Archived decisions

HAMPSHIRE COUNTY COUNCIL

Decision Report :

With the concurrence of the Chairman under Section 100B (4)(b) of the Local Government Act 1972, this matter has been included on the agenda to ensure that the most up-to-date information is presented.

EXECUTIVE SUMMARY

1) Summary of Decision Area:

1.1. This report proposes the recommendations to the County Council on the 2009/10 budget and council tax, based on the budget guidelines approved on 22 December 2008. The proposals take account of the consideration of the guidelines by the relevant Executive Members, and the scrutiny arrangements through the Select Committees. This report compares the variations in the proposed 2009/10 budget with those budget guidelines.

1.2. The proposed budget requirement, to be met by formula grant and council tax, for 2009/10 is £659.7m. The precept, met by council tax payers is £512.4m, £15.3m (3.1%) more than in 2008/09, which results in a Band D council tax of £1,023.57. The increase in council tax is £24.57 (2.5%) a year. The council tax rise is lower than the planned 3% within the guidelines because additional recurring resources are available from lower waste volumes (£4.5m) and in efficiency gains from changes in the waste contract arrangements (£2.1m).

1.3. All services have prepared budgets within the cash limits set in the budget guidelines which gave priority to the demographic costs and pressures on Adults and Children's services. Other services have been provided with base budget increases to match the continuing cost of services. All other pressures and priorities have been offset by efficiency savings and other changes.

1.4. Total efficiency savings identified in the 2009/10 budget are £20.5m (3.1%).

1.5. Additional efficiency and other savings anticipated in 2008/09 and 2009/10, and variations in tax base and the surplus on collection funds provide additional resources of £6.7m on a one-off basis, and £6.1m on a continuing basis.

1.6. Without reducing the budget guidelines for service related spending it is now possible to set provisional council tax rises of 2.5% in 2009/10 and 2010/11 using these additional resources.

1.7. Additional one-off savings have been used:

· to meet increased electricity prices (£1.3m) spread between 2008/09 and 2009/10

· make additional revenue contributions to capital (£3.0m) in lieu of anticipated capital receipts

· for urgent safety improvements on the A326 (£450,000)

· to prepare for Building Schools for the Future (£500,000)

· to facilitate locality funding, the rural strategy, economic prosperity and wellbeing, community involvement and safeguarding costs.

1.8. Additional recurring resources will be used to:

· help reduce future council tax rises

· provide £1.2m towards the reduction of risk in the practice of safeguarding children in Hampshire

· allocate £250,000 to Recreation and Heritage to complete the restructuring and modernisation of the library service, to avoid any reduction in the materials fund and to provide for all new initiatives over the next three year financial plan.

1.9. Balances are estimated at £29.0m at 31 March 2009 which includes £7.6m to keep the council tax increase at 2.5% in 2009/10 and 2010/11 using savings arising from 2007/08 and 2008/09. The underlying level of balances is £16m (2.4% of net expenditure) based on the current risk assessment.

2) Issues Covered in Report:

2.1. This summary sets out the main features of the budget. The rest of the report provides more analysis of the changes since the guidelines were set. The Appendices to the report provide all the detail of the budget.

2.2. The remainder of the report consists of the following paragraphs:

· revised budget 2008/09 (paragraph 2)

· 2009/10 formula grant settlement (paragraph 3)

· 2009/10 service budget pressures met within growth in the budget guidelines, or from further savings and redeployments (paragraph 4)

· efficiency savings (paragraph 5)

· annual review of charges and maximisation of income (paragraph 6)

· workforce plan (paragraph 7)

· additional resources and budget proposals (paragraph 8)

· performance and risk management (paragraph 9)

· earmarked reserves (paragraph 10)

· balances (paragraph 11)

· 2009/10 overall budget proposals (paragraph 12)

· 2010/11 to 2011/12 provisional budgets (paragraph 13)

· treasury management strategy and annual investment strategy for 2009/10 (paragraph 14)

· prudential and financial health indicators (paragraph 15).

3) Recommendations:

3.1. The recommendations are contained in the Proposed Executive Decision report and include:

· carry forward to 2009/10 of projected service underspends of £10.6m

· budget proposal for 2009/10 of £659.7m and precept of £512.4m (3.1% increase)

· recommended Band D council tax of £1,024 (2.5% increase)

· provisional budgets 2010/11 - 2011/12

· approvals required for growth and savings, increased income from charges, reserves and balances, and the integrated workforce plan

· various statutory requirements on risk analysis and management, treasury and investment management, the provision for the repayment of debt and the prudential code on borrowing.

MAIN REPORT

1) Contextual Information:

1.1. The Cabinet agreed a three year budget plan for 2008/09 to 2010/11 in February 2008. The key features of the plan are as follows:

· it makes allowance for increased demand for social care services and for projected higher costs of the waste management contract, but otherwise contains no provision for growth in service budgets

· all service budgets are uplifted for inflation based on the assumption that increases in pay and prices would be contained within an average increase of 2.5% per annum

· income is to be maximised by reviewing charges in line with the average inflation on the related gross expenditure

· it assumes that efficiency savings will be achieved to finance any proposed service developments, unfunded demand pressures or to cover excess inflation within the context of the Government's target for local government of annual efficiency savings of 3% per annum.

1.2. In order to maintain a three year financial plan, Cabinet agreed an updated medium term financial strategy in October 2008 to include 2011/12, based on similar assumptions.

1.3. Revenue budget guidelines, in rounded £m terms, for each service are:

Table 1: Service budget guidelines

	2009/10 £m	2010/11 £m	2011/12 £m
Adult Services	295	308	318
Children's Services	153	158	163
Environment	112	115	116
Policy and Resources	54	55	56
Recreation and Heritage	34	34	36
Total service guidelines	648	670	689

These guidelines have subsequently been amended for changes in specific and area grant, inter-service transfers and contingency allocations, none of which affect the "bottom line" of the budget requirement.

1.4. The projected cash increases in services are:

Table 2: Percentage cash increases in service guidelines

1.5. The percentage increase for Children's Services in 2009/10 and 2010/11 are relatively low because of the impact of one-off invest to save funding in 2008/09, due to be repaid in 2010/11.

1.6. The medium term financial strategy is closely linked to the corporate strategy and the corporate improvement plan to ensure that priorities are affordable, provide value for money and that resources follow priorities.

2) Revised budget 2008/09:

2.1. There is no formal review of the revised budget as budgets are monitored regularly during the year and changes, with required action, reported as they occur. Cabinet reviews the high risk budgets which are largely demand-led and monitors employee budgets during the year, as well as activity levels and financial health indicators.

