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 Area Agreement.

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

2

Consult on a cyclic basis with interested stakeholders (eg. the public, private sector and staff) on budgetary priorities.

Stakeholder meetings held in the autumn 2007 during the development of the 2008/09 budget.

3

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.

4

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 three year grant settlement and Council tax assumptions built into the three year budget plan

5

Ensure integration of medium term financial and service planning.

Framework developed by Corporate Performance and Efficiency group, focussing on the Corporate Business Plan.

6

Incorporate in the medium term financial strategy the impact of joint plans agreed with partners.

Medium term financial strategy will set out the County Council and total partnership investments in areas of partnership work.

7

Maintain three year 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 2008/09 and a provisional budget for 2009/10 and 2010/11 will be submitted to the Cabinet and County Council in February 2008, prior to consultation on a revised medium term financial strategy following CSR 07 and the three year grant settlement.

8

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 2008, with a target of 2.3% proposed in 2008/09 as a result of the assessment.

9

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 2008/09 to 2010/11 budget included in Appendix 6.

10

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 £10.2m to the reserve proposed in 2007/08 to bring the level of the reserve to £30m.

11

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.

Smaller increase of 0.5% per annum over the next three years has resulted from the March 2007 actuarial review.

12

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

Increases no longer transparent in national spending plans, but increases at a similar level to the later years of SR 2004 included in 2008/09 to 2010/11 budget plans.

13

Set service budget guidelines to provide an annual increase of at least 4.3% in the Adult Services guideline from 2008/09 to 2010/11.

Inclusive of specific and area grants spending on Adult Services is budgeted to increase by 5.3% in 2008/09, 5.4% in 2009/10 and 4.5% in 2010/11.

14

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

2008/09 budget set at a level equal to estimated specific grants, plus a County Council contribution of £128,000 to reflect further delegation of functions to schools since 2006/07.

15

Manage the application of the grant equalisation reserve in order to protect services from future grant loss from the 2006/07 and 2008/09 revised formulae.

2008/09 to 2010/11 budgets allow for use of the grant equalisation reserve over a 6 year period to phase in the impact of loss of grant.

16

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 2008/09 to 2010/11 agreed in this report.

17

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. Audit Commission have commended delivery against this plan.

18

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 2006/07's final accounts subject to the two year recovery plan agreed for Adult Services and in preparation of 2008/09 budget.

19

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 £1.7m to be absorbed in 2008/09 budget.

20

Seek to deliver efficiency gains in line with the Government target of 3% annually.

Summary of planned efficiencies from 2007/08 to 2010/11 included in Appendix 3 of the report. Initial estimate for 2008/09 equivalent to about 2.3%.

21

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 2008/09 to 2010/11 budget process.

22

Assist in developing the third sector's capacity by setting financial assistance within clear frameworks and on a three year basis where possible.

Existing practices to be reviewed in context of three year grant settlement.

23

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 2008/09 budget strategy.

24

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 and LAA outcomes and CPA 3 star Use of Resources assessment for value for money.

25

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.

2008/09 council tax likely to be within or very close to the lower quartile of County Council's without fire funding responsibilities.

Capital programming

26

Review capital strategy on an annual basis and prepare three year capital programme (consistent with CSR periods) in accordance with the strategy.

Revised strategy approved by the Cabinet in July 2007.

27

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

Programme for 2008/09 to 2010/11 underpinned by projected capital receipts of £155m over the period 2007/08 to 2009/10.

28

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 £17.1m of 2006/07's capital receipts.

29

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 submitted for a street lighting column replacement project in partnership with West Sussex County Council and Southampton City Council.

30

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

2008/09 to 2010/11 capital programme guidelines 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. In finalising the budget additional borrowing above this level is proposed in 2008/09 and 2009/10.

31

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

Funding of £34.5m by external partners, incorporated in 2008/09 and 2010/11's estimated capital payments.

32

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 2008/09 to 2010/11 capital programme which involve in aggregate potential unsupported borrowing of £53.7m by the end of 2010/11 after peaking at £67.5m at 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.