Archived decisions

HAMPSHIRE COUNTY COUNCIL

Decision Report

1. Executive Summary

1.1. The grant settlement was announced on 26 November 2009 and as expected confirmed the grant increase for 2010/11 as the final year of the current three year spending review period. There are no figures for the next three year period and assumptions have to be made about the impact of the public spending cuts from 2011/12.

1.2. This report therefore confirms the cash limits for 2010/11 set with the 2009/10 budget, and the 2011/12 and 2012/13 cash limits as adjusted for the corporate efficiency savings targets agreed within the medium term financial and efficiency strategy by Cabinet on 26 October 2009.

1.3. Executive members are asked to prepare budgets within the agreed guidelines, so that the Leader and Cabinet can make the final budget recommendations for 2010/11 at the meeting on 5 February 2010. Select Committees will be able to review the budget proposals during the January cycle.

1.4. The Government's recent announcement on free personal care at home, to be implemented from October 2010, presents an uncertain and potentially large unfunded budget pressure which will need to be assessed when further information is available by February 2010. Some funding will be provided through the area-based grant, but local authorities are also expected to contribute funding from efficiency savings. The Consultation response closes on 26 January 2010 and a draft response will be submitted to January's Cabinet, which will assess the funding implications.

1.5. The pre-budget report is due to be announced on 9 December 2009 and it is anticipated that this may provide some further clues towards the public spending cuts to follow in 2011/12. It is also expected that the potential for savings from the "Total Place" initiative will feature. The main points will be summarised at the meeting.

1.6. The Cabinet will need to have regard even more than ever, to the worsening budget position for 2011/12 and later years, when setting the 2010/11 budget. This process was started with the medium term financial strategy and the agreement to find an additional £15m of corporate efficiency savings over and above the County Council's usual target of £15-20m per year deployed within service cash limits.

2. Provisional local government finance settlement 2010/11

2.1. 2010/11 is the final year of this three year settlement and as expected the Government grant for 2010/11 remains unchanged at £146.8m, a floor increase of 1.5%. Nationally formula grant is 2.6% higher than in 2009/10.

2.2. The average Band D council tax increase in 2009/10 was 3% (Hampshire's was 1.9%). The Government expects to see it fall further next year while authorities protect and improve frontline services.

2.3. The ministerial statement said that "we expect the average Band D council tax increase in England to fall to a 16 year low in 2010/11. We remain prepared to take capping action against excessive increases set out by individual authorities and requiring them to re-bill for a lower council tax if necessary."

2.4. The County Council's proposed increase of 1.9% for 2010/11 should fall within any capping constraints.

2.5. The consultation on the provisional settlement closes on 6 January 2010. There does not seem to be any point in making any representations this year.

2.6. Full details of area based grant have not yet been announced, which is expected to include on a conditional basis, partial provision towards the new burden of free personal social care at home, subject to a number of grant distribution options. The funding implications will be examined by the Executive Member for Adult Social Care in formulating a draft response to the consultation, which will be submitted to Cabinet in January.

2.7. There is a concern that the Government's estimate of free home care may be understated, particularly in areas with relatively high levels of self-funders. Even on the basis of the Government's estimate, local authorities are expected to contribute over 1/3 of the estimated cost from efficiency savings, a sum in excess of £5m in a full year for the County Council. This is unrealistic given the existing expectation that cashable efficiencies will be utilized to assist in funding demographic pressures, the personalisation of services and anticipated reductions in future Government grant. The Government should be expected to provide adequate additional funding for new duties imposed on local authorities. The proposal is a piecemeal response to the need to reform the system of social care, which by focussing on providing public funding for older people currently contributing to or fully funding their care, runs the risk in the current economic climate of exacerbating existing social care funding pressures.

2.8. Some specific grant details are still awaited. As appropriate, changes will be built into the service reports and the overall position summarised for the February Cabinet meeting.

