Archived decisions

Item 5

Hampshire County Council

Executive Member - Recreation and Heritage

16 November 2006

Outdoor Service - options for funding savings 2007 - 08

Report of the Director of Recreation and Heritage

Contact: Stuart Nundy

1. Summary

1.1 This report is an outline of the options available to save 4.2% of the current Outdoor Service budget for 2007 -08, with a specific proposal and potential impact

2. Financial position 2006/07

2.1 In 2006 -7 the budget for the outdoor Service (excluding Calshot) was £616k. It is anticipated that R&H DMT will require a saving of 4.2% to be set against this budget in 2007-08. This equates to approximately £27,000.

2.2 The current budget comprises of five elements.

a) £63k covers the full cost of the Outdoor Activities Officer, including travel, IT equipment, training , conferences, etc.

b) £75k is retained centrally to provide support to HCC young people who have financial difficulties accessing the Hampshire Centres, providing funding for corporate projects (eg: Aiming High, Children Looked After; Family Learning) and providing a small contingency against emergency actions that may be required at the outdoor centres. (This element is otherwise known as the `support fund').

c) £190k is the combined cost of providing revenue support to Tile Barn, Beaulieu and the Mountain Centre, providing for a fee offset for HCC young people.

d) £150k is provided as revenue support to the outdoor centres within Southampton and Portsmouth, underpinning their use by HCC young people. (The Cities Support)

e) £134k is provided as Grant Aid to five independent charitable outdoor centres within Hampshire (Beaulieu/CET; Avon Tyrell; Queen Elisabeth Outdoor Centre; Privett Centre; Gilbert White Study Centre) (The grants)

2.3 Over the past three years funding has been cut across the outdoor service budget in order to provide both savings (eg Procurement savings, Gershon Savings) and to create the Policy Fund. Although the Policy Fund has also helped to support a number of service initiatives, the net result has been a year on year reduction in directly available funding. However, these reductions have had no impact either upon grants (which have been entirely protected in the past, including the addition of inflation), nor the funding to the two cities (as their funding is agreed annually, in advance of announced required savings. Thus, the savings over the past years have entirely hit the core funding of our own Centres, and the centrally held support fund. In essence, the budget available for our own centres has shrunk year on year since 2003, whilst the budget against grants and the City centres has increased

2.4 The pressures facing our own centres are increased next year beyond the 4.2% saving being proposed. As a consequence of the introduction of Pay and benefits two additional cost increases are going to emerge. Firstly, many staff in the outdoor centres are likely to benefit from P&B because of the outcome of a process that links and relates all HCC roles to each other, rather than to externally benchmarked equivalents. At present outdoor staff are paid in line with national averages for similar outdoor jobs across the UK. It is a fact that outdoor jobs are not highly paid, but by keeping our centre costs in line with national averages, we are able to compete with other national providers . P&B will break this link, forcing us to pay staff more highly, and thus increase costs to customers. However, we can only increase fees at a rate which the market will bear, and will thus have to find extra savings to simply pay our own staff. In addition, because of an internal decision relating to income generating services, none of the outdoor centres will get corporate help for more than approximately 40% of the increased costs. The consequences of P&B will add approximately 3% pa additional savings requirements onto the outdoor service, on top of any annual pay rise for inflation (say, 2.5%). The combined impact is likely to mean something closer to 10% being required from the centres themselves next year.

2.5 The support fund has taken the brunt of required savings since 2002, especially those that are announced at an advanced stage of the financial year. In 2006-07 £6000 was taken from this element as `savings' prior to the start of the financial year, and an additional £10,000 - £16000 seems likely between November and March. The fund is now at the point where it is struggling to maintain its activities, and may have to curtail direct support to HCC young people if cut further

2.6 It is understood that Grants to external bodies will be protected from direct cuts in 2007-08, although they will not attract inflation. This means that we will be unable to find any of the 4.2% savings from grants.

2.7 The City support element has remained fixed now since 2000, and has attracted both inflation and some real increase over that time. However, the costs of providing this service are very disproportionate when compared to our own centres. This funding is not a grant, and is therefore seen as a viable option for savings in 2007-08

3. Impact assessment

3.1 In order to save the required £27,000 from the Outdoor budget in 2007/08, the only viable option is to take this completely from the budget element used to support the City outdoor centres. This would equate to a figure of £13,500 being taken from support for both Portsmouth and Southampton.

