At a meeting of the CABINET of HAMPSHIRE COUNTY COUNCIL held at THE CASTLE, WINCHESTER on 8 February 2008.

Present:

Councillors:

p T.K. Thornber, CBE (Chairman)

Also present with the agreement of the Chairman: Councillor M.F. Cartwright; K.G. Chapman; A.P. Collett; B.D. Dash; Dr. R.J. Ellis; P.R.C. Hutcheson; C.A. Leversha and R.C. McIntosh

375. APOLOGIES FOR ABSENCE

Apologies for absence were received from Councillor M.J. Woodhall.

376. DECLARATIONS OF INTEREST

Members were mindful that, where they believed they had a personal or personal prejudicial interest in any matter to be considered at the meeting, they should normally at the time of the debate, declare their interest, and, having regard to the circumstances described in paragraphs 9, 10, 11 and 12 of the County Council's Code of Conduct, consider whether to leave the meeting whilst the matter was discussed.

377. MINUTES

The minutes of the meeting of the Cabinet held on 21 January 2008 were confirmed as a correct record.

378. CHAIRMAN'S COMMUNICATIONS

There were no communications.

379. REVENUE BUDGET AND PRECEPT 2008/09 AND PROVISIONAL
BUDGETS 2009/10 TO 2010/11

The Cabinet considered the report of the County Treasurer (Item 5 in the Minute book) setting out the proposed 2008/09 revenue budget and council tax, within the budget guidelines approved on 17 December 2007, based on a revision of the provisional guidelines set in February 2007. The report summarised the changes since then and the 2008/09 budget accordingly takes account of subsequent developments and monitoring reports to the Executive Members. Some corrections to the report were noted as follows:

· Page 2 of the decision sheet, recommendation 9 should refer to "(Table 13, paragraph 8.40)"

· Page 2 of the decision sheet, recommendation 10 should refer to "(Appendix 6)"

· Page 11 of the report, paragraph 4.11, second sentence should refer to "....... will be met from the carry forward if agreed and achieved in 2007/08"

The County Treasurer expanded on the report and supported this with a short presentation focussing on the main points included in the report, such as:

· 2008/09 budget guidelines and the medium-term financial plan
2008/09 to 2010/11
for 2008/09:

· service guideline increases

· spending pressures and savings

· cashable efficiency savings

· additional one-off resources and potential use

· additional recurring resources

· budget and council tax summary

· comparator data for County Councils


and also drew attention to the decision by the Court Service to recover in full public family law fees for cases brought under the Children's Act. Although the Government has included an additional £563,000 of grant in recognition of these additional costs, this is however matched by the need to increase the cash limit for Children's Services by an equivalent amount as these new costs had not been included in its budget. The County Treasurer also highlighted that due to the unwinding of the formula grant councils are receiving very different settlements and are experiencing funding pressures, which in turn will lead to different levels of council tax rises possible within the 5% capping level set by the Government.

The final formula grant settlement covers the three year period from 2008/09 to 2010/11 and although this offers certainty for that period in regard to the amount of grant the County Council will receive, the grant increases remain very low; 2% (£2.8m) for 2008/09, 1.75% (£2.5m) for 2009/10 and 1.5% (£2.2m) for 2010/11. This is despite strong representations made to the Department for Communities and Local Government to which a response was not received and resulted in no change to the final settlement.

The Cabinet expressed strong concerns in respect of the continuing trend by the Government of low formula grant settlements for Hampshire, which are well below inflation (Retail Price Index - 4% and Consumer Price Index for services - 3.3%), give the second lowest grant per head (£112 compared with an average of £176 while the average grant increase for counties is 5.3%) and does not adequately address the demographic and other pressures that the County Council continues to face. Despite the disappointing position the low settlement puts the County Council in, the council tax increase is within the capping limit set by the Government (equates to an increase of 83p per week for an average band D property) and importantly the budget proposed preserves the delivery of high quality vital services. £14.6m of efficiency savings has been identified in the proposed budget and it will be necessary to deploy these savings to fund additional service pressures that the 2% grant settlement doesn't cover. The Cabinet continue to be of the view that the current low settlement position for Hampshire and the pressure that puts on the council tax is not sustainable and will continue to lobby the Government on this issue as well as continuing to press for a return to local authorities of the control of business rates.

Cabinet particularly welcomed the turnaround position for Adult Services, which is on track to successfully complete a two-year recovery and modernisation plan by the end of March 2008 and congratulated everyone involved in this achievement.

