Contact: Jon Pittam, ext 7400

1. Summary

1.1 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.

1.2 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.

1.3 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.

2. Reason

2.1 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.

2.2 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.

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