ITEM 2

AT A MEETING of the CABINET of HAMPSHIRE COUNTY COUNCIL held at The Castle, Winchester on Friday, 11 February, 2005.

PRESENT:

Councillors: T.K. Thornber, CBE (in the Chair); C.R.H. Davidovitz; K.B. Estlin;

Mrs. S.M. Glasspool, DL; Felicity Hindson, MBE; J. Waddington; M.J. Woodhall.

Also in attendance: Councillors: K.G. Chapman; A.P. Collett; R.J. Kimber; Mrs. C.A. Leversha.

1. DECLARATIONS OF INTEREST

Members were mindful that, where they believed they had a personal or personal prejudicial interest in any matter to be considered at the meeting, they should normally at the time of the debate, declare their interest and, having regard to the circumstances described in paragraphs 9, 10, 11 and 12 of the County Council's Code of Conduct, consider whether to leave the meeting whilst the matter was discussed.

423 MINUTES

The Minutes of the meeting held on 24 January, 2005 were confirmed as a correct record.

424 CHAIRMAN'S COMMUNICATIONS

There were no communications.

425 DEPUTATIONS

There were no deputations.

426 REVENUE BUDGET AND PRECEPT 2005/06

The Cabinet considered the report of the County Treasurer (Item 5 in the Minute Book) which proposed the recommendations to County Council on the 2005/06 Revenue Budget and the council tax based on the budget guidelines approved by Cabinet on 13 December 2004.

The County Treasurer amplified the report, drawing attention to the key features of a budget of £1,107.9m, a council tax of £869.40 at an increase of 3.5% (the joint lowest since the 1974/75 reorganisation) and spending which was £40m (or 3.7%) above Formula Spending Share (FSS) compared with 4.4% in 2004/05. During the course of the ensuing discussion, Members agreed that from the further £200,000 proposed for allocation to meet additional education pressures, £76,000 would be ring fenced for after-school transport. It was also agreed that the Leader should write to the Office of the Deputy Prime Minister, copies to Hampshire MPs, expressing the County Council's grave concerns at the lack of a specific response by Government on the local government finance settlement. There was unanimous support for the budget, and subject to these additions, the recommendations contained in the report were adopted. A copy of the substantive decision sheet is set out as Appendix 1 to these Minutes.

427 CAPITAL PROGRAMME 2005/06 TO 2008/09

The Cabinet considered the report of the County Treasurer (Item 6 in the Minute Book) on the proposed Capital Programme for 2005/06 to 2008/09 based on the guidelines approved by Cabinet on 13 December 2004. The Cabinet adopted the recommendations in the report and a copy of the decision sheet is set out as Appendix 2 to these Minutes.

428 BALANCE OF FUNDING REVIEW - PROGRESS

The Cabinet considered the report of the County Treasurer (Item 7 in the Minute Book) summarising the progress of the Inquiry into Local Government Funding, proposing a response to the Inquiry's request for views, and examining how proposals for a combination of local taxes might work following publication of a paper by the Local Government Association. The Cabinet adopted the recommendations in the report and a copy of the decision sheet is set out as Appendix 3 to these Minutes.

429 GOVERNMENT CONSULTATION ON THREE YEAR REVENUE AND CAPITAL SETTLEMENTS

The Cabinet considered the report of the County Treasurer (Item 8 in the Minute Book) which summarised the proposals outlined in a Consultation Paper published by the Office of the Deputy Prime Minister to introduce three year revenue and capital settlements for Local Authorities in 2006/07. Whilst there was support for the concept of three year Government financial settlements, the Cabinet shared the reservations of the County Treasurer that there were a number of other changes over the next two years affecting local government finance which cast some doubt as to whether it was sensible to press ahead with the introduction of multi-year settlements as early as the proposed 2006/07. There was an underlying unease at the rigidity envisaged by the Government for local authority three year budgets and council tax figures, which was in contrast to the flexibility contained in the Government's own three year spending plans.

The Cabinet adopted the recommendation in the report and a copy of the decision sheet is set out as Appendix 4 to these Minutes.

