Archived decisions

HAMPSHIRE COUNTY COUNCIL

Decision Report

1. Executive Summary

1.1. This report concerns the management of the Environment services during the first quarter of the 2009/10 financial year. It aims to provide reassurance that the services are being managed within approved cash limits and that key service performance and workforce targets are being achieved.

1.2. The outcome of the first quarter's revenue budget monitoring review shows a satisfactory position for this stage in the financial year. Potential underspendings have been identified against the budgets for road safety education and the contribution to the safety camera partnership. Expenditure on staffing and support costs is currently shown to be on budget, although this forecast assumes that further savings will be identified during the remainder of the year to fully achieve the allowance for staff turnover and other savings that were built into the 2009/10 budget, and that any other cost pressures are absorbed within the respective cash limits for operational budgets.

1.3. Good progress has been made in achieving the department's key service improvements. Particular attention has continued to be focused on the Corporate Improvement Plan and Local Area Agreement priorities to improve road condition, reduce traffic speeds in villages, reduce waste to landfill, proactively manage the growth agenda and promote measures to mitigate and adapt to climate change. The recently agreed targets to address congestion and accessibility issues present a key challenge.

1.4. Workforce numbers are stable and reflect increased recruitment and retention success in the current climate; turnover and sickness have reduced or remain at acceptable levels for the various staff groups employed.

2. Contextual information

2.1. The report presents the outcome of the first quarter's service monitoring review for the 2009/10 financial year and represents the first step towards the integration of financial, performance and workforce monitoring, in line with corporate requirements. This approach to integrated service planning and monitoring will be further developed in future monitoring reports and the preparation of the 2010/11 service planning and budget strategy as the year progresses.

2.2. The Environment Department's budget monitoring process reflects a comprehensive approach which includes a series of review meetings between finance section staff and those departmental officers with delegated budget responsibilities. During this process plans for service spending during the year, together with trends in expenditure and income, are reviewed in comparison with the approved budget plan, in order to update the forecast outturn projection for each of the main service headings. The outcome of this process is initially reported to the department's management so that any necessary actions can be considered.

2.3. The report covers the outcome of the first revenue budget monitoring review for the 2009/10 financial year which was carried out in consultation with the departmental budget holders during the summer. An update of the 2009/10 cash limit is also provided, taking into account recent budget changes.

2.4. Performance information has been collated from an analysis of progress against the activities and measures set out in the department's delivery plans for 2009/10. These are aligned to the aims and objectives set out in the current Environment Department Plan.

2.5. Workforce data is provided quarterly from HR systems, and progress against workforce aims assessed by the department's workforce and organisation development advisory group. The data and commentary is considered by the departmental management team.

3. Finance

Cash Limit Changes

3.1. The original 2009/10 cash limited budget for the Environmental services, which was confirmed by the County Council at its meeting in February, was £112.636 million.

3.2. A number of changes have subsequently been made to the cash limit, increasing the figure by £1.394 million to £114.030 million. These adjustments include variations in expenditure being funded from Government grant, the first quarter's call on the central waste management contingency, and a number of other agreed changes. A summary showing all of the cash limit changes is set out in Appendix 1.

3.3. The cash limit adjustments include an increase of £12,000 being this department's share of the £24,000 unplanned underspending recorded during the closure of the 2008/09 accounts. It is suggested that this sum be added to the department's budget for staffing and support costs, to help towards the funding of any unforeseen pressures that may emerge during the course of the year.

3.4. Further adjustments to the cash limit will be made throughout the year to cover the quarterly allocations from the central waste management contingency, together with any subsequent budget transfer and adjustments that may be required. These will include changes to IT services charges, to reflect revised arrangements for charging for infrastructure and other fixed costs, and transfers in connection with the facilities management review which will be dealt with as part of the 2009/10 revised budget process.

Outcome of Quarter 1 Budget Monitoring Review

3.5. Appendix 2 provides a summary of the 2009/10 revenue budget over the standard divisions of service headings, together with details of assessed expenditure to 30 June 2009.

3.6. The main issues arising from the budget monitoring review are discussed in the following paragraphs.

Highways Maintenance

3.7. The overall highways maintenance programme for 2009/10 amounts to nearly £64 million, including routine highways maintenance activities funded from the revenue budget, together with the capital programme provision for structural maintenance of roads and bridges.

3.8. The 2009/10 cash limit for revenue budget funded routine highways maintenance is £29.726 million. Assessed expenditure to 30 June 2009 was £6.440 million, being broadly in line with the estimated spend profile for this programme.

