Contact: Jon Pittam, ext 7400

1. Summary

1.1 The accompanying report sets the scene for decisions on the 2004/05 revenue budget and council tax, based on the budget guidelines approved on 15 December 2003. It takes account of subsequent developments. Allocation of the £2m flexibility built into the budget total guidelines and use of balances are proposed to meet the pressures identified in the development of the budget by the Cabinet.

1.2 The following decisions are sought, based upon the recommendations of the Leader and Cabinet to the County Council for the 2004/05 budget and council tax that:

1 the base budget (Table 5 and Appendix 3) be approved

2 plans to carry forward planned savings from 2003/04 to 2004/05 (Table 2 and Appendix 4) be approved

3 the full passported increase for the Schools Budget be approved and that the growth on Social Services to match the cash increase in its formula spending share (Table 6) be confirmed

4 the additional growth proposals of £3.6m from Executive members, met by the redeployment of resources within the budget guidelines (Table 7 and Appendix 4) be approved

5 the contingency of £3.8m for the waste management contract be approved

6 the costs absorbed of £5.0m from efficiency improvements (Table 9 and Appendix 5) be approved

7 the annual review of charges and maximisation of income across services (Table 10 and Appendix 6) be approved

8 additional continuing resources available totalling £4.9m (Table 13) including the £2m flexibility within the budget guidelines, £1m extra grant in the final settlement and £1.1m additional income from reduced discounts on second homes be allocated as set out in Table 14, subject to further reports made to the Leader on the business case and performance improvements expected.

9 £3.8m of balances and non-recurring sources of income be allocated to contingency and earmarked for one-off investment subject to further reports made to the Leader on the business case and performance improvements expected, and £0.9m be retained in balances for use in 2004/05 or 2005/06 (Table 14)

10 the estimated level of balances at 1 April 2005 of £7.2m and the earmarked reserves set out in Appendix 10 be approved

11 the revised budget for 2003/04, in Appendix 2 be approved

12 the budget for 2004/05 as summarised in Tables 16 to 20, set out in detail in Appendix 7 and including the additions in recommendations 8, 9 and 10 of the report be approved

13 the indicative budget plans for 2005/06 and 2006/07, and the medium-term financial planning strategy, as set out in Appendix 9, be approved

14 the treasury management strategy for 2003/04 and the treasury management code of practice as set out in Appendix 12, be approved

15 it be a recommendation to Council that

a. the Treasurer's report under Section 25 of the Local Government Act 2003 be taken into account when the Council determines its budget and precept for 2004/05

b. the revenue budget for 2004/05 (as set out in the attached draft budget book) be approved

c. the total budget requirement for the general expenses of the County Council for the year beginning 1 April 2004 be £1,052,275,000

d. the County Council's basic council tax for the year beginning 1 April 2004 be £840.15

e. the County Council's council tax for the year beginning 1 April 2004 for properties in each tax band be:

	£
Band A	560.10
Band B	653.45
Band C	746.80
Band D	840.15
Band E	1026.85
Band F	1213.55
Band G	1400.25
Band H	1680.30

f. precepts be issued totalling £402,457,953.46 on the billing authorities in Hampshire, requiring the payment, in such instalments and on such dates set by them and previously notified to the County Council, in proportion to the taxbase of each billing authority's area as determined by them and as set out below:

Basingstoke and Deane Borough Council	58,048.10
East Hampshire District Council	45,830.43
Eastleigh Borough Council	41,762.61
Fareham Borough Council	41,241.00
Gosport Borough Council	25,766.30
Hart District Council	35,678.00
Havant Borough Council	41,997.00
New Forest District Council	70,293.80
Rushmoor Borough Council	29,127.09
Test Valley Borough Council	44,349.00
Winchester City Council	44,937.74

g. that the revised Treasury Policy Statement (annex 2 to Appendix 12) be approved

h. the prudential indicators (annex to Appendix 13) be approved.

2. Reason

2.1 The full County Council must agree the 2004/05 revenue budget and set the council tax for 2004/05 at its meeting on 25 February 2004. The Leader will present his budget speech and recommendations at that meeting. This report provides the background to those budget decisions and presents the recommendations from the Leader and Cabinet to the County Council.

2.2 The County Treasurer under the new Section 25 of the Local Government Act 2003 is also required to report to the full Council on the:

· robustness of the estimates for 2004/05

· adequacy of the financial reserves in the budget.

2.3 These decisions support all the aims of the corporate strategy as it provides the financial resources for:

· Aim 1 - maximising life opportunities

· Aim 2 - stewardship of the environment

· Aim 3 - achieving economic prosperity

· Aim 4 - building strong and safe communities

· Aim 5 - improving services

· Aim 6 - developing councillors and staff

3. Other options considered and rejected

3.1 Other options are not available as far as process and timetable are concerned, but it is expected that the leaders of the opposition parties will wish to present their own recommendations on the budget and council tax to the County Council as amendments to these proposals.

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. Reason for the matter being dealt with if urgent

6.1 Not applicable.

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

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Councillor T K Thornber