Contact: Paul Carey-Kent, Ext 7525

1 Introduction

1.1 This committee has requested an input as early as possible in each accounting cycle into the Council's key financial decisions. In the case of the final accounts report, the reporting cycles required allow little scope for this committee to consider the paper before approval by Cabinet (as happened on 27 June), and the final accounts report is anyway primarily a matter of fact rather than policy. However:

(i) the Final Accounts will not be approved by the County Council until July 21 so there does remain time for this Committee members to feed into that process.

(ii) The report does incorporate issues relevant to future budget monitoring and planning, eg Appendix 8, which sets out progress made against the Council's Financial Management Policies. Any views in these issues could go to July 25 Cabinet and be taken forward as appropriate independent of the approval process for the final accounts.

1.2 There will be a further opportunity for this Committee to consider the issues involved in planning for the 2006/07 budget at its 12 September meeting, which will consider an update on the background factors prior to Cabinet setting its budget guidelines later in the year.

1.3 The following recommendations arising from the report on the final accounts were approved by Cabinet:

i. that the variations in service cash-limited expenditure, as set out in Table 1 be approved

ii. that the accounts for 2004/05 be closed on the basis that:

· Education, Environment and Policy and Resources retain 50% of their underspendings in accordance with the County Council's financial management policy

· Social Services carry forward its overspending of £0.5m to 2005/06, to be met from the contingency set aside for that purpose in its 2005/06 budget, also in accordance with the County Council's financial management policy

iii. that adjustments and variations on other budgets as set out in Table 3 be approved

iv. that the potential use of £900,000 from the underspending towards one-off priorities, as set out in Table 5, be approved, subject to further reports on the business case and value for money of each priority to the relevant Executive Member before commitment

v. that £4.2m to be added to balances, pending the outcome of the pay review and next year's grant settlement

vi. that contributions to and from earmarked reserves be made as set out in Appendix 4 and the draft protocol set out in Annex 2 to the Appendix be approved

vii. that the report on the County Council's treasury management activities as set out in Appendix 5 be approved

viii. that the prudential indicators set out in Appendix 6 be approved for submission to the County Council

ix. that the final accounts of the Hampshire Pension Fund as set out in Appendix 7 be approved and submitted to the County Council

x. that the final accounts of the County Council for 2004/05 be approved and submitted to the County Council

xi. that progress in implementing financial management policies as set out in Appendix 8 be noted

xii. that capital payments for the year be financed as set out in Table 3 of Appendix 9

xiii. that the carry forward of capital schemes from 2004/05 to 2005/06 as set out in Annex 2 of Appendix 9 be noted

xiv. that services capital programme cash limits for 2005/06 be increased by the sums shown in:

a) column 6 of the table in Annex 1 to Appendix 9 (to reflect the carry forward of capital schemes and of the balance of cash limits from 2004/05)

b) column 3 of the table in Annex 4 to Appendix 9 (to reflect services' share of capital receipts)