Contact: Nick Gibbins, ext 7544

1. Summary

1.1 The 2004/05 budget includes a number of contingency items relating to new initiatives, which were subject to approval of further reports, confirming how the money would be spent and the outcomes expected, by Executive members or by the Leader and Cabinet. This report proposes the allocation of contingency items relating to Grants to Voluntary Organisations (£0.3m), IT and e-government investment (£0.5m), Personnel and Training restructuring (£0.5m) and Pay and Benefits review (£0.3m out of a total of £0.5m).

1.2 The following decisions are sought:

i. that the Executive Member agrees the proposed grants to INTECH, Hampshire Association of Parish Councils and to take up membership of Localis and the IPPR Commission, as set out in paragraph 2 of the report.

ii. that the allocation from the contingency of the following earmarked sums be approved:

	£m
Grants to voluntary organisations	0.3
IT and E-Government investment	0.5
Personnel and Training restructuring	0.5
Pay and benefits review	0.3

2. Reason

2.1 This decision supports all of the aims of the Corporate strategy, but particularly Aims 4 and 5 - Building strong and safe communities and improving services.

3. Other options considered and rejected

3.1 Taking no action to allocate these contingency sums and thus to support the policies approved in the budget.

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: ..................... Date of decision: ...........................

Councillor T K Thornber

Contact: Nick Gibbins, ext 7544

1. Introduction

1.1 The 2004/05 budget approved by the County Council in February includes a number of items included on an earmarked basis within the contingency. These relate to new initiatives where the precise amount required, the timing and phasing of spending and the definition of how the money would be spent and the outcomes expected, were uncertain. This report deals with the items which relate to the Policy and Resources budget and were earmarked for the following purposes:

	£m
Grants to voluntary organisations	0.3
IT and E-Government investment	0.5
Personnel and Training restructuring	0.5
Pay and benefits review	0.3

A further sum of £0.2m was earmarked for the costs of reconfiguring SAP to implement the outcome of the Pay and Benefits review and this will be the subject of a further report once the requirements of the Pay and Benefits review have been determined.

1.2 These proposals support the aims of the Corporate Strategy and in particular Aims 4 and 5 - building strong and safe communities and improving services.

2. Grants to voluntary organisations (£0.3m)

2.1 The budget for 2004/05 includes a proposed one-off contingency sum to provide `extra resources for grants to voluntary organisations, including proposals to develop an exit strategy in funding INTECH over the next three years, to provide for a regeneration project at Wecock Youth and Community Centre, to replace the resources required for community safety audits, consider a subscription to Localis, support the development of Quality Parishes and maintain a County Council presence at County shows'. Support for the Wecock project has been provided from the capital repairs programme but the remaining proposals highlighted in the February budget report to the Cabinet are considered in this report.

INTECH (3 years at £40,000 per annum)

2.2 INTECH 2000 is a major interactive hands-on technology and science centre designed to broaden the understanding of scientific and technological principles. INTECH moved to a new larger facility on Morn Hill, Winchester in 2002. A substantial proportion of visitors to the centre are from schools and in the past INTECH has been supported by the Education budget in funding technicians salaries to develop and maintain exhibits and services (£80,000) and in providing a grant of £40,000 per annum for free visits from schools. From 2004/05 the basis of Education support is however changing so that by 2005/06 £80,000 of the current grant aid of £120,000 per annum will be delegated to schools. INTECH will therefore need to develop the marketing of its services to schools on the basis of making an entry charge to schools to replace the loss of grant. A grant of £5000 to INTECH was approved from the grants to voluntary organisations budget in April to finance support from the County Council's Inspection and Advisory Service in developing the market for its services.

2.3 INTECH need to increase visitor numbers to sustain the viability of the increased scale of operation at Morn Hill as well as to respond to the new Education funding approach. It is proposed that in order to assist INTECH for a transitional period of three years, that Policy and Resources should provide an annual grant of £40,000 to develop the service to children in disadvantaged areas, but supporting the attendance of children from Leigh Park, Havant, Gosport and parts of Andover, Basingstoke and Aldershot. The grant will be conditional on the development of a service level agreement with the County Education Officer and the attainment of targets that will be monitored annually. INTECH will derive a continuing benefit from the establishment of IT links which have been funded by the County Council to enable a room at INTECH to be used as a SAP training venue, and it is proposed that a single contribution of £5,000 be offset against the first year's grant.

