by the Executive Member. The review identified a clear need to bolster the staffing structure to meet the obligations placed on the service by the Countryside and Rights of Way (CRoW) Act and to respond to the challenge of providing greater access to the benefits of countryside recreation. The financial implications of the restructuring were detailed in the November reports. In summary, implementing the review recommendations in full requires an addition of £400,000 per year to the base budget for the Countryside Service. £300,000 of this will be met from the Policy Fund. This includes £180,000 of new resources provided as part of the 2003/04 budget to meet CRoW Act commitments. The balance of £100,000 will be met by redeployment within the Countryside Service budget.

10.5 Reshaping of the Libraries and Information Service has been a radical exercise. It has been a critical factor in changing the Audit Commission's judgement that the service is unlikely to improve to one that, following re-inspection in 2003, confirms strong prospects for improvement. It is inevitable that a reorganisation on this scale would involve significant transitional costs associated with early retirements. These were identified in the review and built into the budget calculations. In recognition of members' concerns that no individual should suffer a reduction in pay as a result of reorganisation, grade protection arrangements have also been put in place that add to these costs. All of these transitional costs will decrease over time, but for the next three years the service is likely to incur additional expenditure associated with the review. In 2004/05 this will total £515,000, of which £250,000 will be met from the Policy Fund. As the costs of the Library and Information Service reorganisation taper off in subsequent years, it will be possible to redirect this funding to achieve progressive improvements in library opening hours.

11 Review of charges

11.1 Responsibility for setting the statutory charge for fines on overdue library books etc remains with the Executive Member. Currently fines for adult users are 10p per day and children (aged 5-17) 1p per day. It is proposed that there will be no change in 2004/05 and that other library charges will remain the same as this year.

6.2 Discretionary charges have been reviewed in accordance with the framework for setting charges for Recreation and Heritage Services approved last year by the Executive Member in consultation with the Recreation and Heritage Policy Review Committee. Charges will be adjusted where appropriate with the aim of increasing income or to further specific objectives.

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 department's support services, except where they have been given to departments to buy services, and repair and maintenance of buildings. It also includes cost of member support within this budget which are rechargeable to Policy and Resources Budget for corporate and democratic core services. Apart from capital charges, 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 £1.8m.

13 Staffing statistics

13.1 The average number of staff in the base budget is 929. This compares with the original estimate for 2003/04 of 922 which is an increase of 7.

13.2 The proposals to redeploy resources (Appendix 2) would increase staffing numbers by 5.

14 Business units

14.1 The trading accounts of Arts Marketing Hampshire are summarised in Appendix 4.

14.2 This shows that Arts Marketing Hampshire continues to operate at or around breakeven.

Recommendation

That the Executive Member approves the revenue budget for 2004/05 for submission to Cabinet

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.

TITLE FILE

Appendix 1

Recreation and Heritage Services

Revenue budget 2004/05

Calculation of the base budget 2004/05 - Summary of cash limited expenditure

The following table shows the progression from the original budget for 2003/04 which was prepared at outturn prices 2003/04 to the base budget 2004/05 at outturn prices 2004/05.

Annex 1 to Appendix 1

Recreation and Heritage Services

Calculation of base budget 2004/05

Parameters used in the compilation

Annex 2 to Appendix 1

Recreation and Heritage Services

Calculation of base budget 2004/05

Significant costs of inflation

Annex 3 to Appendix 1

Recreation and Heritage Services

Calculation of base budget 2004/05

Significant variations

Major variations between the repriced budget 2003/04 and the base budget for 2004/05 at November 2003 prices contributing to the increase of £159,000 (0.6%) are set out below:

Annex 4 to Appendix 1

Recreation and Heritage Services

Base budget 2004/05

Analysis of variations

Appendix 2

Recreation and Heritage Services

Revenue budget 2004/05

Redeployment of resources and cost pressures absorbed

Appendix 3

Recreation and Heritage Services

Revenue budget

Reconciliation of the original 2003/04 budget on the following pages with the 2003/04 budget in the published budget book.

Appendix 4

Recreation and Heritage Services

Base revenue budget 2004/05

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 position and movement in its earmarked reserve accounts.