Adult Services

2.2. A planned underspend of £3.9m is expected, despite the increased number of clients supported, as a result of efficiency improvements, the increasing use of reablement and the absence of new pressures requiring the use of contingencies. It is recommended that the planned underspend should be carried forward to assist meeting new growth pressures in 2009/10. It is the intention to maximise this underspend to provide as much flexibility as possible within the 2009/10 budget and in the context of a planned process to balance resources and demand over the next three years.

2.3. The planned underspend of £3.9m includes a contingency of £1.6m and assumes that winter pressures do not exceed £1.7m of the overall contingency funds.

2.4. There is no cash increase in the £31m specific grant for supporting people in 2009/10, and a reduction of £0.9m in 2010/11. The supporting people partnership has agreed a three year spending plan which relies on carrying forward a planned underspend of £3.9m from 2008/09 to future years. The partnership has set a contracting strategy over three years to deal with the real terms reduction in grant which results in further planned carry forwards of £2.2m to 2010/11 and £1.7m to 2011/12.

Children's Services

2.5. There is a planned underspend of £500,000 within the schools budget in respect of payments for 3 and 4 year olds, because of the delay in one phase of the increase to 15 hours provision per week from September 2008 to January 2009. This will result in further dedicated schools grant being carried forward to 2009/10.

2.6. There is also a planned underspend of £1.3m, mainly from delays in implementing IT priorities and from the maximisation of specific grants, in the non-schools budget.

2.7. It is recommended that this planned underspend is carried forward to 2009/10 to cover the delayed IT and other emerging priorities.

Environment

2.8. A balance of £254,000 remains uncommitted on road safety education from the reduced County Council contribution in 2008/09 required towards the safer roads partnership. It is proposed that the planned underspend should be carried forward to support further road safety initiatives in 2009/10.

2.9. In addition a small underspend of £60,000 is available on public transport support from service reconfigurations and could be used to support anticipated pressures in 2009/10.

Policy and Resources

2.10. The revised budget is at the cash limit but includes savings of £413,000 to be found within Property, Business and Regulatory Services to meet additional costs on office accommodation, the corporate estate, the development account and sites for gypsies and travellers. Further savings of £165,000 are required to offset an overspend on coroners' costs despite an extra contingency of £100,000 set aside in the 2008/09 budget.

2.11. Planned underspendings are recommended for approval of:

· £500,000 on the Chief Executive's budget including £200,000 brought forward from 2007/08 to meet transitional costs of restructuring in 2008/09. The further carry forward of this £200,000 will meet additional budget pressures in 2009/10. Further savings of £105,000 occur on Human Resources from slippage in new systems pending the outcome of the corporate service review. Another £50,000 is available from the planned staff survey being delayed from 2008 to 2009. Finally there are other savings of £135,000 arising mainly on Hantsdirect and member training

· £59,000 on elections as there have been no by-elections in 2008/09 which will assist in funding the cost of the 2009 County Council elections

· £200,000 from a late grant to help with the transitional run-down of student support and from some significant staff turnover on County Treasurer's. £100,000 will be used for student support in 2009/10 and the balance for new pressures in 2009/10.

Recreation and Heritage

2.12. A potential overspend of £225,000 has been reported, primarily on the library and information service where pressures are being caused by a combination of issues associated with staffing, utilities, the implementation of the new library management IT system and a continuing reduction in income. However the outturn is expected to be at the cash limit for 2008/09 as compensatory savings will be found.

Summary of the revised budgets 2008/09 for services

2.13. All services will therefore stay within cash limits and Cabinet is asked to approve the carry forward proposals for planned underspends in table 3.

Table 3: Proposed service carry forwards to 2009/10

2.14. The next part of the report deals with projected variations in other spending outside service cash limits during 2008/09.

Local Authority Business Growth Incentive Scheme (LABGI)

2.15. The total LABGI allocation for 2007/08 was £1,417,753. This is the 2007/08 allocation (the last year of the initial scheme) and some additional payments were only confirmed in June 2008 and were not accounted for in the accounts for 2007/08 (based on the principle that a grant is only due once approved by Parliament). There may be a further 2007/08 grant because Communities and Local Government (CLG) held back a contingency of around £100m nationally in case of further judicial reviews.

2.16. The Leader has agreed the principle that 30% of subsequent amounts received for LABGI will be set aside for economic development purposes. £993,000 will be added to a LABGI reserve to be allocated by the Leader for long term contribution towards economic prosperity, wellbeing and regeneration and other capital investment projects.

Rights of Way

2.17. Additional legal costs of £220,000 have resulted from a major appeal which was lost in a rights of way case. Although normally the cost would fall within the Recreation and Heritage cash limit to be met, the Leader has agreed exceptionally that these costs will be met corporately given the other pressures on its 2008/09 cash limit.

Capital financing charges

2.18. Anticipated slippage in capital payments, together with the impact of lower interest rates over the latter part of the year on variable financing costs will produce an anticipated saving of around £5.4m.

Revenue contributions to capital

2.19. However the collapse of land sales will require an additional revenue contribution of £1.5m from this saving to avoid further reductions in the capital programme or the increased costs of financing unsupported borrowing in future years.

Interest on balances

2.20. A reduction in interest rates will reduce the amount of interest earned on revenue balances from now on. However balances and reserves have not been used to the extent anticipated when the budget was set and were supplemented when the accounts for 2007/08 were closed. As a result additional interest of £2m is anticipated in 2008/09.

Waste contract contingency

2.21. A large reduction in waste volumes during 2008/09 is now apparent. This reflects the success of recycling, but also the measures taken earlier in the year to restrict the deposit of commercial waste at household waste recycling points. Latest projections suggest that as much as £3m out of the total contingency of £4.4m will not be required in 2008/09.

Council tax

2.22. The underlying council tax increase for 2009/10 and 2010/11 set in the budget was 3.5% in each year. £5.1m was set aside when the 2007/08 accounts were closed to plan for council tax rises of 3% in each year, ie 0.5% lower than they would otherwise have been. £2.5m is required to enable this in 2009/10, but £5.1m in 2010/11 (£2.5m to sustain the reduction in 2009/10 and £2.6m for the extra cost in 2010/11). A further £2.5m is therefore required and it is proposed to set this aside from the additional savings anticipated from interest on balances and the waste contingency.

2.23. The overall variations in other budgets from the changing economic circumstances during 2008/09 are summarised in table 4.