3. Budget considerations

3.1. Meetings were held during November involving the Leader, Executive Member and relevant officers to consider the issues in setting budgets within the guidelines proposed by the Cabinet. No major budget consultation is planned to take place until Government spending plans become clearer for 2011/12 and onwards.

3.2. The budgets should be developed from the service planning undertaken during the Autumn linked to the corporate strategy, as reflected in the priorities of the corporate improvement plan, and the eight themes of the local area agreement and within the financial management policies agreed within the medium term financial strategy in October 2009.

3.3. The Government's annual target for local government efficiency savings has been increased from 3% to 4% for 2010/11. Services will be expected to accommodate budget pressures within provisional cash limits by means of efficiency savings, achieved in areas that do not coincide with the corporate efficiency programme. In future, efficiency savings reported in accordance with the national indicator criteria will represent a combination of efficiency savings absorbed within the base budget, efficiency savings redeployed within the service and corporate efficiency savings, which will be transferred to the Corporate Policy Reserve and redeployed corporately either to reduce the council tax increase or to support the service objectives of the corporate strategy, ensuring that the £15m budget gap projected for 2011/12 is met.

3.4. Following the meetings with the Leader to discuss budget options, and subject to Cabinet confirmation of the provisional budget guidelines in December, budget proposals will need to be developed for consideration by the relevant scrutiny committee and executive member in January 2010, for submission to February's Cabinet. Scrutiny committees have been programmed to meet in the morning prior to the executive member decision day on the following dates:

2010
12 January	- Environment
14 January	- Culture, Communities and Rural Affairs
15 January	- Adult Services
	- Children's Services
21 January	- Policy and Resources

3.5. The County Council has already set a provisional budget for 2010/11 and 2011/12. The budget will continue to be presented in two stages, involving the preparation of a base budget and the changes required to the base budget to meet the budget guideline, but the format of the budget report to Executive members is designed to give more emphasis to explaining changes from the previous provisional budget.

3.6. As in previous years, it is not proposed that there should be a distinct corporate process for preparation and separate reporting of a revised budget. Reliance will be placed on service and corporate budget monitoring reporting arrangements. Revised budgets for 2009/10 will be reported to Executive members in January 2010, based on the latest amended budget for the service, in conjunction with the reporting of 2010/11 to 2012/13 budgets. These should include any proposals for the carry forward of planned underspendings from 2009/10, including spending financed from area based grant.

3.7. Appendix 1 attached shows the changes in setting the revenue budget guidelines for 2010/11, 2011/12 and 2012/13 from the 2009/10 budget.

3.8. In addition to changes in specific grants, the impact of the new burden of free personal home care proposal, final details of tax base and collection surpluses are still awaited.

4. Capital programme 2010/11 to 2012/13

4.1. The Cabinet on 26 October 2009 set provisional locally resourced guidelines for 2011/11 to 2012/13 based on a continuation of the programme level for 2009/10 to 2011/12, which involved spreading the previous 2009/10 and 2010/11 programmes over three years. Details are included in Appendix 2. This is in recognition of the extent to which the level of capital receipts to support the locally resourced capital has declined over the last two years and the requirement to generate future capital receipts to repay temporary unsupported borrowing.

4.2. The Government has already announced details of its support for capital schemes in 2010/11 covered by supported borrowing and of most of its support by means of capital grant. Details of Government support for projects in 2011/12 and 2012/13 are unlikely to be known until after the next Spending Review, but programmes can be planned provisionally, where this is appropriate, on the basis of the best information available on potential future levels of support. Allowance will continue to be made for not taking up Government supported borrowing in full based on the existing policy of limiting the increase in the capital financing requirement to 2.5% per annum, subject to the specific decisions taken in 2008/09 to support additional borrowing.

4.3. The capital programme guidelines are set out in Appendix 2.

5. Havant Public Service Village

5.1. The County Council was successful in being awarded a grant of £5.1m from the Department for Children, Schools and Families (DCSF) Co-location Fund towards a project in Havant designed to improve the outcomes in the Havant area for children, young people and families. A Havant Public Service Village project has been developed jointly with Havant Borough Council and a business case for the joint funded project is set out in Appendix 3 (confidential). The project will be procured by the County Council and forms the next stage of the Hampshire Workstyle programme. Prudential borrowing of £2.5m by the County Council is proposed which would be financed from capital receipts/revenue savings generated by the project. The Cabinet is recommended to approve the amendment to the capital programme.

