Archived decisions

HAMPSHIRE COUNTY COUNCIL

Decision Report :

EXECUTIVE SUMMARY

1) Summary of Decision Area:

1.1. This report seeks endorsement of the action being taken by officers to manage revenue budgets within the cash limits for 2008/09.

1.2. At the end of August 2008, on-going budget pressures within corporately held land, sites for gypsies and travellers and the Coroner Service mean net expenditure for 2008/09 is likely to exceed the budget for these areas. Actions have been identified to manage the budget and the budgetary position will be monitored closely throughout the year. Other budgets are anticipated to be within cash limit. IT Services are predicting a trading deficit for this year, which, together with the deficit brought forward from 2007/08 will be recovered by the end of 2009/10 as planned and agreed previously. Other business units are expecting to meet their targets of a modest trading surplus.

1.3. Capital payments for the County Council for 2008/09 are forecast to be close to the estimate of £197.3m reported to Cabinet on 8 February 2008.

2) Issues Covered in Report:

2.1. This report is the second monitoring report for 2008/09 and provides an overview of the position of :

· Policy and Resources own revenue cash limited budgets

· Policy and resources business units

· Policy and Resources capital programme

· The County Council's capital payments.

3) Recommendations:

3.1. That the action being taken by officers to manage revenue budgets within the cash limits for 2008/09 be endorsed.

MAIN REPORT

1) Purpose of the Report:

1.1. This report is the second monitoring report for 2008/09 and provides an overview of the position on:

· Policy and Resources own revenue cash limited budgets

· Policy and Resources business units

· Policy and Resources capital programme

· the County Council's capital payments.

2) Contextual Information:

2.1. Since the Policy and Resources revenue budget was approved by the County Council in February 2008, a number of changes have been made to reflect the carry forward of budget from 2007/08, transfers between services, allocations from central contingency and other sources of funding. The latest cash limited budget is set out in Appendix C.

2.2. In February 2008, the County Council approved the Policy and Resources capital programme and the financing strategy for the overall County Council capital programme based on capital expenditure of £197.3m. The latest capital programme for Policy and Resources, is set out in Appendix D.

3) Key Issues:

3.1 Comments on budget issues for 2008/09 based on monitoring of income and expenditure up to the end of August 2008 are given below.

Chief Executive's Department (including Human Resources)

3.2 Current projections are that the budgets for the Chief Executive's Department will be contained within the cash limits for 2008/09. There are a number of areas, for example Hampshire Action Teams (HATs), scrutiny and the remuneration and benefits team, which are currently funded on a temporary or pilot basis. Work is on-going to evaluate future requirements in order to develop proposals for future permanent funding for consideration in the 2009/10 budget.

County Treasurer's Department

3.3 The department is managing the pressures in the service and the 3% efficiency savings to deliver to its cash limit for 2008/09.

3.4 One of the main issues currently facing the Treasurer's department is the downsizing of the Student Support unit from 2008/09, phased over three years, and the continuing need to deliver a quality service during that period.

3.5 Implementation of plans for delivery of the final year of SAP savings, requiring a further £160,000, are underway and it is anticipated that these savings will be delivered in full. The department is considering a planned underspend in the current year to alleviate pressure next year and will bring forward revised plans to the next Policy and Resources budget meeting.

Property Business and Regulatory Services

3.6 The most significant budgets in terms of size are Property Services, Office Accommodation and Repairs and Maintenance and at this halfway stage in the year all are still expected to be managed within cash limit. Regulatory Services comprising Trading Standards, Hampshire Scientific Service and the Accredited Community Safety Officer Service together with the Registration Service are also expected to be in balance.

Corporately held land

3.7 The net income budget for Corporate Estate is £134,600. Since the last budget monitoring report in July, the forecast shortfall in income has reduced to £109,200 due to a series of minor adjustments on a number of budget headings. In 2007/08 as in previous years the basic cash limit for the Corporate Estate budget was augmented by a contribution from capital receipts to offset these costs where disposal was imminent - additional funding of this nature in 2008/09 is unlikely and thus not allowed for in the forecast.

3.8 The position for the Development Account has been adversely affected both by maintenance costs required to be carried out under the terms of the leases and costs associated with units being vacant for longer than originally projected. Consequently the forecast overspend has risen to £73,000. Both the Development Account and Corporate Estate budgets will be the subject of internal review in the coming year.

Sites for Gypsies and Travellers

3.9 The Sites for Gypsies and Travellers budget continues to be under pressure with rising energy and site maintenance costs together with lower levels of income from the rent of pitches than is required to balance the budget. Rent levels are determined by the Rent Officer. The current projections indicate a slightly reduced overspend of £106,000 resulting from vacancy management. A review of the service is currently been undertaken with support from the Treasurer's Consultancy team.

3.10 The department will continue to take action where possible to manage these total pressures within its existing resources

HM Coroner Service

3.11 HM Coroner Service budget does not form part of the Property, Business and Regulatory Services' cash limited budget but the service is within the department's remit. In recent years, costs associated with inquests and charges from hospitals e.g. for use of mortuary facilities have increased significantly and an overspend at similar levels to 2007/08 of £150,000 is still anticipated.