Table 4: Anticipated variations in 2008/09 outturn

3) 2009/10 local government grant settlement:

3.1. There has been no change in the distribution of formula grant for 2009/10, as expected, despite the County Council's response to the provisional settlement. No attempt has been made by Communities and Local Government to answer any of the points raised in the County Council's letter which was just acknowledged. A copy of the response, in particular drawing attention to the problems of supported borrowing and the economic crisis and its impact is attached at Appendix 10.

3.2. Formula grant for 2009/10 is £144.8m, a £2.5m (1.75%) floor grant increase over 2008/09. The increase for 2010/11 is £2.2m (1.5%). There are no base line adjustments or late changes as in previous years. As reported at the last Cabinet the figures for 2010/11 should now be treated with caution in the current economic climate. As announced in the Pre Budget Report substantial additional efficiency savings are now being sought in public spending which may be announced in the Budget in April 2009. This could result in the floor grant being changed and reduced to zero. No grant figure is available for the new third year - 2011/12.

3.3. Comments made by the Local Government Minister were:

· "Today's settlement gives councils a healthy 4.2 per cent increase in funding next year, despite the economic downturn, so just like last year every council will get an increase in grant." (Most of the increase of 4.2% is for dedicated schools grant, the formula grant increase nationally is 2.6%, but the County Council's increase was a lower 1.75%.)

· "Councils are facing tough budget decisions like the rest of Government but people rightly expect us all to tighten our belts. However any steps to make efficiency savings must maintain or improve vital local services that communities need." (The County Council's budget assumes £20.5m in efficiency savings with no reductions in services.)

· "This balanced settlement confirms the provisional figures set out in last year's three year settlement which has given councils the stability, flexibility and financial certainty to manage their budgets effectively."

· "Council tax payers have a right to know how councils are ensuring value for money on services, so this year - for the first time - councils will be required to include efficiency information on council tax bills."

· "I expect next year's average council tax rise to be substantially below 5 per cent - I will not hesitate to help people by capping any excessive increase if I have to."

3.4. The County Council has achieved £51m of efficiency and other savings over the last three budget years.

3.5. Details of the provisional grant settlement were presented to Cabinet in December 2008.

4) 2000/10 Budget - service guidelines:

4.1. The budget assumptions and service guidelines were set out in paragraph 1 of the main report (Tables 1 and 2).

4.2. Executive Members have submitted budgets within the cash limits set by the budget guidelines.

4.3. Full details of the proposals for additional spending, and redeployment of resources to contain these within the approved budget guidelines are set out in Appendix 2.

Adult Services

4.4. Total growth and pressures are estimated at £18.5m. In addition there are extra specific grants of £4.8m, with matching spending, enabling £23.3m of additional spending (8.1%) to be accommodated to meet demographic pressures and the changes required for personalisation.

4.5. The extra spending of £23.3m will be met by:

· £6.7m growth included as a priority in the service budget guidelines

· £8.3m redeployment of resources and savings to help absorb some of the pressures

· £3.5m from the planned carry forward of £3.9m from 2008/09 to 2009/10 (as approved by Cabinet)

· £4.8m extra specific grant, including £2m social care reform grant (bringing the total for that grant to £3.6m) and to assist with the transfer of responsibilities for learning disability and associated issues in transfers from hospital campuses.

4.6. The use of £18.5m local resources will be available to meet:

· extra demographic and dependency pressures (£9.9m)

· additional commissioning and inflation costs over the 2.5% price assumption (£3.4m)

· the transformation programme (£0.6m) to improve personalisation and phase in the Hampshire model proposed by the Adults' Commission (supplemented by £3.6m from specific grant)

· the high priority to safeguard clients during the transformation period as the Hampshire model and Hantsdirect are phased in (£0.7m)

· other operational pressures, including some reinstatement of future contingency levels (£3.9m).

4.7. The main means of achieving savings are:

· improved management of transition for children's services

· improved procurement priorities

· ensuring that clients do not require long-term support by use of Hantsdirect and reablement, that is the use of early intervention and prevention

· improved working with the health service by basing social workers in hospitals to enable better discharge planning, fewer bed blocking fines and fewer continuing care cases

· operational efficiencies across all services

Children's Services - schools budget

4.8. The total schools budget is £803.6m which consists of £681.9m dedicated schools grant and £121.6m in other specific grants, including schools budget standards fund (£62.9m), school standards grant (£34.8m) and sure start, early years and child care grant (£22.4m). The overall cash increase is £20.1m (3.0%) which is equivalent to a per pupil increase of 3.7%. Increases in other specific grants result in an overall cash increase of £34.6m (4.5%) in the schools budget

4.9. Within that cash increase the available headroom (that is after meeting inflation costs, changes in pupil numbers and capital programme effects) is £8.7m for 2009/10 which will meet a variety of pressures including allocations for pay and benefits, and deprivation and on a one-off basis for information and communication technology, and smart meters in schools to assist with carbon reduction targets.

Children's Services - other budgets

4.10. Growth proposals to meet additional pressures and demands total £4.8m, which will be funded by savings and redeployments of £3.6m and the £1.2m growth increase in the guidelines.

4.11. These changes cover some advance work for building schools for the future, increased allowances and support for children in care, additional costs of home to school transport and to offset the loss of income from the reduction in interest rates on school balances.

4.12. The redeployment proposals include:

· use of grant flexibility (£0.8m)

· further savings to be identified (£1.5m) which is equivalent to a 2% efficiency target on the non-schools budget, excluding the budgets for home to school transport, children in care and services for young people

· savings in independent foster placements, reduction in non-county placement budgets, use of the inspection and advisory service reserve, and on transport.

Environment

4.13. Total service pressures of £2.9m (2.6%) have been offset by an equivalent level of savings and redeployments.

4.14. Pressures of £1.1m have been identified in the budget for routine highways maintenance together with an extra £0.3m in an anticipated increase in maintenance costs on street lighting with the phased implementation of the private finance initiative scheme in the Autumn. Other pressures include the village 30 initiative (£0.2m), bus subsidy costs (£0.3m), staffing and support costs (£0.5m) and £0.5m towards feasibility studies for major transport schemes.

4.15. Redeployment and savings proposals include:

· re-prioritisation of budgets (£1.2m)

· staff savings from management reviews (£0.6m)

· other redeployments and savings from the safer roads partnership, corporate funding towards street lighting and transfer from capital.

Policy and Resources

4.16. £1.5m of mainly one-off pressures will be funded by transfer from capital of £0.6m (for Hampshire workstyle project team costs, carbon reduction commitments and property services), £50,000 from the SEERA budget towards accredited community safety officers in Totton, and £0.8m from the pay and benefits reserve for human resources and legal costs for equal pay claims.