6. Conclusion

6.1. The grant settlement is as expected, so budget preparation for 2010/11 can continue as currently planned, subject to identifying the costs and funding of the Government's proposed additional burden of free personal home care due to be implemented, subject to consultation and legislation from October 2010. It is recommended that a separate contingency budget is developed to deal with this issue for consideration by Cabinet in February.

7. Recommendations

7.1. To confirm the revenue budget guidelines set out in Appendix 1.

7.2. To confirm the locally resourced capital programme guidelines set out in Appendix 2.

7.3. To request Executive members to report back within these guidelines for final decision to be made by the Leader and Cabinet in February 2010.

7.4. To make strong representations about the Government providing adequate funding for its proposals on free personal home care, and to request the Executive member for Adult Services to bring forward a contingency budget of anticipated costs and funding should the proposals be enacted for implementation from October 2010.

7.5. That the inclusion of the Havant Public Service Village project in the 2010/11 Policy and Resources capital programme at a total cost of £13.057m be approved, financed by grants and contributions of £10.557m from Havant Borough Council and the DCSF, together with prudential borrowing of £2.5m.

CORPORATE OR LEGAL INFORMATION:

Links to the Corporate Strategy

IMPACT ASSESSMENTS:

1. Equalities Impact Assessment:

1.1. Equality objectives are not considered to be adversely affected by the proposals in this report.

2. Impact on Crime and Disorder:

2.1. 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 proposals.

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

No specific proposals affecting adaptation to climate change.

Provisional Revenue Budget Guidelines

	Adult Services	Children's Services (exc schools block)	Culture, Communities and Rural Affairs	Environment	Policy and Resources	Total
	£m	£m	£m	£m	£m	£m
2010/11
Adjusted 2009/10 budget	302.2	165.9	34.3	111.4	72.8	686.6
Deletion of 2008/09 underspendings carried forward to 2009/10	-3.9	-1.3	-	-0.6	-1.2	-7.0
Variations in specific grants	1.3	5.3	-	0.1	0.1	6.8
Revenue impact of capital programme	-	-	-	0.5	-	0.5
LPSA2 pump priming	-	-	-	-	-0.1	-0.1
Deletion of use of PSA 1 Reward grant	-	-	-	-	-0.5	-0.5
Pay and Benefits allocations	0.6	0.1	-0.1	0.1	-	0.7
Non-recurring items in 2009/10 budget	-	-0.5	-	-	-0.7	-1.2
Invest to Save repayments	-0.1	-1.4	-0.2	-	-	-1.7
Waste Management contract	-	-	-	1.1	-	1.1
Hantsdirect - set up costs	-	-	-	-	-1.2	-1.2
County Council elections	-	-	-	-	-0.9	-0.9
Student Support transfer	-	-	-	-	-0.1	-0.1
Pay and Benefits implementation	-	-	-	-	-0.7	-0.7
Revenue/Capital virements	-	-	-	0.5	-0.6	-0.1
Supporting People carry forward	2.2	-	-	-	-	2.2
Other changes	-0.2	-	-	-0.2	-0.4	-0.8
Inflation allocation	5.0	2.7	0.5	1.3	1.0	10.5
Base budget	307.1	170.8	34.5	114.2	67.5	694.1
Growth in provisional budget	7.0	1.2	-	-	-	8.2
Budget guideline 2010/11	314.1	172.0	34.5	114.2	67.5	702.3
2011/12
Variations in specific grant	-7.9	0.2	-	-	-	-7.7
Student Support transfer	-	-	-	-	-0.2	-0.2
Deletion of invest to save reserve repayment	0.1	1.4	0.2	-	-	1.7
Revenue impact of capital programme	-	-	-	0.4	-	0.4
Deletion of other non-recurring items	-0.5	-	-	-	-0.3	-0.8
Carry forward of 50% of 2008/09 underspending	0.3	-	-	-	0.1	0.4
Inflation allocation	6.1	3.1	0.7	1.5	1.4	12.9
Base budget	312.2	176.7	35.4	116.1	68.5	708.9
Growth within guideline	2.6	0.8	-	-	-	3.4
Budget guideline 2011/12	314.8	177.5	35.4	116.1	68.5	712.3
2012/13
Deletion of 2008/09 carry forward	-0.3	-	-	-	-0.1	-0.4
Variations in specific grants	0.5	0.2	-	-	-	0.7
Deletion of other non-recurring items	-1.7	-	-	-	-	-1.7
Inflation allocation	6.3	3.2	0.7	1.6	1.4	13.2
Base budget	319.6	180.9	36.1	117.7	69.8	724.1
Growth within guideline	2.7	0.8	-	-	-	3.5
Budget guideline 2012/13	322.3	181.7	36.1	117.7	69.8	727.6

