Hampshire County Council
	Recreation and Heritage Policy Review Committee		Item 7
	19 January 2006
	Executive Member Recreation and Heritage			Item 2
	19 January 2006
	Revenue Budget 2005/06, 2006/07 and 2007/08 and Performance Monitoring 2005/06
	Report of the County Treasurer and the Director of Recreation and Heritage

Contact: Bevis Ingram, 01962 847508, email [email protected]

Stuart Dorward, 01962 864110, email [email protected]

1 Introduction

1.1 This report sets out the proposed Recreation and Heritage revenue budget for 2006/07, a provisional budget for 2007/08 and recommends a revised budget for 2005/06. This report has been prepared in consultation with the Executive Member for review by the Policy Review Committee, before the budget is considered formally by the Executive Member. It will be reported to the Leader and Cabinet on 10 February 2006 to make final recommendations to County Council on 22 February 2006.

1.2 The Recreation and Heritage revenue budget for 2006/07 and 2007/08 provides financial resources for all Recreation and Heritage services and therefore supports their contribution to the aims of the Corporate Strategy and the Cultural Strategy. The budget focuses available resources on improving quality of life by:

· creating a thriving cultural life in the County which celebrates diversity and fosters local identity

· increasing participation in a wide range of cultural, recreational and sporting activities

· using cultural resources for learning and skills development, and

· increasing the benefits to the local economy flowing from cultural activities.

2 Budget strategy

2.1 The Cabinet has set a provisional budget strategy based on the following guidelines:

For 2006/07:

· dedicated schools grant for schools

· base budget for all other services, adjusted for inflation on the same assumptions made in previous forecasts - 2.95% for pay increases to reflect national agreements, 2.5% for price increases and 1.5% for the increase in employer's contributions to the Local Government Pension Scheme

· an extra £3.4m for social care above the base budget level to recognise extra demographic and other pressures in line with the increase to national spending plans.

For 2007/08:

· dedicated schools grant for schools

· base budget for all other services, adjusted by 2.5% for pay increases (following the Chancellor's recent announcement to bear down on national pay awards - in line with the teachers' pay settlement of 2.5%), 2.5% for price increases and 1.2% rise in employer's pension contributions

· an extra £3.9m for social care above the base budget level.

2.2 In arriving at the base budget Executive Members are required to ensure that:

· income will be maximised by reviewing charges and introducing new income wherever possible in excess of the 2.5% price inflation assumption, taking account of the powers to charge for discretionary services in the Local Government Act 2003

· any proposals for spending above the budget guideline are matched by cashable efficiency savings

· all proposals for additional spending, however financed, are accompanied by a summary business case containing clear financial and performance data setting out how performance will be improved and value for money achieved, and how it links to the key aims of the Corporate Strategy

· staffing implications of proposed budgets are identified for inclusion within service workforce plans.

2.3 There is also a requirement to identify annual efficiency improvements of at least 2.5% for the annual efficiency statement. These need to be integrated into budget planning and categorised into cashable and non-cashable. Cash savings in budget terms will be required to meet new pressures and service development proposals.

3 Budget guidelines

3.1 The budget guidelines were considered by the Cabinet on 19 December 2005. For Recreation and Heritage, the provisional budget guidelines are:

For 2006/07	£31.5m
For 2007/08	£32.5m

3.2 This report sets out the Recreation and Heritage Executive Member's responses to the guidelines. The report:

· reviews the revised budget for 2005/06 (as set out in paragraph 4 and Appendices 1 and 2)

· reviews the 2006/07 base budget which totals £31.5m (as set out in paragraph 5 and Appendix 3)

· identifies £530,000 of pressures and costs absorbed (as set out paragraph 6 and Appendix 4)

· proposes the redeployment of £530,000 of resources (as set out in paragraph 6 and Appendix 4)

· identifies efficiency improvements of £0.5m, being 1.6% of the base budget (as set out in paragraph 6 and Appendix 5)

· reviews the charges made by Recreation and Heritage (as set out in paragraph 7 and Appendix 6)

· identifies the workforce implications of the budget proposals (as set out in paragraph 9 and Appendix 7)

· proposes a detailed budget for 2006/07 (as set out in Appendix 8)

· reviews the trading accounts of business units (as set out in paragraph 10 and Appendix 9)

· proposes a provisional budget for 2007/08 (as set out in paragraph 11 and Appendix 10)

· provides information on progress against key performance indicators (as set out in Appendix 11).

