Appendix 1

Hampshire County Council

Capital Strategy 2005

1 Introduction

1.1 This Capital Strategy has been approved by the County Council and the Corporate Management Team. It brings together the Council's key policies for managing all its capital assets, including land, buildings and roads, by:

· focusing attention on the most effective and efficient use of the Council's capital assets

· linking directly to the key aims in the Council's Corporate Strategy and to the Community Strategy

· improving the management and use of capital assets alongside the Council's policy and service objectives

· providing the strategy for the preparation of the Council's corporate asset management plan (AMP) and capital programme, and for reviews in the Corporate Review Programme.

1.2 Core data on the background to the County Council's Capital Strategy are attached as Annex 1.

2 The Vision and Priorities for Hampshire, Community and Corporate Strategies

2.1 The Capital Strategy has been prepared within:

· the Council's Vision

· the Corporate Strategy, and

· the developing Community Strategies.

2.2 The County Council is working with the eleven Hampshire Local Strategic Partnerships (LSPs), which include district councils, to develop community strategies for each district. In addition, a county-level Hampshire Strategic Partnership has been established and a Community Strategy for Hampshire has been published which is complementary to the district strategies. The priorities identified at the county level, along with those from district LSPs, are reflected in the Capital Strategy.

2.3 The key themes identified by the Hampshire Strategic Partnership are:

· safe and strong communities

· health and well-being

· economic prosperity and life-long learning

· environment, infrastructure and transport.

2.4 The Corporate Strategy translates the Vision into action, moving the Council from its present position to where it and the community wants to be. There are six key aims which provide the focus for all the Council's activities:

· maximising life opportunities

· stewardship of the environment

· achieving economic prosperity

· building strong and safe communities

· improving services

· developing councillors and staff.

2.5 The six key aims have implications for the Council's capital assets. Schemes are not included in the capital programme unless they contribute to meeting one or more of the six aims. For example, during the current financial year, the Council will:

· continue the Enhance project to provide 500 nursing care beds by the autumn of 2006

· start work on the replacement of John Hunt of Everest Community School in Basingstoke in an area of relative deprivation on a new development site, providing much improved facilities for pupils and the local community

· undertake major condition repairs at over 100 service units ranging from resurfacing playgrounds to major structural repairs of timber-framed buildings

· start work on the new £6.5m Winchester Cultural Centre, funded partly by offsetting capital receipts

· begin initial work to remodel and refurbish the Ashburton Court buildings at the Council's headquarters which are reaching the end of their economic life. The project will be financed from reduced office costs elsewhere, including rentals, as well as lower future repair and maintenance liabilities. Capital receipts from other land disposals will also be used so that no additional costs will fall on the council tax. Initial work will be funded by unsupported borrowing

· invest in over 80 local transport schemes to improve safety, traffic management and use by cyclists and pedestrians.

2.6 The Capital Strategy takes account of the context of the current Local Public Service Agreement (PSA) with the Government, covering the period from 2002/03 to 2004/05. The additional capital investment required by the Local PSA, financed in part by unsupported borrowing approvals, has been included in the capital programme. Discussions have been held on the development of a second generation Local PSA which will run from 2005/06 to 2007/08. The priorities and targets from this agreement will be reflected in the Capital Strategy in the future, as will the recently announced Local Area Agreement.

3 Framework for managing assets and the capital programme

3.1 The County Council approves the Capital Strategy, the corporate AMP and capital programme following consideration by the Cabinet. All these documents are subject to scrutiny by the Council's policy review committees. Responsibility for asset management within the Cabinet is allocated to the Executive Member for Policy and Resources.

3.2 At officer level, the Asset Management Group provides a corporate approach to asset management. The Group is responsible for preparing the Council's Capital Strategy and corporate AMP. It is led by the Director of Property, Business and Regulatory Services (PBRS) and the County Treasurer, and reports to the Corporate Management Team. The Group includes senior representatives of service departments, as well as officers responsible for preparing the Council's Community Strategy to make sure that all the strategies are fully integrated.

