Archived decisions

HAMPSHIRE COUNTY COUNCIL

Decision Report

EXECUTIVE SUMMARY

1 Summary

1.1 This report presents the results of the review of the River Hamble budget which has been carried out following consultation between the Marine Director and the County Treasurer. It presents the revised budget for 2008/09 and the proposed forward budget for 2009/10.

1.2 The underlying principle for both years is to produce budgets that enable the Harbour Authority to meet its operational requirements within the available revenue earning capacity.

1.3 The budgets are presented to the River Hamble Harbour Board for approval.

1.4 All costs attributable to the Harbour Authority carrying out its statutory and ongoing duties on the River have been identified and built into the budget, including environmental and health and safety responsibilities. It is to be expected at this stage of the financial year when setting the revised budget that not all budgets are fully committed, but all have been reviewed and assessed in the light of the best information available at the moment.

1.5 Appendix 1, attached, sets out the detail of the original budget for 2008/09 as approved, together with the revised budget for 2008/09 and the forward budget for 2009/10.

2. Recommendation

2.1 That the budget as presented be approved by the River Hamble Harbour Board.

MAIN REPORT

1 Revised Budget 2008/09

1.1 The revised budget for 2008/09, summarised in Appendix 1, shows a revised gross expenditure budget of £696,900. This is a £28,851 increase on the original budget. The income budget, however, has been revised up to £700,400 thereby generating a small surplus of £3,500 after the £43,000 contribution to the Asset Replacement Reserve which is already included in the forecast.

1.2 The revised budget has been prepared at outturn prices for the year so the budget for inflation provision is no longer required.

1.3 More detailed comments on the variations to the original budget are included as part of Appendices 1 and 2, which provide more detail on the budget heads.

2 Forward Budget 2009/10

2.1 The forward budget for the financial year 2009/10 is also shown in Appendices 1 and 2. The proposed budget is balanced at a break even position of £718,000 income and expenditure, and includes a contribution to the asset replacement fund of £43,000 as previously agreed by the Harbour Board. This represents an increase in expenditure compared to the revised budget in 2008/09 of £21,100.

2.2 Most of the increase is due to staff costs which are forecast to rise by approximately 3.0% against the 2008/09 revised budget, and which include annual step progressions, and increase in the employer's contribution to the Local Government Pension Scheme, and an anticipated pay award of 2.5%.

2.3 Income has risen by £17,600 compared to the 2008/09 revised budget, most of which is attributable to the revised Harbour Dues charges which will come into effect in January 2009.

2.4 The forward budget has been prepared at forecast outturn prices for the year so the budget for inflation provision is no longer required.

3 Reserves

3.1 Appendix 3 sets out the expected position on the reserve account based on the assumptions made in compiling the budget. Estimated total reserves, excluding any interest on balances, as at 31 March 2009 are £509,888, and at 31 March 2010 £552,888. These figures include the revenue reserve, asset replacement fund and the asset enhancement fund for future development of harbour facilities in line with agreed Harbour Board policy.

4 Charges for 2009

4.1 In accordance with the policy agreed by the Harbour Board in July 2008, Harbour Dues for the calendar year 2009 are increased by the Retail Price Index (RPI) at May 2008, less 1%.

4.2 The forward budget for 2009/10 has been calculated on the basis of this proposed increase.

5 Impact Assessments

5.1 This report is 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. The proposals outlined in this report are not considered discriminatory.

CORPORATE OR LEGAL INFORMATION:

Notes to Appendix 1 and 2

All other budget have been assessed and increased or reduced in line with the projected outturns and inflation. The details of significant variations are as follows:

1. Salary budgets have been increased in 2008/09 and 2009/10 to account for annual step progression and projected pay award.

2. Budget has decreased in 2008/09 and 2009/10 to reflect recent spending patterns.

3. The electricity and gas budgets have been increased to reflect increased prices from the suppliers. The budget for water /sewerage has fallen in line with anticipated usage.

4. The budget for the lease of the Warsash and Hamble jetties has been removed from this budget heading and added to The Crown Estate settlement budget within supplies & services.

5. The overall transport costs for both years have reduced as the boats are due for a major refit which reduces the requirement for annual maintenance.

6. All costs have risen in line with inflation or held at 2007/08 prices with the exception of ICT (for Harbour Management System) and promotions and publicity which covers the aerial photographs.

7. The Oil Spill response budget has increased for training and equipment following the exercise last year.

8. This budget separately identifies, for purposes of clarity, the annual settlement with The Crown Estate which forms part of the management agreement.

9. The CCTV budget has been reduced in line with historical and anticipated expenditure.

10. The revised and forward budgets have been prepared at outturn prices for the year so the budget for inflation provision is no longer required.

11. The Harbour Dues for 2009/10 have been increased by 3.3% as approved by the Board in July 2008. The budget for this is also affected by the change in accounting practice explained in note 8.

12. The Crown Estate funding has now been reduced to reflect the new management agreement.

13. The visitor income budget has increased to show the gross income received which in previous budgets was artificially low as the relevant part of the payment due to The Crown Estate was netted off against this gross income.