4 Revised Budget 2005/06

4.1 The cash limit for the revised budget is £30.3m. The calculation is shown in Appendix 1.

4.2 A summary comparing the revised budget with the cash limit is set out in Appendix 2.

4.3 Budget monitoring reports have indicated that there are significant pressures on the revenue budget - notably on Libraries income - and that remedial action is being taken to address those pressures. The revised budget is presented at cash limit reflecting the managerial action being taken.

4.4 Calshot Activities Centre, other Outdoor Centres and the Community Support Unit are planning to underspend their revenue budgets in 2005/06 by £233,000 to fund capital developments. £50,000 of this was allocated to the Community Buildings Fund in November 2005 and £58,000 was set aside to contribute towards the cost of the Argoed Llwyd Mountain Centre dining room extension, as detailed in the March 2005 project appraisal. It is now possible to fund these projects from the main capital programme, owing to the availability of capital receipts in excess of the original estimate. The revenue underspendings can thus be used to offset the pressures elsewhere in the budget. It is therefore recommended that the Recreation and Heritage contribution of £58,000 to the Argoed Llwyd dining room extension be funded from the main 2005/06 capital programme, and that the following additions to the 2006/07 programme be made:

· Calshot Activities Centre climbing wall £75,000

· Balance of Argoed Llwyd dining room extension £50,000

4.5 Unusually, there is no Easter in the financial year 2005/06 (there were two in 2004/05). Services with seasonal usage patterns, or significantly visited by families (eg Milestones Museum and Manor Farm Country Park) are therefore experiencing difficulty in meeting their income targets. This is being addressed through marketing and cost management and severely limits the ability of these parts of Recreation and Heritage to make cash savings to offset the pressures referred to in 4.3.

4.6 The County Council's overall budget for 2005/06 included a requirement to make procurement savings of £1m pro rata to eligible contracts, of which £109,000 (almost 11%) has been allocated to Recreation and Heritage. Of this, £13,000 relates to library shelving, which is a capital item. The revenue cash limit has been reduced by £96,000.

4.7 Previous budget monitoring reports have included information on a number of performance measures that are monitored to provide assurance that the efficiency improvements required to deliver corporate budget targets are not being achieved at the expense of service quality. Appendix 11 provides the latest data for these measures. Activity levels generally continue to show small but steady increases in activity.

5 Base Budget 2006/07

5.1 A base budget for 2006/07 has been prepared on the basis of the current financial policies of the Council, in order to provide a starting point from which decisions can be made. The base budget for this service is £31.5m at outturn prices.

5.2 Appendix 3 shows the make up of the base budget.

5.3 Overall, the base budget includes a net reduction in expenditure at constant prices of £215,000. The main variations are shown in Annex 3 to Appendix 3.

6 Cost pressures, redeployment proposals and efficiency improvements - 2006/07 and 2007/08

6.1 The Cabinet requires all Executive Members to consider and report on:

· cost pressures absorbed within the budget guidelines

· the redeployment of any resources required to offset any new spending priorities, or inescapable budget pressures, or legislative requirements which otherwise cannot be met within their budget guidelines

· annual efficiency improvements

6.2 Details of cost pressures absorbed of £530,000 and redeployment proposals of £530,000 are included in Appendix 4.

6.3 It is almost certain that the pressures currently being experienced will recur in future years, and as a consequence proactive managerial action to address and offset those pressures is required. There are also further cost pressures arising from People's Network in respect of:

Phase 1: 2006/07 is the first year in which the full recurring cost of the IT infrastructure will be chargeable to revenue

Phase 2: approved by the Executive Member in November

6.4 In previous years, significant resources have been redirected using the Policy Fund. Although the scope to do this is more limited in 2006/07, it is proposed to enhance the fund by a further £158,000 within the total redeployments of £530,000. Initially, this extra will be held as a general contingency against the pressures described in this section of the report. A high priority as an early call on this contingency would be £50,000 to ensure service users are able to derive maximum benefit from the services via essential spending on health and safety improvements. This contingency would be financed from the efficiency savings outlined below, as would a modest development budget of £20,000 for the Countryside Service, recognising that the vast majority of the service budget is for committed operational spending.