3.3 The Director of PBRS manages and monitors the implementation of the capital programme for building works, together with service chief officers, in line with the Council's financial regulations, standing orders on contracts and the conditions agreed by the Council when the capital programme is approved. Project appraisals are prepared for major schemes at feasibility and design stages, before contracts are let. Regular reports monitoring the capital programme are considered by the Executive Member for each service. The overall progress on implementing the programme, including the resources to finance it, is reported to the Corporate Management Team and the Executive Member for Policy and Resources.

3.4 Chief officers responsible for individual capital schemes work with colleagues from other services and disciplines to maximise the benefit for all services from capital investment. The involvement of other departments is a key part of the project appraisal process for capital schemes. This makes sure that solutions that cut across the boundaries between services are identified at an early stage.

4 Existing strategies on capital matters

4.1 The County Council's approach to managing its assets and planning the capital programme recognises the corporate and integrated nature of asset management, with a framework based on a `corporate landlord'. The Executive Member for Policy and Resources is responsible as landlord for the Council's land and buildings. Users and occupants similarly have responsibilities as `tenants'. The Capital Strategy builds on this existing platform to provide high quality and effective assets, in support of the delivery of services, that are safe and fully accessible for all users and the public.

4.2 The Council considers that maintaining its existing assets is very important. Under its Strategy for the Built Estate, the Council identifies properties for which there is a long-term need and then invests in their maintenance to make sure they are maintained to appropriate standards. Planned programmes are then carried out to maintain their condition and deal with outstanding maintenance liabilities. Budgets for all the Council's repairs and maintenance of buildings, both capital and revenue, are controlled centrally as part of the Strategy. All community schools and an increasing number of foundation schools buy-back a comprehensive revenue property management service through a service level agreement. A particular issue at present is the repair and refurbishment of system-built buildings which are nearing the end of their life. Having completed a 10 year programme to replace the heating systems, the Council has approved a medium-term strategy for re-cladding, re-roofing and structural repairs to the earliest marks of these buildings. A planned approach is also adopted for the structural maintenance of highways assets.

4.3 The Council has clear objectives for holding land and property and these provide the context for a rolling programme of property reviews. This systematic review started six years ago and has been completed and reported for all services. It has identified opportunities for the re-use or disposal of surplus properties, rationalisations and issues regarding the suitability of premises for future service delivery. Sale proceeds are reinvested in the core building stock or other corporate priorities. The Council continues to give incentives to services to encourage them to recycle assets by allowing them to retain part of the proceeds for reinvestment. This makes sure that assets are suitable for their purpose, meet corporate and service objectives and are used efficiently and effectively.

5 Service plans

5.1 The strategic approaches adopted within each of the Council's service areas for capital investment and asset management are derived from the Council's Corporate Strategy and this Capital Strategy. The level of investment planned over the next four years for the main service areas is summarised in Annex 1.

5.2 An education AMP has been prepared as required by the Department for Education and Skills, working closely with schools and governing bodies under the Council's Management Partnership arrangements. The key aims are to:

· Contribute to raising educational standards, including new provision for early years education with private and voluntary sector partners.

· Optimise the use of capital and other financial resources.

· Reflect the current and anticipated future needs of the curriculum.

· Underpin the County Council's strategy for the maintenance, repair and improvement of school buildings.

· Address the capital funding implications of falling school rolls.

5.3 The first full local transport plan was forwarded to the Government in July 2000. The main thrust of the plan tackles the following key transport policy concerns:

· Maintaining the transport network, dealing with essential repairs and making the network safe and efficient for all users.

· Reducing dependence on the private car and encouraging alternative modes of transport such as cycling, walking and public transport.

· Implementing the first element of South Hampshire Rapid Transit (SHRT) between Fareham-Gosport-Portsmouth to address the severe transport problems and development pressures in southern Hampshire. This scheme is currently under review following the Government's decision not to increase its level of support. A final decision on whether to progress the scheme is required by the end of July 2005.

5.4 A new local transport plan for 2006 to 2011 will be submitted to the Government by 29 July 2005.

5.5 The priorities for the Council's social services assets are:

· Making sure that all facilities comply with the requirements of the Care Standards Act 2000.

