Item_3_-_Budget_Monitor_Report by wangnianwu

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									HERTFORDSHIRE COUNTY COUNCIL                                   Agenda Item No:

AUDIT PANEL
WEDNESDAY 21 JUNE 2006 AT 2 P.M.
                                                                     3
                                                                 (also on 19 June
                                                                 Cabinet agenda)



COUNTY COUNCIL REVENUE AND CAPITAL BUDGET MONITOR 2005/06

Report of the Finance Director

Author: Andrew Nightingale - Assistant Finance Director (01992 555331)

Executive Member: Robert Gordon

1.    Purpose of the Report

      To inform members of the forecast outturn for Revenue and Capital Budgets in respect
      of 2005/06 and provide information to enable members to consider requests for carry
      forwards.

2.    Summary

2.1   The final outturn position for 2005/06 shows a revenue underspend of £10.734m
      (0.997%) against the latest budget of £1,077.142m, before requests for carry forwards
      are taken into account. Carry forward requests totalling £3.684m have been made and
      are detailed in the relevant service sections of this report.

2.2   The principal reasons for the variation in the forecast revenue outturn are listed in Table
      2 (para. 1.2), whilst a summary analysis across service is shown in Appendix A.

2.3   Table 3 (para. 3.1) analyses by service the projected capital underspend of £69.335m,
      Analysis by type of variance is shown in Table 4 (para. 3.1), whilst a summary analysis
      across services is given in Appendix B. The report also includes a request for virement
      of £409,000 relating to the 2006/07 budget provision for the Marsh Lane Day Centre
      project (para. 3.3.1).

2.4   General Balances as at 31 March 2006 would be £28.2m, if all carry forward requests
      were to be approved. Given the planned use of £9m of reserves in the 2006/07 budget,
      plus the anticipated need to use £1.5m of these reserves to fund the impact of the
      Mumby judgement, the estimated level of general balances as at the end of March 2007
      would be £17.7m. In effect this would represent an increase of balances of £2.7m
      compared to the assumptions made in the setting of the 2006/07 budget.

2.5   The reported 2005/06 prudential indicators are included as Appendix C. These are part
      of the treasury report going to council.




                                                                                                1
1.    REVENUE BUDGET VARIANCES

1.1   Table 1 below summarises the variances by service using the criteria previously laid
      down in Financial Regulations 2000.

      Table 1: Budget Variances 2005/06

                                                   Planned       Unplanned        Net
                                  Overspends       Under-         Under-       Variances
                                                   Spends         spends
                                         £000           £000           £000       £000
      CSF Schools                       1,348              0         (4,041)    (2,693)
      CSF Education Non-                  792              0           (962)      (170)
      Schools
      CSF Children’s Services           1,821               0        (3,592)    (1,771)
      CSF Cultural Services               178               0          (100)         78
      Adult Care                        3,570         (2,893)                       677
      Environment                         717           (746)                      (29)
      Resources Portfolio                 193           (783)                     (590)
      (Corporate Services)
      Central Capital                     438                                       438
      Financing & Interest on
      Balances
      Fire & Rescue                     2,703            (75)                     2,628
      Registration                                        (1)                        (1)
      Coroners                                           (71)                       (71)
      Civil and Emergency                    6                                         6
      Planning
      Trading Standards and                              (45)                      (45)
      Consumer Protection
      Contingency                                     (3,650)                   (3,650)
      Special Provision                               (2,655)                   (2,655)
      Office Rationalisation                          (1,605)                   (1,605)
      Project
      Capital Charges non                 823                                       823
      operational
      Asset Management                                (1,646)                   (1,646)
      Revenue Account
      Local Authority Business                          (459)                     (459)
      Growth Incentive
      Scheme Grant
      Totals at 31/03/06               12,589       (14,629)         (8,695)   (10,734)

1.2   The following table shows those variances of £75,000 or more against the latest
      budget. Detailed explanations for these variances are listed in sections 1.3 to 1.6.




