Hampshire County Council

Executive Member - Recreation and Heritage Item 3

27 March 2007

Financial and Performance Monitoring 2006/07

Report of the Director of Recreation and Heritage and The County Treasurer

Contact: Bevis Ingram (01962) 84 7508 [email protected]

Stuart Dorward (01962) 84 6110 [email protected]

1. Summary

1.1 The purpose of this report is to provide an update on the current financial performance position against the revised revenue budget for 2006/07 which was approved in January.

1.2 Overall, without further action, there would be a net overspend of £17,000 compared with the revised budget. The two main pressures are in the Library and Information Service, owing to the additional costs of regrading library assistants (£80,000) and further falls in DVD/video income (£60,000); these cost pressures are partially offset by further vacancy management savings of £45,000. The major variations in other services include:

· A planned underspending of £40,000 on Arts and related budgets which is required next year to fund the Damien Hirst exhibition

· An underspending of £38,000 on the community support service

2 Recommendations

2.1 It is requested that the Executive Member for Recreation and Heritage approve the following recommendations:

i) That the financial and performance positions be noted

ii) That the approach to achieving a balanced budget be approved

3 Financial Position 2006/07

3.1 The financial position is summarised in Appendix 1 with greater detail for each service in Appendix 2. This shows that there is a total projected overspend of £46,000. However, £58,000 of this relates to Milestones Museum and Basingstoke and Deane Borough Council will fund half of the projected overspend. As a consequence, the net Recreation and Heritage overspend, with no further management action, would be £17,000.

3.2 As part of the revised budget, the cash limits for the following services were reduced by £230,000 to cover projected overspendings, most notably in the Library Service:

· Countryside

· Sport and Community

· Museums and Archives

· Arts

· Tourism, Marketing and Design

3.3 It is projected that expenditure on each of these services will be at, or slightly below cash limit. One exception is the Arts budget where a planned underspending of £33,000 is the main contributor towards the £40,000 required to help fund the Damien Hirst exhibition in the Great Hall in Autumn 2007. The balance of the funding identified in 2006/07 will come from the Tourism, Marketing and Design budget. There is also an underspending of £38,000 on the community support service, arising from vacancy management in the course of the year. The Director will, in the new financial year, consider ways of making this sum available for community support services.

3.4 The Libraries budget is showing net pressures of £96,000. The main factors in this are:

· The cost of regrading Library Assistants

· A continued reduction in income from video hire

The regrading of the Library Assistants has cost £80,000 in 2006/07. The regrading was agreed late in 2006 which means that, apart from further vacancy management savings, there has been little time to take other corrective action.

3.5 Managers, particularly in the Library Service, are being encouraged to ensure that expenditure in the final quarter continues to be very tightly controlled. An example of this is that the balance of £39,000 on the Policy Fund, which has been held as a small contingency, will not be allocated. It is anticipated that overall net expenditure will be very close to cash limit.

3.6 In summary, the budget remains under considerable pressures, some of which have emerged towards the end of the financial year, and these are being addressed through management action.

4. Performance Position 2006/07

4.1 Performance to date against the key service targets is summarised in Appendix 3 to this report. As this is the first year in which projections have been made, it should be stressed that these are not seasonally adjusted. For example, the number of visits to countryside sites is relatively low, but could well improve with increased numbers in the final quarter.

4.2 Most of the performance indicators continue to be at least close to, or in line with, target. The significant exception remains the number of library visits per 1,000 population. Based on counts in sample libraries, it is estimated that performance will be 3% short of the target level. At the end of the second quarter, the shortfall was estimated as 4%.

4.3 It has recently been announced that Hampshire County Council's Culture Service Assessment for 2006 has been rated as 3, whereas for 2005 it was 4 - the highest level. The reason for this is that Hampshire did not achieve the "lower threshold" on one indicator, and a rating of 4 cannot be given if the lower threshold is not reached on any one of the eleven key indicators.

4.4 The indicator in question is the Libraries "stock level and stock turn" which in effect identifies the average number of times that library books are lent out in the course of the year. Hampshire County Council did challenge the assessment on the grounds that the stock turn was reduced as a result of library closures to enable improvement works, and that therefore the assessment "penalised" the County for improving its libraries. The Leader has recently written to the Secretary of State for Culture, Media and Sport expressing his disappointment at the assessment. The following is an extract from that letter:

"So you can understand my disappointment and exasperation at the recent Audit Commission announcement on our culture block result. Against a background of steady improvement against the performance indicators used in the assessment, our result ultimately turned on a small reduction in just one indicator - stock turn in the library service. We presented a well argued and evidenced case to the commission which identified the impact of our extensive library refurbishment programme on this indicator. Ironically because of the rigid nature of this measure, Hampshire County Council is being penalised for improving its libraries!"

5. Impact Assessment

5.1 This report has been prepared on the basis of budget monitoring carried out in accordance with the County Council's financial management policy. This policy applies equally to all services and ensures consistent financial management decisions across all services, and the actions outlined in this report are not considered discriminatory.

6. Conclusion

6.1 There are still financial pressures on the Library Service, but savings on other Recreation and Heritage services, and continued control of expenditure mean that the outturn is likely to be close to cash limit.

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.

None.