Contact: Bevis Ingram, (01962) 84 7508; [email protected]

Stuart Dorward, (01962) 84 6110; [email protected]

1 Introduction

1.1 This report presents a brief update on the current financial situation for the Department in 2005/06 and proposes the approach to be taken to monitoring the revenue budget and capital programme in both financial and performance terms. It also outlines the key financial issues which are likely to impact in the course of the year.

1 Financial Position 2005/06

1.1 The revenue budget for Recreation and Heritage for 2005/06 exceeds £30m, and the breakdown of this is summarised in Appendix 1.

1.2 As part of the planned budget management strategy for 2004/05, £198,000 of capital expenditure was deferred, to enable a transfer of funds to support the revenue budget¹. As explained in the accompanying final accounts report, the need for this arose from the loss of income at libraries undergoing refurbishment and the need to invest in new stock for those libraries. This now needs to be "repaid" by a switch of £198,000 from revenue to capital in 2005/06.

1.3 Major changes in libraries will continue to have a significant impact on the revenue budget. Income and expenditure levels at libraries will be closely monitored, so that any necessary remedial action can be taken. This will be particularly significant when the temporary arrangements in Winchester come into force whilst the Cultural Centre is being developed. The 2005/06 budget has been adjusted to allow for the potential loss of income.

2.4 Other budgetary issues for the current financial year include:

· The 2004/05 underspending at Milestones Museum was partly due to the fact the financial year included two Easters. There is no Easter holiday period falling in the 2005/06 financial year and visitor numbers are expected to be lower than the 86,000 achieved last year. The under-spending last year has been earmarked as a contingency against the possible under-achievement of income in the current year and an adjustment will be made at revised budget stage if necessary.

· Any vacancy savings arising in the Museums Service will be used to create a development fund to meet the service's highest priority needs, in accordance with the recommendations in the museums review approved by the Executive Member in January 2005.

· The 2005/06 budget includes an allowance for running costs associated with the People's Network. Meeting the current National Library Service Standard on internet access in libraries would require significant further investment in additional IT equipment and workstations. The costs and benefits of this need to be evaluated before further investment is undertaken. It is hoped that a cost effective solution to enable this particular national standard to be met can be found.

· The Policy Fund has, in recent years funded major service development initiatives. In most instances the resources have now been moved to the relevant service budget. As a consequence, there is now much less scope for further service developments through the Policy Fund.

2 Progress against achieving savings targets, 2005/06

2.1 The 2005/06 base budget process required services to identify efficiencies which equated to 2.5% of the budget. These savings have been retained and redeployed by services. The concept of this was nothing new to Recreation and Heritage, as in recent years a significant percentage of the revenue budget has been re-deployed through the Policy Fund to support policy-led service developments.

2.2 The budget detailed savings totalling £730,000 for 2005/06. These were made up as follows

· Additional income in Libraries (VAT) £170,000

· Withheld policy fund allocations £102,000

· Efficiency targets across all services £150,000

· Other budget reductions across the service £308,000

2.3 The last two items (totalling £458,000) have been applied to service budgets and are reflected in the figures in appendix 1 of this report.

2.4 Service Managers have undertaken to ensure that these reductions will not impact on the level of service provided. In the short term pragmatic measures such as vacancy management will ensure the target is met. In the long term a series of efficiency projects is being undertaken to achieve savings in future years. These projects cover a number of areas including transport and travel, ICT, design and publications and income generation.

3 Proposed framework for budget monitoring reports

3.1 Budget monitoring reports feature regularly on the agenda for the Executive Member's Decision Day and for the Policy Review Committee. This has principally focussed on the revenue budget position as this accounts for the majority of the resources available to the Department. Monitoring reports also concentrated on the financial position, with few links to service delivery.

3.2 Part of the impetus for identifying the savings referred to in paragraph 3 above came from the national efficiency agenda. All local authorities, in common with the public sector generally, are being required to identify efficiency savings of at least 2.5% per annum for each of the next three years. The Audit Commission will be monitoring achievement against this target; one issue is the need to demonstrate that "efficiencies" have not been achieved at the expense of services quality (ie they are in effect a "cut" in service being badged as an efficiency). This will be monitored by reviewing what is being termed the "Quality Cross Check". This will involve reviewing a series of performance indicators to provide assurance that the achievement of financial efficiency targets has not had an adverse impact on services.