430 FRAMEWORK FOR DELIVERING EFFICIENCY SAVINGS

The Cabinet considered the report of the County Treasurer and Chief Executive (Item 9 in the Minute Book) which provided an initial view on the recently issued Government framework for delivering efficiency savings in local services. The Cabinet adopted the recommendations in the report and a copy of the decision sheet is set out as Appendix 5 to these Minutes.

5bM40205

Contact: Jon Pittam, ext 7400

2. Summary

2.1 The accompanying report set the scene for decisions on the 2005/06 revenue budget and council tax, based on the budget guidelines approved on
13 December 2004.

2.2 The following decisions were taken:

1 the base budget be approved

2 £300,000 savings from abandoned vehicles are used to meet additional spending arising from the submission of revised proposals for South Hampshire Rapid Transport

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 be agreed, rather than the two lower options included in the budget guidelines for consideration

4 a provision for future inflation and contingencies of £6.1m including a contingency of £4.7m for the waste management contract be approved

5 Education (other than the schools budget) be required to meet its cash efficiency savings target in full, in common with other services, and to redeploy other resources, to a total of £420,000, towards its unfunded pressures list; such savings being under pinned by its central contingency of £376,000 and projected surplus on services to schools at 31 March 2006 of £330,000.

6 a further £200,000 be allocated centrally towards remaining pressures on Education, of which £76,000 would be ring-fenced for after school transport

7 the additional pressures and growth proposals from Executive Members totalling £7.6m be approved

8 the cash efficiency savings and redeployment proposals of £8.4m put forward by Executive Members and required of Education, be approved

9 additional one-off spending of £600,000 in 2005/06 and continuing spending of £850,000 be approved

10 the annual review of charges and maximisation of income across services be approved

11 £4m of balances be transferred (subject to further reports made to the Leader on the business case and performance improvements expected against each use of the new reserve) to a modernisation, restructuring and efficiency measures reserve in the light of changes from the Children Act, job evaluation and the requirement for an annual efficiency plan to meet `Gershon' targets.

12 the estimated level of balances at 31 March 2006 of £8.7m and the contribution to reserves and the level of earmarked reserves be approved

13 the revised budget for 2004/05 be approved

14 the budget for 2005/06 be approved

15 the treasury management strategy for 2005/06 and the treasury management code of practice be approved

16 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 2005/06

b) the revenue budget for 2005/06 be approved

c) the total budget requirement for the general expenses of the County Council for the year beginning 1 April 2005 be £1,107,865,000

d) the County Council's basic council tax for the year beginning 1 April 2005 be £869.40

e) the County Council's council tax for the year beginning 1 April 2005 for properties in each tax band be:

	£
Band A	579.60
Band B	676.20
Band C	772.80
Band D	869.40
Band E	1062.60
Band F	1255.80
Band G	1449.00
Band H	1738.80

f) precepts be issued totalling £ 420,453,637.76 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	58,822.30
East Hampshire District Council	46,369.94
Eastleigh Borough Council	42,139.85
Fareham Borough Council	41,376.00
Gosport Borough Council	26,083.80
Hart District Council	36,156.40
Havant Borough Council	42,029.00
New Forest District Council	70,932.90
Rushmoor Borough Council	29,701.43
Test Valley Borough Council	44,324.00
Winchester City Council	45,677.95

g) that the revised Treasury Policy Statement be approved

h) that the annual investment strategy be approved

i) the prudential indicators be approved.

2.3 The Cabinet also agreed that the Leader should make further representations on the 2005/06 final settlement to the Office of the Deputy Prime Minister with a copy to Hampshire Members of Parliament.

3. Reason

3.1 The full County Council must agree the 2005/06 revenue budget and set the council tax for 2005/06 at its meeting on 23 February 2005. 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.

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

· robustness of the estimates for 2005/06

· adequacy of the financial reserves in the budget.

3.3 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

4. Other options considered and rejected

4.1 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.