Community Safety Audits (£55,000)

2.4 The Crime and Disorder Act 1998 imposed a statutory duty on the County Council to work in partnership with District Councils, Police, Fire and Primary Care Trusts, to set up community safety partnerships at district level. The partnerships are charged with conducting a local crime audit, consulting on it, preparing a community safety strategy, implementing it and monitoring it, on a three year cycle. The second set of strategies covering the period 2002-2005 are entering their final year. The County Council contributed towards the costs of the audit process in 1998 and 2001 and at the Executive member - Policy and Resources decision day in February it was agreed that the County Council would make an estimated 20% contribution (£5,000) towards the cost of the Community Safety Audits in each district area in 2004 at a total cost of £55,000.

Policy Exchange/Localis (£10,840)

2.5 The County Council has been invited to join this organisation. The purpose of Localis is to act as an `independent think tank whose mission is to develop and promote new policy ideas which will foster a free society based on strong communities, personal freedom, limited government, national self-confidence and an enterprise culture'.

2.6 The organisation works in partnership with academics and other experts to commission major policy development studies based on an evidence based approach which can be used by members for lobbying, influencing and supporting local research and policy development. Kent and Essex County Councils are members and the organisation is seeking to broaden its membership base among the key UK local authorities. Subscription levels are based on population and with the benefit of a 25% new members discount, the first year's subscription would be £10,840.

Quality Parishes (£6,000)

2.7 The Hampshire Association of Parish and Town Councils have requested a grant of £6,000 from the County Council to fund the cost of a consultant who would work with parish councils to help them develop successful bids for quality parish status. Based on two days outreach work per parish council, a grant of £6,000 would enable assistance to be offered to 20 parish councils in 2004/05.

County Shows (£35,000)

2.8 The decision to provide a corporate stand at the New Forest and Hampshire County Show in 2003 was successful as an opportunity to promote the County Council and its corporate aims. Funding of £35,000 will be required in 2004/05 to continue this policy.

2.9 Two other non-recurring proposals could also be considered for funding from the additional provision for grants to voluntary organisations.

IPPR Commission (£30,000)

2.10 At a recent meeting of South East County Council Leader's Group a proposal to establish a commission to look at key issues affecting the future of the South East was agreed subject to agreement being reached on funding. If a commission is established it will be vital to the strategic interests of the County Council to be fully engaged. Based on an overall budget of £150,000 for the commission's review, the County Council's share is estimated at up to £30,000.

Exhibition in Winchester Cathedral (£25,000)

2.11 A decision was taken by the Executive Member for Policy and Resources in May to offer a further grant of £25,000, in addition to an earlier grant of £5,000, towards the cost of providing an exhibition within Winchester Cathedral to commemorate the 450th anniversary of the marriage of Queen Mary and King Philip of Spain which took place at the Cathedral.

2.12 If the Executive Member agrees to proposals for allocating the contingency item for grants to voluntary organisations set out in this paper, including making a decision to join Policy Exchange / Localis, to pay a grant of £6,000 towards Quality Parishes and to support the IPPR Commission this would commit £282,000 of the contingency sum, leaving a balance of £18,000 to deal with pressures in other areas of the grants budget.

3. IT and E Government investment (£0.5m)

3.1 As indicated in the report on the 2004/05 budget to Cabinet, the priorities in allocating the contingency sum for E-Government systems were to provide funding for:

· a business warehouse - a product to improve the quality and speed of reporting across all corporate systems as they are migrated from the mainframe. Implementation is in progress and initial use of Business Warehouse is expected to commence during the summer. £250,000 has been earmarked to fund the implementation

· collection and monitoring of Best Value Performance Indicators - this is a high corporate priority and is linked to the development of Business Warehouse £50,000 has been allocated for this purpose

· collection of income over the internet - £50,000 is required to develop the functionality to enable the County Council to receive payments over the internet. This is a high priority for achieving several E-government targets across all services

· funding for other E-Government targets - a balance of £150,000 is available to support other E-Government investment. The E-Government and ICT officer steering group has proposed that the balance of corporate funding for E-Government included within the earmarked contingency sum should be used to fund Hantsweb development. Whereas until the last two years, the County Council was seen as a national leader in the field of government web sites, other public sector organisations have now caught up and in some cases are now ahead of the County Council. Over the next 18 months it is proposed to improve and update the image of Hantsweb, re-focus the site to serve the needs of users in the context of E-Government targets, re-establish leadership in accessible design and to ensure that all County Council web pages follow corporate standards. More emphasis will be given to enabling transactions to be undertaken with the County Council as opposed to information provision. A Hantsweb Management Board will be set up to ensure that the development of Hantsweb meets corporate objectives.