Recreation and Heritage

4.17. A total of £0.4m is being redeployed to meet a variety of new growth proposals, including £150,000 for the new library information management system.

Total service budget guidelines

4.18. Full details of all these growth items, and the redeployments and savings proposed to meet pressures above the budget guidelines are set out in Appendix 2. The next table summarises the position for each service.

Table 5: Summary of 2009/10 spending pressures and savings

*from the sum set aside from the 2007/08 underspending for street lighting private finance initiative support

5) Efficiency savings:

5.1. The Government assumption is now 3% per annum in cashable terms. This is assumed in the grant settlement and overall savings of the amount need to be demonstrated. However that is not exactly the same as the cash reductions and savings included in the budget to meet new pressures, as shown in table 5, which totals £19.9m, 3.1% of the budget requirement. The total efficiency savings are a similar £20.5m (3.1%) shown in table 6

5.2. Cashable efficiency improvements producing a budget saving and meeting the Government's definition of efficiency include the following initiatives by service.

Adult Services

5.3. £8.3m of savings have been identified including £1.1m from modernisation, £1.5m on commissioning, £1.5m relating to dependency and demographic pressures and £4.1m in other operational efficiencies including continuing health care and learning disability savings.

Children's Services

5.4. Cashable budget savings are £2.9m including £0.3m through independent fostering providers and £0.4m in the intensive support service. However £1.5m of these savings have still to be identified.

5.5. Total targeted efficiency improvements are £3.3m (2.0%).

Environment

5.6. Cashable budget savings amount to £1.3m from a number of initiatives. Total efficiency improvements identified are £2.3m (2%), with the extra amount being achieved in cost increases avoided on street lighting energy and the use of developers' contributions to offset borrowing.

Policy and Resources

5.7. There are no efficiency savings that meet the Government's definition, as business rate savings are not allowable. Total cashable efficiency improvements are £2.0m (2.0%) achieved by offsetting the cost of salary increments, the final phase of SAP benefits realisation, the engineering term maintenance contract, registration services modernisation, corporate procurement and a number of IT Services efficiency improvements.

Recreation and Heritage

5.8. Cashable savings amount to £0.4m and the total efficiency improvements (mainly increments) are £0.9m (2.7%).

Total efficiency improvements

5.9. Appendix 5 identifies these efficiency improvements on services which total £20.5m (3.1%). These are summarised by service in the next table.

Table 6: Cashable efficiency savings 2009/10

5.10. The corporate services review and the corporate efficiency savings review will identify further savings to help make available additional resources in 2010/11.

6) Annual review of charges and maximisation of income:

6.1. Fees and charges have been raised where there is scope to do so in policy and financial terms, and the inflation allocation has been calculated on the basis that charges are increased in line with the allowance for inflation on gross expenditure, averaging 2.7%.

6.2. Details of income reviews and charges were set out in the budget reports for Executive Members and in the summary below.

Table 7: Summary of income from fees and charges

7) Workforce plan:

7.1. The workforce plan will be developed in the context of the corporate strategy and the budget. Appendix 5 summarises changes in the overall workforce supported by the budget.

7.2. The base budget shows an overall increase of 593 full time equivalent (FTE) staff of which 460 relates to the transfer of the Connexions service to the County Council, financed by additional area based grant and the staff of the new children's centres financed by sure start grant. Additional grant and external income also finances some of the additional posts.

7.3. The overall budgeted variation in workforce costs and FTE numbers in relation to growth, savings and redeployment proposals is shown next.

Table 8: Summary of changes in workforce costs and numbers

	Costs		Numbers
	£m		(FTE)
Adult Services	1.6		54
Children's Services	0.3		7
Environment	-0.4		-14
Policy and Resources	-		-
Recreation and Heritage	-0.3		-9
Total Services	1.2		38
Schools - grant funded			93
Overall total			131

7.4. The budget therefore provides for an additional 724 FTEs, including transferred services and services financed by new specific grant, but of these, just 38 new posts are funded by the County Council itself.

Adult Services

7.5. There is a mix of additional permanent and temporary posts funded by the growth allocated in the budget guidelines and from additional specific grants. These include professional, care and support posts. The growth provides for the extra clients arising from demographic pressures and the extra dependency from, for example, the more complex needs of dementia care service users in residential homes, additional safeguarding posts and to support the transformation required to implement the Hampshire model and personalisation. Additional posts are also related to the learning disability integration with the Hampshire Partnership Trust and increased investment in learning disability care management teams to support transitional workloads and increasing complexity.

7.6. In total there are 171 extra staff of which 139 relate to new posts (64 are temporary and 75 permanent). The remaining 32 result from recruitment to previously vacant posts. 54 of the new staff are funded by specific grant (30 from social care reform, 21 from learning disabilities). 54 posts are met within the growth proposals (22 temporary and 32 permanent).

Children's Services (excluding schools)

7.7. A small increase of 7 from the net effect of proposals for growth, savings and redeployments. The base budget allows for 478 additional staff of which 460 relate to children's centres and to the integrated youth service (services for young people) following the transfer of the Connexions service to Hampshire.

Environment

7.8. There is a net reduction of 14 posts from the proposed savings.

Policy and Resources

7.9. There is a net increase of 79 posts, mainly from the success of HC3S in competitive tendering for school catering contracts and other increases in staffing in business units funded by internal and external income.

Recreation and Heritage

7.10. There is an increase of 12 staff in the base budget, mainly as a result of the transfer of adult education from Children's Services, and other additional grant funded posts. The savings and redeployment proposals are expected to offset 9 of those additional posts.

Schools

7.11. After allowing for a reduction of 66 staff in the base budget as a result of lower pupil numbers, the growth proposals assume 93 additional posts, resulting in a net increase of 27.

8) Additional resources and budget proposals:

8.1. There are a number of changes since the provisional budget forecast was made a year ago for 2009/10. This part of the report identifies those changes, distinguishing them between additional resources that are of a one-off nature for 2009/10 and those which are recurring and can be built into the budget for future years as well.

One off changes in the budgeted position for 2009/10

Collection fund

8.2. The collection fund surplus notified by district councils in January 2009 is £1m more than budgeted. This takes the total surplus to £2.5m, but is less than the surplus of £3m achieved in 2008. It is anticipated that future surpluses will decline as the economic recession will mean fewer new houses and households which will reduce both the tax base increase and the surplus on the collection fund. The collection fund surplus is already likely to decline as less council tax income is collected during the year.