5. Conflicts of interest declared by the decision maker or a member or officer consulted

5.1 Not applicable.

6. Dispensation granted by the Standards Committee

6.1 Not applicable.

7. Reason for the matter being dealt with if urgent

7.1 Not applicable.

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

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

Councillor T K Thornber

Contact: Jon Pittam, ext 7400, e-mail: [email protected]

8. Summary

8.1 The accompanying report sets out for approval the proposed capital programme for 2005/06 to 2008/09, based on the guidelines agreed by Cabinet on 13 December 2004 and the support for capital schemes recently announced by the Government. The proposals take account of the County Council's capital strategy and the Prudential Code for Capital Finance in Local Authorities including the capital financing position, the level of debt outstanding and the consequences for the revenue budget and council tax.

8.2 The following decisions are sought, based on the recommendations of the Leader and Cabinet to the County Council for the capital programme for 2005/06 to 2008/09:

1 That the Environment capital scheme for Safer Routes to Schools be controlled on an accrued expenditure basis, with effect from 2004/05 (paragraph 5.4 of the main report).

2 That it be a recommendation to Council that:

i) £1.85m be added to the Education capital programme for 2004/05 to provide a new Chiltern Primary School in Basingstoke (paragraph 4.8)

ii) that additional unsupported borrowing of £1.805m be used in 2005/06 and 2006/07 to finance most of the cost of the new Chiltern Primary School, to be repaid from the sale of the former Worting infant school site (paragraph 4.9)

iii) that additional unsupported borrowing of £2.857m be used in 2005/06 and 2006/07 to finance part of the cost of the scheme to provide sports facilities at Crestwood Community School, Eastleigh, which is included in the proposed capital programme for Education for 2005/06, to be repaid from the sale of excess site area at the school (paragraph 4.10)

iv) that £4.9m be added to the Policy and Resources capital programme for 2004/05 for the purchase of a site at Mount Hospital, Bishopstoke and to cover holding costs prior to its disposal for redevelopment, subject to the executive member for Policy and Resources approving the purchase (paragraph 6.8)

v) that additional unsupported borrowing of £4.45m be used in 2005/06 and 2006/07 to finance part of the cost of the Mount Hospital site, with the initial payment of £0.45m being met from the provision in the 2004/05 capital programme for advance and advantageous land purchases (paragraph 6.8)

vi) that the executive member for Social Care be asked to report to a future meeting of Cabinet on the proposed programme for Social Services including the overall use of future capital receipts made available to Social Services to cover:

· £1.32m for Social Services' contribution towards the cost of the improvements already made to residential homes for older people

· £0.375m for the replacement day centre for older people in the Hythe and Dibden area

· £1.7m for the shortfall on the SWIFT social care IT system (paragraph 8.3)

vii) that the requests from the executive member for Social Services to use unsupported borrowing be deferred pending the report referred to in recommendation vi) (paragraph 8.4)

viii) that Cabinet be authorised to determine any further use of unsupported borrowing within the County Council's agreed prudential framework for capital finance

ix) the capital programme for 2005/06 be approved as set out in Appendix 3 of the accompanying report and subject to the conditions set out in section B.3 of the County Council's Financial Procedures and, where appropriate, to the approval of the Executive Member for Policy and Resources to the proposed re-use of capital receipts

x) the capital programmes for 2006/07 to 2008/09 be approved as set out in Appendix 3 for the purpose of undertaking design work (including the preparation of feasibility and design project appraisals)

xi) expenditure on preliminary design and planning work for major transport schemes be permitted when they have achieved a place in the County Council's Local Transport Plan, subject to the cost being met within existing Government allocations

xii) authority be given to incur expenditure on land purchases as follows:

(a) up to the sum specified in respect of sites still required for the schemes included in the capital programme for the period 2005/06 to 2008/09 provided that the relevant scheme has been the subject of a feasibility or design project appraisal approved by the relevant executive member

(b) up to the amount included in the 2005/06 programme in respect of advance and advantageous land purchases.

9. Reason

9.1 The full County Council must agree the capital programme for 2005/06 to 2008/09 at its meeting on 23 February 2005. The Leader will present his budget speech and recommendations at that meeting, including proposals for the capital programme. This report provides the background to the capital programme and proposes the recommendations from the Leader and Cabinet to the County Council.-

9.2 These decisions support all the aims of the corporate strategy as the capital programme provides 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.

10. Other options considered and rejected

10.1 Other options are not available as far as process and timetable are concerned, but the leaders of the opposition parties may wish to present their own recommendations on the capital programme to the County Council as amendments to these proposals.

