Archived decisions

Hampshire County Council

Executive Member- Recreation and Heritage Item 3

13 September 2007

Finance and Performance Monitoring 2007/08

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

cpm

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

1. Summary

1.1 The purpose of this report is to provide an update on the current financial position against the revenue budget and the capital programme for 2007/08 and to outline the anticipated position for 2008/09. The report also presents the performance in the first quarter of the year for a range of significant service performance indicators.

1.2 The revenue budget position is very tight, with a potential overspend approaching £340,000. An action plan is therefore being implemented, and the need to maintain this level of restraint will be reviewed in the course of the year: a balanced budget will be delivered at the year-end as a consequence of the action plan.

1.3 The approved capital programme for 2007/08 is £769,000. Every opportunity is taken to enhance this through attracting external funding and achieving capital receipts through the disposal of surplus assets. As a consequence, the capital programme for 2007/08 has been enhanced by more than £1.6 million, thus increasing spending power more than threefold.

1.4 Performance information for the current year is very positive, suggesting that 2006/07 performance levels have been sustained in the first quarter of 2007/08.

2. Recommendations

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

    i) that the revenue budget position for 2007/08 be noted

    ii) that the additions to the capital programme be noted and approved

    iii) that the performance information for 2007/08 be noted

    iv) that the medium term financial position be approved for submission to Cabinet

3. Revenue Budget 2007/08

3.1 Appendix 1 to this report summarises the financial position for Recreation and Heritage services, and this is shown in more detail in Appendix 2. If no managerial action were taken, there would potentially be an overspend of £336,000.

3.2 Over £310,000 of this potential overspend relates to the Library Service. No other Recreation and Heritage Services are reporting significant overspends at this stage, although the impact of both the foot and mouth outbreak, and more generally the bad summer weather, on Countryside income will need to be monitored. The potential overspend in Libraries arises mainly from the continuing trend of declining income even though the income budget for 2007/08 is some £300,000 lower than the original budget for 2006/07. It is estimated that if income continues to follow current patterns, there will be a shortfall of some £200,000. The main area of declining income is electronic media: this is a national trend and is not unique to Hampshire.

3.3 The Library Service restructure is nearly complete, and has yielded the target savings of £1 million in a full year. Members will recall that its objective is for the Service to live within its means. The restructure was implemented part way through the financial year and significant one-off costs were incurred. These have largely been dealt with but some £90,000 remains and is included in the £340,000 above.

3.4 Whilst the projected overspend is a worst case position, the action plan will ensure that a balanced budget is delivered. Managers across the Department are being encouraged to commit only essential expenditure. In addition, uncommitted allocations of some £70,000 from the Recreation and Heritage Policy Fund will remain uncommitted. This course of action will be reviewed throughout the financial year, to ensure that the action is both necessary and effective.

4. Capital programme

4.1 The approved capital programme for 2007/08 is £769,000. The `core' programme was £619,000 and this has been enhanced by a capital receipt, and by bringing forward £100,000 from the 2010/11 programme. Because the demand for capital resources exceeds the core programme levels, every effort is made to enhance the programme through further capital receipts and through maximising external income. As a consequence capital expenditure has been enhanced by more than £1.6 million as outlined below.

4.2 The following capital receipts are at differing stages and may be available to enhance the Recreation and Heritage Capital Programme:

    £000

    · Recreation and Heritage allocation of sale proceeds, Woolston Road, Havant (this sum to be invested locally)

    500

    · Sale of Hound Lodge (approved by Executive Member, Policy and Resources, April 2007 for repairs at Royal Victoria Country Park - see below)

    310

    · Balance of existing programmed receipts after commitments:

      o Whitchurch Library

      o Buildings associated with Treadgolds Museum

    75

    80

    965

4.3 It is proposed that the following allocations be approved from the above resources as they become available:

    £000

    · Royal Victoria Country Park Chapel - enhancement

    of existing Capital Programme provision, bringing

    total to £300,000

    150

    · Countryside Service (match funding for Lottery Bid

    at Sir George Staunton Country Park) *

    200

    · Community Buildings and Village Halls

    38

    · Library refurbishments at Fareham and Andover

    145

    · Andover Chapel (report elsewhere on this agenda)

    5

    · Record Office: further contribution to local studies project (total value £206,000)

    117

    655

    * Part of re-investment of Woolston Road receipt - subject to approval of

    Lottery Bid.