3.12 In addition to this, an increased number of inquests in the Portsmouth and South East Hampshire Coroner's District will be held during 2008/09 requiring the appointment of an additional Assistant Deputy Coroner and court space in which to hold the hearings. The estimated cost of these inquests is £100,000 and funding up to this amount is currently held in contingencies.

Other non-departmental Policy and Resources budgets

3.13 No significant variations on non-departmental budgets have been identified in this review.

3.14 This part of the Policy and Resources budget includes the Members' grants budgets totalling £1m for 2008/09, including £0.22m carried forward from 2007/08. To date, authorised grants of £241,962 have been processed for payment.

4) Business Units

Property, Business and Regulatory (PBR)

4.1. HC3S' target for the year is a modest surplus of £12,000, but meal numbers and income are continuing to increase. The service is also supported by School Meal grant funding and the final grant allocation was significantly higher than was included in the budget assumptions. Food price inflation continues to rise above the levels forecast in the trading account that was prepared in Autumn 2007 and the extent to which this offsets the benefits of improved income levels will be key to the final outturn.

4.2. Hampshire Transport Management has confirmed a reduction in its hire charges of around 2.5% for 2008/9 (5% in real terms) to Hampshire County Council customers.

4.3. Forecasts for the other PBR businesses continue to provide assurance that the targets for 2008/09 will be achieved. The combined target surplus for the year is £198,000.

IT Services

4.4. IT Services continues planned investment in technologies to support the development of key programmes including Hantsdirect, the new Data Centre, and Ashburton Court, using in particular, the IBM Enterprise Licence Agreement. IT Services will also be letting two significant contracts over the next two years for the Hampshire Public Service Network (HPSN) and hardware maintenance. These are all within agreed financial plans.

4.5. IT Services have agreed plans to generate a trading deficit of £600,000 in the current year, in line with the 5 year IT financial forecasts. These predict a return to break even by the end of 2009/10. This position has been previously agreed and justified by a range of investments necessary to support corporate programmes of the County Council.

4.6. A number of challenges have to be met in order to achieve this target, including generating new efficiency savings from within existing IT resources to meet service improvement priorities such as the fit out and migration of the Data Centre to Ashburton Court, Hantsfile and Hantsdirect. Hantsdirect finances are being reviewed by the programme board to consider service personalisation, and future roll out demands.

4.7. Other self-funded work to improve IT service efficiency, resilience, and capacity include the installation of a ring network, the re-tendering of the HPSN contract and the implementation of technology to reduce energy consumption and maintenance costs.

5) Policy and Resources capital programme

5.1 The Policy and Resources capital programme for 2008/09 amounts to £52.7m, as set out in Appendix D. This includes the recommendation of the Buildings Land and Procurement Panel to the Executive Member for Policy and Resources to re-profile £2m of the 2008/09 capital repairs allocation to 2009/10 to impact on key corporate initiatives such as Hampshire Workstyle and the achievement of carbon reduction targets.

5.2 The capital repairs programme, including New Deal for Schools, totals £40.5m and is controlled on an expenditure basis. The balance of £12.2m, is controlled on a starts basis.

5.3 As at 31 August 2008, expenditure on capital repairs totalled £7.8m, and schemes to the value of £0.3m had started, representing an overall commitment of £8.1m.

Overall capital payments and sources of finance

5.4 The capital financing approved by the County Council in February 2008 was based on capital expenditure of £197.3m. Based on previous capital expenditure profiles and actual payments at 31 August 2008, it is likely that the outturn will be close to the original estimate.

6) Conclusions:

6.1 At the end of August 2008, on-going budget pressures within corporately held land, sites for gypsies and travellers and the Coroner Service mean net expenditure for 2008/09 is likely to exceed the budget for these areas. Actions have been identified to manage the budget and the budgetary position will be monitored closely throughout the year. Other budgets are anticipated to be within cash limit. IT Services are predicting a trading deficit for this year, which, together with the deficit brought forward from 2007/08 will be recovered by the end of 2009/10 as planned and agreed previously. Other business units are expecting to meet their targets of a modest trading surplus.

6.2 Capital payments for the County Council for 2008/09 are forecast to be close to the estimate of £197.3m reported to Cabinet on 8 February 2008.

7) Summary Recommendations:

7.1 That the action being taken by officers to manage revenue budgets within the cash limits for 2008/09 be endorsed.

CORPORATE OR LEGAL INFORMATION:

COMPREHENSIVE RISK & IMPACT ASSESSMENT:

Race and equality impact assessment

The proposals in this report are the result 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. The proposals in this report are not considered to be discriminatory.

Crime prevention

The County Council has a legal obligation under Section 17 of the Crime and Disorder Act 1998 to consider the impact of all decisions it makes on the prevention of crime. The proposals in this report have no adverse impact on the prevention of crime.

Policy and Resources Revenue budget - latest 2008/09 cash limit

Policy and Resources 2008/09 capital programme