6.5 Appendix 8 shows the gross Policy Development Initiatives (Policy Fund) budget as £754,000. The majority of this has been committed for 2006/07, leaving an unallocated balance/contingency of £220,000 (which includes the £158,000 redeployment mentioned in paragraph 6.4). Many of the allocations are likely to be made permanent in the course of the year. The existing commitments for 2006/07 can be summarised as:

	£000
Expanding user base	212
Quality and innovation	92
Market development	10
ICT	220
	534

6.6 The budget for the Library and Information Service includes a line for unallocated savings of £457,000. This is made up as follows:

			£'000
Base budget pressures (Annex 3, Appendix 3)			285
Growth:
	People's Network Phase 1 (Appendix 4)		142
	People's Network Phase 2 (Appendix 4)		173
	Bursledon Library		17
			617
Less:	IT efficiencies (Appendix 4)		(100)
	Vacancy management already in place		(60)
	(included in £232,000 in Appendix 4)
			457

Funding for these will be found from within the Recreation and Heritage budget. The Director of Recreation and Heritage is addressing this through the management of the budget in the current year, and through the planning and management of the budget for 2006/07 (for example the Policy Fund contingency will probably be used for this).

6.7 The net budget for Milestones represents the County Council's contribution to the running costs of the Museum. This is normally matched by Basingstoke and Deane Borough Council. However, the Borough has indicated that it will reduce its contribution by £65,000 from 2006/07, leaving its net contribution to the Museum at £178,000. This represents some 33% of the net cost. The Milestones' budget therefore includes an unallocated saving of £65,000 at this stage. The Executive Board of Milestones, comprising senior members of both authorities, has been looking at options for the future operation of the museum with the aim of placing its finances on a secure long term footing. They recently agreed that a detailed examination of trust status should be undertaken. This could have considerable financial benefits. A recommendation will be made to the parent authorities in April. If the authorities agree the move to trust status, the necessary legal and constitutional changes could not be implemented until part way through 2006/07. The County Council therefore needs to consider its immediate response to the Borough's decision on funding. In turn, the Executive Board will need to consider how it can deliver a balanced budget in the short term, pending any decision on trust status for Milestones. The Director of Recreation and Heritage proposes allocating a sum of £20,000 to Milestones as part of the redeployment proposals for 2006/07. This will partially offset the Basingstoke reduction and leave a net unallocated saving of £45,000.

6.8 The County Council has been in detailed discussions concerning the possible redevelopment of the Cricklade Theatre, Andover. The business plan is being finalised and it is estimated that, subject to that business plan being agreed, Hampshire County Council's annual contribution could be in the order of £120,000, and that this would be shared equally between Policy and Resources, Recreation and Heritage and Children's Services. It is likely to be necessary to redirect resources already being spent on projects in Andover to support the Recreation and Heritage share, but this has not been included in the redirection proposals at this stage.

6.9 The County Council is required to identify annual efficiency improvements of at least 2.5% for the annual efficiency statement (AES) required by the Government. At least 1.25% of the improvements in each year needs to be `cashable' in the Government's terms. These occur when inputs (money, people, assets etc) are reduced but outputs remain unchanged or when the price of inputs is reduced but outputs remain unchanged. However, not all cashable efficiency savings in AES terms provide usable cash in budget terms. For example, absorbing the cost of increments within the base budget counts towards the AES but does not generate new budget provision.

6.10 Appendix 5 identifies efficiency improvements totalling £0.5m (1.6%). All of these are eligible for inclusion in the annual efficiency statement and £400,000 (1.3%) represents usable budget savings.

6.11 Efficiency savings are proposed in order to fund the proposed redeployment of resources. The sources are:

· Service efficiencies: £198,000 - these will be achieved through a combination of departmental projects and local management

· Efficiency savings in the Department's use of IT: £100,000 - much of this has been identified through a project already well under way

6.12 These are cashable efficiency savings in Gershon terms and represent 1% of the Recreation and Heritage budget. Together with increments, cashable efficiency savings total 1.65% compared with an annual minimum target of 1.25%.

6.13 Appendix 11 includes information on the current 2006/07 and 2007/08 targets set for certain of quality cross check performance indicators in the County Council's statutory Performance Plan. These are likely to be revised as part of the departmental service planning process.

7 Review of charges

7.1 The service's 2006/07 revenue budget includes income of £6.9m from fees and charges. Details of the material headings are included in Appendix 6.