· Using the Council as lead agency to assist the development of supported housing with district councils, in pursuit of the `Supporting People' objectives of independent living and social inclusion.

· Modernising services for people with learning disabilities in line with the objectives of the White Paper `Valuing People'.

· Meeting the requirements of health and safety, disability discrimination, equality and other legislation.

· Developing an integrated community equipment service.

· Providing 500 nursing care beds in new homes and extensions to existing care homes which will also be refurbished.

5.6 Other significant schemes include:

· Provision of infrastructure for the County Council's development land at North Popley, which will be financed by capital receipts released by the development.

· Remodelling and refurbishing the Council's headquarters, as described in paragraph 2.5, including the use of capital receipts from North Popley.

6 Cross service plans

6.1 Equally important are county-wide strategies including:

· The County Structure Plan and the emerging South East Plan, which identifies areas of significant growth in new housing over the next ten years. Schools, transport and community facilities will be needed and included in future capital programmes and bids. Substantial levels of additional resources will be required.

· The Corporate Sustainable Development Strategy, which promotes policies and actions to achieve sustainable development. Agenda 21 principles underpin the Council's actions and services, including capital investment. In addition, the regeneration of older urban areas and country towns supports the Council's policies for long-term land use and travel, improving the quality of life in those areas.

· The Corporate Water Action Plan. The Council adopts the best practice in the effective and efficient use of energy and water in its own properties.

· The Corporate Equalities Plan and Race Equalities Scheme, including access to services and facilities.

· The Council's e-government strategy for delivering local government online across all of its services.

· The office accommodation strategy, which makes sure that all offices are fully used.

· The land disposal strategy, investing in roads and other infrastructure where these advance works will maximise returns. The Council also retains control over developments through the quality of the design and the use of planning policies to fulfil its environmental stewardship aims.

7 Links to the Performance Plan

7.1 The County Council's programme of reviews is set out in the Performance Plan. This programme has been revised from 2005/06 to incorporate all strategic review activity across the Council and to present it according to the categories identified in the Office of the Deputy Prime Minister's Efficiency Technical Note. The Corporate Management Team and departmental managers are informed by the Capital Strategy in determining whether capital issues feature in reviews. Relevant outcomes from reviews are fed back to the Capital Strategy and the capital programme, along with recommendations from audit and other independent inspections.

7.2 In meeting its targets under the Gershon efficiency agenda, the Council has reviewed its capital plans in identifying the potential for efficiencies. The scope for ongoing efficiencies in procurement of capital schemes is covered below in section 12.

8 Working with partners

8.1 The County Council works closely with all partner organisations on service matters that affect capital issues. These include district councils, neighbouring local authorities, the police and fire authorities, school governing bodies, the diocese, community and voluntary bodies, the health service, the lottery boards, national organisations such as Sport England, as well as the business sector including developers.

8.2 The joint working with district councils and others to develop and implement the Community Strategy reinforces the wide range of existing partnership arrangements concerning capital schemes. The Council's close links with district councils and the neighbouring unitary authorities in Portsmouth and Southampton include the provision of community and leisure facilities in schools, local area transport strategies, a joint office strategy, the regeneration of older urban areas, integrated waste management facilities, coast protection, museums, special needs housing, community safety and disability discrimination. All involve capital investment or the use of assets. As an example of community planning in practice, the relocation of a secondary school in Basingstoke, the John Hunt of Everest Community School, is being implemented in close co-operation with the local district council to make the redevelopment of the area of North Popley more viable, sustainable and inclusive, as well as providing extra housing to meet Structure Plan targets. The concept of Discovery Centres has been developed with partners and is now being implemented to provide library services, adult learning and community use in one building, leading to wider service use of existing assets for longer hours.

8.3 The partnership between the Council's social services and the health service over the use of assets is long established. Current examples include:

· The joint initiative to provide 500 new nursing care beds by 2006.

· Commissioning a jointly-managed residential facility for children with severe disabilities in Basingstoke.

· Development of information systems to support joint mental health services across Hampshire.

· Entering into a lease for the joint occupation of office premises provided by a Local Improvement Finance Trust (LIFT).

· Development of an integrated community equipment service.

· The establishment of joint mental health and learning disability team bases.

