Archived decisions
Hampshire County Council Executive Member - Environment: South Hampshire and Resource Management 26 July 2005 Environment Business Case re 2005/06 Budget Redeployments Report of the Director of Environment and County Treasurer |
Item 7 |
Contact: Dave Wootton, ext 6931 email: [email protected]
1. Summary
1.1 During the 2005/06 budget process the following budget pressures were identified:
£'000
Highways Maintenance
Traffic Management Act 135
Asset Management 325
Bridge Inspections 60
Excess Inflation 583
Public Transport
Bus Subsidies 300
Planning and Development
Spatial Strategy 60
Management and Support
Special Projects Officer 35
Health and Safety Support 45
Other pressures 420
1963
1.2 The budget envisaged that these pressures would be funded by the following savings and improvements:
£'000
Highways Maintenance
Term Maintenance Contract efficiencies 300
Capitalisation of traffic management 452
Application of developers contributions 50
Transfer from structural maintenance 301
£'000
Public Transport
Review of bus subsidies 300
Planning and Development
Reduced contribution to New Forest Committee 5
Withdrawal of support to Danebury Trust 6
Reduction in Spatial Strategy events 17
Reduction in Minerals and Waste advertising 25
Reduction in Ecology SLAs 15
Waste Management
Savings in disposal of abandoned vehicles 150
School Crossing Patrols
Recruitment difficulties 25
Traffic Surveys
Fewer surveys 25
Management and Support
Additional income 70
Review of scheme design 66
Reduced communication 18
Delete IT Client post 30
Savings in IT hardware maintenance, etc 41
Savings in office expenses 67
1963
2. Progress to Date on "Pressures"
Traffic Management Act - £135,000
2.1 This increased spending results from a new legislative requirement. As a minimum, there will be a need for one-off costs of £75,000 during 2005/06 for IT systems development and training, with ongoing IT systems running costs of £30,000 per annum. An additional member of staff will also be required to provide support, including the input of highways works notices, at an estimated cost of £30,000 per annum. However, it is also intended to add additional coordinating responsibilities, equivalent to work for three additional full time equivalent staff members, to the workload of existing employees without additional expense, which is therefore an efficiency saving. The £105,000 has been set aside within the budget but remains unspent because the legislation and development by the IT system suppliers has not progressed as the Department for Transport envisaged. Progress is likely to be delayed until the end of the year. The appointment of the additional member of staff is similarly delayed and will probably cost £20,000 (including overheads) rather than £30,000. The improvement in performance will be in electronically registering more completely the County Council's own highway works to understand fully what is happening on the network as required by legislation.
Asset Management - £325,000
2.2 This increased spending is a result of a new legislative requirement. However, the more rigorous asset management planning approach should enable the County Council to demonstrate more clearly the impact of changes in the level of funding to the quality and serviceability of the highway network. Consultancy work is underway to identify gaps in the County Council's existing data capture and resource planning processes. However, it is estimated that additional one-off costs of £125,000 will need to be incurred on the required resource input, to produce the asset management plan, together with £150,000 to address any remaining inventory gaps. Ongoing costs of £50,000 in 2005/06 and 2006/07, falling to £25,000 in 2007/08 will be needed in connection with the continued updating of the new inventory system. A programme has been prepared to publish the Asset Management Plan early in 2006 and the £12,000 has been earmarked for resource, consultants and temporary staff to assist with the process. It is anticipated that the £150,000 for inventory collection will be fully required. As regards the £50,000 for ongoing running costs, it is thought that only 50% will be needed in 2005/06.
Bridge Inspections - £60,000
2.3 Bridge inspections are becoming more onerous to carry out to comply with nationally required standards. The results of inspection will provide the County Council with its 'bridge condition indicator', which will, in the future, be used as one of the criteria for the allocations of funding for bridge maintenance. An increase of £60,000 per annum to the bridge inspections budget (making the total £240,000 per annum) is required so that this work may be resourced at the necessary level. The benefits will be more consistent and objective inspections, better condition data and better prioritisation of maintenance. This improved data is already being collated and will lead to more focused inspections being undertaken.
Excess Highways Maintenance Inflation - £583,000
2.4 As part of the budget process an assessment of inflation was made in preparing the base budget for routine highways maintenance. A total inflation shortfall of £583,000 was identified reflecting increases of £356,000 from higher prices for street lighting energy and other contracts, compared with the corporate allocation for inflation, together with a shortfall of £227,000 relating to the adjustment made in the 2004/05 budget to transfer part of the inflation allocation to cover higher costs (eg increments) on management and support services, which has reduced highways maintenance works expenditure in real terms.
Bus Subsidies - £300,000
2.5 The budget process identified that on the basis of recent trends, it is possible that the cost of renewing contracts for supported bus services will increase by approximately 10%, creating a budget pressure of approximately £100,000 during 2005/06. In addition, it is very likely that further pressures will emerge from deregistration of existing commercial services. Although any additional contractual commitments for new services would be subject to an assessment of priorities within the public transport budget, this further pressure could be in the region of £200,000, making a total budget pressure of up to £300,000. The intention was to absorb this pressure by reprioritising support for non-commercial services.
Spatial Strategy - £60,000
2.6 A one-off financial contribution of £60,000 is expected to be required in 2005/06 towards further consultancy work in connection with the development and implementation of the South Hampshire and Western Corridor and Blackwater Valley sub-regional strategies, continuing the work programme agreed by the relevant cross-authority member steering groups. In particular, work on housing need (south Hampshire) and infrastructure testing are envisaged. The £60,000 has been set aside in the budget and it is expected that it will be fully utilised later in the year.