7.2 Under the policy on charging agreed in December 2002, responsibility for decisions on the level of library fines, reservation fees and charges for replacement borrower tickets, remains with the Executive Member. Library fines are currently 10p per day for adults. It is very likely that the income pressures on the Library and Information Service will continue, despite the increase in library usage. It is therefore proposed that the charge for late book returns be increased from 10p per day to 15p per day. This will help to offset the loss of fine income following the reintroduction of the four week loan period in April 2005. Although this is a significant increase, it should be noted that the charge is avoidable. Borrowers are now able to renew book loans online or by telephone.

7.3 All other charges are reviewed annually in accordance with the agreed policies and framework approved by the Executive Member in consultation with the Recreation and Heritage Policy Review Committee. Charges will be adjusted where appropriate with the aim of increasing income or to further specific policy objectives.

8 Other expenditure

8.1 The budget includes some items which are not counted against the cash limit. This includes capital charges and budgets for central departmental support services, except where they have been given to departments to buy services, and repair and maintenance of buildings. It also includes cost of member support within this budget which are rechargeable to Policy and Resources Budget for corporate and democratic core services. Apart from capital charges, these have been excluded at this stage as Policy and Resources control them and they have not yet been agreed. They are being agreed in the same cycle as this report. In the original budget they totalled £2.7m.

9 Workforce levels and costs

9.1 The workforce implications of the proposed budget are set out in Appendix 7. The 2006/07 base budget supports a planned workforce of 964 full time equivalent (FTE) staff. This is an increase of 11 over the original budget for 2005/06. The increase relates to approved new posts predominantly funded by specific grants from external bodies and the Policy Fund.

9.2 In addition to the above there are approximately 50 staff employed by Hampshire County Council either on behalf of jointly managed committees such as the Basingstoke Canal and the Blackwater Valley Service or through directly grant aided posts.

9.3 The net effect of proposals for growth and redeployment of resources (Appendix 4) on staffing levels are as follows:

2006/07	2 FTEs
2007/08	6 FTEs

It is intended to appoint the Winchester Cultural Centre Manager in the course
of 2006/07. This will be met from within the existing budget.

9.4 There may also be further new posts funded by sources such as new external grants in the course of 2006/07.

10 Business units

10.1 The trading accounts of Arts Marketing Hampshire are summarised in Appendix 9.

11 Provisional budget for 2007/08

11.1 The provisional budget for 2007/08 for this service is £32.5m at outturn prices as set out in Appendix 10.

11.2 There is a budget pressure of £0.2m for additional costs of the Winchester Cultural Centre due to open in 2007/08. These costs have not been included in the provisional budget but were identified at the project appraisal stage in November 2004. In February 2005 Cabinet requested Recreation and Heritage to meet these costs and accordingly either further redeployments will be required, or it will not be possible for all the growth items in Appendix 4 to recur beyond 2006/07. At this stage, this latter course of action has been assumed.

12 Impact assessment

12.1 In completing this report, account has been taken of the corporate Equalities and Race Scheme.

Recommendation

1 The recommendations are included in the covering decision sheet and are listed below:

To approve for submission to the Leader and Cabinet:

(a) The revised budget for 2005/06 (as set out in Appendices 1 and 2)

(b) The base budget for 2006/07 (as set out in Appendix 3)

(c) The proposals for growth and redeployment of resources (as set out in Appendix 4)

(d) The proposals for efficiency improvements (as set out in Appendix 5)

(e) The annual review of income and charges (as set out in Appendix 6)

(f) The workforce implications of the proposed budget for 2006/07 (as set out in Appendix 7)

(g) The detailed budget for 2006/07 (as set out in Appendix 8)

(h) The summarised trading accounts of business units (as set out in Appendix 9)

(i) The provisional budget for 2007/08 (as set out in Appendix 10)

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:

Published works.

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

TITLE FILE

Appendices

Appendix		Colour
1	Revised budget 2005/06 - calculation of the cash limit	yellow
2	Revised budget 2005/06 - comparison with cash limit	yellow
3	Base budget 2006/07 - summary of cash limit	pink
3 - Annex 1	Base budget 2006/07 - definition of base budget	pink
3 - Annex 2	Base budget 2006/07 - significant costs of inflation	pink
3 - Annex 3	Base budget 2006/07 - significant variations from 2005/06 repriced budget	pink
3 - Annex 4	Base budget 2006/07 - analysis of variations	blue
4	Proposals for growth and redeployment 2006/07 and 2007/08	yellow
5	Efficiency statement	yellow
6	Review of income 2006/07	yellow
7	Workforce levels and costs 2005/06 - 2007/08	blue
8	Revenue Budget 2006/07 - budget book detail	green
9	Business units - summarised trading accounts	white
10	Provisional budget 2007/08	pink
10 - Annex 1	Provisional budget 2007/08 - analysis of variations	blue
11	Performance Monitoring 2005/06 and Performance Targets for 2006/07 and 2007/08	white

Appendix 1

Recreation and Heritage Service

Revised budget 2005/06

Calculation of the cash limit for the revised budget 2005/06

The following table shows the progression from the original budget for 2005/06 to the cash limit for the revised budget 2005/06. Both are at estimated outturn prices 2005/06.