The Cabinet adopted the recommendations set out in the report for submission and approval by the County Council on 21 February 2008. A copy of the substantive decision sheet is attached to these minutes as Appendix 1.

380. CAPITAL PROGRAMME 2008/09 TO 2010/11

The Cabinet considered the report of the County Treasurer (Item 6 in the Minute book) setting out the proposed capital programme for 2008/09 to 2010/11, based on the guidelines approved on 17 December 2007 and the support for capital schemes recently announced or confirmed by the Government. The proposals presented take account of the County Council's capital strategy and Prudential Code for Capital Finance in Local Authorities including the capital financing position, the level of debt outstanding and the consequences for the revenue budget and council tax.

A number of difficulties were highlighted which are exacerbated by the Government's stance on so called `supported' borrowing and this particularly affects the Environment portfolio and Children's Services. The Cabinet considered the difficulties highlighted and recommended that the Environment capital programme for 2009/10 be increased to incorporate the Winchester Park and Ride and associated works at a cost of £7.1m, requiring additional borrowing of £6.8m after allowing for advance works already programmed and the use of external contributions. This will require schemes to the value of £6.4m to be deferred as set out in table 16 of the report. Additional borrowing of £4.4m for schools' projects (Children's Services £3.0m and Policy and Resources £1.4m) spread over 2008/09 and 2009/10 was also recommended.

Capital receipts continue to be a major source of finance for the capital programme and the Cabinet welcomed the high level of receipts achieved so far this year, towards a target which is at a record level for the County Council.

The Cabinet adopted the recommendations set out in the report for submission and approval by the County Council on 21 February 2008, subject to an amendment to the decision sheet to reflect the views expressed above. A copy of the substantive decision sheet is attached to these minutes as Appendix 2.

Contact: Jon Pittam, (01962) 847400; [email protected]

1 Summary

1.1 This report sets out the 2008/09 revenue budget and council tax, within the budget guidelines approved in December 2007 which were based upon the provisional guidelines set in February 2007. The report summarises the changes since then. The 2008/09 budget therefore takes account of subsequent developments and the reports back by the Executive Members. The proposed council tax rise is 4.5% within the Government's capping limit of 5%. The council tax rise is slightly lower than the predicted 4.9% within the guidelines, because the cash increase in Government grant is 2% rather than the projected 0%.

1.2 The report is in three parts:

· this summary decision sheet, containing the detailed recommendations required on the budget and council tax

· the budget report

· the appendices which complete the drill-down to the detail of the budget, as considered by Executive Members for each service

1.3 The following decisions were made, based upon the recommendations from the Leader and Cabinet to the County Council for the 2008/09 budget and council tax that:

1. the revised estimates 2007/08 (Appendix 1) be approved

2. the anticipated underspendings of £5.9m in Table 1 (paragraph 2.13) be carried forward to 2008/09 (up to £4.3m on Adult Services, £980,000 on Environment and £630,000 on Policy and Resources)

3. the additional pressures and growth proposals from Executive Members totalling £23.9m be approved (Table 6, paragraph 4.23 and Appendix 2)

4. the savings and redeployment proposals of £14.5m put forward by Executive Members, be approved (Table 6, paragraphs 4.23 and 4.24 and Appendix 3)

5. cashable efficiency savings of £14.6m in 2008/09 (Table 7, paragraph 5.5 and Appendix 3) be approved

6. the annual review of charges and maximisation of income across services (Table 8, paragraph 6.2) be approved

7. the workforce implications of the proposed budget 2008/09 (Table 9, paragraph 7.2 and Appendix 5) be agreed

8. additional one-off growth of £7.4m be approved (Table 11, paragraph 8.19) including £1.4m Invest to Save contribution for Children's Services in 2008/09 (as a result of the business case to increase foster care rates and to produce savings against the higher longer term costs of independent foster care placements), a £5.5m contribution to a capital reserve, and resources set aside for the Commission on Personalisation, the Senate, Basingstoke Canal and apprentices

9. additional recurring growth of £2.0m be approved (Table 13, paragraph 8.40), including revenue support towards higher capital payments of £11.2m over three years, a contribution of £1.2m to an invest to save and modernisation reserve, and a contingency for further allocation against business cases, including £250,000 for Recreation and Heritage

10. adjustments to reserves as set out in Table 14, paragraph 10.13 and the overall level of reserves (Appendix 6) be approved

