Archived decisions

Policy

Related targets/outcomes

Overall financial planning and budget strategy

1

Budget strategy related to corporate priorities, as reflected in corporate business plan with links to the local public service agreement and local area agreement.

Linkage to Corporate Business Plan made explicit in budget proposals and in preparation for business cases requiring approval prior to the release of increased sums in the budget, or in developing savings plans.

2

Growth and saving plans to be submitted to the appropriate executive member or to the Cabinet, identifying planned outcomes and performance improvements for budget growth and mechanisms for achieving any significant savings.

Plans to be submitted to Executive members prior to initial budget monitoring reports, so that implementation of plans can be monitored.

3

Ensure that the long-term level of revenue commitments does not exceed long-term funding likely to be available including forecast levels of future grant settlement and council tax.

Revenue commitments to be assessed based on the assumption of no increase in grant in 2008/09 and 2009/10 and of Council tax increases not exceeding 5%.

4

Ensure integration of medium term financial and service planning.

Framework developed by Corporate Performance and Efficiency group, focussing on the corporate business plan

5

Maintain three budget projections in order to support medium term financial planning, subject to fine tuning of resource allocation decisions on an annual basis.

A budget for 2007/08 and a provisional budget for 2008/09 and 2009/10 be submitted to the Cabinet and County Council in February 2007, the provisional budgets being subject to review following the 2007 Spending Review.

6

Minimise levels of non-earmarked reserves, at a level determined by risk assessment, in order to maximise use of available funds on service provision.

Risk assessment incorporated in budget proposals submitted to the Cabinet in February 2007, with a higher target of 2.4% proposed in 2007/08 as a result of the assessment.

7

Review the rationale and adequacy of earmarked reserves on at least an annual basis.

Protocol reviewed twice yearly. Further review of protocol in relation to 2007/08 to 2009/10 budget included in Appendix 10.

8

Build up an earmarked reserve in recognition of the transitional costs of implementing Pay and Benefits proposals associated with equal pay compensation.

Further contribution of £7.5m to the reserve proposed in 2007/08 to bring the level of the reserve to £17m.

9

Seek to minimise the degree of instability in the employers' contribution to the Hampshire Pension fund, subject to objective of securing 100% funding in the long-term.

Outcome of March 2004 actuarial review involves phased increase from 2005/06 to 2007/08 in employers' contribution. No specific allowance made for any further increases arising from the 2007 actuarial review in setting provisional budgets for 2008/09 and 2009/10.

10

Continue policy of increasing budgets for Children's Social Care in line with increases in national spending plans.

Proposed budget for 2007/08 and provisional budget for 2008/09 and 2009/10 based on the continuation of this policy, based on increases incorporated in 2004 spending review.

11

Redistribute service budget guidelines to provide an annual increase of 4.3% in the Adult Services guideline from 2007/08 to 2009/10.

Other service guidelines reduced by £1.1m per annum to accommodate.

12

Set a schools budget in consultation with the Schools Forum based on specific grants allocated by the Government.

2007/08 budget set at a level equal to estimated specific grants, plus a County Council contribution of £208,000 to reflect further delegation of functions to schools in 2006/07and 2007/08.

13

Manage the application of the grant equalisation reserve in order to protect services from future grant loss from the 2006/07 revised formula.

Annual contributions of £1.2m in 2006/07 and 2007/08 are proposed, in view of the risk of significant further grant loss from 2008/09.

14

In order to allow services to operate within firm cash limits, allocate provision for inflation to services at the start of the financial year and require excess inflation to be absorbed.

Provisional allocations for 2007/08 to 2009/10 agreed by Cabinet in September 2006.

15

Services expected to contain spending within the approved cash limit, with no supplementary allocations being available other than in exceptional circumstances unless a specific contingency provision made within the budget.

Adult Services 2005/06 overspending has been written off in view of the exceptional circumstances and a two year period has been set for the financial recovery plan.

16

Services expected to carry forward 100% of any overspending against the overall service cash limit, but are allowed to retain up to 100% of any planned underspendings identified prior to the approval of the following year's budget. 50% of any unplanned underspendings can automatically be carried forward.

Policy applied in dealing with under and overspendings in 2005/06's final accounts and in preparation of 2007/08 budget.

17

Require the continuing absorption of cost increases by expecting services to absorb any net cost arising from the annual cost of salary increments.

Increments of £1.8m to be absorbed in 2007/08 budget.

18

Seek to deliver efficiency gains that exceed the targets set by the Gershon review.

Summary of planned efficiencies included in Appendix 5 of the report. Improvements of £30.3m identified in the 2004/05 and 2005/06 backward-looking AES's

19

Encourage service chief officers to submit applications for specific grants/partnership funding designed to maximise the resources available to the County Council, by allowing capital and revenue cash limits to be adjusted to reflect changes in grant levels.

Applied in 2007/08 to 2009/10 budget process.

20

Require services to review the level of fees and charges at least annually and set budget limits on the assumption that the level of charges will be increased in line with assumed inflation on gross expenditure.

Reflected in 2007/08 budget strategy. Appendix 6 summarises the review of income.

21

Seek best value in spending, bearing in mind that considerations of quality, risk, sustainability, environmental impact, local economic development and equalities may all be relevant in addition to price.

Reflected in Best Value, Local PSA programmes and CPA 3 star Use of Resources assessment for value for money.

22

Seek to retain relatively low council taxes in Hampshire, with the aim of setting a tax in the lowest quartile of County Council council taxes.

2007/08 council tax likely to be within or very close to the lower quartile of County Council's without fire funding responsibilities.

Capital programming

23

Review capital strategy on an annual basis and prepare four year capital programme in accordance with the strategy.

Revised strategy approved by the Cabinet in July 2006.

24

Seek to maintain the level of the locally-resourced capital programme by continued recycling of surplus assets to generate capital receipts.

Programme for 2007/08 to 2010/11 underpinned by projected capital receipts of £116m over the revised 2006/07 to 2008/09.

25

Allow services to retain at least 25% of the value of their capital receipts and where necessary to finance investment in replacement assets, up to 100%.

Services authorised to retain £5.3m of 2005/06's capital receipts.

26

Adopt a Public Private Partnership (PPP) approach, including the use of the Private Finance Initiative (PFI), where this provides best value for the Council.

Full business case being prepared for a street lighting column replacement project in partnership with West Sussex County Council and Southampton City Council.

27

Make full use of Government-supported borrowing, subject to the affordability of the additional capital financing costs generated.

2007/08 to 2010/11 capital programme based on limiting the take up of supported borrowing to a level consistent with a 2.5% annual increase in the capital financing requirement from supported borrowing, in view of the implications of being an authority well below the grant floor.

28

Seek to maximise capital resources by developing capital schemes in conjunction with external partners where appropriate.

Funding of £37.4m by external partners, incorporated in 2006/07 and 2007/08's estimated capital payments.

29

Approve the use of unsupported borrowing within the framework of the County Council's prudential code

- business unit investment where the financing costs will be funded by charges made to customers

- `invest to save' projects generating savings which will enable the financing costs to be funded, capital receipts or developer contributions which will enable borrowing to be repaid, or alternative costs to be avoided.

- Temporary borrowing to cover short-term shortfalls in capital financing resources.

Proposals have either been approved or are being submitted in the 2007/08 to 2010/11 capital programme which involve in aggregate potential unsupported borrowing of £68.3m by the end of 2008/09, in accordance with County Council's code. A revision to the policy was introduced in 2006/07 to require services to absorb the revenue cost of temporary unsupported borrowing rather than recovering these costs in arrear when the capital receipt / external contribution is received.