3.9. Approved routine maintenance work allocations to the various departmental and agency district council budget holders currently total £29.626 million, leaving an unallocated revenue reserve sum of just £100,000 to cover any operational pressures that might emerge later in the year. This reserve sum is at a significantly lower level than the sum of £390,000 available at a similar stage in the 2008/09 financial year, mainly because of the need to absorb an inflation price increase of 7.25% payable under the term highways contract for 2009/10, which was well above the corporate allowance of 2.5%.

3.10. In view of the financial and service related pressures affecting Highways Maintenance, at the decision day meeting of the Executive Member for Policy and Resources on 9 September 2009 it was agreed that a further £2.6 million be transferred from reserves to fund highways works. These include £2 million for surfacing C and U class roads, £300,000 for highways drainage improvements and £300,000 to enable the completion of the Village 30 speed limits programme. It is anticipated that these additional allocations will help to ease the pressure on the maintenance programme, although some realignment of the programme may be necessary later in the year.

3.11. Appendix 3 provides a summary of the latest approved 2009/10 highways maintenance programme, covering both the revenue budget for routine maintenance activities and the capital programme allocation for structural highways maintenance. The overall capital maintenance budget includes the award of £338,000 Government grant towards the maintenance of de-trunked roads (the A339) and an additional sum of £1.0 million released from the Corporate Policy Fund reserve towards the cost of highway remedial works arising from the severe winter. It also reflects an agreed increase of £1.2 million from re-phasing of the County Council's capital programme, to enable major maintenance work on the A326 to be brought forward from 2010/11 to 2009/10.

Road Safety Education

3.12. The 2009/10 revenue budget for road safety education is £991,000 including an increase of £200,000 arising from the award of Government grant towards "Bikeability" cycle training, announced during March. This sum will allow a further 5,000 children to benefit from this training during the current financial year.

3.13. The 2009/10 road safety budget also includes the sum of £254,000 carried forward from last year arising from the reduced contribution towards the Hampshire and Isle of Wight Safer Roads Partnership (SRP) in 2008/09. This sum was earmarked to provide additional resources in 2009/10 for further road safety initiatives or other speed management priorities.

Safer Roads Partnership

3.14. In setting the budget for 2009/10, a sum of £1.288 million was provided to cover the County Council's anticipated contribution to the SRP during the current year. However, the agreed County Council contribution for 2009/10 is lower at £1.186 million, resulting in a saving of £102,000, compared to the budget provision. In addition, a further sum of £395,000 is available from the repayment of the "loan" made by the County Council from the road safety budget during 2007/08 and 2008/09, when other partners' road safety grant was insufficient to meet their share of the costs of the SRP. This "loan" was made with the proviso that when the partnership received a new income stream from charges arising from the new Driver Awareness Training scheme, this income would be first applied by repaying the Hampshire loan.

3.15. The repayment of the loan, together with the lower contribution to the SRP in 2009/10, results in a potential underspending of £497,000 against the current SRP budget allocation. The overall position, taking into account the amount of £254,000 available against the road safety education budget, results in total resources of £751,000 which are to be re-invested to meet a number of key Member priorities including further reinforcement of the Village 30 programme and other road safety initiatives.

Public Transport

3.16. The 2009/10 cash limit for expenditure on public transport support is £6.662 million. The main element of the public transport budget is the sum of £6.524 million for expenditure on bus subsidies, which includes funding for services by district councils and from developer contributions.

3.17. In preparing the 2009/10 budget, a sum of £60,000 was carried forward from the 2008/09 public transport budget, arising from savings from previous service reconfigurations. It was planned to use this sum to help manage anticipated pressures on this service during 2009/10, including higher costs arising from contract retendering, re-pricing and commercial services de-registrations. The 2009/10 budget report in January also drew attention to the need to continue to apply existing policies, including the rolling programme of area reviews, for the containment of expenditure within available budget limits where appropriate.

3.18. Overall, passenger transport expenditure is currently expected to be contained within the service cash limit. The current level of assessed commitments against the bus subsidies budget is £6.390 million, which leaves a sum of £134,000 available to meet further cost pressures arising from contract variations and other issues during the remainder of 2009/10. However, on an ongoing full-year basis, the amount currently uncommitted within the bus subsidies budget is much lower at £45,000.

3.19. The financial position on the public transport services will be regularly reviewed during the remainder of the year, including consideration of whether there are opportunities to carry forward resources to next year in support of the 2010/11 budget.