                                                                                             2
Table 2

                                                                  Forecast
                                                                    Over/
                                                                   (Under
                                                                   spend)
   Service                    Description               Para       £000
                                                        Ref.
CSF Schools      Additional Welfare & Tuition            1.3.1       (417)
                 Recoupment                              1.3.2       (504)
                 Earmarked Pupil Funding                 1.3.3         147
                 Playgroups                              1.3.4       (172)
                 School Milk                             1.3.5          92
                 Minority Ethnic Curriculum Support      1.3.6       (140)
                 Service
                 Out of County Placements                1.3.29        774
                 Maternity                                1.3.7        335
                 Speech Therapy                           1.3.8      (201)
                 AWPU Recovery                            1.3.9      (148)
                 Nursery Provision                       1.3.10      (345)
                 Schools Contingency                      1.3.9      (959)
                 School Rates                             1.3.9       (96)
                 Teachers Reform Grant                   1.3.11      (500)
                 Alternative Curriculum Projects         1.3.12       (77)
CSF Education    Necessitous Clothing                    1.3.13         86
Non-Schools
                 Property repairs & maintenance          1.3.14        171
                 Mainstream Transport                    1.3.15        113
                 Youth Service                           1.3.16        105
                 Discretionary Awards                    1.3.17      (137)
                 Youth Programme                         1.3.18       (81)
                 Premature Retirements                   1.3.19        218
                 Participation Information Management    1.3.20       (87)
                 Team
                 Commissioning Team                      1.3.20       (28)
                 IT PC Support                           1.3.21      (329)
CSF Children’s   Unaccompanied Asylum seekers            1.3.22         97
Services
                 Children with Disabilities              1.3.23        338
                 Section 17 preventative care            1.3.23        258
                 Local Area Transport                    1.3.24        106
                 Looked After Children                   1.3.23        420
                 Family Centres                          1.3.25      (434)
                 Over 10s Family Service                 1.3.26      (253)
                 Family Placement Service                1.3.27        353
                 Residential Homes                       1.3.28      (345)
                 Out County                              1.3.29      (715)
                 LAC Preventative Strategy               1.3.30      (505)
                 Adaptations & Loft Conversions          1.3.31       (90)

                                                                             3
                  Leaving Care Contracts                   1.3.32    (884)
                  Commissioning Team                       1.3.20    (113)
                  IT PC Support                            1.3.21    (141)
                  Interpreting and Translation             1.3.33       95
CSF Libraries     Shortfall on Fees and Charges            1.3.34      172
                  Non Pay                                  1.3.35    (100)

Adult Care        Home Care (for EPD client group          1.4.1     2,762
(including
Money Advice
Unit)
                  Physical Disability residential and      1.4.2       166
                  nursing care homes
                  Hertfordshire Equipment Service          1.4.3       159
                  Learning Disability residential and      1.4.4     (470)
                  nursing care homes
                  Learning Disability independent sector   1.4.5       (90)
                  day care
                  Transport                                1.4.6       242
                  Gypsy sites                              1.4.7       168
                  Repairs and Maintenance/Special          1.4.8     (250)
                  Equipment
                  Special Grant underspends                 1.4.9    (951)
                  LPSA pump priming resources              1.4.10    (120)
                  Human Resources Unit                     1.4.11    (200)
                  Vacancy management                       1.4.12    (397)
                  Police Community Support Officers        1.4.13    (369)
Environment       Passenger Transport                       1.5.1    (405)
                  Waste Management                          1.5.2      627
                  Strategy, Planning and Information        1.5.3    (193)
Resources         Other Services                            1.6.1       87
Portfolio
(Corporate)
                  Chief Executive & Assistants             1.6.2      (98)
                  Human Resources                          1.6.3     (147)
                  Information Technology                   1.6.4     (358)
Central Capital   Schools interest & other reasons                     438
Financing &
Interest on
Balances
Fire & Rescue     Pay review & award                       1.7.1        327
                  July 2005 Pay award                      1.7.2         75
                  Incident in Stevenage                    1.7.3        230
                  Buncefield Oil Terminal Fire             1.7.4      1,914
Contingency       Contingency                                       (3,650)
Special           Special Provision                                 (2,655)
Provision
Office            Office Rationalisation Project           1.8.1    (1,605)
Rationalisation
Project
Capital           Capital Charges non operational                      823
Charges
                                                                              4
      Asset           Asset Management Revenue Account                         (1,646)
      Management
      Local Authority Local Authority Business Growth                            (459)
      Business        Incentive Scheme Grant
      Growth
                      Forecast Underspend >£75K                                (9,966)
                      Variances
      All Services    < £75k Variances                                           (768)
                      Total Forecast Underspend                               (10,734)