11. the estimated level of balances at 31 March 2008 of £14.4m (Table 2, paragraph 2.21) be approved

12. the budget for 2008/09 as summarised in Tables 16 to 20, set out in detail in Appendix 4 and including the adjustments in recommendations 3, 4, 8, 9 and 10, be approved

13. the provisional budgets for 2009/10 and 2010/11 summarised in Tables 23 to 26 be approved, together with provisional council tax rises of 3.5% in each year

14. the treasury management, annual investment strategies, prudential and financial health indicators for 2008/09, as set out in Appendix 8 be approved

15. it be a recommendation to Council that

a) the Treasurer's report under Section 25 of the Local Government Act 2003 be taken into account when the Council determines its budget and precept for 2008/09 (Appendix 9)

b) the revenue budget for 2008/09 (as set out in the attached draft budget book) and the provisional budgets for 2009/10 and 2010/11 be approved

c) the total budget requirement for the general expenses of the County Council for the year beginning 1 April 2008 be £642,680,000

d) the County Council's band D council tax for the year beginning 1 April 2008 be £999.00

e) the County Council's council tax for the year beginning 1 April 2008 for properties in each tax band be:

	£
Band A	666.00
Band B	777.00
Band C	888.00
Band D	999.00
Band E	1221.00
Band F	1443.00
Band G	1665.00
Band H	1998.00

f) precepts be issued totalling £497,062,410.03 on the billing authorities in Hampshire, requiring the payment, in such instalments and on such dates set by them and previously notified to the County Council, in proportion to the taxbase of each billing authority's area as determined by them and as set out below:

Basingstoke and Deane Borough Council	61,753.90
East Hampshire District Council	47,352.44
Eastleigh Borough Council	43,445.08
Fareham Borough Council	42,200.00
Gosport Borough Council	27,432.40
Hart District Council	37,667.80
Havant Borough Council	42,483.00
New Forest District Council	72,101.30
Rushmoor Borough Council	30,928.94
Test Valley Borough Council	45,148.00
Winchester City Council	47,047.11

g) that the annual investment strategy (Appendix 8) be approved

h) the prudential and financial health indicators (annex 3 to Appendix 8) be approved.

2 Reason

2.1 The full County Council must agree the 2008/09 revenue budget and set the council tax for 2008/09 at its meeting on 21 February 2008. The Leader will present his budget speech and recommendations at that meeting. This report provides the background to those budget decisions and presents the recommendations from the Leader and Cabinet to the County Council.

2.2 The County Treasurer under Section 25 of the Local Government Act 2003 is also required to report to the full Council on the:

· robustness of the estimates for 2008/09

· adequacy of the financial reserves in the budget.

2.3 These decisions support the corporate strategy by providing resources for:

· Hampshire safer and more secure for all

· maximising wellbeing

· enhancing our quality of place

2.4 The budget is part of the integrated financial, performance and workforce planning process linked to the corporate strategy, the corporate business plan and the corporate management plan (resources following priorities, improving value for money and increasing capacity). Resources have been allocated as the highest priority for maximising wellbeing towards meeting the needs of the most vulnerable in Adult Services and Children's Services, as well as meeting the necessary commitments from the waste management contract.

3 Other options considered and rejected:

3.1 Other options are not available as far as process and timetable are concerned, but it is expected that the leaders of the opposition parties will wish to present their own recommendations on the budget and council tax to the County Council as amendments to these proposals.

4 Conflicts of interest declared by the decision maker or other Executive member consulted

4.1 Not applicable.

5 Dispensation granted by the Standards Committee

5.1 Not applicable.

6 Reason for the matter being dealt with if urgent

6.1 Not applicable.

Approved by: Date:
Councillor T. K. Thornber CBE - Chairman

Contact: Jon Pittam, (01962) 847400, e-mail: [email protected]

1. Summary

1.1 The accompanying report sets out for approval the proposed capital programme for 2008/09 to 2010/11, based on the guidelines agreed by Cabinet on 17 December 2007 and the support for capital schemes recently announced or confirmed by the Government. The proposals take account of the County Council's capital strategy and the Prudential Code for Capital Finance in Local Authorities including the capital financing position, the level of debt outstanding and the consequences for the revenue budget and council tax.

