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 February 2009, 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. However, these are likely to be offset by under spends in Property Services, Chief Executive's and County Treasurer's departments and also under spends relating to the audit fee and Members' devolved budgets. IT Services are forecasting a break even position for this year. Other business units are expecting to achieve a surplus in excess of their targets.

1.3. Capital payments for the County Council for 2008/09 are forecast to be slightly below the revised estimate of £215m.

2) Issues Covered in Report:

2.1. This report is the final 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.

3.2. That consideration of the treatment of over and under-spendings against the 2008/09 revised budget be deferred until the final outturn position is known.

3.3. That the principle be approved to carry forward schemes in the 2008/09 capital programme that are not started by 31 March 2009, subject to the cost of the schemes being accommodated within the approved programme limit.

3.4. That an allocation of £1m from the Policy Fund reserve be approved for remedial work on highways arising from the severe winter weather.

3.5. That representations be made to the Ministry of Justice about the lack of accountability associated with the current funding arrangements for the Coroners Service.

3.6. That the Local Government Association's response to the consultation on the Coroners Bill, calling for central funding to be put in place, be supported.

MAIN REPORT

1) Purpose of the Report:

1.1. This report is the final 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 B.

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, recently revised to £215.0m. The latest capital programme for Policy and Resources, is set out in Appendix C.

3) Key Issues:

3.1 Comments on budget issues for 2008/09 based on monitoring of income and expenditure up to the end of February 2009 are given below.

Chief Executive's Department (including Human Resources)

3.2 A number of budgets managed by the Chief Executive were revised in January to take account of some planned under spends in a number of areas. A further area of under spend is now likely relating to Local Involvement Networks (LINks), which were newly established during 2008/09 to promote public engagement in the provision of local health and social care services. Regarding all other areas, the current budget monitoring projections for the Chief Executive's Department continue to predict that the budgets will be contained within the cash limits for 2008/09.

County Treasurer's Department

3.3 The County Treasurer's department has already declared a planned under spend of £200,000 to manage the transfer of the Student Support service and to address the wider department budget pressures in 2009/10. The department is likely to be a further £40,000 under spent at the year end in part due to the unforeseen deferral of the contract to transfer pension records to data image processing.

Property Business and Regulatory Services

3.4 The position for the four largest budgets, Repairs and Maintenance, Office Accommodation, Property Services and Regulatory Services is favourable. The main Repairs and Maintenance budget is expected to be fully spent with the exception of the winter maintenance contingency where despite the poor weather in early February relatively low levels of spending have been incurred. Income levels from external customers are holding up well in the main Property Services budget and the Office Accommodation budget is expected to be in balance at year end. The position on these main budgets is expected to be sufficient to cover most if not all of the projected overspend on the Corporate Estate, Development Account and Sites for Gypsies and Travellers budgets.

3.5 Initial funding solutions to the pressures in the Community Safety service identified as part of the budget process mean that the overall position including the Registration Service should be contained within the cash limit.

Other non-departmental Policy and Resources budgets

3.6 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. The scheme closes in February each year and once the final batch of claims are processed, expenditure for 2008/09 will be around £904,000. As the scheme does not allows for the carry forward of under spending from 2008/09 to the new Council, the unspent sum will be available to offset other spending pressures.

3.7 As previously reported, a saving of £15,000 on the audit fee is anticipated. No significant variations on other non-departmental budgets have been identified in this review.

HM Coroner Service

3.8 This is a Policy and Resources service managed within Property, Business and Regulatory Services. Continuing cost pressures in particular from the use of mortuary facilities (+9% on spending in 2007/08) and post-mortems (+12%) together with the increasing cost of office and court space has increased the projected overspend to £180,000 despite the one-off base budget increase and higher levels of recharge to Portsmouth and Southampton City Councils.

3.9 The current organization of the Coroners service is anomalous, with Coroners being Crown appointments and not being managerially accountable to the County Council, but with the County Council being required to fund the costs incurred by the service. The sharp upward trend in costs in recent years has brought this lack of proper accountability into focus. It is proposed that representations be made to the Minister of Justice about this lack of accountability and that the Local Government Association (LGA) response to the recent consultation on the Coroners Bill, calling for central funding to be introduced, be supported.