8.4 The voluntary and community sector continues to play a key role in many of the Council's capital projects. The One Compact for Hampshire, developed with voluntary and community bodies, sets a protocol for joint working and includes other statutory bodies such as the Primary Care Trusts and district councils. Examples of the voluntary sector's involvement include community and leisure facilities, village halls, local transport and social services facilities. The Council is also working with voluntary and private sector partners to provide early years education.

8.5 The Council is developing new partnerships with industry, including the use of longer-term contracts. It will also continue to work closely with specialist suppliers and contractors. The Quality Partnerships with bus, rail and freight operators are improving public and freight transport in the County. The Council also plays a leading role in the Hampshire Economic Partnership, which brings together local government, central government and training organisations to promote key economic development.

8.6 One of the most important partnerships is with central Government itself, and many of the Council's capital schemes result from close working with Whitehall departments and the Government Office for the South East (GOSE), as well as the European Union.

9 Consultation with the public and partners

9.1 The County Council consults widely with the public, its partner organisations, the business community, the voluntary sector and the Council's staff as part of the process of developing the Performance Plan and Community Strategy. This includes focus groups, opinion surveys, Citizens' Panel, response cards enclosed with the Performance Plan and the Council's magazine for the public, `Hampshire Now'. The Council also consults residents' groups, trade unions and the business sector about the budget, including the capital programme. Following discussions with representatives of the business community in July 2001, it was agreed that the key objectives in the business plans of the Chambers of Commerce should be matched with the Council's key aims in its Corporate Strategy. The priorities for business are skills, employment, transport, infrastructure, housing and the constraints of planning on enterprise. The Chambers confirmed their involvement in consultation on area transport plans and via the Hampshire Economic Partnership.

9.2 An important part of the Council's consultation processes are the extensive and innovative discussions held at the planning and feasibility stage of each capital proposal with all partners and stakeholders. From these detailed, ground-level consultations, and from those on service plans, vital and practical information is drawn together to build up the Capital Strategy, supplementing the more broadly-based `top-down' consultations.

9.3 All these consultation processes are ongoing. The Council will continue to analyse the results and they will influence the content of both the Community Strategy and future capital strategies.

10 The capital programme

10.1 The County Council prepares and publishes a rolling four-year capital programme within limits set by Government borrowing approvals and the Council's assessment of available local resources and the revenue implications of the proposed programme. The Council uses the later years of the programme to plan and prepare schemes. This includes work on design, land acquisition, and obtaining planning approvals and Government support.

10.2 The Council has refined its techniques for assessing priorities between schemes, evaluating options for capital investment that make the best use of its assets in terms of the benefits for services and financial returns. All schemes are developed to meet needs identified in the Capital Strategy and corporate AMP process, and must contribute to meeting the Council's key aims set out in the Corporate Strategy. If necessary, the Council top-slices resources to protect essential parts of the capital programme. Final judgement on political priorities, in the light of public consultation, are made by the County Council. This process has been applied to all schemes in the current programme as well as those currently being considered for inclusion. Full details of the process for assessing priorities are set out in the corporate AMP.

10.3 Linked to the four-year capital programme, the Council has incorporated the key financial elements of the Capital Strategy in its Financial Management Policy. It has also revised its financial control procedures, including the project appraisals and progress monitoring. This makes sure that the need for each scheme and its links to the Corporate Strategy and Best Value are fully considered by members of the Council before approval is given.

10.4 The Council's existing capital assets are reviewed during the preparation of the corporate AMP to see if they are still appropriate and give value for money, taking account of the investment necessary to maintain those assets.

11 Resources for capital

11.1 In the context of its financial strategy, the County Council will continue to use in full the borrowing approvals for which the Government provides grant support. In addition, the Council will maximise the use of capital resources from other bodies, provided that the proposed schemes are compatible with the overall Capital Strategy. This will include submitting bids to central Government, the European Union, health authorities and the National Lottery. The Council will encourage partner organisations to reflect their involvement in capital schemes by contributing to the costs, where appropriate.