1.2 The following decisions were made, based on the recommendations of the Leader and Cabinet to the County Council, for the capital programme for 2008/09 to 2010/11:

1 That the possible need to use prudential borrowing of £4.8m in 2009/10 and £0.7m in 2010/11 to meet the temporary shortfalls of resources, to be repaid from forecast surplus capital resources in 2011/12, be noted and reassessed when the capital programme is next reviewed (paragraph 2.2 of the main report)

2 That Children's Services schemes and resources totalling £13.0m be deferred from the 2007/08 capital programme to 2008/09 (paragraph 7.2)

3 That the take-up by Children's Services of the Government's allocations for the Primary Capital Programme over the three-year period of 2008/09 and 2010/11 be subject to a further report to Cabinet when the Government has decided whether its support will be in the form of capital grants, borrowing allocations or the private finance initiative (paragraph 7.10)

4 That additions to the Children's Services capital programme for 2008/09 to 2010/11 financed by prudential borrowing of up to £25.7m, including £10.4m for 2008/09, be approved in principle, subject to further reports to the Executive Member for Policy and Resources on specific proposals (paragraph 7.17)

5 That the proposal to increase the Environment capital programme for structural maintenance by £7.1m (£4.0m in 2008/09 and £3.1m in 2009/10), financed by additional prudential borrowing with the resulting loan charges met from the Environment revenue budget, be approved (paragraph 8.2)

6 The Environment capital programme for 2009/10 be increased to incorporate the Winchester Park and Ride and associated works at a cost of £7.1m, requiring additional borrowing of £6.8m after allowing for advance works already programmed and the use of external contributions. Schemes to the value of £6.4m will be deferred as set out in table 16 of the report representing the balance of borrowing allocations which the County Council is unable to afford from unsupported or prudential borrowing.


7 Additional borrowing of £4.4m for schools' projects (Children's Services £3.0m and Policy and Resources £1.4m) spread over 2008/09 and 2009/10, was approved.


8 That Policy and Resources capital programme for 2008/09 be increased by £1m for IT Services hardware replacement and investment to facilitate the migration of the data centre to Ashburton Court, improvements to the Hantsnet infrastructure and to provide additional data storage capacity, to be repaid through the IT Services trading account within five years (paragraph 9.7)

9 That it be a recommendation to Council that:

a) the capital programme for 2008/09 and the provisional programmes for 2009/01 and 2010/11 be approved as set out in Appendix 5 of the accompanying report and subject to the conditions set out in section B.3 of the County Council's Financial Procedures on the responsibilities for managing the capital programme and, where appropriate, to the approval of the Executive Member for Policy and Resources to proposals by executive members to retain more than a 25% share of capital receipts

b) expenditure on preliminary design and planning work for major transport schemes be permitted when they have achieved a place in the County Council's Local Transport Plan, subject to the cost being met within existing Government allocations

c) a scheme costing £3m for a potential Basingstoke Discovery Centre be added to the Policy and Resources capital programme for 2008/09, to be released to Recreation and Heritage once a detailed project appraisal, business case and funding package has been agreed by the executive members for Policy and Resources and Recreation and Heritage (paragraph 10.3)

d) authority be given to incur expenditure on land purchases as follows:

(i) up to the sum specified in respect of sites still required for the schemes included in the capital programme for the period 2008/09 to 2010/11 provided that the relevant scheme has been the subject of a feasibility or design project appraisal approved by the relevant executive member

(ii) up to the amount included in the programmes for 2008/09 to 2010/11 in respect of advance and advantageous land purchases.

2. Reason

2.1 The full County Council must agree the capital programme for 2008/09 to 2010/11 at its meeting on 21 February 2008. The Leader will present his budget speech and recommendations at that meeting, including proposals for the capital programme. This report provides the background to the capital programme and proposes the recommendations from the Leader and Cabinet to the County Council.

2.2 These decisions support all the County Council's corporate priorities as the capital programme provides financial resources for:

Hampshire safer and more secure for all

Maximising wellbeing

Enhancing our quality of place.

3. Other options considered and rejected

3.1 Other options are not available as far as process and timetable are concerned, but the leaders of the opposition parties may wish to present their own recommendations on the capital programme to the County Council as amendments to these proposals.

4. Conflicts of interest declared by the decision maker or other Executive member consulted

4.1 None.

5. Dispensation granted by the Standards Committee

5.1 None.

6. Reason for the matter being dealt with if urgent

6.1 Not applicable.

Approved by: Date:
Councillor T.K. Thornber, C.B.E - Chairman