Contact: Bevis Ingram 01962 847508 email [email protected]
Stuart Dorward 01962 846110 email [email protected]

Summary

1.1 The following decisions are sought:

(i) That the projected financial position be noted.

(ii) That the action being taken to restrict the overspend as outlined in the attached report be endorsed.

(iii) That a report on the Peoples Network be brought to the next decision day.

2. Reason

Regular reporting of monitoring of Recreation and Heritage budget.

3. Other options considered and rejected:

None.

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:

................................. ...............................

Councillor J Waddington

Contact: Bevis Ingram 01962 847508 email [email protected]
Stuart Dorward 01962 846110 email [email protected]

With the concurrence of the Chairman of the Recreation and Heritage Policy Review Committee, under Section 100B(4)(b) of the Local Government Act 1972, this matter is included on the agenda to enable the Committee to determine the matter within a reasonable period of time.

1. Introduction

1.1 Regular budget monitoring reports are made to the Policy Review Committee and Executive Member throughout the year. The report presented in July dealt primarily with the allocation of additional funding provided in the 2004/05 budget and the disposition of resources between service budgets and the Policy Fund. It also highlighted some issues that would put pressure on the Department's budget in this and later years.

1.2 This report gives a fuller picture of the position on this year's budget following a monitoring exercise undertaken using data available to the end of July 2004, with subsequent updates to end of August 2004.

2. Summary of Current Position

2.1 The Appendix provides a service by service summary showing the approved budget allocations, actual expenditure to the end of August and a projection of the year end position (forecast outturn).

2.2 The current projection on the basis of these figures is that, without further management action, the Department could be facing an overall overspending against the cash limit of £354,000 (1.2%) by the end of the year. The reasons for this are set out later in the report. Additionally, there is a need to provide new loan materials this year for new and refurbished libraries. This adds a further £250,000 to the pressures on the budget giving a total potential overspend of £604,000 (2.3%).

2.3 It is still early in the year and the projections present a `worst case' position. Some action has already been taken (see below), but it is clear that further measures will be necessary at both service and departmental level to bring the forecast outturn back within the cash limit. The Departmental Management Team will take appropriate action to make sure this is the case.

2.4 The following paragraphs outline more details of the position on a service by service basis.

3. Library and Information Service

3.1 The Service is going through a period of great change following implementation of the new structure, major investment in infrastructure, the development of Discovery Centres and the completion of the Peoples Network programme. The financial consequences of these changes have a significant impact on this year's budget, but will continue to affect the financial position of the Service over subsequent years. For this year, the current estimate is that these factors result in pressures totalling £1.1 million. Management action is already in hand that will limit this to £500,000.

3.2 The budget monitoring exercise has identified the following pressures:

Supplies and Services and Peoples Network (£350,000)

3.3 The projected overspend on supplies and services relates mainly to additional IT costs of the Peoples Network (as highlighted in the previous budget monitoring report). There are also some additional revenue costs (hire of temporary buildings etc.) associated with the Discovery Centre and library refurbishment programmes. An approach to funding the running costs of the Peoples Network in the short term was worked out with IT Services as part of the project budget supported by the New Opportunities Fund (NOF). It was a nationally applied condition of the NOF grant that the continuing running costs of the Peoples Network would be met by the library authorities. With the completion of the roll out in Hampshire these costs are now having a full impact on the revenue budget. The continuation and possible expansion of the network of public access internet terminals is a key element of the library transformation programme and will play a significant part in the County Council's electronic service delivery developments. A further report on the long term implications of the Peoples Network will be brought to the next decision day.

Income Shortfall (£500,000)

3.4 The closure of several large libraries for refurbishment during the year is inevitably affecting the income performance of the service. The estimate of a £500,000 shortfall is very much a worst case position. The Service management team has reviewed the situation and believes that, by taking a new approach to procuring, marketing and selling videos and DVDs, the shortfall can be managed down to £250,000.

