Contact: Jon Pittam, (01962) 84 7400; [email protected]

1 Introduction

1.1 This report deals with recent Government announcements and their actual or potential impact upon the 2006/07 budget.

1 Capping

1.1 The capping criteria for 2006/07 was a budget increase of 6% and a council tax increase of 5%. Medway and York councils have been put forward for capping in 2006/07. There were a further 18 local authorities with council tax rises which were more than 5%.

2 Chancellor's budget

2.1 The key announcements for local authorities were:

· Future public services - a national debate before the Comprehensive Spending Review 2007 (CSR 2007)

· Increased funding for schools.

· Further details on planning gain supplement.

· Nationwide free off peak bus travel for those over 60 (at district council level).

· Review of greater devolution and decentralisation from Government offices.

· The importance of cities to regional growth and a review of devolving decision making to cities.

School funding

2.2 The Chancellor announced an additional £220 million in 2006/07 and £365m in 2007/08 to help schools provide greater "personalisation" of learning in and beyond the school day, especially for children from disadvantaged backgrounds. This goes direct to schools via the school standards grant but with a new formula weighted for deprivation and poor attainment. This is on top of the extra funding for personalisation in the dedicated schools grant (DSG). This approach makes a mockery of multi-year budgets and is likely to lead to a further increase in schools balances. Despite the introduction of DSG yet another specific grant and revised formula distribution have been introduced at very late notice just before the start of the new financial year.

2.3 The average amount for a primary school will increase from £39,000 in 2005/06 to £44,000 in 2007/08, and for a secondary school from £98,000 to £190,000.

2.4 The Department for Education and Skills (DfES) also announced in March plans to "transform half of all primary school buildings with additional investment of £7 billion over the course of the programme". The proposals for consultation will involve "demolishing or rebuilding over 900 of the worst condition primary schools and significantly improving a further 8000 primary schools by 2022". So a very long-term programme and the impact on Hampshire may well be non existent particularly over the next few years.

Youth Matters: Next Steps

2.5 A £115m fund has been set up available over two years through the youth opportunity fund and the youth capital fund - ring fenced for young people (13 to 19 year olds) to bid for from their local authorities to improve facilities and activities in their neighbourhood. Around £500,000 will be available to an average local authority and over £2m in the "very largest local authority and where the need is greatest over the next two years".

2.6 This includes 10 pilot areas for the "youth opportunity card". There will be a statutory responsibility, in the context of national standards, "to ensure that young people have access to a whole range of positive activities ... for example access to two hours per week of sporting activity and two hours of other constructive activities in clubs, youth groups and classes".

2.7 As this resource will be ring-fenced it can be used to help the Cabinet's priority to provide a safer Hampshire by engaging young people in such activities. The Executive Member, Education will wish to bid and secure funds to implement locally.

Preventative Technology Grant

2.8 A preventative technology grant of £80m over two years was also announced in March. This is intended to enable councils to invest in telecare to help an additional 160,000 older people nationally to remain independent at home. Hampshire's grant for 2006/07 is £0.6m and is £1m in 2007/08. This is a welcome help towards the pressures in those years. The grant will be paid as a specific formula grant with no conditions attached, so that the Executive Member should ensure it is spent on continuing commitments from the 2005/06 overspend to help those people remain independent at home.

Social Care Review

2.9 The Government has also announced a review of social care to be led by Sir Derek Wanless. An initial review suggests that elderly people must be guaranteed a minimum level of state funded social care, with means testing for care needs like washing, dressing and cleaning being scrapped. The initial report from Sir Derek, commissioned by the King's Fund found "serious shortcomings" in care provision and funding arrangements, and called "for investment to treble by 2026". The minimum care standards would be universally available and free, with the Government then matching additional private spending up to a limit. This long-term zero based review will involve a "comprehensive examination of how social care funding works" and the question of who pays for what.

3 Recommendation

3.1 The recommendations are contained in the summary decision sheet.

Section 100 D - Local Government Act 1972 - background documents

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

NB the list excludes:

1. Published works.

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