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

Stuart Dorward, 01962 846110, email [email protected]

1. Introduction

1.1 The Recreation and Heritage budget is the subject of regular monitoring, with the position on the budget being reported to the Executive Member and the Policy Review Committee throughout the year. The Executive Member and Policy Review Committee received monitoring reports in July, September and November, following an update on the budget in May.

1.2 This paper reports on the revised budget for the current financial year and seeks approval for a transfer of £133,000 from revenue to capital to part fund the new accommodation block at Calshot.

1.3 The remainder of the paper updates the monitoring position to the end of December 2003. It is expected that the further action planned in the report will eliminate any potential overspend by the end of the year.

2. Revised budget 2003/04

2.1 The cash limit for the revised budget is £27,269,000 A detailed calculation of the cash limit for the 2003/04 revised budget is set out in Appendix 1.

2.2 Since the last monitoring report in November, the overall cash limit for the Recreation and Heritage Department has reduced by £253,000 as shown below:

2.3 Approval is sought to vire £133,000 from the revenue budget to the capital programme to part fund the new accommodation block at Calshot. This is in line with the funding approach proposed in a report to the Executive Member on 20 November 2003 and in the accompanying report on the new accommodation block at Calshot to be presented to the Policy Review Committee today.

2.4 Appendix 2 shows the revised summary cash limit (which takes account of the virement for Calshot), the actual to date and forecast outturn.

3. Budget Monitoring

3.1 The actual to date figures in Appendix 2 show income/expenditure recorded to the end of December for each service. The actual figures for some services at the end of December look out of line with the budget, but this is due to the uneven profile of income and expenditure during the year. This was commented on in earlier reports.

3.2 The rapid development of Recreation and Heritage Services has inevitably thrown up new pressures as highlighted throughout the year in the earlier budget monitoring reports. The report in November forecast an overspend of £28,000; the Director of Recreation and Heritage has given a commitment that there will be no overspend by the end of the year.

3.3 However, additional pressures and commitments now make it probable that without further action to restrict spending, there will be an overspend against the revised budget limit for the year. The main pressures continue to be:

· the transitional costs of the Library review

· Milestones and the Museums Service.

3.4 The additional costs associated with the Libraries Review were highlighted in the report to the Executive Member in July. The scale of the challenge facing the Libraries and Information Service Management Team should not be underestimated. An action plan has been implemented. As an additional contingency, £100,000 of the Policy Fund is being held back to meet any shortfall. With this it is expected that the additional costs can be contained within the Libraries and Information Service budget.

3.5 Visitors to Milestones continue to be lower than hoped for, resulting in an expected shortfall in income in 2003/04. To hedge against any further shortfall in income and to provide reasonable certainty of a breakeven position, the Milestones Executive Board has taken the following action:

· £50,000 of Milestones' functions and costs have been transferred to the Museums Service

· £60,000 has been transferred from the Policy Fund, assuming Milestones will not meet its income targets for the remaining months of 2003/04, and

· the operational staffing structure has been reviewed with further reductions made through redeployment, the full year effect of which will occur in 2004/05.

3.6 Managers in the Museums Service have planned to make £30,000 of cost reductions in three areas (operations, collections and education) over the next three months to absorb the transfer of Milestones' functions and costs. The planned cost reductions will involve curtailing expenditure to essential items only for the remainder of the year, slowing down the replacement of materials and equipment and temporarily managing without relief staff. Whilst this may result in short term closures of some spaces or facilities, it is understood that the reductions will not adversely impact on advertised opening hours. The Museums Service is unlikely to be able to absorb the full £50,000 transfer from Milestones to the Museums in the remaining three months leaving a balance of £20,000 to be found.

3.7 In Appendix 2 the Policy Fund now stands at £1,136,000. In order to meet the budget pressures above, £100,000 of uncommitted funds has been held back to meet the additional costs of the Libraries Review (described in paragraph 3.4) for the remainder of the year. In total only £90,000 is now available from the Policy Fund. Therefore overall without further management action the potential overspend for the whole Recreation and Heritage Department is £30,000. (£20,000 Museums, plus £10,000 Policy Fund /Libraries).

3.8 The Director of Recreation and Heritage is determined to ensure that there will be no overspend at the end of the financial year. The Recreation and Heritage Department Management Team have therefore recognised that firm action is required to eliminate the potential overspend and have now agreed to make savings of £30,000 in the Community Support and Outdoor Service areas to offset the potential overspend. This will comprise vacancy savings from 2 posts, delayed purchase of minor equipment and deferment of minor building improvements to early 2004/05.

3.9 It is expected that the further action planned in the report will eliminate any potential overspend by the end of the year.
3.8

Recommendation

1. To note the revised budget in Appendix 1

2. To approve the virement of £133,000 from revenue to capital to part fund the new accommodation block at Calshot (Section 2.3)

3. To note the financial position as at the end of December 2003 in Appendix 2.

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

Revised budget 2003/04

Calculation of the cash limit for the revised budget 2003/04

The following table shows the progression from the original budget for 2003/04 to the cash limit for the revised budget 2003/04. Both are at estimated outturn prices 2003/04.