1.3   CHILDREN, SCHOOLS & FAMILIES (CSF)

1.3.1 Additional Welfare and Tuition                   £417,000 or 5.7% underspend

      The projected underspend on the Additional Welfare & Tuition relates to Applied
      Behaviour Analysis programmes to support autistic children. There has been an
      increasing trend for this support up to 2003/04 following tribunal decisions. However,
      this trend has not continued and this has resulted in an underspend of £417,000 in the
      2005/06 budget. There is however still a continued growth in demand for support for
      young children with complex needs, including autism, and this will need to be carefully
      monitored over the next year to assess requirements.

1.3.2 Recoupment                                      £504,000 or 110% underspend

      Inter-authority Recoupment operates in arrears. At the end of each financial year
      income and expenditure for that financial year is estimated and accrued. This means
      that during 2005/06 financial year claims are sent and received by authorities for the
      financial year 2004/05.

      We have been more successful at collecting special school recoupment income for
      2004/05 than had been anticipated at the end of 2004/05. In addition, we anticipate
      that we will collect more income for 2005/06 than was previously estimated.

      The effect of the anticipated increase in income has resulted in the underspend forecast
      on this budget.

1.3.3 Earmarked Pupil Funding                         £147,000 or 38.4% overspend

      The overspend in EPF is due to an increased number of allocations to pupils meeting
      the criteria. Although the percentage of agreed applications has remained the same the
      total number of applications from schools has increased. This increased perception of
      need from schools is not out of line with the national picture of increasing pressures on
      SEN budgets that are heavily centralised and primarily targeted to individual pupils.
      Like many other authorities Hertfordshire is currently undertaking a review of its SEN
      funding arrangements in mainstream schools to try to address this and other issues.

1.3.4 Playgroups                                      £172,000 or 56.7% underspend

      The requirement for additional support for children with additional needs attending
      private or voluntary settings has been less then that previously predicted. The
      availability of Sure Start grant has also reduced the call against this budget.


                                                                                                5
1.3.5 School Milk                                       £92,000 or 10.2% overspend

      The contract for school milk has recently been re-tendered and let with a new supplier,
      Dairy Farmers of Great Britain, from April 2006.

1.3.6 Minority Ethnic Curriculum Support Service (MECSS)
                                                 £140,000 or 5.5% underspend

      The new needs related formula for allocation of the Ethnic Minority Achievement (EMA)
      Grant, from 1 April 2005, resulted in a significant projected reduction of funding for the
      service. This underspend relates to the carry forward (£115,000) from 2004/05 to meet
      the potential for additional costs resulting from redundancy and freezing of vacancies
      (£28,000) to prepare for the further reduction of grant in 2006/07. The grant
      announcement in December 2005 reduced the equivalent grant loss over the two
      financial years from £562,000 to £423,000. Given this the carry forward will no longer
      be required.

1.3.7 Maternity                                         £335,000 or 27.5% overspend

      There has been an increase in both the volume (11%) and average pay (4%) for
      maternity claims from schools which have resulted in an overspend of £335,000. This
      demand led budget is extremely volatile and relies on prompt notification from schools
      of planned maternity leave. Management action is being taken to improve the
      notification processes from schools so that variances can be highlighted at an earlier
      stage. The increase in the current period relates to claims from schools with payroll
      arrangements outside of the authority. The level of claims from these schools has
      increased by £201,000 (190%) on 2004/05 levels.

1.3.8 Speech and Language Therapy contracts             £201,000 or 14.8% underspend

      This service is provided under contract from the Hertfordshire Partnership Trust in the
      west of the county and the North Herts and Stevenage PCT in the east of the county.
      The potential underspend recognises the provision that has been delivered by the
      contractor in 2005/06. CSF and health partners have been reviewing the arrangements
      for the provision of the service in order to implement a new model from April 2006. This
      has also led to further savings as services are now included under the contract that
      were previously understood to be outside.