Locally resourced capital programme guidelines

	Adult Services	Children's Services	Culture Communities and Rural Affairs	Environment	Policy and Resources	Total
	£000	£000	£000	£000	£000	£000
2010/11
Guideline approved in February 2009	470	88	379	6,152	6,351	13,440
Inflation uplift of 2.25% on core programme	11	2	9	152	143	317
Provisional 2010/11 guideline	481	90	388	6,304	6,494	13,757
2011/12
Guideline approved in February 2009	585	88	408	6,310	6,366	13,757
Inflation uplift of 2.25% on core programme	13	2	9	155	143	322
Provisional 2011/12 guideline	598	90	417	6,465	6,509	14,079
2012/13
Continuation of 2010/11 programme	481	90	388	6,304	6,494	13,757
Adjustment for advancing of 2010/11 programme to an earlier year	-	-	60	-	-	60
Provisional 2011/12 guideline	481	90	448	6,304	6,494	13,817

Havant Public Service Village (PSV) Business Case

1. Summary

1.1 This appendix summarises the business case for the proposed Public Service Village (PSV) in Havant.

2. Background

2.1 The Borough of Havant contains some of the most deprived wards in Hampshire and consequently is one of the County Council's priority areas for improving community outcomes.

2.2 In March 2009 an unexpected opportunity arose to apply to the Co-Location Fund, sponsored by the Department for Children, Families and Schools (DCSF), for funding towards the development of a Public Service Village (PSV) in Havant. The fund's objective is to "contribute to improved outcomes for children, young people, families and local communities". With the support of the Chief Executive, Leaders and relevant Executive Members of both Councils, and of the Director of Children's Services on behalf of the Children's Trust Board, a joint bid was submitted with HBC for a £5.1m capital contribution from DCSF to a £10.6m core project. This submission was successful and, as a condition of grant, a new public atrium on the front of the PSV is required to be open for business on 1 September 2011.

2.3 The centrepiece of the PSV proposal will be a public atrium providing an important community facility for local residents, including an internet café and coffee shop. The atrium will also provide a welcoming and inclusive environment for the delivery of key public services, such as social care, housing and benefits, in a more integrated way. Thus, for example, a Connexions Personal Adviser, giving one-to-one support to a young person, will have immediate access to colleagues from social care, housing, benefits, health, education and the youth service, thereby providing a much more effective, co-ordinated and immediate service to the individual.

2.4 The atrium will be supported by a shared back office accommodating County and Borough Council staff as well as others. This space will deliver the ambitions of Hampshire Workstyle in Havant, providing a high quality flexible office environment for existing Borough Council staff together with 250 Children's Services, Adult Services, Environment staff and Health colleagues. These staff are identified in Appendix A. There is also significant potential to share this space - both front and back of house - with voluntary and community sector colleagues.