Special Projects Officer - £35,000
2.7 Currently there is reliance within the Environment Department upon a single member of staff to manage multiple business improvement projects simultaneously. There is currently a need to invest more resources in these types of projects across the department, including the management of various proposals for efficiency savings, if these projects are to be successfully implemented. The Special Projects Officer was appointed in June and funded within the £35,000 set aside. There will be a slight saving as the £35,000 allowed for an appointment from April.
Health and Safety Support - £45,000
2.8 An additional staff resource, at an estimated cost of £45,000 per annum, is required to provide support for strategic health and safety management. As the Environment Department is responsible for major operational activities and capital works, risks of non-compliance are significant. The grading of this post is currently being evaluated with the expectation that an appointment will be made shortly. There will be a saving as the £45,000 set aside was for a full 12 months.
Other Pressures - £420,000
2.9 The base budget strategy assumes that the cost of staff salary increments and other back office cost increases identified during the budget roll-forward process are absorbed. Additional expenditure of £420,000 has been identified and will need to be offset by equivalent efficiency savings or by the redeployment of resources within the base budget total.
3. Savings and Redeployment
3.1 The budget pressures identified in section 2 total £1.963 million and the following paragraphs set out how the budget strategy anticipated funding this sum and the progress in delivering the efficiencies and savings.
Term Maintenance Efficiencies - £300,000
3.2 Throughput via the Term Maintenance Contract in 2004/05 was £32.4 million and will deliver the 1% discount generating a saving of £324,000 in 2005/06.
Traffic Management Schemes Capitalisation -£452,000
3.3 These schemes, formerly funded from revenue, will be charged to this year's integrated transport capital programme. The 2005/06 capital programme approved in January reflects this change in the funding arrangements for this work.
Developers' Contribution Income - £50,000
3.4 An investigation of all legal agreements held between developers and the County Council has identified a number of commuted sums that are held for future highways maintenance purposes. Subject to the use of the contribution complying with the conditions in the various legal agreements, approximately £50,000 of this funding could be released each year to supplement the budget for highways maintenance. The commuted sums are generally provided to meet the additional revenue costs of new highway works and this practice is expected to continue in the future. It is therefore fully justified that they should be used for this purpose and income of £50,000 from this source has been included in the approved 2005/06 highways maintenance programme.
Transfer from Structural Maintenance
3.5 The total pressures identified on highways maintenance are:
£k
Traffic Management Act 135
Asset Management 325
Bridges 60
Excess Inflation 583
1103
Less: Term Maintenance Contract Discount 300
Traffic Management Schemes 452
Developers' Contributions 50
Balance 301
3.6 The balance of £301,000 has been transferred from the locally resourced capital provision for highways structural maintenance to ensure activities, such as grass-cutting, traffic signals maintenance and white lining, are funded in accordance with current policies and contractual commitments.
Review of Bus Subsidies - £300,000
3.7 The present budget pressures can be summarised as follows:
£ per year £ in 2005/06
(part year)
Renewal of Gosport and Fareham £108,000 £ 73,000
tendered services, with minor cuts
Renewal of Andover area tendered £ 14,000 £ 11,000
services
Renewal of Basingstoke area tendered £ 14,000 £ 11,000
services
Deregistrations of commercial services £160,000 £133,000
which justify subsidy
Pressure from commercial services £ 51,000 £ 51,000
deregistered in 2004/05
Total £347,000 £279,000
3.8 Action is proposed to withdraw support from those services which no longer satisfy the existing policy of a maximum subsidy per passenger journey of £2.50. The implementation of these changes is sufficient to meet the full year impact of the budget pressures but because they will only take effect from September 2005 there is a residual shortfall in 2005/06 of £93,000. To avoid making further reductions it is proposed at this early stage in the financial year to carry this sum within the overall cash limit for Environment Services during the remainder of the year, utilising any forecast under-spendings.
Reduced Support to Outside Organisations - £11,000
3.9 All support to the Danebury Trust (£6,000) has been withdrawn as excavation and post-excavation work on the final dig has yet to begin. The planned reduced contribution to the New Forest Committee (£5,000) can be increased by a further £20,000 to the full budget provision following the creation of the National Park Authority.
Reduction in Spatial Strategy Events - £17,000
3.10 A revised programme of events will be managed to keep within the reduced budget provision.
Reduction in Minerals and Waste Advertising - £25,000
3.11 The endeavour is to manage within the reduced budget.
Reduction in Ecology SLAs - £15,000
3.12 The budget has been reduced to reflect this saving
Savings in Disposal of Abandoned Vehicles - £150,000
3.13 It is considered that the scrap metal market will be sufficiently buoyant to generate at least this level of saving.
School Cross Patrols - £25,000
3.14 It has been possible to maintain the service despite recruitment problems and the £25,000 is felt to be the minimum likely saving.
Fewer Traffic Surveys - £25,000
3.15 The intention is to reduce the level of surveys needed by the Transport Policy team without adversely affecting the quality of data needed.
Management and Support - £292,000
3.16 This heading is made up of a number of efficiency savings in communications, office expenses and IT hardware, the deletion of a post in the IT Client Section and additional income from trench reinstatement. These savings will be delivered with no impact on service levels. Some of these savings (eg the deletion of the IT Client post, the receipt of extra income and the lower communications provision) are already happening and the remaining areas are being pursued and will be delivered.
Recommendation
That approval be given to allow the £1.963 million of budget pressures identified in the budget to be offset by the redeployments identified and the progress set out in this report be noted.
Section 100 D - Local Government Act 1972 - background papers | |
The following documents disclose facts or matters on which this report, or an important part of it, is based and has 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. |
TITLE |
LOCATION |
Working File |
Environment Department Room 426 |
400/DW