1.3.9 Schools contingency                               £1.203m or 2% underspend

      There are now four elements to this unde spend: availability of Targeted Transitional
      Grant (TTSG), recovery of AWPU for excluded pupils, school rates funding and
      balances from a closed school (Pin Green).

      The DfES approved the use of £837,000 of TTSG to support the cost of the 3%
      protection factor in the schools delegated budgets. This enabled a contingency to be
      made in the schools budget against the continued uncertainty over the level of three
      year old provision, following the introduction of universal entitlement in April 2004. In
      light of the level of take-up of places in 2005/06, this contingency is not required.

      Underspend of £148,000 reflects the extent to which recovery of the AWPU for
      excluded pupils exceeds the payments for readmitted pupils.


                                                                                                  6
      The balance of underspend on rates at the end of the financial year is £96,000. This
      relates to funding claw backs from schools (as a result, for example, of rates refunds for
      prior years) over and above what had been anticipated.

      The balance of the underspend (£122,000) mainly results from the reversion to HCC of
      the closing balance of Pin Green Primary School.

1.3.10 Nursery Provision                              £345,000 or 3.6% underspend

      This budget includes a comparatively new entitlement, a free nursery place for all three-
      year-olds. Although uptake initially conformed to the expected pattern, there has been
      a plateau in level of demand over recent terms and it is now expected that the demand
      will continue at this level.

1.3.11 Teachers Reform Grant                          £500,000 or 2.9% underspend

      This budget spend relates to a claims based grant which supported the costs of the pay
      progression scheme in schools. Although the main data collections for the payment of
      funding to schools were in September, schools are able to claim subsequently for:
            -additional teachers progressing onto the Upper Pay scale (including
            backdating),
            -new teachers on the leadership scale,
            -supply teachers and teachers on maternity

      These additional claims have been lower than had been previously anticipated and
      therefore there is an underspend resulting from the unused grant. This is the final year
      of this grant as funding for Teachers’ pay progression is now within the Dedicated
      Schemes Grant.

1.3.12 Alternative Curriculum Projects                        £77,000 or 100% underspend

      Proposals for use of this element of the standards fund grant were revised in light of the
      authority’s strategy in relation to the development of Key Stage 4 Learning Centres.
      Subsequent slippage in key appointments has resulted in an underspend of £77,000.

1.3.13 Necessitous Clothing                           £86,000 or 39% overspend

      The amalgamations of a number of Hertfordshire schools have impacted on this
      demand led budget and led to the current overspend position.

1.3.14 Property repairs & maintenance                 £171,000 or 3.7% overspend

      This overspend relates to previous year commitments, identified during a systems
      review by Mouchel, who are responsible for planned and responsive maintenance.
      Mouchel is now implementing a revised system to improve the process of budget
      monitoring in the future.

1.3.15 Home to School Transport                       £113,000 or 1.1% overspend

      The impact of increased fuel and other overhead costs for transport of children to
      schools from residential homes (£55,000) has impacted on this budget. The balance of
      the overspend relates to the costs of transporting pupils to the reallocated New Briars
      JMI. The relocation was as the result of the discovery of chalk mines and serious risk
      of subsidence at Briars Lane.
                                                                                                 7
1.3.16 Youth Service                                  £105,000 or 2.2% overspend

      The overspend largely relates to the impact of rent costs (£82,000) for 2004/05 that had
      not been accrued. In addition there have been extra recruitment costs resulting from the
      Growth and Change reorganisation of this area of the service.

1.3.17 Discretionary Awards                           £137,000 or 59.1% underspend

      The underspend results from more effective use of the grant to meet the costs of non
      medical awards and thus reduce the pressure on the CSF budget.

1.3.18 Youth Programme                                £81,000 or 34% underspend

      This service provides education and training support for excluded pupils. Issues with
      the recruitment of staff have caused slippage in the delivery of these training
      programmes, and resulted in an under spend of £81,000.