Current funding comparisons for day use activities

It is the case that the cost of HCC supporting the City Centres is already far higer than the support we give to our own centres (nb: column 5) . The variation above is partly due to historical reasons. Until 1999, Southampton and Portsmouth centres provided free provision for all schools (HCC and City). Once the decision was taken to introduce charges, this was done hesitantly and slowly. Because of our lack of direct control over the City Centres and their budgets there has also been inconsistency over annual increases in charges, linked to a real reluctance on behalf of schools to pay charges, especially in the early years. At our own centres, charges for all courses have been present for many years, and fees are raised annually at least in line with inflation. This has not been the case with the City Centres.

Southampton Centres - SWAC and Woodmill.

Current situation (2006/07

· Unit cost per session; £14.50

· Session numbers provided: 7250 (Nominal figure - actual numbers vary - see below)

· Total cost per annum (7250 sessions @ £14.50) = £105125, made up of:

o HCC contribution @£10 per session = £72500

o Schools contribution (@ £4.50 per session) = £32625

User numbers:

· There has been a steady fall in user numbers since 2004.

· The primary use time is consistently April until September. As the total number of sessions has reduced, this has actually increased.

Options.

The projected unit cost per session for 2007/08 has increased to £16.00. On this basis we have the following options

1) Maintain session usage at a nominal 7250, allowing new schools to access the centre and take up additional sessions where available.

· 7250 sessions @ £16.00 per session = £116000

· Reduce 05/06 HCC subsidy by £13500, = £59,000

· Schools contribution increased to £7.86 per session

· Impact: A 57% increase to schools; Potential school backlash; Reduction in user numbers;

2) Reduce sessions to 6000 per annum, focused on current user schools only.

· 6000 sessions @ £16.00 per session = £96,000

· HCC subsidy as above @£59,000

· Schools contribution increased to £6.00 per session

· Impact: a 25% increase in cost to schools

· Potential school backlash

Portsmouth Outdoor Centre.

Current situation.

· 6000 sessions @ £17.00 per session = £102000

· HCC subsidy 06/07 = £77732

· Schools fees @ £4.00 per session = £24,000

User numbers:

· Session numbers have declined over recent years below the 6000 mark.

· The proportion of session between April and September has increasingly become a dominant element of the total amount.

Options

1) Maintain session usage at 6000 sessions.

· 6000 sessions @ £19 per session = £114,000

· Reduce HCC subsidy to 64000 = deficit of £50,000

· Schools fee increases to £8.30 to cover deficit

· Impact: as above for Southampton

2) Reduce session usage to 5000 sessions

· 5000 sessions @ £19 per session = £95,000

· HCC subsidy of £64,000 =- deficit of £31,000

· Increase schools fee to £6.20 to cover deficit

· Impact; As above for Southampton

3) Off set required savings elsewhere within outdoor budget either partially or wholly.

· Impact: Reduction in funding to HCC's own outdoor centres and/or price increases to HCC schools to use HCC centres.

· Continuation of funding imbalance between HCC centres and the City outdoor centres.

Conclusion.

By removing significant amounts of funding from the centres we will inevitably impact on the centres' operations. We may even affect their stability. However, we should also be aware that in Southampton, their own decision makers are likely to have a greater impact.  £2million is mooted to be saved across Southampton across leisure services alone over the next three years, on top of significant cuts over the past five years already. eg £850K this year . There are plans for Southampton itself to raise fees to their own young people to £7 or £8 per session, and we would thus be doing nothing different

Also on the cards for outdoor learning is the complete withdrawal of funding for SCC schools and youth groups from next April.  This is only at the proposal stage and may well be modified to some form of compromise position.  

In Portsmouth, the City Council is engaged in a review of the Outdoor Centre, with proposals that might lead to it being `taken over' by a charitable provider, moving to Trust Status, or maintaining the status quo. No decision has yet been reached. However, the senior manager is due to retire this April. Other senior staff have already left, and it is likely that major change will follow

Longer term, if we are to be in position to fund a Northern outdoor centre of our own, beginning the process of loosening the funding ties is probably in our own interests, 2007 -08 efficiency savings apart.

If we do instigate a change that leads to an increase in costs to HCC young people, it would also be possible to off set some of the concerns of some schools by offering to open the Support Fund to children using these centres, in the same way that children using HCC's own sites are able to do currently. In fact, schools using the Southampton centres have been able to do this for the past year, following some similar fee increases in 2005. Interestingly, no school has applied for this help thus far. I would anticipate few doing to so (in the long term) with the above proposal.

Recommendations

i. That the outline of the Outdoor Service funding situation be noted

ii. That the approach to achieving savings in 2007 -08 be endorsed.

Links to Corporate Strategy

Yes No

Hampshire safer and more secure for all _

Maximising well-being _

Enhancing our quality of place _

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 replied upon to a material extent in the preparation of this report.

NB: the list excludes:

1. Published works

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

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