2.5 The shared facility is expected to be underpinned by joint service provision in areas such as facilities management and IT (where there is potential for the County Council to provide the service subject to a Borough Council decision). The opportunity for shared services is enhanced by the evolving close working relationship between Havant Borough Council and East Hampshire District Council which now share a Chief Executive.

2.6 The strong central core provided by the PSV will be complemented by improved facilities (already being developed) elsewhere in the community, such as children's centres, community centres and schools. This distributed model of service delivery will evolve during the coming months in light of the emerging decisions around Local Children's Partnerships and the Building Schools for the Future (BSF) programme.

2.7 The project now has a joint Programme Manager in place and the workstreams are regularly reporting on progress to the recently established Joint Steering Group and from there, to the decision making Joint Programme Board.

2.8 Phase 1 of the BSF programme is also focused in Havant and bringing the two projects together provides an excellent opportunity for ensuring the location of services is suited to delivering the maximum benefits for the community.

3. Key Objectives

3.1 The Havant PSV is considered to be a priority project for investment because it has the potential to deliver on the following objectives:

· Reducing inequalities and improving the outcomes for key groups in the community by improving access to services they already receive and increasing access to other services including early intervention and prevention activities. The specific focus will be on:


o Improving the life chances of those 16 - 19 year olds at risk of underachievement (NI 117)

o Improving skill levels, raising basic skills and moving people up the skills ladder (NIs 163, 164 & 165)

o Improving the health & wellbeing of people in Hampshire and reducing health inequalities between the areas with high and low deprivation scores (NI 120)

· Better use of resources through the Introduction of flexible working and the consideration of improved Facilities Management.

· Efficiency gains made through the release of capital and revenue from the disposal of unsuitable buildings including River Way and Town End House.

· Provision of drop in sites to meet the requirements of flexible workers in the area.

3.2 There are two kinds of expected benefits from the project:

a) Organisational benefits:

_ 30% reduction in footprint of office space.

_ A more flexible and adaptable organisation through:

_ Building capacity for future, wider business and organisational transformation

_ Increasing the capacity of staff to deliver professional services by removing tasks which are not core to their professional role

_ Creating an environment which facilitates sustainable efficient working practices

_ Increasing the effective use of existing and emerging technology.

_ Reduced carbon footprint

_ Improved customer experience through:

_ Working closely with the corporate customer service approach to look at joined up approaches to:

_ Reduction of avoidable contacts (NI 14)

_ Improved customer journeys

_ Joined up services and information

_ Customer focused design of both the building and local customer communications through joint working across teams and partnership organisations

_ Improved asset management and long term financial savings leading to cost avoidance and reduction

b) Community benefits - reducing Inequalities in Havant:

As mentioned earlier in Havant there is also the added opportunity to work with the `Transforming Communities' workstream of the BSF project in the area. Together these projects provide a unique opportunity to impact on inequality issues by effective and targeted partnership working focused on locating and designing services for maximum impact. It is intended that the PSV will focus specifically on:

_ The unemployed and those receiving benefits, developing strategies to:

_ get people back to work; reduce the number of families with no-one employed.

_ reduce income deprivation and its effects, particularly on children & families

_ increase skills and employability

_ reduce the health inequality issues that frequently align with deprivation (winter deaths, male life expectancy, mental health issues, obesity)

_ Young people Not in Employment, Education or Training (NEETs):

_ Providing a near town centre resource to draw them into a specially designed environment where they can access services focused on improving their outcomes

_ Supporting potentially vulnerable adults:

_ Supporting the delivery of the Universal Offer with effective targeting of information and support to the users of the PSV who will include:

_ Adults with learning disabilities

_ Older people claiming benefits

_ Families of older and/or vulnerable adults seeking support

_ Older people paying bills or seeking advice

_ Disabled adults and their families

This objective will be enhanced though the potential to develop closer working links with organisations such as the Hampshire Partnership Foundation Trust.

_ Improved communication across organisations and teams already supporting vulnerable adults and their families leading to better joined up, more proactive and earlier interventions.