11.2 The Council will continue to make full use of its own resources to finance the capital programme, primarily from capital receipts and by using revenue finance mainly for capital repairs and structural highway maintenance, within the context of its overall financial strategy. The rolling programme of land reviews will continue to identify land and buildings no longer required which can be sold to provide resources for reinvestment. Where appropriate, the Council will `invest to save', especially in new IT technology. Following the Government's reforms of its capital control system to allow additional borrowing within prudential limits, the Council will use such loans for suitable invest-to-save and in/out projects, subject to appropriate business cases and revenue costs being contained within cash limits.

11.3 As part of its culture of partnership, the Council works closely with other organisations to maximise benefits from their capital investment. This includes joint transport investment by the Highways Agency, bus companies and the Strategic Rail Authority. For example, the Council is improving the infrastructure for the A3 road, in conjunction with Portsmouth City Council and a bus company, to provide new buses and services for the route. The joint schemes listed in paragraph 8.3 reflect the close working of health authorities and social services.

11.4 The County Council will be looking for substantial additional resources from the Government over the next ten years to help provide the facilities required for the significant growth in new housing in the Hampshire County Structure Plan for 2001 to 2011 and the emerging South East Plan.

12 Procurement

12.1 The Council will consider all methods of procuring and financing its capital programme. It will adopt a public-private partnership (PPP) approach, including the private finance initiative (PFI), if this can be shown to be the best value for money and consistent with the Capital Strategy. This is more likely to be the case for larger schemes with an income stream, such as the South Hampshire Rapid Transit scheme if it proceeds.

12.2 The Council has continued to develop its procurement strategy in line with the Government's policy set out in the National Procurement Strategy for Local Government. The Council is leading on the construction workstream for the South East Centre of Excellence. Following successful development of framework arrangements for procurement of major capital programmes, over £110m has been procured through the frameworks to date. The Hampshire Procurement Model is being developed further through:

· frameworks for packages/minor works

· arrangements for planned and reactive work

· renewal and improvement of term engineering contracts

· specialist arrangements for work such as asbestos removal.

12.3 Evidence of greater efficiency in construction procurement is demonstrated through a set of performance indicators which capture data on the underlying trends as shown in the following table.

Performance indicator	2003/04	2004/05	Difference	Improvement
Contractor performance	65.0	73.6	8.6	13%
Supply chain performance	55.5	69.6	14.1	25%
Health and safety management	61.0	75.0	14.0	23%
Quality achieved	74.0	73.6	-0.4	0%
Customer satisfaction	73.5	79.1	5.6	8%
On time	64.5	71.6	7.1	11%
On budget	76.0	87.8	11.8	16%
Avoidance of claims/disputes	66.2	73.6	7.5	11%
Average results/improvement	67.0	75.5	8.5	13%

12.4 In addition, a recent analysis of 30 benchmark projects has shown a 9% saving in professional time for best value procurement as compared with project won through lowest price competition.

12.5 Looking forward, the intention is to extend the `Hampshire' procurement template, based on the principle of aggregation through longer term partnerships with the industry, to around 70% of overall activity over a two-year development period. Greater efficiency will be generated through increased early contractor involvement linked to a process of continuous improvement across all services. The Council is beginning to work with the Office of Government Commerce to develop a framework for this work.

12.6 In leading the Building Workstream for the South East Centre of Excellence, long term efficiencies should accrue through this work, in particular:

· collaborative frameworks across councils

· establishing and sharing good practice across councils

· alignment of supplier capacity with long-term regional and sub-regional demand

· common processes and procedures to minimize progressive costs and maximise the benefits of greater standardisation.

12.7 Major supply chains are vital to the success of capital projects, as most of the physical work on site is undertaken by them. On many `Hampshire' schemes such as Enhance, as well as involving the Major Framework Contractors with design development work, key supply chains have been appointed early in the design process. Integrated teams are then formed who deliver:

· better design co-ordination - fewer changes during construction (improved cost predictability)

· more effective programming and planning (time saved)

· added value (improved product)

· simplified processes (time saved)

· improved management through better understanding (more effective risk management).

12.8 In supporting the Kyoto accord, the Council has additionally pledged support for a reduction in carbon emissions. The Council also signed up to Aalborg Commitments in 2004, which unites the Council with European local governments in a campaign to achieve European Sustainable Cities and Towns.