Waste Management

3.20. The waste contract related services original budget for 2009/10 was £42.764 million, based on estimated commitments at the time it was prepared during November 2008. No allowance was included in the 2009/10 base budget for growth in waste volumes beyond predicted 2008/09 levels, nor for future price increases, changes to landfill tax rates or other contract cost pressures.

3.21. As in previous years, a contingency amount has been set aside within the overall County Council budget to cover these inescapable pressures, the sum for 2009/10 being £2.941 million. Periodic allocations will be made throughout the year to increase the waste management cash limit, based on quarterly assessments of cost increases.

3.22. Overall waste volumes during the first three months of the year have been lower, by 2.1%, compared to the corresponding period of 2008/09 and the allowance for growth of 1.4% included in the make-up of the central waste contingency. Within this figure, volumes from household waste collections have reduced by 4.4% year-on-year, although this reduction has been partially offset by increases of 3.6% in the volumes of residual waste from the household waste recycling centres.

3.23. The first quarter's call on the central waste contingency has been assessed at £406,000, reflecting variations in the cost of the waste contract during this period, including contract price changes and increases to the rate of landfill tax. This sum has now been added to the service's cash limit. However, it is too early in the year to predict any clear trends in waste volumes, or whether the contingency sum of £2.941 million will be sufficient to cover higher waste contract expenditure during 2009/10.

3.24. The total 2009/10 budget provision for the non-contract waste management services is £1.134 million. It is currently anticipated that overall expenditure will be contained within the cash limit for this part of the waste management budget, which covers the main non-contract related activities such as facility management, promotions and development, the disposal of abandoned vehicles and LPSA funded projects.

Environment Department Staffing and Support Costs

3.25. The overall 2009/10 budget for departmental staffing and support costs is £28.068 million, mainly covering the running costs of the Environment department, together with the remaining agency arrangements with the district councils and other external support.

3.26. Planned savings of £863,000 from management reviews and other efficiency savings from support service areas were identified in constructing the 2009/10 original budget to offset a number of service pressures, including the impact of the Traffic Management Act, lower income, office changes, the introduction of flexible working arrangements, longer term funding arrangements for partnership activities and staff salary increments.

3.27. These planned savings were reflected in the detailed cost centre budget allocations to budget holders at the beginning of the year and the outcome of the first quarter's budget monitoring review suggests that these savings are largely being achieved in accordance with the budget plan. Good progress has been made in implementing the review of administrative services within the department which is planned to contribute £188,000 towards the overall savings total. To date, firm proposals for savings of £98,000 have been identified from this review and options are currently being considered to achieve the remaining balance.

3.28. As in previous years, monitoring will be undertaken of the achievement of the normal annual allowance built into the staffing and support services budget for savings that are expected to arise during the course of the year from staff turnover, vacancies and other minor housekeeping efficiencies. For 2009/10 this turnover savings allowance has been set at £642,000, which is at a similar level to 2008/09.

3.29. The first quarter's budget monitoring review has already identified actual and projected savings of £231,000, or 36% of the total requirement for the year. As in previous years, the achievement of these savings will be tracked throughout the year in the budget monitoring reports to ensure that the savings assumptions reflected in the budget are being achieved, in case corrective action needs to be taken.

4. Performance

4.1. There has been significant progress in the delivery of transport infrastructure, speed reduction, sustainability and quality of place, including:

(i) A major milestone was recently passed with the securing of planning permission in July 2009 for the construction of the Gosport to Fareham Bus Rapid Transit scheme. This is a key part of measures to improve accessibility and congestion in one of the most economically deprived parts of Hampshire.

(ii) Good progress has been made on completion of the 120 Village 30 schemes across Hampshire. The initial monitoring of traffic speeds has shown an overall speed reduction of 9%, well on track towards the 10% longer term target and the achievement of wider community benefits. Other important road safety benefits are also being sought through the recent launch of the `See me now?' motorcycle safety awareness campaign.

(iii) Major proposals are being advanced to improve quality of life and reduce congestion in the Winchester area through the repaving of Winchester High Street, scheduled for a September 2009 start, and the South Winchester Park and Ride for which construction is now well underway.

(iv) A pilot scheme has been launched to supplement highways maintenance with Parish Lengthsmen in two rural areas of the County. The Meon and Test Valleys will have the addition of a Parish Lengthsman to assist in minor duties to enhance the current term highways contract, operated by Amey Plc. In each area, 10 parishes have been offered £1,000 each for a trial period of one year.

(v) The department played a key role in leading the Council's work to achieve its Aalborg targets to improve the sustainability of the authority. The Council will now be working towards its sustainability targets up to 2015/16. The 10 improvement priorities for 2009/10 were agreed, including new economy, health and transport themes.