				£'000	£'000
Original budget 2005/06 at outturn prices					30,163
Transfers to/from Policy and Resources: - IT rebasing - Procurement				444 -96	348
=	Adjusted original budget				30,511
Inflation Provision added since the original budget for - Business rates					70
Other variations - transfer to capital from the bookfund - transfer to capital - Tile Barn access road - transfer from capital				-198 -88 17	-269
=		Cash limit for the revised budget 2005/06			30,312

Appendix 2

Recreation and Heritage

Revised budget 2005/06

Summary comparing the revised budget with the cash limit

	Cash Limit	Revised Budget	Variation
	£'000	£'000	£'000	%
Cash limited expenditure
Museums and Archives Milestones Tourism Library and Information Service Countryside Service Arts Sports and Community Calshot Activities Centre Policy Development Initiatives Director and Business Development	3,446 278 608 16,245 4,473 2,018 1,835 228 541 640	3,446 278 619 16,467 4,473 2,018 1,677 153 541 640	- - 11 222 - - -158 -75 - -	- - 1.8 1.4 - - -8.6 -32.9 - -
Total	30,312	30,312	-	-

Note

As explained in paragraph 4 an overspend is currently forecast and is being managed down. Any residual overspend could be funded by deferring or freezing capital schemes if required.

Appendix 3

Recreation and Heritage

Revenue budget 2006/07

Calculation of the base budget 2006/07 - summary of cash limited expenditure

The following table shows the progression from the original budget for 2005/06 which was prepared at outturn prices 2005/06 to the base budget 2006/07 at outturn prices 2006/07.

		£'000	£'000
Original budget 2005/06 at outturn prices			30,163
Transfers to/from other services and contingency allocations - IT rebasing - Procurement		444 -96	348
=	Adjusted original budget		30,511
Increases for inflation to reflect November 2005 prices (see Annex 2)
-	Inflation on business rates	64
-	Excess cost of inflation over the inflation allowance	12	76
Original budget at November 2005 prices			30,587
Other variations (see Annex 3)
-	Reductions to offset excess inflation	-12
-	Allowable base budget growth	30
-	Cessation of one-off increase to bookfund	-250
-	Transfer from capital	17	-215
	Allocation for future inflation		30,372 1,123
=	Base budget 2006/07 at outturn prices		31,495

Annex 1 to Appendix 3

Recreation and Heritage

Calculation of base budget 2006/07

Parameters used in the compilation

1	Definitions
1.1	The first stage in the construction of the budget for 2006/07 is the preparation of a base budget. The rules used this year are similar to those applied in 2005/06, which are summarised below.
1.2	The 2006/07 base budget is defined as the current year's budget adjusted for: · allocations made for inflation in 2005/06 including the full year effect of the provision made for outstanding pay awards from 2004/05 · exclusion of expenditure included in the 2005/06 budget which was financed by the carry forward of planned underspendings from 2004/05, the one-off use of reserves or balances, or which was approved on a non-recurring basis · the revenue effect of past capital programmes, subject to its inclusion in the approved capital programme unless a specific Cabinet decision to the contrary · the full year effect of council-approved policies included in the 2005/06 original budget, which have been introduced part-way through the year · changes in income volumes which are not the result of policy decisions · correction of arithmetical errors in the current year's budget