4.4 This, along with £24,000 brought forward from 2006/07, leaves a total of over £330,000 unallocated most of which arises from the Woolston Road disposal. It is prudent at this stage to leave the balance unallocated for:

    · Allocation in accordance with conditions associated with receipts

    · Contingency against costs on Winchester Discovery Centre

    · Costs associated with unavoidable re-location of staff

    · Unforeseen capital requirements

4.5 The current year's capital programme is also enhanced by external funding in excess of £700,000, which has provided an average 75% funding for schemes with a total value of £940,000. The balance of funding has mainly come from the Recreation and Heritage core capital programme, with contributions from Policy and Resources and Environment.

4.6 In summary, the externally funded schemes are:

    External Funding

    Total Scheme

    Countryside Service

    · Queen Elizabeth Country Park Green Fuel

    boiler

    64

    132

    · Odiham Castle Phase II works (HLF-funded scheme reported at May decision day)

    394

    454

    · Rowlands Castle bridleway

    15

    33

    Museums Service

    · Aldershot Military Museum (HLF-funded)

    50

    71

    · Fareham Museum (Woolston and Fareham Borough Council)

    148

    198

    · Allen Gallery (HLF-funded)

    34

    52

    705

    940

5. Performance

5.1 The first quarter's performance figures are attached as Appendix 3. For the first time, the year-end position is forecast based on the profile of the previous year's indicators. Although this does need to be treated with some caution, and will be refined over time, it does indicate that performance on these service indicators is likely to be at similar levels to 2006/07, despite service budgets having been reduced in real terms to meet corporate and departmental requirements.

6. Medium Term Financial Position

6.1 Cabinet in May agreed "to request Executive Members to review ..... budget pressures and savings options to contain spending within the limits set out .... for 2008/09 and 2009/10". The aim of this is to enable the three year budget plan to be updated.

6.2 A review has been undertaken and indicates that corporate requirements, and unavoidable and high priority service developments for 2008/09, represent 3.0% of the Recreation and Heritage budget. On the assumption that no additional resources would be available, it is considered that the most appropriate way to achieve this would be to ask all services to contribute 3.0% of their budgets to these high priority areas.

6.3 This approach has the advantage that it would meet anticipated efficiency targets, and does not require any service to make disproportionate savings. However, it should be noted that this approach has been adopted in recent years; as a consequence, services are understandably finding it harder to achieve further savings without a more direct impact on service provision.

6.4 The key financial pressures and service priorities are outlined below. Inevitably it is possible to predict the 2008/09 position with more confidence than for subsequent years. The position for all three years will need to be reviewed. The annual variations in net expenditure from 2007/08 levels are:

    2008/09

    £000

    2009/10

    £000

    2010/11

    £000

    Corporate requirements

    (Hantsdirect, budget re-directions)

    271

    410

    552

    High Priority Recreation and Heritage Developments:

    Committed:

    Winchester Discovery Centre

    150

    150

    150

    Library Restructure: Pension costs

    150

    150

    -

    Peoples Network Equipment Replacement

    20

    20

    20

    Travel/transport savings

    (20)

    ( 20)

    (20)

    300

    300

    150

    Other Priorities:

    Countryside Service

    150

    150

    150

    One-off costs of move from North Walls

    50

    -

    -

    Policy Fund - to enable resources to be

    targeted at strategic priorities

    200

    400

    600

    400

    550

    750

    Total

    971

    1,260

    1,452

    Increase over previous year as percentage of 2007/08 base budget

    3.0

    0.9

    0.6

7. Impact Assessment

7.1 The proposals in this report are in accordance with the budget strategy and 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 proposals outlined in this report are not considered discriminatory.

8. Conclusion

8.1 There are pressures on the revenue budget, mainly as a result of declining income levels in the Library Service. Expenditure is being tightly managed to ensure a balanced budget. Capital receipts and external funding are significantly enhancing the capital programme resources. Meanwhile, performance levels are in line with 2006/07. The medium term financial position indicates that it will be possible to achieve efficiency targets and address the key priorities for the future.

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 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.