Tax base

8.3. The estimate for growth in the tax base for 2009/10 is now 0.6% instead of the previous assumption of 0.5%. This results in an extra £0.6m income, but given the recession it would not be prudent to assume an increase of this amount in future years.

Capital financing costs and interest on balances

8.4. Short term interest rates have reduced from the budgeted 5.75% to 1.5%. Short-term rates may still decline further. As the treasury management strategy shows the target is 45% for borrowing at fixed rates. Longer-term borrowing rates are still around 4.5%. Short-term, variable borrowing rates are much lower. Capital financing costs are therefore dependent upon the mixture of longer-term, higher fixed rate interest costs, and lower variable rate costs using internal balances and market loans. However based upon budgeted assumptions about the level of internal balances it is anticipated that a substantial saving of £4m on net interest costs will be achieved in 2009/10 compared with previous budget assumptions.

8.5. On the other hand the collapse of the commercial housing and land market has meant that capital receipts are no longer available as expected to finance the capital programme in 2009/10 and 2010/11 and higher levels of borrowing will also be incurred in 2008/09. Indeed as the report on the capital programme shows the budget assumes that capital receipts will not begin to pick up again until 2010/11 and 2011/12. Most of these anticipated receipts are required for in/out or ringfenced schemes where the capital spend is already being incurred in advance of the receipt. The existing locally resourced capital programme for 2009/10 and 2010/11 has been spread over 3 rather than 2 years to take partial account of this. However it will be necessary to incur additional unsupported borrowing before the delayed capital receipts are likely to be achievable.

8.6. Balances are also expected to be lower in 2009/10 than in the current year mainly because the capital reserve will be fully utilised to finance capital expenditure in 2008/09 and 2009/10.

8.7. The effect of lower interest on balances and the additional temporary borrowing required in lieu of capital receipts is about £5m, so that the impact from savings from lower interest rates is wiped out by a net overall increase of £1m in the budgeted assumptions.

8.8. The impact of these one-off changes in 2009/10, together with the extra £6.1m which is anticipated to be available from savings in 2008/09 is shown in table 9.

Table 9: Additional one-off resources available in 2009/10

	£'000		£'000
Collection fund surplus	1,044
Taxbase	571
			1,595
Net increase in capital financing costs			-1,000
Budgeted one off savings in 2009/10			595
Anticipated savings for 2008/09			6,154
Additional resources available			6,749

8.9. The additional one-off resources are available for investment in 2009/10 or later years, provided that no continuing commitments result.

A326

8.10. The Leader has proposed in response to recent fatal accidents, that A326 road safety improvements for street lighting (£250,000) and traffic signals (£200,000) should be brought forward from the planned major works scheduled in the capital programme in 2010/11 and 2011/12. A revenue contribution to capital to finance these necessary improvements in 2009/10 is proposed, but with no overall reduction in the Environment's capital programme for this scheme so that all the necessary road safety improvements can be implemented.

Locality funding

8.11. The arrangements for Hampshire action teams are under review. Initial funding up to the review period had been provided but expires at the end of 2008/09. It is proposed to provide a further year's funding for the support arrangements until the new Council, after the elections, can determine what form of locality support it wants in place, compatible with the developing Senate arrangements from 2010/11 onwards. £285,000 will provide for the team in 2009/10.

Energy inflation

8.12. Fuel and energy prices increased substantially during 2008. There has been no immediate impact on gas prices as the County Council has a two year gas contract in place until Autumn 2009. However all of the County Council's electricity contracts were renewed for a one year period in October/November 2008, increasing average prices by approximately 70%. Longer term prices have now reduced again but the average 70% increase in electricity prices in October 2008 will increase the winter bills for 2008/09 and in 2009/10. To fund this pressure in full would require one off increases of £0.6m in 2008/09 and £0.7m in 2009/10. The total would be allocated across all services in proportion to direct costs with the most significant amounts of:

· £0.4m for Recreation and Heritage (mainly libraries)

· £0.5m for Policy and Resources (mainly office accommodation)

· £0.3m for Adult Services (mainly residential and nursing homes)

Building Schools for the Future (BSF)

8.13. Initial feasibility and project management work needs to start before submissions can be made and accepted into the building schools for the future (BSF) programme. It is hoped that the County Council will enter its first phase with improvements to schools and removal of surplus places in the Havant area. Children's Services and Policy and Resources have provided some initial funding but a corporate contribution of £0.5m is required.

8.14. In the longer run it is anticipated that there could be a substantial funding gap between the resources available within BSF and the actual cost of the schemes. BSF funding will be in the form of private finance initiative (PFI) for new buildings or capital grant for other improvements or refurbishments. This funding gap will need to be bridged by a combination of capital receipts, revenue contributions to capital and unsupported borrowing. Funding will need to be sought within the schools budget but some corporate contributions may also be required. However no provision for this funding gap has been made in preparing the current financial plans for 2009/10 to 2011/12.

Rural strategy

8.15. Initial consultations and development of a potential rural strategy are nearly complete. The County Council has identified the importance of developing an effective Rural Strategy as part of its improved performance in 2009. The downturn in the economy makes the development of this strategy even more relevant. Given the demographics and characteristics of Hampshire and subject to the final agreement by the Cabinet it is proposed to bring forward a series of initiatives to impact on the rural economy during 2009/10. £200,000 is proposed for some pump priming to lead and project manage initial initiatives.

Economic prosperity

8.16. The economic recession and new duties to develop economic planning at sub regional level indicates the need to set aside resources to develop capacity during 2009/10. Initial proposals to develop an economic prosperity board, as well as an economic development skills board and learning for young people requires about £200,000 for pump priming. The aim is to match fund with external resources and commit to initiatives to help improve skills and employment. Future allocations of the local authority business growth incentive (LABGI) scheme may be available for longer term contributions to supplement this work especially towards economic prosperity and wellbeing during the next few difficult years in the economy. The Chief Executive will bring forward to Cabinet proposals on both the management of the Rural Strategy and economic prosperity as part of the corporate services reviews.

Community involvement

8.17. Initiatives are being planned to improve engagement with the wider community to tackle key issues, for example the longer-term care of the elderly and improving services and facilities available for the young and vulnerable. Improvements in consultation and reducing inequalities are key areas. £100,000 is proposed to provide some project management and to finance some early initiatives.

Safeguarding costs

8.18. The introduction of the Independent Safeguarding Authority with the requirement for registration and updating the Criminal Records Bureau checks on behalf of existing and new staff has been estimated to cost £50,000 on initial costs (provision has been made within the schools budget for the cost in schools). Human Resources will require some additional support towards temporary staffing to cope with the transitional workload and another £50,000 is proposed.