Annex 2 to Appendix 3

Recreation and Heritage

Calculation of base budget 2006/07

Significant costs of inflation

1.	Variation between the actual cost of inflation in 2005/06 (as at November 2005) and the provision for inflation included in the 2005/06 budget
							£'000
	Additional cost of inflation						76
	Less:
	-	Allocation from contingency for business rates					-64
	=	Shortfall in the provision					12
2.	Significant costs of inflation between budgeted 2005/06 outturn prices and November 2005 prices
2.1	Pay awards
	Provision was originally made in 2005/06 for pay awards of 2.95% for teachers and other employee groups.
	The pay awards agreed were:
	Negotiating body: Effective date:						%
	Local Government Services Staff Hampshire Management Grades				1 April 2005 1 April 2005		2.95 2.95
2.2	Non pay inflation
	Provision was originally made in 2005/06 for a net amount of £121,000
	This was for general price increases of 2.5% (£211,000) offset by increased income of £90,000 to match inflation in gross expenditure
3.	Allocation for future inflation						£'000
	Provision for all pay awards of 2.95% in 2006/07						697
	Increase in local government employers' pension contributions (from 250% to 275% of employee contributions)						308
	Provision for non-pay inflation at 2.5%						233
	Reduction for increased income						-115
	Total allocation for future inflation						1,123

Annex 3 to Appendix 3

Recreation and Heritage

Calculation of base budget 2006/07

Significant variations

Major variations between the repriced budget 2005/06 and the base budget for 2006/07 at November 2005 prices contributing to the decrease of -£215,000(-0.7%) are set out below:

	Variations against the repriced 2005/06 budget
	£'000	%
Museums and Archives
Transfer to Libraries and Information for Gosport Discovery Centre Staff	-51	-
Libraries and Information
Transfer from Museums for Gosport Discovery Centre staff	51	-
Transfer from capital for IT post	17	-
Transfer from Director for IT posts	68	-
Cessation of bookfund increase	-250	-
Increments	113	1.0
Cessation of reorganisation costs	-101
Increase of costs of contract cleaning	67	23.4
Transport	116
Minor variations across the service	83	-
Savings to be achieved	-285	-
Countryside
Transfer from Policy Fund	37	-
Transfer to Arts	-9	-
Arts
Transfer from Countryside	9	-
Policy fund
Additional resource	30	-
Transfer to Countryside	-37	-
Transfer to Director	-70	-
Director and Business Development
Transfer to Libraries and Information	-68	-
Transfer from Policy Fund	70	-

Annex 4 to Appendix 3

Recreation and Heritage

Base budget 2006/07

Analysis of variations

	Adjusted original budget 2005/06	Variation in inflation to November 2005 prices		Other variations		Inflation allocation to 2006/07 outturn		Base Budget 2006/07
	£'000	£'000	%	£'000	%	£'000	%	£'000
Cash limited expenditure
Museums and Archives	3,474	10	0.3	-51	-1.5			3,433
Milestones	257	19	7.4	2	0.8			278
Tourism, Marketing and Design	583							583
Libraries and Information	16,282	32	0.2	-121	-0.7			16,193
Countryside	4,427	5	0.1	18	0.4			4,450
Arts Sports and Community	2,033 1,942	-3 2	0.1 -	7 -3	0.3 -0.1			2,037 1,941
Calshot	217	11	5.1	-	-			228
Policy Fund	673			-77	11.4			596
Director and Business Development	623			10	1.6			633
Inflation						1,123		1,123
Net cash limited expenditure	30,511	76	0.3	-215	0.7	1,123	3.7	31,495
Expenditure outside cash limit: Capital charges FRS17 Pension adjustment Expenditure met from/income transferred to:	5,660 594	-283	-5.0	668 -664	11.8			6,045 -70
Arts Marketing Hampshire	-1			1				-
Total net expenditure	36,764	-207	-0.6	-210	-0.6	1,123	3.1	37,470

Appendix 4

Recreation and Heritage

Proposals for growth and redeployment 2006/07 and 2007/08

		2006/07	2007/08	Staffing (FTEs)
				2006/07	2007/08
		£'000	£'000
Growth proposals:
People's Network: Phase 1		142	142	-	-
People's Network: Phase 2		173	173	-	-
Policy initiatives and contingency		158	-	-	-
Countryside developments		20	-	-	-
Milestones Museum		20	-	-	-
Bursledon Library		17	34	1	1
Winchester Cultural Centre		-	220	1	5
Total cost pressure		530	569	2	6
Redeployment proposals:
IT efficiencies		-100	-100	-	-
Reductions across service		-198	-198	-	-
Library efficiency and other savings		-232	-249	-	-
Other redeployments to be identified			-22
Cost pressures after redeployments		-	-	2	6

People's Network

Recurring costs associated with implementation of the People's Network including Phase 2 approved at the November Decision Day.

Policy initiatives and contingency

Contingency against budgetary pressures and high priority service developments.