4. Risks

4.1 There is a formal risk log which gives a more comprehensive picture, but the main risks associated with the Havant project which need to be managed are that:

· joint financial management of a project of this nature is a new undertaking which needs focussed management;

· the national financial environment has a negative impact on the sale and receipts required from the vacated buildings;

· partnership working is not sufficiently effective to deliver the benefits of joint working;

· staff do not adapt their working practices sufficiently to deliver the expected sustainable long term benefits;

· the community do not have ownership of the project and make negative comparisons with other facilities they do own and / or do not use the facility as expected;

· we do not get the correct service mix in the PSV to have an impact on the inequality issues that will improve outcomes for the community;

· the IT infrastructure agreements necessary to create the seamless service to customers are not forthcoming or do not happen in a time to facilitate progress on the project; and

· project costs are adversely affected by crucial tasks on the critical path for example the decanting of Havant Borough Council staff.

5. Financial Issues

5.1 Currently the following funds are identified:

5.2 The atrium and back office space will continue to be owned by the Borough Council so it will be important to ensure that the basis for the County Council's future occupation of this space reflects and protects the significant level of investment in the project.

5.3 Approval for prudential borrowing of £2.5m is sought based on the realisation of capital receipts from three surplus County Council offices at River Way (occupied by Children's Services) and Town End House (occupied by Adult and Children's Services) and Fernglen (a Register office). These are forecast to realise capital receipts of £2.25m with the balance of the prudential borrowing to be funded either from revenue savings associated with the project or further capital receipts .

5.4 Work on an overall business case for the project is being carried out in partnership with Havant Borough Council. From a County Council perspective the other key issue will be to assess the extent of up front invest to save funding or prudential borrowing required, and the availability of longer term revenue and capital savings to enable the up front investment to be repaid within a reasonable timescale, and longer term efficiency savings to be achieved. Whilst not all the required data is yet available, early indications suggest longer term annual revenue savings arising from the vacation of our two major buildings, and the net 30% reduction of floorspace occupied in the new accommodation, of up to £100,000 per annum, consistent with the requirement to fund part of the prudential borrowing. This figure relates specifically to the direct occupation of office space by County Council staff. The scope, and comparative costs of other facilities management services is being considered.

6. Governance

6.1 All elements of the Governance structure for the project are now in place and the Joint Programme Board met for the first time on 9th November, 2009. Membership includes Elected Members from both Havant Borough Council and Hampshire County Council. Elected representatives from the County Council are Cllr David Kirk (Joint Board Vice-Chair and Cabinet Representative) and Cllr Robin McIntosh (Local Member).

6.2 The workstreams are in the process of defining their Terms of Reference and structural arrangements below the Board are up and running.

7. Projected Timescales.

7.1 The project has a tight timescale imposed by the DCSF. One major condition of the grant funding is that the new public service atrium, and supporting functions necessary to facilitate the improvement of outcomes for young people, must be in place by September 2011. This means commencing work on site by September 2010. During this twelve month period the contractor will focus on the construction of the new atrium, and the refurbishment of roughly half of the existing civic office accommodation. It is estimated that the remainder of the work necessary for overall completion (the refurbishment of the final portion of office space) will be completed by April 2012.

8. Impact Assessments

8.1 As the project comes into sharper focus, the appropriate impact assessments for equalities and sustainability will be undertaken and maintained.

HCC Havant Staff

This list is intended to identify all County Council staff at the Civic Centre (CC), River Way (RW) and Town End House (TEH) who may be affected by the Havant Public Service Village (PSV) project.

At this stage the following information is required: department; team/function; headcount (broken down into managers, admin and other staff) and service manager. If the service manager is not based in Havant, their name should be highlighted in bold, to help ensure that all non-Havant line managers can be kept informed.

Wherever possible, admin staff should be counted with the teams/functions to which they are attached, rather than as a separate admin team in their own right. This is to ensure that team spaces are big enough to accommodate admin support.

Data has been pulled together from a variety of sources and is indicative at this stage.