Revenue contributions to capital

8.19. In addition to the extra contribution of £1.5m proposed in 2008/09, a further one-off contribution of £3m will help to reduce unsupported borrowing costs in 2009/10 and later years arising from the collapse of anticipated capital receipts. It will also reduce the risk of any future reductions or restructuring of the locally resourced capital programme.

8.20. These proposals will allocate £6.1m of the available £6.7m of additional one-off resources accruing from anticipated net savings in 2008/09 and 2009/10 compared with the original budget assumptions. This leaves £0.6m on a one-off basis which is dealt with later in the report. The use of the additional one-off resources is summarised in the next table.

Table 10: Use of additional one-off resources

	£'000
A326 - road safety improvements	450
Locality funding	285
Energy - electricity prices	1,317
Building Schools for the Future	500
Rural strategy	200
Economic prosperity and wellbeing	200
Community involvement	100
Safeguarding costs	100
Revenue contributions to capital	3,000
Proposed use	6,152

Continuing changes in budget assumptions for 2009/10

Contingency

8.21. In setting the provisional budget guidelines for 2009/10 in February 2008, assuming at that time a 3.5% council tax rise, a balancing figure of around £1m was included in the contingency to provide some final budget flexibility. This is partly offset by slightly higher costs than estimated on flood protection levies and the inflation contingency, leaving about £1m available for recurring spending compared with those previous assumptions.

Waste contingency

8.22. The impact of lower waste volumes can also be built into the budget base and the previous contingency set aside for additional waste costs can be reduced, based on current volumes. This represents a "pay back" to council tax payers who have in the past had to finance all the extra costs of the waste contract without any additional Government grant support or private finance initiative credits.

Waste Contract

8.23. In addition, the County Council has been successful in contract negotiations to recalculate the interest rate assumed in financing the capital infrastructure provided by the contractor (now that all the final costs have been agreed and the project can be "refinanced" with the development risks removed). At the same time the County Council has agreed to incur prudential borrowing to finance a lump sum payment (instead of an addition to the annual contract payments) to finance the pass-through costs of the architectural enhancements at the three energy recovery facilities (at Chineham, Marchwood and Portsmouth). The cost of finance is cheaper to the County Council and savings will now be made to offset the contractual payments required by the contractor financing the costs. These two efficiency improvements will save an annual £2.1m against the current budget and avoid additional costs of £1.1m.

SAP benefit realisation savings

8.24. The initial investment in introducing the SAP system was capitalised and financed from revenue contributions to capital. The cost of the investment will be repaid during 2009/10 with the savings having reinstated the contributions used. The benefits realisation, primarily in staff savings in County Treasurer's and IT Services, in recruitment costs in Human Resources and in procurement costs, are now available on a recurring basis. The savings had previously been assumed to help finance the planned reduction in council tax from 3.5% to 3% when the 2007/08 accounts were closed.

8.25. However the Leader has now proposed a corporate policy fund which will allow the County Council to get ahead of the game in making efficiency savings to redirect to front line services as the outlook for public spending deteriorates. It is therefore proposed to transfer £1.5m achieved from the SAP benefits realisation savings in 2009/10 into this fund for allocation to meet priorities that emerge from 2009/10 onwards. The remaining £911,000 of SAP benefit realisation savings become available for redeployment in 2010/11. It is proposed to supplement this new fund by savings which will be identified and accrue later in the year and into 2010/11 from the corporate efficiency review.

Corporate services review

8.26. The Employment in Hampshire County Council Committee has reviewed a report on the proposed deletion of 4 senior manager posts in the Chief Executive's and Property, Business and Regulatory departments as a result of the initial stage of the corporate services review. The full year savings are estimated at £0.5m, but after initial early retirement costs, the net savings in 2009/10 are about £380,000. There are further stages of the review to progress in 2009/10 and redistribution of these savings will be necessary to improve capacity. The savings will be first used to meet future restructuring costs and capacity building in these functions with the resultant balance being transferred to the corporate services review fund in due course.

8.27. These changes to the budget assumptions result in new recurring savings of £6.1m from 2009/10 onwards as summarised below:

Table 11: Recurring savings in 2009/10 budget

	£'000
Contingency deletion	1,006
Lower waste volumes	4,462
Efficiency savings from changes in waste contract	2,146
SAP benefit realisation savings earmarked to corporate policy reserve	-1,539
Total recurring savings in 2009/10	6,075

Proposed use of continuing resources

Children's Services, safeguarding

8.28. Additional resources are proposed to make a substantial contribution to the reduction of risk in the practice of safeguarding children. The overall aim of the proposal is to ensure that children are safeguarded effectively by maximising the time available for qualified social workers to work directly with clients and focus on high quality social work practice.

8.29. A full year budget addition of £1.2m will provide for:

· 28 extra (a 10% increase) social care support staff and family support workers ((£730,000)

· 7 more staff in a restructured independent reviewing service (£300,000)

· 3 professional social work practitioner posts based permanently within Hantsdirect to respond to initial contacts (£130,000).

8.30. The initial cost in 2009/10, subject to the successful appointment of the new staff may be lower at around £750,000 to £950,000. However children's services have the largest amount of unallocated efficiency savings (£1.5m) in their savings and redeployment proposals. A full year budget growth will therefore be given to children's services for 2009/10 on the condition that they identify specific full year recurring savings of £1.5m during 2009.

Recreation and Heritage

8.31. £250,000 was added to the Recreation and Heritage budget in 2008/09, together with £300,000 on a one-off basis to provide a boost to the purchase of new library books. It is also proposed to provide further one-off support of £220,000 for legal costs and £375,000 for excess electricity prices in 2008/09 and 2009/10.

8.32. This is significant support and a final £250,000 on a recurring basis is proposed to complete the library restructuring and modernisation, including new systems, to meet loss of income and to avoid all future calls on the materials and book fund for other pressures or initiatives in the 2009/10 - 2011/12 financial plan across all Recreation and Heritage services.

Council tax

8.33. The additional efficiency saving on the waste contract (£2.1m) together with the reduced volumes of waste for disposal (£4.5m) provides enough resources to fund improvements in children's safeguarding as well as scope for a further "council tax dividend" to reflect the previous calls on the council tax payer to meet increases in waste volumes and new waste infrastructure costs in previous budgets.