Summary

3.10 At the end of February 2009, the anticipated variations in cash limited expenditure are:

Chief Officer controlled budgets:
Chief Executive	- £121,000
County Treasurer	- £40,000
Property Services	- £250,000
Repair and Maintenance winter contingency	- £200,000
Corporately held land	+ £245,000
Sites for Gypsies and Travellers	+ £82,000
Other budgets:
Members' devolved budgets	- £96,000
Audit fee	- £15,000
Coroners	+ £180,000
Overall forecast outturn for Policy and Resources	-£215,000

3.11 The provisional outturn position will be reported to the Executive Member for Policy and Resources in May 2009 and carry forward proposals will be made in accordance with the approved policy.

4) Business Units

Property, Business and Regulatory (PBR)

4.1. The updated forecast for 2008/09 shows that the overall position will be considerably ahead of the original budget forecasts and the combined surplus is now expected to be £578,000 with each business showing an improvement against the original plan mainly as a result of increased demand.

IT Services

4.2. The projected trading outturn for 2008/09 has improved considerably from a predicted deficit in January to a forecast outturn which is now very close to break even.

4.3. There has been growth in income driven by the return of Connexions, the new disaster recovery contract for which funding has now been secured and additional work required for Hantsdirect. There have also been reductions in cost in the IBM enterprise licence agreement programme and the Data Centre move programme. In addition, the planned upgrade to the operating system installed on each of the servers has been delayed until the new financial year.

4.4. A review of staffing needs across the department has been taking place and a number of posts have been lost through natural wastage, the roles being absorbed with other roles through restructuring. In total this approach has reduced headcount in Business Support and Corporate IT by 7.0 ftes. Plans to replace costly external consultants by increasing headcount in Business Solutions and Service Delivery have been partly successful and overall staffing costs have reduced despite a small increase in external consultancy driven by increased demand for services.

Hantsdirect roll out

4.5. The programme team are continuing to deliver in accordance with the revised programme schedule agreed in November. Whilst some slippage is forecast in 2008/09, the programme remains on course to stay within its allocated funding by the time it concludes in 2009/10.

5) Policy and Resources capital programme

5.1. The Policy and Resources capital programme for 2008/09 amounts to £48.7m, as set out in Appendix D. This includes previously agreed proposals to re-profile £3m 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 and to allow some smoothing of the reduction to the capital repairs programme.

5.2. The capital repairs programme, including New Deal for Schools, totals £39.5m and is controlled on an expenditure basis. The balance of £9.2m, is controlled on a starts basis.

5.3. As at 28 February 2009, expenditure on capital repairs totalled £27.6m, and schemes to the value of £5.9m had started, representing an overall commitment of £33m.

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. This was revised to £215.0m in February 2009 to include expenditure on the architectural enhancements at the Chineham, Marchwood and Portsmouth Energy Recovery Facilities. Based on previous capital expenditure profiles and actual payments at 28 February 2009, it is likely that the outturn will be slightly below the revised estimate.

5.5. The pothole busters programme resulted in around 30,000 holes in the road being repaired. Unfortunately the extreme weather in February had an adverse effect on the condition of the road network and in Hampshire as in many other areas, there has been a significant increase in the number of potholes needing repairs, so that a further investment in pothole busting is required. In view of the need to maintain the highway in a good condition, the County Council's contractors have been requested to repair as many as possible as part of their routine operations. However this effort needs enhancing over the next few months to return Hampshire's roads to good condition and an allocation of £1m from the Policy Fund reserve is proposed to finance this remedial work to Hampshire's roads.

5) Carry forward of 2008/09 capital schemes not started as at 31 March

5.1. The County Council's policy is to allow the carry forward of capital schemes not started by 31 March subject to the cost of the schemes carried forward being contained within the programme limit. Approval is sought for the carry forward of schemes on this basis. Details of the scheme carried forward will be reported to the Cabinet in June in the report on the 2008/09 final accounts.

6) Conclusions:

6.1. At the end of February 2009, 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. However, these are likely to be offset by under spends in Property Services, Chief Executive's and County Treasurer's departments and also under spends relating to the audit fee and Members' devolved budgets. IT Services are forecasting a break even position for this year. Other business units are expecting to achieve a surplus in excess of their targets.

6.2. Capital payments for the County Council for 2008/09 are forecast to be slightly below the revised estimate of £215m.

7) Summary Recommendations:

7.1. Please see Executive Summary for recommendations.

CORPORATE OR LEGAL INFORMATION:

COMPREHENSIVE RISK & IMPACT ASSESSMENT:

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 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

3. Climate Change:

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

· the proposals in this report do not have a specific impact on carbon footprint/energy consumption.

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

· the proposals in this report do not have a specific impact on climate change.

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

Policy and Resources 2008/09 capital programme