Countryside developments

Recognition that service budget covers committed operational spending only.

Bursledon library

Revenue costs of new library - project agreed at November Decision Day.

Milestones Museum

Additional contribution for 2006/07 as detailed in Section 6 of the report.

Appendix 5

Recreation and Heritage

Efficiency statement

		2005/06		2006/07		2007/08
		AES £m	Budget £m	AES £m	Budget £m	AES £m	Budget £m
Cashable efficiency improvements:
a	AES eligible and budget saving:
	Procurement savings	0.1	0.1
	IT efficiencies			0.1	0.1
b	AES eligible but no budget saving:
	Increments	0.3		0.2		0.2
	Completion of IT2000 rollout	0.1
	Redirection to Policy Fund	0.2		0.2		0.2
c	Budget saving but AES ineligible:
	Library efficiency and other savings				0.3
Totals		0.7	0.1	0.5	0.4	0.4
% of base budget		2.3	0.3	1.6	1.3	1.2
Total of all efficiency improvements		0.7	0.1	0.5	-	0.4
% of base budget		2.3	0.3	1.6	-	1.2

Notes

Cashable efficiency improvements are defined in the annual efficiency statement (AES) as occurring when:
-	inputs (money, people, assets, etc) are reduced but outputs remain unchanged
-	the price of inputs (procurement, labour costs etc) are reduced but outputs remain unchanged.
A reduction in price of inputs is measured in general against the increase in the Gross Domestic Product deflator (likely to be around 2.5% in 2006/07). Thus if the price of inputs remains constant there is a gain of 2.5%.
a	efficiency savings that count against the AES and produce budget savings - this will include general procurement savings against the budget provision of a 2.5% increase in prices.
b	efficiency savings that count against the AES, but do not produce a budget saving because the efficiency is avoiding unbudgeted cost e.g. staff reductions made to absorb increments, procurement efficiencies where costs are still exceeding 2.5%, capital receipts or developer contributions applied to avoid unplanned additional borrowing
c	efficiency savings that do not meet the AES criteria but produce a budget saving. These will include efficiency savings that relate to LEA services to schools (that are outside the scope for AES) and fortuitous savings that are not strictly efficiencies
Non-cashable efficiency improvements are defined in the AES as occurring when:
-	increased outputs or improved quality of service are obtained for the same inputs
-	increased outputs or improved quality achieved at a rate that exceeds the increase in inputs.

Appendix 6

Recreation and Heritage

Review of income 2006/07

		Current charge	Total income	Date of last review	Planned date for next review	Proposed increase (if proposed now)	Is charge set to recover full cost	Is charge subject to an assessment scale determined locally?	Additional income from increased or new charge
			£'000			£	Yes/No	Yes/No	£'000
1	Museums and Archives Fees and charges, publications, photocopying, micro-form, microfiche,. microfilm, photos, searches, cinema use, miscellaneous	Various	964	January 2005	2006	N/A	No	No	N/A
2	Milestones * Fees and charges, publications, miscellaneous	Various	524	January 2005	2006	25p	No	No	10
3	Libraries ** Fines, video hires, publications	Various	1,799	January 2005	2006	5p	No	No	100
4	Countryside Entrance charges, car parks	Various	756	January 2005	2006	N/A	No	No	N/A
5	Arts Fees and charges, rents, bar car parks	Various	550	January 2005	2006	N/A	No	No	N/A
6	Sports and Community Fees and charges, rents, bar car parks	Various	275	January 2005	2006	N/A	No	No	N/A
7	Calshot Activities Centre Fees and charges, sales, board, rents	Various	1,984	January 2005	2006	N/A	Yes	No	N/A
	Total		6,852						110
	* **	Charge for tickets increased by 25p - subject to agreement by Executive Board Charge for late book returns to be increased from 10p to 15p per day.

·

Appendix 7

Recreation and Heritage

Workforce levels and costs

	2005/06		2006/07
Cost of establishment (note 1)		£24.8m		£25.9m
FTE posts available (establishment)	994		994
Average cost per FTE		£24,960		£26,028
Salaries (including employer's national insurance and pension contributions)	£23.1m		£24.55m
Temporary/fixed term/casual staff	£0.4m		£0.4m
Additional hours	£0.2m		£0.3m
Total workforce costs		£23.7m		£25.25m
Average FTE staff budgeted	951		962
New posts proposed (FTE) (See Appendix 4 for details)				2
Full year cost of new posts at midpoint				£0.05m
Deletion of posts proposed (FTE) (see Appendix 4 for details)				-
Full year saving from deleted posts at midpoint			-	-
Revised FTE establishment				995
Revised workforce budget		£23.7m		£25.3m

Note 1 - the cost of establishment includes the actual salary for those staff in post and the mid-point salary cost of vacant posts. Salary costs include National Insurance & Superannuation and allowances other than payments for additional hours.

