Archived decisions

Contact: Tom Niedrum, ext 6931 email: [email protected]

1. Summary

1.1 This report presents the results of the review of the River Hamble Budget which has been carried out by consultation between the Marine Director and the Devolved Finance Unit. It presents the draft revised budget for 2006/07 and the draft forward budget for 2007/08, as well as the proposed charges for 2008.

1.2 The underlying principle for both years is to produce budgets that enable the Harbour Authority to meet operational requirements within the available revenue earning capacity. For 2008, an increase of RPI + 1% is applied to Harbour Dues, as agreed in previous years.

1.3 The results are presented to the River Hamble Harbour Management Committee for comment. The report will then be submitted to the River Hamble Harbour Board for approval.

1.4 All costs attributable to the Harbour Authority carrying out its statutory and ongoing duties on the River have been identified and built into the budget, including legislative and health and safety responsibilities. It is to be expected at this stage of the financial year when setting the revised budget that not all budgets are fully committed, but all have been reviewed and assessed in light of the best information available at the moment. It will continue to be closely monitored throughout the rest of the year.

1.5 In previous years, the budget has been divided between the `Harbour Undertaking and Management of the Moorings' and the `Visitor Centre Partnership'. These have now been combined into one budget to more properly reflect the current management of the budget.

1.6 Appendix 1, attached, sets out the detail of the original budget for 2006/07 as approved, together with the revised budget for 2006/07, and the forward budget for 2007/08.

2. Reason

2.1 This report does not directly support the priorities of the Corporate Strategy but nonetheless forms a vital part of the management of the River Hamble Harbour Undertaking.

3. Revised Budget 2006/07

3.1 The revised budget for 2006/07 for the River Hamble Harbour Undertaking, summarised in Appendix 1, shows a revised gross expenditure budget of £579,250. This is a decrease on the original budget of £37,750.

3.2 The income budget has also decreased and is revised from £617,000 to £600,350. The net position shows a surplus of £21,100 compared to the original break-even position. If achieved, this surplus will be transferred to the reserves in accordance with the long term plan to eliminate the deficit on the Harbour Undertaking and to allow for the long term replacement of assets. The current position of the reserve account is discussed below and in Appendix 3.

3.3 More detailed comments on the variations to the original budget are included as part of Appendix 1, and also in Appendix 2, which provides more detail on some of the budget heads.

3.4 In summary, a number of expenditure budgets were reviewed and reduced in line with the expected spend in the current year, but the major items were the contingency for the introduction of the new Pay and Benefits scheme for staff salaries (now delayed until 1 April 2007), and general expenditure being contained without the need to deploy the inflation provision or the contingency sum held within the Budgetary Pressures head.

3.5 Income was down against the original budget due to reduction in the moorings meterage, and a change in the management arrangements with the Crown Estate. Supervision charges were separately identified from Harbour Dues in the charges for the calendar year 2007, but have been incorporated within the Harbour Dues for the 2008 calendar year.

4. Forward Budget 2007/08

4.1 The forward budget for the financial year 2007/08 is also shown in Appendices 1 and 2. The proposed budget is balanced at a break even position of £621,300. This represents an increase in expenditure compared to the revised budget 2006/07 of £42,050, but of only £4,300 compared to the original budget for 2006/07.

4.2 The main reason for the increase in the total expenditure budget is to take account of the expected costs of assimilating staff onto the new Pay and Benefit pay scales, with effect from 1 April 2007. A contingency has been retained to cover the costs of staff allowances, which are still the subject of negotiations.

4.3 The Harbour Dues budget for 2007/08 incorporates supervision charges, as above, and is calculated on the moorings meterage as at August 2006. It includes the first three months income from the charges for the calendar year 2008, which have been increased in accordance with the proposals below.

5. Reserves

5.1 Appendix 3 sets out the expected position on the reserve account, based on the assumptions made in compiling the budget. Estimated total reserves, excluding any interest on balances, as at 31 March 2007 are £472,000, and at 31 March 2008 £538,000. This is in line with the policy of ensuring that there is provision for the long term replacement of assets and the future development of the River Hamble, including the cost of rebuilding the Harbour Master's Jetty in the current financial year.

6. Charges for 2008

6.1 In accordance with the previously agreed policy of the Harbour Board, it is proposed to increase Harbour Dues for the calendar year 2008 by the increase in the Retail Price Index (RPI) to September 2006, plus a further 1%.

6.2 RPI increase to September 2006 was 2.7%, so it is therefore proposed to increase Harbour Dues by 3.7% from 1 January 2008.

6.3 The forward budget for 2007/08 has been calculated on the basis of the proposed increase.

7. Impact Assessments

7.1 This report provides a position statement on the River Hamble budget, therefore an impact assessment in terms of the Race Relations (Amendment) Act has not been undertaken. This budget is not expected to compromise the County Council's policies for equality and diversity.

7.2 Setting and revising the revenue budget is key to ensuring that the Department's services are delivered in a cost-effective manner within overall corporate budget guidelines.

Recommendation

That this report be noted by the River Hamble Harbour Management Committee and submitted to the River Hamble Harbour Board for its consideration and approval.

1105/TN

APPENDIX 1

Notes on the above Table

1. 2006/07 - Growth is due to the employment of an additional coxswain during the summer months compared to the original budget. Transfer of sum to Pay & Benefits allowance to reflect payment of additional allowances during P&B assessment period.

2007/08 - Estimated cost of transfer to new Pay & Benefit pay scales. Contingency is for payment of allowances, currently under negotiation.

2. Budget heads have been reviewed and an assessment made of the budget required for both 2006/07 and 2007/08.

3. New ratings assessment has provisionally been agreed with the Rating Officer, and the budget reflects the anticipated requirement for the new assessment.

4. This budget has been combined with the Former SSY under Supplies & Services

5. Additional estimated requirement for 2007/08

6. Maintenance Costs in 2006/07 in respect of CCTV

7. Inflation provision not required

8. New income budget

9. See Para. 3.5 above - supervision charges now combined with Harbour Dues.

10. No longer required due to change in management arrangements with The Crown Estate.

APPENDIX 2

Notes on the above Table

1. Budget heads have been reviewed and an assessment made of the budget required for both 2006/07 and 2007/08.

2. Budget not required in 2007/08

3. Reduced requirement estimated for 2007/08

4. See note 3 to appendix 1, contingency sum left pending confirmation of new assessment

5. Not required at present, pending outcome of national policy changes.

6. Allocated to salary budget in 2006/07. Reduced requirement in 2007/08.

APPENDIX 3