8.34. The council tax increase can be reduced from 3% to 2.5% in 2009/10 as a result. The use of the remaining £0.6m of one off resources also provides sufficient resources in 2010/11 to reduce the planned council tax rise in 2010/11 from 3% to 2.5% as well. This should make a very positive contribution to pressures on households over what are expected to be two very difficult financial years.

8.35. A 2.5% council tax rise will occur in the same year as the 5.0% pensions increase for 2009/10 which was set by the September 2008 retail price index (RPI). However the current RPI increase is 0.9%, but consumer price index inflation remains at 3.1%, and that on services at 4.1%.

Summary of use of additional resources

8.36. In summary therefore, additional resources of £6.6m can be used to reduce council tax forecasts for the next two financial years to 2.5% (compared with 3.5% planned a year ago for both years). £0.6m of additional savings will be required in 2011/12 to make good the one off use.

Table 12: Use of continuing resources

9) Integrated planning, performance and risk management:

9.1. The budget recognises the priorities set in the corporate improvement plan and reflects the overall corporate strategy, particularly ensuring value for money, improving capacity and that resources follow priorities. The performance management framework provides for the overall integration of services, work force and financial planning.

9.2. Section 25 of the Local Government Act 2003 requires the Chief Financial Officer (the County Treasurer) to report to the County Council when setting its council tax on:

· the robustness of the estimates included in the budget

· the adequacy of the financial reserves in the budget

9.3. The County Council is required to have regard to this report in approving the budget and council tax. It is appropriate for this report to go first to Cabinet and then to be made available to the County Council in making its final decision. The full report is set out in Appendix 9.

9.4. The main areas of risk are:

· equal pay claims - this is dealt with by the job evaluation transitional costs reserve and no further provision is proposed this year. It is proposed to rename this reserve as the equal pay reserve. Capitalisation directives will also be applied for to spread the cost over a number of years. The transfer out of the reserve is not now expected until 2010 at the earliest

· grant loss - there is now certainty for the next two budget years, with predicted grant losses as the floor is unwound. The planned use of the grant equalisation reserve will reduce some of these pressures on future council tax rises and the pattern of profile for the use of this reserve was reported to Cabinet in October 2008. However the grant increase for 2011/12 is not known and could be zero, or even a cash reduction, which may require a quicker use of the reserve than currently planned

· risks from the budget assumptions - these are prudent and there may be some scope for savings from lower pay and price increases than budgeted at 2.5% though the main impact of lower inflation on price increases will be deferred to 2010/11

· the fall in interest rates, the temporary increase in electricity prices and the collapse of land sales have been dealt with at the October and December Cabinets as they occurred, or have been allowed for in the budget

9.5. The detailed risk assessment is set out in Appendix 9 and indicated a prudent level of balances at around £16m ( about 0.9% of gross expenditure or 2.4% of net expenditure).

9.6. Balances at or around this level, together with the proposed level of earmarked reserves, set out in the next paragraph, will be sufficiently robust for the County Treasurer's assurance required by Section 25 of the Act.

10) Earmarked reserves - budgeted at 31 March 2010:

Schools (£43.6m)

10.1. The single largest budgeted reserve remains the Schools reserve which is about the same as the actual balance at 1 April 2008, as the budget assumes that schools spending matches their delegated budgets in 2008/09 and 2009/10. The reserve is only available to each relevant school.

Designated underspendings (£3.9m)

10.2. This covers the planned carry forward of underspendings from 2007/08 and 2008/09 to assist service budget pressures in 2009/10 and 2010/11 (for supporting people)

Invest to save/modernisation (£3.6m)

10.3. This remains to provide investment against business cases for further service improvements. It is anticipated that the corporate efficiency reviews may require some additional investment to secure longer term savings. It has increased from £2.6m to £3.6m, because of a budgeted contribution.

Trading Units (£7.6m)

10.4. These are the total surpluses available within the Council's various trading activities, including the former direct service organisations (£1.4m), services to schools (£2.8m), supplies (£1.6m), printing (£0.7m), IT services (-£0.3m), and children's centres (£0.5m) amongst others detailed in Appendix 6.

Insurance (£7.7m)

10.5. The original budget was £5.2m, but the outturn for 2008/09 resulted in a net increase to £7.7m. No further additions or reductions are planned in 2009/10.

Equal pay (£38.4m)

10.6. The former job evaluation transitional costs reserve was increased with the closure of the 2007/08 accounts from £31.1m to £36.4m. No further additions are now proposed, pending the settlement of outstanding claims through the employment appeals process. However interest on the balance will be added to the reserve to offset in part any interest due on the backdated claims. It is not known when the reserve might be drawn down, but £0.8m will be taken from the reserve in 2009/10 to finance the human resources and legal costs associated with managing equal pay claims to cover the cost of the pay and benefits team for a further year and some remaining pay and benefits transitional costs as proposed in the budget report to the Executive Member for Policy and Resources.

Grant equalisation (£22.4m)

10.7. The County Council will have remaining damping grant of £21m at 31 March 2010. It is anticipated that the remainder of the grant damping will be lost over the next two spending review periods. It is planned to use £2.5m in 2009/10, £3.7m in 2010/11 and £4.5m in 2011/12 from the grant equalisation reserve to help cover the anticipated grant loss.

10.8. The balance on the reserve will be £22.4m at 31 March 2010 and £14.2m by 31 March 2012.

Local Authority Business Growth Incentive (LABGI) reserve (£1m)

10.9. A new reserve set up for future allocation on longer term contributions towards economic prosperity, well being and regeneration and other capital investment projects.

Landfill allowances (£4.0m)

10.10. The reserve is available to offset future council tax rises, bearing in mind past investment in waste infrastructure, and to finance future waste infrastructure costs. There were no changes in the reserve in 2008/09 and none are currently planned in 2009/10.

Corporate policy fund (£1.5m)

10.11. This is a new reserve proposed for 2009/10 to provide additional resources for future investment as public expenditure constraints tighten, and to provide in year flexibility towards new, emerging front-line service priorities.

10.12. It is secured by the SAP benefit realisation savings and it is proposed that the reserve will be increased by efficiency savings generated by the corporate efficiency review.

Capital (-)

10.13. The reserve stood at £13.9m at 1 April 2008, but despite slippage in payments will be eliminated by 31 March 2010, as a result of lower capital receipts.

Summary of earmarked reserves

10.14. Full details of each reserve, showing budgeted movements from 31 March 2009 to 31 March 2012 are set out in Appendix 6. The main reserves as estimated at 31 March 2010 are summarised next.