(vi) Work to support the County Council's climate change ambitions has continued, including the joint hosting of a workshop on energy issues to inform a high level strategy and assist delivery of the LAA commitments. Work has also commenced on a Coastal Adaptation Strategy.

(vii) As part of the work on the Improvement and Efficiency South East (IESE) Highways and Transportation workstream, the establishment of a professional services arrangement for highways has been investigated. Following market testing and dialogue, a regional three-supplier framework arrangement is now being procured, to start in January 2010, that will realise savings for the Council and other local authorities.

5. Workforce

5.1. The main headlines show that workforce numbers are stable and reflect increased recruitment and retention success in the current climate; turnover and sickness have reduced or remain at acceptable levels for the various staff groups employed.

Core (central) Staff

5.2. Core numbers employed are similar to expected and turnover is down to 12.4%, the lowest for seven years.

5.3. Core staff reported sickness is similar to recent quarters at 5.4 fte days lost per fte - one of the consistently lowest rates in the County Council.

5.4. The improvement in the recruitment position has been maintained with only one unsuccessful first advertisement in the quarter.

School Crossing Patrols

5.5. For school crossing patrols, numbers of leavers have reduced in recent months and recruitment has again been more successful. Following an earlier rise, sickness absence in this staff group has been monitored and managed more closely recently, and has been replaced by a sharp drop.

Accidents and Employee Casework

5.6. There have been no changes or concerns in numbers of accidents or employee casework for any staff groups.

6. Conclusion

6.1. A number of adjustments have been made to the Environment services' cash limit, increasing the overall budget by £1.394 million to £114.030 million. Further adjustments will need to be made throughout the remainder of the year for additional quarterly allocations from the central waste management contingency and other transfers.

6.2. A further allocation of £2.6 million has been provided from central reserves to fund high priority highways works, including additional surfacing and drainage improvements. This will help to ease the pressure on the highways maintenance programme, including the revenue budget for routine repairs where only £100,000 currently remains in reserve. However some realignment of the overall programme may be necessary later in the year.

6.3. Resources totalling £751,000 on the road safety education and Safer Roads Partnership budgets, reflecting further loan repayments from the SRP, a lower County Council contribution in 2009/10 and resources carried forward from the 2008/09 budget, are to be re-invested to meet a number of key Member priorities including further reinforcement of the Village 30 programme and other road safety initiatives.

6.4. On public transport, a sum of £134,000 is available to meet further cost pressures during the remainder of 2009/10. Expenditure is currently expected to be contained within the cash limit and there may be opportunities later in the year to carry forward resources in support of the 2010/11 budget.

6.5. Waste management volumes show continuing reductions year-on-year, based on the figures during Q1. However, it is too early to predict any longer term trends in waste volumes or whether the waste contingency sum of £2.941 million for 2009/10 will be sufficient to fully cover waste contract related expenditure during the year.

6.6. The 2009/10 budget for staffing and support costs included planned savings of £863,000 which are on track to be achieved in accordance with the approved budget. In addition, projected savings of £231,000 have so far been identified against the turnover allowance of £642,000 within the staffing and support costs budget, or just under 36% of the total requirement for the year.

6.7. Performance against the department's aims and objectives is broadly on track. Key risk issues have been identified and are being addressed as appropriate to their priority and risk level.

6.8. Workforce indicators are satisfactory, being stable or improving, and do not give any cause for concern.

7. Recommendations

7.1. That the actions being taken to manage expenditure be approved.

7.2. That the latest performance and workforce monitoring position be noted.

2129Rpt/887/RA

CORPORATE OR LEGAL INFORMATION:

Links to the Corporate Strategy

Other Significant Links

IMPACT ASSESSMENTS:

1. Equalities Impact Assessment:

1.1. Assessment of the Race Relations (Assessment) Act has been considered in this monitoring report. No adverse impact has been identified in terms of race, creed or gender.

2. Impact on Crime and Disorder:

2.1. As this is a general report covering the monitoring of the budget, performance and workforce for the department, it cannot set out detailed crime and disorder implications. However, crime and disorder implications of specific departmental issues would be reflected in individual service plans and project reports where appropriate.

3. Climate Change:

a) How does what is being proposed impact on our 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?

As this is a general report covering the monitoring of the budget, performance and workforce for the department, it cannot set out detailed climate change implications. However, climate change implications of specific departmental issues would be reflected in individual service plans and project reports where appropriate.