3.3 Some of these indicators are being prescribed by the Office of the Deputy Prime Minister (ODPM), but Local Authorities also have freedom to propose better indicators where these exist. It is therefore proposed that budget monitoring reports should in future include monitoring of non financial indicators of performance of the Recreation and Heritage service. This is generally consistent with accepted good practice as well as assisting with compliance with the requirements of the efficiency agenda. It is important that the performance indicators to be used are:

· Measurable

· Capable of regular up-dating (within existing resources)

· True indicators of service usage and quality (and already being collected and monitored)

· Representative of the Department's range of services

3.4 Ideally indicators should focus on service outcomes (eg user satisfaction). However, these are often hard to measure and even harder to monitor on an ongoing basis, therefore when this is not possible, checks that key inputs are being maintained are also useful as performance measures. The selected indicators must also balance usefulness against cost of collecting data and guard against creating an industry of measurement for measurement's sake.

3.5 A range of indicators will need to be selected that will broadly reflect the activities of the department. At this stage it is suggested that the following could be considered. Most of these already form the basis of annual reporting in the County Council's budget book or through the Performance Plan indicator process:

· Physical visits per 1000 population to libraries

· Library book stock

· Visits to/usage of museums per 1000 population

· Cubic metres of muniments held by Hampshire Record Office

· Percentage of total length of footpaths/rights of way easy to use by members of the public

· Number of places provided/occupied at Calshot and other Outdoor Centres

· Number of visitors to Arts Centres

3.6 Further work is being undertaken by the Recreation and Heritage Management Team in line with corporate requirements on performance monitoring.

4 Capital Programme 2005/06

4.1 The position on the 2005/06 capital programme was reported in March 2005 and the Executive Member approved a number of allocations within the programme limit for the year. This left £224,000 uncommitted. Since March work has been undertaken to identify other priorities for capital investment and the following projects are now recommended for inclusion in the programme:

Argoed Llwyd Fire Precautions (£25,000)

4.2 The Executive Member approved the project appraisal for the dining room extension at Argoed Llwyd in March. Since then a full fire safety survey of the building has identified the need for further work to improve fire precautions and evacuation routes. This work is best carried out in conjunction with the building of the extension.

Disability Discrimination Act Improvements (£50,000)

4.3 For the last two years a planned programme of work to improve access to Recreation and Heritage sites for disabled people has been jointly funded with Policy and Resources. A further programme of work has now been agreed for 2005/06

ICT Developments (£55,000)

4.4 The Department needs to undertake a considerable amount of work to improve its ability to transact business with customers electronically. There is a particular need to develop booking systems for Outdoor Centres and Country Parks to enable bookings via the internet. This is a key priority in the targets set by Government for electronic service delivery

Aldershot Museum (£21,000)

4.5 The Department has submitted a bid to the Heritage Lottery Fund for support with a project to provide new visitor facilities and interpretation in the Military Guard Room recently relocated to the museum site. This development will particularly emphasise the long association between the Gurkha community and Aldershot. If successful the Recreation and Heritage capital programme would need to contribute £21,000 towards the total project cost of £94,000

Ashcroft Arts Centre (£20,000)

4.6 A scheme has been developed to considerably improve facilities at the Ashcroft Arts Centre in Fareham. The total cost of the project is £100,000 and will be shared with partners. A contribution of £20,000 will be required from the Recreation and Heritage programme for 2005/06

4.7 These allocations would leave £53,000 uncommitted (see Appendix 2). It is suggested that this should be held as a contingency against possible cost increases.

Recommendations

That members support the following recommendations for the approval of the Executive Member:

1 The current financial situation is noted (paragraph 2).

2 The action taken to achieve the annual savings requirement is approved (paragraph 3).

3 That the transfer from revenue to capital of £198,000 for the library refurbishment programme be approved (paragraph 2.2).

4 The approach to monitoring the budget and performance outlined in this report is endorsed (paragraph 4).

5 The allocation of the capital programme be approved (paragraph 5)

Section 100 D - Local Government Act 1972 - background documents

The following documents discuss facts or matters on which this report, or an important part of it, is based and have been relied upon to a material extent in the preparation of this report.

NB the list excludes:

1. Published works.

2. Documents which disclose exempt or confidential information as defined in the Act.

None

APPENDIX 1

Recreation and Heritage Revenue Budget 2005/06

APPENDIX 2

Recreation and Heritage Capital Programme 2005/06