Appendix 8

Recreation and Heritage

Revenue Budget 2006/07

Reconciliation of the original 2005/06 budget on the following pages with the 2005/06 budget in the published budget book.

		£'000
Net expenditure on page B67 of the published budget book		38,172
Adjustments for items in the budget book but not included at this stage: - Support services and repair and maintenance of buildings - Charges to Corporate and Democratic care	-2,719 123	-2,596
Adjustments made to the original budget figures: - Transfer from Policy and Resources - Transfer to Policy and Resources - FRS17 Pension Adjustment	444 -96 840	1,188
Total net expenditure for 2005/06 original budget shown overleaf on page 26		36,764

Appendix 9

Recreation and Heritage

Business units - summarised trading accounts 2006/07 and 2007/08

		Original budget 2005/06	Revised budget 2005/06	Base budget 2006/07	Provisional forecast 2007/08
		£'000	£'000	£'000	£'000
	Arts Marketing Hampshire
	Income Expenditure	-508 507	-424 423	-478 478	-480 470
	Net operating (surplus) deficit	-1	-1	-	-10
	Reserve balance brought forward	-10	-11	-12	-12
	Reserve balance carried forward at 31 March	-11	-12	-12	-22

Appendix 10

Recreation and Heritage

Provisional budget 2007/08

The following table shows the progression from the 2006/07 proposed budget at outturn prices to the provisional budget 2007/08 at outturn prices.

			£'000	£'000
Proposed budget 2006/07 at outturn prices				31,495
-	Base budget variations:
	Revenue effect of capital programme			30
Allocation for future inflation				998
Provisional budget 2007/08 at outturn prices				32,523

Annex 1 to Appendix 10

Recreation and Heritage

Provisional budget 2007/08

Analysis of variations

	Proposed Budget 2006/07	Base budget variations	Growth and redeployment	Inflation allocation to 2007/08 outturn		Provisional Budget 2007/08
	£'000	£'000	£'000	£'000		£'000
Cash limited expenditure
Museums and Archives	3,433					3,433
Milestones	278					278
Tourism, Marketing and Design	583					583
Libraries and Information	16,193					16,193
Countryside	4,450					4,450
Arts	2,037					2,037
Sports and Community	1,941					1,941
Calshot	228					228
Policy Fund	596	30				626
Director and Business Development	633					633
Inflation	1,123			998		2,121
Net cash limited expenditure	31,495	30		998		32,523
Expenditure outside cash limit:
Capital charges	6,045					6,045
FRS17 Pension adjustment	-70					-70
Expenditure met from/income transferred to:
Arts Marketing Hampshire			-10			-10
Total net expenditure	37,470	30	-10	998		38,488

Appendix 11

Recreation and Heritage

Performance Monitoring 2005/06 and Performance Targets for 2006/07 and 2007/08

		National indicator	2004/05			2005/06				2006/07	2007/08	Notes
			To date	Actual		To date	Projected	Target		Target	Target
Libraries
	Aggregate opening hours per week per 1,000 population	PLSS 2	-	87		-	88	-		-	-
	Visits per 1,000 population	PLSS 6	-	5,463		-	5,970	-		-	-
Museums
	Visits per 1,000 population	BV 170b	203	284		249	310	290		296	301	1
	Number of pupils visiting in organised groups	BV 170c	21,384	31,604		19,595	32,236	32,236		32,881	33,583	1
Archives
	Visits to/usages of Hampshire Record Office		-	-		22,128	-	-		-	-	2
Countryside
	Number of visits to principal sites		-	-		690,244	-	-		-	-	3
	% of Rights of Way network that is easy to use	BV 178	-	85		-	85	85		86	86
Outdoor Centres
	Number of users		39,500	46,695		41,197	-	-		-	-	2
Arts Centres
	Numbers of users		-	-		30,148	-	-		-	-	3

Notes

1. Year to date figures are April to November.

2. Year to date figures are April to December.

3. Year to date figures are April to September.