Table 13: Summary of estimated earmarked reserves

10.15. Total earmarked reserves at 31 March 2010 are therefore £92.4m compared with actual reserves of £111.2 at 1 April 2008, and budgeted reserves of £79.1m at 1 April 2009.

11) Balances

11.1. Budgeted balances at 31 March 2009 were £15m. Balances were increased with the 2007/08 underspend, although some were set aside for additional spending during 2008/09 and later years. The one off additions reported in table 4 will add to balances at 31 March 2009, although £7.6m will be drawn down in 2009/10 and 2010/11 towards the commitment for lower council taxes in these years.

11.2. The movement in balances during 2008/09 is shown in the next table.

Table 14: Movement in balances 2008/09

11.3. The estimated level of balances at 31 March 2009 is £29.0m. This includes the additional projected savings in 2008/09, not allocated to earmarked reserves but carried forward to support council tax reductions in 2009/10 and 2010/11.

11.4. The overall movement in balances from 31 March 2009 is summarised in the next table:

Table 15: Movement in balances

11.5. The underlying level of balances is therefore currently £16m after: allowing for the underspend carried forward to be spent in 2009/10; the amounts carried forward to reduce the council tax increase in 2009/10, 2010/11 and 2011/12; and the addition to balances from budgeted contributions in 2010/11 and 2011/12. £16m is the recommended level.

12) 2009/10 overall budget proposals

12.1. Taking all these changes into account the final budget proposals for 2009/10 compared with 2008/09 are:

Table 16: Service cash limits 2009/10

12.2. Other budgets compared with 2008/09 can be summarised as follows:

Table 17: Other budgets 2009/10

12.3. Bringing all these budgets together results in an overall budget requirement of £659.7m which is a 2.7% increase on the 2008/09 Budget of £642.7m:

Table 18: 2009/10 budget requirement

12.4. The budget requirement will be met as shown in the next table compared with 2008/09 figures:

Table 19: 2009/10 precept met by council tax payers

12.5. It is anticipated that the overall council tax bill for 2008/09 will increase by about 2.9% (assuming an average district council tax rise of say 3.5%) as follows:

Table 20: Provisional council tax bill 2009/10

12.6. The trends in spending plans, budgets and council tax are as follows:

Table 21: Percentage increases in council tax compared with spending plans, grant and budget

12.7. The council tax rise is 2.5%, and at £1,024 exceeds £1,000 for the Band D council tax payer for the first time

12.8. Provisional comparisons with other County Councils suggest that Hampshire County Council has:

· the lowest County Council formula grant per head in 2009/10 (after floor damping)

· the lowest relative needs grant per head

· council tax which remains below average and within, or close to, the lowest quartile target

· council tax rise below average

13) 2010/11 to 2011/12 provisional budgets

13.1. The guidelines for 2010/11 and 2011/12 follow those provisionally set in February 2008 for 2010/11, and in October 2008 for 2011/12, subsequently confirmed in December 2008. Priority has been given to Adult Services, and Children's Services to reflect demographic and cost pressures. Other services remain at base budget level.

13.2. Full year effects of savings and growth, variations in reserves and use of balances are built into the plan. No assumptions have been made about the level of the schools budget beyond 2010/11 for which there is no information available on Government grant.

13.3. The provisional budget requirements for 2010/11 and 2011/12 are estimated as follows:

Table 22: Provisional budget limits 2010/11 and 2011/12

13.4. Other budgets are provisionally estimated as set out in Table 22

Table 23: Other budgets 2010/11 and 2011/12

13.5. The budget requirements for each year are therefore:

Table24: 2010/11 and 2011/12 budget requirements

13.6. The budget requirement in each year will be met as set out next:

Table 25: 2010/11 and 2011/12 precepts met by council tax payers

13.7. Adjusted for changes in specific grants and in the use of earmarked reserves and past underspendings and allowing for anticipated contingency allocations for the waste contract and business rates, the following table summarises the underlying changes in spending within the budget requirement.

Table 26: Percentage cash changes in 2010/11 and 2011/12 budgets

Financial planning framework

13.8. Appendix 7 sets out the County Council's current financial management policies.

14) Treasury management strategy and investment strategy for 2009/10

14.1. The County Council is required to adopt a treasury management strategy and an annual investment strategy for 2009/10 and these are set out in Appendix 8 for approval. The Appendix summarises:

· the strategy for the management of the long-term debt portfolio relative to forecast trends in long and short term interest rates

· the arrangements for the investment of surplus cash funds during the year

· the investment strategy for submission to the County Council for approval, conforming with the prudential code for financial management.

15) Prudential and financial health indicators

15.1. The prudential code ensures that:

· capital programmes are affordable in revenue terms

· external borrowing and other long-term liabilities are within prudent and sustainable levels

· treasury management decisions are taken in line with professional good practice

15.2. Appendix 8 also contains the prudential indicators required by the code for the County Council, together with additional financial health indicators. The summary of the indicators in Annex 3 to Appendix 8 will be submitted for approval by the full Council in setting the budget.

16) Appendices

16.1. Appendices to the report are:

1. Revised budget 2008/09 (salmon)

2. Proposals for growth and redeployment of resources in 2009/10 to 2011/12 (yellow)

3. Efficiency improvements 2008/09 to 2011/12 (blue)

4. Budget 2009/10 - detailed analysis, based on the budget guidelines set by Cabinet in December 2008 (green)

5. Workforce statement and summary of workforce budgets 2009/10 (pink)

6. Reserves and balances 2009/10 to 2011/12 (white)

7. Draft medium term financial management policies (salmon)

8. Treasury management and investment strategies, prudential and financial health indicators (yellow)

9. Treasurer's report on risks, reserves and balances (blue)

10. Treasurer's letter in response to the consultation on the local government finance settlement 2009/10 (white)

16.2. The analysis of the formula grant settlement and financial trends (future trends as well as past trends) will be produced as background papers to be available for the Cabinet meeting, but have not been included as detailed appendices to this report.

CORPORATE OR LEGAL INFORMATION:

IMPACT ASSESSMENTS:

1. Equalities Impact Assessment:

a) Equality objectives are not considered to be adversely affected by the proposals of this report.

2. Impact on Crime and Disorder:

a) The proposals in this report are not considered to have any direct impact on the prevention of crime.

3. Climate Change:

a) How does what is being proposed impact on our carbon footprint / energy consumption?

· No specific changes.

b) How does what is being proposed consider the need to adapt to climate change, and be resilient to its longer term impacts?

· Executive members have considered climate changes in making their submissions and have had regard to energy conservation and carbon reduction in relevant budget proposals.