12.9 Sustainability proposals for the built estate in 2005/06 to support the UK climate change agenda include:

· identifying those buildings with low environmental credentials

· working with schools that currently show a pattern of high energy use and developing a programme of energy efficiency measures

· monitoring water consumption and identifying water conservation measures

· implementing, on a trial basis, the Building Research Establishment's `Smart Waste' system to selected major capital projects

· working with BREEAM, a new Environmental Assessment Method, for designing and managing new school buildings.

13 Performance measurement

13.1 The Council has adopted the national performance indicators (PIs) for property published by the Government in March 2001. The results for these PIs have been calculated for the third year and published in the corporate AMP during 2004. In addition, the County Council has continued to publish the results for its own local property PIs, which include user satisfaction, contractor performance, energy and water use, asset performance and, as described in section 11, procurement. These local PIs are used in conjunction with the national PIs for benchmarking with other providers. This includes the Egan construction indicators and use of the National Best Value Benchmarking Scheme. The local performance framework has been reviewed for 2004/05 and beyond, with new performance targets established. PI information continues to be shared with SECAMP, the South East County Asset Management Plan network, enabling comparisons to be made with other county councils in the South East. Specialist consultants are commissioned as appropriate to undertake benchmarking exercises prior to letting contracts.

13.2 The results for all property PIs are reported regularly to members, service managers and partners as appropriate. Once completed and in operation, capital schemes are evaluated with users and lessons fed back to the preparation of future schemes. The Council's financial and business systems are currently being replaced in a major capital investment known as the Enterprise Project. The construction procurement system was replaced during 2004 and work has recently started on the next phase to integrate the Council's building and land information. Social services' core systems have also been replaced by the SWIFT system in a £5.2m project. This conforms to the Department of Health's `Information for Social Care' specification and will assist with the achievement of Local PSA targets. The integrated new systems will improve the collection and dissemination of performance management information. SWIFT will also provide the basic building block for an Integrated Children's System, as required by the Department for Education and Skills and permission to extend the contract with the system's supplier to achieve this is now being sought.

Annex 1

Capital Strategy - Core Data

1 Revenue budget 2005/06

	£m
Gross revenue budget	1,415
Net budget after income and specific grants	1,130
Budget requirement	1,108

2 Assets

	Number	Gross Floor	Value
		Area (GIA)	31 Mar 2004
		sq m	£m
Operational assets
Schools	537	1,251,000	1,640
Libraries	53	35,000	57
Residential homes and day centres	97	89,000	93
Offices and administrative buildings	82	83,000	37
Museums and art galleries	27	33,000	26
Other land and buildings	77	50,000	99
	-------------	-------------	--------
Land and buildings	873	1,541,000	1,952
Vehicles, plants and equipment	-	-	59
Infrastructure - roads and bridges	-	-	238
Community assets - parks etc	37	36,000	10
	-------------	-------------	--------
	910	1,577,000	2,259
Non-operational assets	69	183,000	64
Work in progress	-	-	79
	-------------	-------------	--------
Totals	979	1,760,000	2,402
	-------------	-------------	--------

3 Maintenance liabilities - land and buildings

	Total	Priority levels
	Cost	1	2	3	4
		Urgent	Essential	Desirable	Long-term
		to prevent	within	in	beyond
		closure	2 years	3-5 years	5 years
	£m	£m	£m	£m	£m
Education	253	-	101	85	67
Libraries	7	-	3	4	-
Social services	15	-	5	9	1
Offices	25	-	6	9	10
Other services	21	-	7	12	2
	----------	----------	----------	----------	----------
Total	321	-	122	119	80
	----------	----------	----------	----------	----------

Maintenance liabilities - roads and bridges

	£m
Roads	169		see note below
Footways	25
Highway drainage	67
Street lighting column replacement	50
Bridges	7
Road signs and markings	3
	--------
Total	321
	--------
This is an assessment of the amount that would need to be spent to eliminate the backlog of maintenance work that has reached critical `intervention' level of deterioration, ie, where failure to carry out maintenance works will result in disproportionate increases in future maintenance costs. The information used to make this assessment is based on local condition information and locally determined compound rates approximately two years ago. New methods for estimating the value of the assets and depreciation are being launched nationally this year. The new methods will then be used to recalculate the assessment to a national standard.