11. Conflicts of interest declared by the decision maker or a member or officer consulted

11.1 Not applicable.

12. Dispensation granted by the Standards Committee

12.1 Not applicable.

13. Reason for the matter being dealt with if urgent

13.1 Not applicable.

Approved by: Date:

Councillor T K Thornber, C.B.E

Contact: Jon Pittam, ext 7400

14. Summary

14.1 This report summarises the progress of the Inquiry into Local Government Funding led by Sir Michael Lyons and suggests a response to the Inquiry's request for views. It also reports on a recent paper published by the Local Government Association (LGA) setting out in more detail how its proposals for a combination of local taxes might work in practice.

14.2 The following decisions are sought:

1 That the County Treasurer, in consultation with the Leader, be authorised to submit a written response to the Lyons Inquiry as set out in this report.

2 That the County Treasurer, in consultation with the Leader, be authorised to submit a written response to the Local Government Association on its latest proposals for a combination of local taxes as set out in this report, and that this response be copied to the Lyons Inquiry.

15. Reason

15.1 The County Council needs to influence the LGA's thinking on the balance of funding review and the outcome of the Lyons Inquiry.

15.2 This decision supports all the Aims of the Council's corporate strategy as the funding of local government 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.

16. Other options considered and rejected:

16.1 Not applicable

17. Conflicts of interest declared by the decision maker or a member or officer consulted

17.1 Not applicable.

18. Dispensation granted by the Standards Committee

18.1 Not applicable.

19. Reason(s) for the matter being dealt with if urgent

19.1 Not applicable.

Approved by: ................................... ... Date: .........................

Councillor T K Thornber

Contact: Jon Pittam, ext 7400, e-mail: [email protected]

20. Summary

20.1 The Office of the Deputy Prime Minister published a consultation paper on 15 December 2004 on Government plans to introduce three-year revenue and capital settlements for local authorities in 2006/07. The consultation period ends on 11 March 2005. This report summaries the Government's proposals.

20.2 The following decision is sought:

That the County Treasurer in consultation with the Leader, be authorised to submit a written response to the Office of the Deputy Prime Minister on behalf of the County Council to the proposals for three-year settlements as set out in this report and in Appendix 1 in response to the questions raised by the Government in the consultation paper.

21. Reason

21.1 The County Council needs to influence the Government's proposals for three-year financial settlements.

21.2 This decision supports all the Aims of the Council's corporate strategy as the Government's financial settlement 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.

22. Other options considered and rejected:

22.1 Not applicable

23. Conflicts of interest declared by the decision maker or a member or officer consulted

23.1 Not applicable.

24. Dispensation granted by the Standards Committee

24.1 Not applicable.

25. Reason(s) for the matter being dealt with if urgent

25.1 Not applicable.

Approved by: ................................... ... Date: .........................

Councillor T K Thornber

Contact: Paul Carey-Kent, ext 7525

26. Summary

26.1 The details of the Government's efficiency framework for 2005/06 - 2007/08 have now been received. There are elements which either remain unclear or are stated to be subject to further work by the Government. However, achievement of targets does not appear quite as implausible as it would have been based on the original consultation proposals. Further work will be required to assess the extent to which the Council's 2004/05 record and 2005/06 budget plan will yield prospects for achieving of targets.

26.2 The following decisions are sought:

· that calculations of the requirements on the County Council to generate efficiency improvements be reported to the Cabinet on 21 March 2005

· that a draft efficiency plan for the County Council be considered by the Cabinet on 21 March and by the Policy & Resources Scrutiny & Select Committee on 7 April 2005

· that the plan be finalised by the County Treasurer and Chief Executive in the light of comments made at those meetings for submission by 15 April 2005.

27. Reason

27.1 In order to meet Government requirements.

28. Other options considered and rejected

28.1 Not applicable.

29. Conflicts of interest declared by the decision maker or a member or officer consulted

29.1 Not applicable.

30. Dispensation granted by the Standards Committee

30.1 Not applicable.

31. Reason for the matter being dealt with if urgent

31.1 Not applicable.

Approved by: Date:

Councillor T K Thornber