Contact: Jon Pittam, (01962) 847400; [email protected]

1 Summary

1.1 The accompanying report sets the scene for decisions on the 2006/07 revenue budget and council tax, based on the budget guidelines approved on
19 December 2005. As a result of the two year grant settlement it is also possible to set a provisional budget for 2007/08. The three year budget forecast will be updated in September 2006. The 2006/07 budget takes account of subsequent developments and the reports back by Executive members after scrutiny by the relevant Policy Review Committees. The council tax rise is 4.7% as set in the guidelines and within the Government's capping limit of 5%.

1.2 The following decisions are sought, based upon the recommendations from the Leader and Cabinet to the County Council for the 2006/07 budget and council tax that:

1 the revised estimates 2005/06 (Appendix 2) be approved

2 £565,000 of service underspendings in 2005/06 be carried forward to 2006/07 (Table 2)

3 the base budget 2006/07 (Appendix 3) be approved

4 a provision for future inflation and contingencies of £12.6m including £4.8m for the waste management contract and £7.5m towards the continuing costs of job evaluation be approved (Table 23)

5 Executive Members prepare provisional contingency plans to reduce staffing and improve productivity as part of a benefits realisation strategy to offset a further £2.5m of continuing costs anticipated to arise from job evaluation (paragraph 11.13)

6 Executive Members also prepare contingency plans to deal with the resource transfer required when the contact centre is set up (paragraph 11.8)

7 the cash limit for adult social care be increased by £2.7m to eliminate its shortfall against the budget guidelines in 2006/07

8 the additional pressures and growth proposals from Executive Members totalling £16.9m be approved (Table 9 and Appendix 4)

9 the cash efficiency savings and redeployment proposals of £10.8m put forward by Executive Members, be approved (Table 10, paragraph 6.1 and Appendix 4)

10 additional one-off spending of £3m in 2006/07 (Table 14) and continuing spending of £690,000 be approved (Table 15)

11 the annual review of charges and maximisation of income across services (Table 12 and Appendix 6) be approved

12 adjustments to reserves as set out in paragraph 11 and Table 18 and the overall level of reserves (Appendix 10) be approved

13 a budgeted contribution of £1.8m to balances and the estimated level of balances at 31 March 2007 of £10.9m (Table 20) be approved

14 the workforce implications of the proposed budget 2006/07 (Appendix 8) be agreed

15 the budget for 2006/07 as summarised in Tables 21 to 25, set out in detail in Appendix 7 and including the adjustments in recommendations 7 to 13 of the report, be approved

16 the provisional budget for 2007/08 as set out in Appendix 9 be approved

17 the treasury management and the annual investment strategies for 2006/07, as set out in Appendix 11, be approved

18 it be a recommendation to Council that

a) the Treasurer's report under Section 25 of the Local Government Act 2003 be taken into account when the Council determines its budget and precept for 2006/07 (Appendix 13)

b) the revenue budget for 2006/07 (as set out in the attached draft budget book) and the provisional budget for 2007/08 be approved

c) the total budget requirement for the general expenses of the County Council for the year beginning 1 April 2006 be £568,360,000

d) the County Council's band D average council tax for the year beginning 1 April 2006 be £910.62

e) the County Council's council tax for the year beginning 1 April 2006 for properties in each tax band be:

	£
Band A	607.08
Band B	708.26
Band C	809.44
Band D	910.62
Band E	1,112.98
Band F	1,315.34
Band G	1,517.70
Band H	1,821.24

f) precepts be issued totalling £ 444,717,358.55 on the billing authorities in Hampshire, requiring the payment, in such instalments and on such dates set by them and previously notified to the County Council, in proportion to the taxbase of each billing authority's area as determined by them and as set out below:

	£
Basingstoke and Deane Borough Council	60,116.70
East Hampshire District Council	46,626.44
Eastleigh Borough Council	42,628.47
Fareham Borough Council	41,536.00
Gosport Borough Council	26,476.40
Hart District Council	36,860.00
Havant Borough Council	42,327.00
New Forest District Council	71,105.30
Rushmoor Borough Council	29,980.50
Test Valley Borough Council	44,503.00
Winchester City Council	46,207.85

g) that the annual investment strategy (section 6 to Appendix 11) be approved

h) the prudential indicators (annex to Appendix 12) be approved.

2 Reason

2.1 The full County Council must agree the 2006/07 revenue budget and set the council tax for 2006/07 at its meeting on 22 February 2006. The Leader will present his budget speech and recommendations at that meeting. This report provides the background to those budget decisions and presents the recommendations from the Leader and Cabinet to the County Council.

2.2 The County Treasurer under Section 25 of the Local Government Act 2003 is also required to report to the full Council on the:

· robustness of the estimates for 2006/07

· adequacy of the financial reserves in the budget.

2.3 These decisions support all the aims of the corporate strategy as it provides the financial resources for:

· Aim 1 - maximising life opportunities

· Aim 2 - stewardship of the environment

· Aim 3 - achieving economic prosperity

· Aim 4 - building strong and safe communities

· Aim 5 - improving services

· Aim 6 - developing councillors and staff

3 Other options considered and rejected

3.1 Other options are not available as far as process and timetable are concerned, but it is expected that the leaders of the opposition parties will wish to present their own recommendations on the budget and council tax to the County Council as amendments to these proposals.

4 Conflicts of interest declared by the decision maker or a member or officer consulted

4.1 Not applicable.

5 Dispensation granted by the Standards Committee

5.1 Not applicable.

6 Reason for the matter being dealt with if urgent

6.1 To meet the County Council budget decision-making timetable.

Approved by: Date:
Councillor T K Thornber CBE