4 Capital programme

4.1 The County Council's four-year capital programme for 2005/06 to 2008/09 is summarised on the following page. Full details of the programme are published in the Council's Budget Book for 2005/06. The estimated capital payments on the programme and on schemes already in progress are also shown together with details of how the County Council expects to finance them.

Capital programme - value of schemes in 2005/06 to 2008/09
	2005/06	2006/07	2007/08	2008/09
	£m	£m	£m	£m
Schools	94.2	50.5	52.3	42.2
Local transport	39.9	37.3	37.3	37.3
Libraries, museums, arts, countryside, sport etc	8.5	0.8	0.8	0.8
Social services	1.7	1.1	0.8	0.8
Capital repairs of buildings funded from the
County Council's own resources	11.8	19.9	14.3	14.3
Regeneration of older urban areas, household
waste recycling centres and other schemes	5.9	5.1	5.1	5.1
Development land	13.7	-	-	5.0
	----------	----------	----------	----------
Total programme	175.7	114.7	110.6	105.5
	----------	----------	----------	----------
Capital payments and financing
	2005/06	2006/07	2007/08	2008/09
	£m	£m	£m	£m
Payments on the programmes for 2005/06 to
2008/09 and works in progress	191.6	163.1	127.0	121.2
	----------	----------	----------	----------
Financed by:
Loans	63.4	46.7	38.6	36.1
Capital receipts	20.5	22.2	6.8	6.5
Grants and contributions	69.6	54.1	49.9	46.2
Contributions from revenue and reserves	38.1	40.1	31.7	32.4
	----------	----------	----------	----------
Total financing	191.6	163.1	127.0	121.2
	----------	----------	----------	----------

5 Unsupported borrowing

5.1 The Government introduced a new prudential capital control system from April 2004 that allows local authorities to raise additional loans for capital purposes, unsupported by Government grant. The County Council has agreed that unsupported borrowing may be used to finance invest-to-save projects that generate ongoing savings to cover the additional costs of borrowing and reinvestment or in/out projects for which the replacement asset is required in advance of the capital receipt.

5.2 Schemes using unsupported borrowing that have been approved so far include:

· an accommodation unit at Calshot Activities Centre, to be repaid from additional income or lower spending

· provision for early years children with special needs at Nightingale Primary School, Eastleigh, to be repaid from the sale of part of the school site

· the replacement of the John Hunt of Everest Community School in Basingstoke and the development of land at North Popley, to be repaid from sale proceeds

· a new sports hall and associated facilities at Crestwood Community School in Eastleigh, to be repaid from the sale of part of the school site

· the amalgamation of infant and junior schools in the Buckskin area of Basingstoke to form Chiltern Primary School, to be repaid from the sale of the former infant school site

· investment in IT infrastructure, to be repaid from charges to IT Services' users.

5.3 Unsupported borrowing of £20m has also been used as part of the overall funding arrangements associated with the Enhance scheme to provide additional nursing care beds.

6 Hampshire - profile

6.1 Hampshire is a large county of 376,900 hectares with a mixture of significant urban and extensive rural areas. Although less than 10% of the county is urban, 77% of the population lives in urban areas, with another 10% living in rural towns.

6.2 Hampshire's population of 1,251,000 (mid 2003) ranks as the third largest for shire counties in England. The age-profile is similar to the national average.

6.3 Between 2001 and 2011, the population is forecast to grow by 3.3%, assuming that the number of dwellings built in the County is consistent with the Government's current Regional Planning Guidance. The population aged under 45 years is expected to decline by 3.5% during this period, while the population aged 45 and over is expected to increase by 13.1%, including a 38.6% increase in the population aged 85 and over. The number of households in Hampshire is forecast to increase by 8.6% between 2001 and 2011, almost three times the present increase in population.

6.4 Further details of Hampshire can be found in "A Profile of Hampshire" published by the County Council in May 2005.