4. Personnel and Training restructuring (£0.5m)

4.1 The strategy and proposed structure for the new Human Resources Department have now been further developed. The restructuring involves significant change for Personnel & Training including:

· moving to a new organisation structure, to create a flexible framework that can respond to national pressures, future challenges and support inter-agency working

· infrastructure development to facilitate service delivery, and provide the basis for improved service delivery at reduced costs

· new accommodation, necessitating several interim moves before staff are able to occupy their ultimate working environment

· implementation of flexible working and hot desking, with space saving technology including flat screens and specialist storage units

Target Benefits (£750,000 pa from 2007/08)

4.2 The SAP benefit realisation targets for Personnel and Training are £500,000 from reduced staff costs and £250,000 from recruitment advertising savings to be phased in by 2007/08. Realisation of these target savings is dependent on the re-structuring of the Personnel and Training Department.

Implementation Plan

4.3 It is envisaged that the structure, which will be implemented during 2004/05, will be a transitional phase moving to optimum operation by 2007/08. The recruitment centre and business support teams are currently scheduled for implementation during July 2004, and the employment practice team will be implemented during November 2004. Implementation of the required systems and communication infrastructure is being planned to provide the necessary framework for effective support as each team becomes operational. The expectation is that each team will be resourced at the transitional level for approximately a year, to maintain the quality of the service provided and allow flexibility for the development of:

· efficient business processes

· a flexible framework to provide consistent advice and support

· an effective infrastructure

· a modern customer facing culture.

Additional Staff Costs (£200,000)

4.4 The current and proposed staff costs were calculated for comparative purposes, based on a full year of operation for all teams, at the proposed role profile grade evaluations. The additional staff costs over the current, fully resourced baseline, for a full year, is currently estimated at approximately £275,000. An amount of £200,000 has been provided as a contingency for the additional staff. It is the intention of the Personnel and Training Management Team to actively manage the additional staff costs to the proposed budget through:

· phased implementation which will provide flexibility in deploying resources

· ongoing turnover, currently forecast at 14% for 2004/05

· management of vacancies.

4.5 Areas where additional staff costs may be incurred include:

· temporary support during initial set up

· redundancy costs where staff are displaced through the recruitment process

· interim management/agency staff where posts are difficult to fill.

4.6 These additional costs will be managed through:

· phasing the implementation to allow additional support to be deployed at critical phases

· redeployment and retraining provided for displaced staff

· managing vacancies to provide flexibility for any interim posts required.

Infrastructure One-Off Costs (£300,000)

4.7 The effective operation of the Human Resources service will be dependent upon investment in effective:

· client relationship management systems

· call centre telephony

· user friendly access to the HR website containing comprehensive, consistent information.

The current estimates, indicated that the one-off costs of the infrastructure will be in the order of approximately £210,000.

4.8 Additional one-off expenditure will be required for:

· new furniture and storage facilities

· new IT desktops and server capacity

· physical office moves.

The current estimates indicate that the one-off costs associated with the physical move are in the order of £100,000.

4.9 An amount of £300,000 has been provided within the contingency for the one-off infrastructure costs which current estimates suggest should be adequate.

Timing of Expenditure

4.10 The implementation phasing is under development and is dependent upon the availability of appropriate office accommodation and implementation of supporting infrastructure. At this time it is likely that all one-off infrastructure costs will be incurred in the financial year 2004/05, approximately £300,000. However, the identified additional staff costs are based on a full year and, given the current implementation target dates, some of this expenditure is likely to fall within the financial year 2005/06.

5. Pay and Benefits Review (£0.3m)

Staff Costs (£200,000)

5.1 The ongoing resourcing of the Pay and Benefits project, coupled with the addition of specialist compensation and benefits staff, who have been identified as a requirement for the successful progression of the pay and benefits review, create staff costs for 2004/05 and 2005/06 of approximately £200,000 per annum, to finance a team of approximately five full-time equivalents.

Consultancy Costs (£100,000)

5.2 External consultancy costs for support to the Pay and Benefits project are estimated at approximately £100,000 for 2004/05. This support includes strategic consultancy, modelling and market comparison tools and role evaluation quality assurance.

6. Recommendations

6.1 That the Executive Member considers whether to agree the proposed grants to INTECH, Hampshire Association of Parish Councils and to take up membership of Localis and the IPPR Commission, as set out in paragraph 2 of the report.

6.2 That the allocation from the contingency of the following earmarked sums be approved:

	£m
Grants to voluntary organisations	0.3
IT and E-Government investment	0.5
Personnel and Training restructuring	0.5
Pay and benefits review	0.3

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

None