Archived decisions

FINAL ACCOUNTS 2006/07 AND MEDIUM TERM FINANCIAL STRATEGY 2007/08-2009/10

The Corporate Strategy and the Corporate Business Plan sets the overall direction for the County Council's budget and the Medium Term Financial Strategy to ensure that priorities are affordable and provide value for money, and that resources follow priorities.

In regard to the final accounts for 2006/07, the Cabinet reviewed them on 25 June 2007 prior to the Governance Committee approving the Statement of Accounts on 28 June 2007. A copy of the original report to the Cabinet is available on Hantsweb at:

/decisions/decisions-index/index-docs-6662

and copies have been placed in the Members' Rooms.

In summary, there was a total overspend of £4.5m (0.8%) against the 2006/07 cash limit, as reported to the Cabinet in May which was £6.4m lower than anticipated when the revised budget was approved in February 2007. Additional spending of £7.3m on services, and the impact of carrying forward both an unallocated contingency of £2m within the Adult Services budget and earmarking £0.1m for the carry forward of 50% of the under spends on Environment and Policy and Resources, is offset by savings of £4.9m on other budgets.

In regard to underspendings and overspendings, the Cabinet agreed that the Environment department and Policy and Resources retain 50% of their underspendings and Recreation and Heritage carries forward its overspending to 2007/08, which is in accordance with the County Council's financial management policy. They also agreed that the Adult Services overspending in 2006/07 be written off in accordance with the Financial Recovery Strategy and that unallocated contingency of £2m in the service's 2006/07 budget be carried forward to 2007/08.

Other main points:

    · £1.8m was earmarked for additional one- off spending proposals including a capital grant towards regeneration proposals at Gosport; a contribution towards a Community Sports Centre project in partnership with Winchester City Council and Sport England and consideration of a further contribution towards relocation costs of the Trinity Centre in Winchester.

    · Approved an invest to save contribution of £175,000 to fund restructuring costs in the libraries service, repayable over the period 2008/09 to 2010/11.

    · Closure of the 2006/07 accounts results in a target level of balances of £14.4m based on a risk assessment for 2007/08 which will be subject to review with the next three year budget strategy.

    · Contributions to and from earmarked reserves and the protocol for earmarked reserves were approved (Appendix 4 of the Cabinet report).

    · Approved the County Treasurer's annual report on treasury management activities (Appendix 5 of the Cabinet report).

    · Approved the prudential and health indicators (Appendix 6 of the Cabinet report).

    · Approved the `backward look' annual efficiency statement for 2006/07, based on actual performance for submission to the Department for Communities and Local Government. The submission indicated that after allowing for the inclusion of efficiency gains in 2004/05, 2005/06 and 2006/07, the three year target for 2005/06 to 2007/08 at 2.5% per annum will be achieved a year early (Appendix 7 of the Cabinet report).

    · Approved the final accounts of the Hampshire Pension Fund which indicated that the value of the funds assets had increased from £2.7bn to £2.9bn during the course of 2006/07 (Appendix 8 of the Cabinet report).

    · Noted the progress made in implementing financial management policies (Appendix 9 of the Cabinet report)

    · Approved the 2006/07 capital spending and financing report (Appendix 10 of the Cabinet report)

    · Noted the partnership accounts for 2006/07 in recognition of the County Council's responsibility for financial stewardship (Appendix 11 of the Cabinet report)

    · Noted the County Council's Chief Internal Auditor's Assurance Statement for the year ended 31 March 2007 (Appendix 12 of the Cabinet report)

In regard to the Medium Term Financial Strategy, a new format was proposed whereby a single document was prepared bringing together the County Council's:

    · three year budget plan, comprising the 2007/08 budget and the provisional budget for 2008/09 and 2009/10

    · the capital programme for 2007/08 to 2010/11, also included in the County Council's 2007/08 budget book

    · a number of underpinning policy statements and strategies

    - financial management policies
    - value for money strategy and efficiency plan
    - treasury management and investment strategies
    - the Capital Strategy
    - prudential indicators for capital finance

    · a set of financial health indicators to monitor the Strategy

The Strategy highlighted the links between the County Council's spending plans over the next three years with the Corporate Strategy and the joint plans agreed with the County Council's strategic partners.

When rolling forward the medium term financial plan and other elements of the financial strategy to cover 2008/09 to 2010/11, this process will be constrained by CSR07, which has been delayed to the autumn. It is anticipated that a three year grant settlement will be announced in December 2007 and accordingly there is likely to be a very short period following the CSR07 announcement in which a three year budget plan to 2010/11 can be developed.

In approving the Medium Term Financial Strategy on 21 May 2007, the Cabinet agreed that Executive Members would review the value for money benchmark activity and performance forecasts, budget pressures and savings options to contain spending within the limits set out in the provisional budgets for 2008/09 and 2009/10. The outcome of these reviews will be reported back to the Cabinet in September 2007 to assist planning and budget consultation during the autumn prior to setting final budget limits in December 2007 after the formula grant announcement for the CSR07 period.