Book Fund (£250,000)

3.5 There is a clear need to buy new loan materials (books, CDs, DVDs, etc) for new and refurbished libraries across the County (Alton, Gosport, Farnborough, Chandlers Ford, Yateley, and Fleet ). This will help to meet user expectations of an improved service on reopening. This additional expenditure is being incurred with full knowledge of the financial consequences. If it cannot be accommodated within the budget, half of the approved £500,000 transfer from the Service's revenue budget in 2004/05 to fund capital improvements (the second tranche of £500,000, matching a similar transfer in 2003/04) could be deferred to 2005/06 with no impact on the timetable of these works.

3.6 Overall, the Library and Information Service budget is well managed, with many pressures being absorbed year by year. The Service management team has reviewed costs elsewhere in the budget and believes that savings totalling £350,000 can be made by rigorous vacancy management and by restricting spending to essential items. However, the budget does not have the capacity in the short term to meet all of the pressures arising from a period of very rapid change in the Service without a significant impact on services. As indicated above, deferral of £250,000 of the planned revenue contribution to the capital programme is a further option, but this would still leave another £250,000 to be found elsewhere in the Recreation and Heritage budget.

4. Museums Service

4.1 The Museums Service is currently reporting a projected overspending of £49,000 for the year. Some of the pressures are of a one off nature, while others (e.g. transfer of some staff from Milestones in 2003/04, and regrading of other staff) affect the ongoing base budget.

4.2 The Service management team will review the situation and take action to eliminate the overspend by the year end (e.g. vacancy management, reductions in devolved budgets, reduced overtime working).

5. Countryside

5.1 The Countryside Service is reporting a possible overspend of £25,000. This results from an income shortfall following the poor weather in August. The Service management team will take action to ensure that expenditure remains within the cash limited budget for the year.

6. Arts

6.1 The Arts Service has identified a potential overspend of £15,000 resulting from additional IT costs at the Arts Centres. Action will be taken to cover this. As yet, the local Learning and Skills Council's withdrawal of funding from arts and leisure based adult education programmes, highlighted in the July budget monitoring report, has not had any impact on the budget.

7. Sport, Community Support and Outdoor Centres

7.1 An overspend of £15,000 is projected due to the delayed opening of the Tile Barn bunkhouse. This has resulted in lost income while staffing and other costs have been incurred.

8. Archives, Milestones, Calshot, Directorate and Business Development

8.1 The current forecast outturn for these budgets is that expenditure will match the cash limit.

9. Policy Fund

9.1 After additions and allocations agreed in July, the total of the Policy Fund stands at £1,016,000. Details of this were outlined in the budget monitoring report presented in July. This now includes the retention, agreed by Cabinet, of 50% of the £32,000 underspending against the revenue cash limit reported in the 2003/04 final accounts. At the end of August £228,000 of the Policy Fund had been spent. However, all of the Policy Fund has been allocated to projects and commitments have been entered into on many of these (e.g. over £400,000 is committed on staff costs and a further £200,000 supports the ongoing costs of the IT initiatives entered into in 2002/03 and 2003/04). At this stage there are a few projects that have not yet progressed beyond the planning stage. These could be delayed, although in many cases discussions will have taken place with partners creating a level of expectation about the availability of funding this year. Overall therefore the Policy Fund is fully committed. (See Appendix B).

10. Conclusions

10.1 The scale of the pressures identified through budget monitoring is such that careful planning and management is needed throughout the Department to avoid an estimated overspending of £604,000 against the current cash limit. Further action to be taken at a service level will restrict this to £500,000, which relates to the projected overspending in the Library and Information Service. Further discussion is needed on how the additional spending on loan materials to support the library transformation programme and the essential running costs of the Peoples Network can be supported within Recreation and Heritage, and a further report will be brought to the next decision day.

10.2 As a contingency measure, the Departmental Management Team has already taken action to apply new procedures across the Department to ensure that vacant posts are filled only where essential and to restrict spending on supplies and services. The position will be kept under constant review and, if necessary, specific savings targets will be applied across all services

Recommendations

That the proposals set out below be supported, and submitted to the Executive Member for Recreation and Heritage for his consideration:

1 That the projected financial position be noted.

2 That the action being taken to restrict the overspend as outlined in this report be endorsed.

3 That a report on the Peoples Network be brought to the next decision day.

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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