1.3.19 Premature Retirements                          £218,000 or 5.6% overspend

      The overspend relates to both pensions and severance costs for school based staff.
      Whilst provision had been made within the budget for increased severance relating to
      amalgamations and reorganisations, delays in the expected implementation of a
      number of these from 2004/05 has meant that the costs have all been absorbed in the
      current financial year. In addition the closure of Boxmoor House School has
      contributed to the increase in severance costs to year end. The reduction of £89,000 in
      the overspend in March 2006 relates to lower than anticipated charges for previous
      years early retirements for non teaching staff.

1.3.20 Strategy Group                                 £228,000 or 11.7% underspend
                                                      £100,000 carry forward requested

      This underspend relates to slippage in recruitment to vacancies in the Strategy Group.
      Given this we have been unable to progress work on the Performance Management
      Balanced Scorecard reporting.

      Work is required to automate the flow of information from Operational ICT systems into
      Performance Management/ Balanced scorecard reporting. This activity is currently
      resource intensive and if not completed will require ongoing intervention of CSF staff to
      produce Key Performance data manually. It is anticipated that there will be efficiency
      savings associated with the completion of this project. In addition the outputs from this
      program are essential to the continuing improvement in the way we present data for
      CPA/Management reporting purposes and our ability to demonstrate a clear, open and
      consistent audit trail from Operational activity through to Management Information
      presentation. A carry forward of £100,000 is therefore requested to complete this work.




1.3.21 IT PC Support                                  £470,000 or 10.3% underspend
                                                      £235,000 carryforward requested

                                                                                                8
      Whilst work has commenced on the procurement and development of critical CSF
      systems, this has taken longer than previously anticipated. Significant delays have
      been experienced in the Electronic Social Care Records System as a result of the
      contractor Hyperwave going temporarily into administration. This issue has now been
      resolved. Work was also needed to align business processes to the technology
      available and there have been delays in the procurement of the software to comply with
      EU legislation. This includes work on:
          Electronic Social Care Records (ESCR)
          Integrated Children’s Services (ICS)
          Replacement Admissions System

      Investment in these systems will be key to improvements in performance and the
      delivery of statutory requirements. We are therefore proposing a carry forward
      £235,000 of this resource into 2006/07.

      The increase in underspend of £220,000 in the current period relates to a number of
      factors. Significant investment has been made in laptops for social workers as part of
      the ‘Way we Work’ project related to Apsley. The later than originally planned Apsley
      One start date means the first quarter’s charges will not take place until the 2006/07
      financial year. In addition direct costs previously incurred for the Electronic Social Care
      Record project (£70,000) were offset by the application of the Improving Information
      Management (IIM) grant which would otherwise have been lost to HCC.

1.3.22 Unaccompanied Asylum seekers                    £97,000 or 63.8% overspend

      There have been significant pressures on a small number of cases for UASC over and
      above the average funding levels met by the grant. The overspend relates to the high
      cost of emergency Wrixon care and residential placements for two children. In addition
      there are an increasing number of young people, because of their age and who are
      leaving care, that can no longer claim support from the Home Office. Whilst some
      contingency has been made available from the Home Office and reduced some of the
      impact there is still significant pressure on the budget. We are currently making special
      representation to the Home Office in the case of the high cost placements but the result
      will not be known until June 2006. This is a national problem and representation is
      being made to the government by the Local Government Association.

1.3.23 Support for Children in Need                    £1.016m or 24.9% overspend

      An element of the support for Children in Need has been delivered through Wrixon Care
      limited, an agency which provides accommodation, contact, care and supervision. This
      agency provides for emergency care in the area of:
                    - Children with disabilities
                    - Section 17 Preventative care
                    - Looked After Children
      The requirements for such emergency support has impacted on the budgets in these
      areas and contributed to the overspend position.

      Management action has been taken to reduce the level of accommodation procured
      through this agency by the establishment of a new single ‘block bed’ contract. ‘Herts
      Care Step 33’ now provides a placement service through a more permanent and cost
      effective service provision. A review of resource used during this financial year with
      Wrixon will result in a further re-direction of service to other more cost effective
      providers.

                                                                                                9
      Further details of the movements on the elements on this budget are set out below.

      The overspend on Children with Disabilities is largely due to new commitments
      through direct payments in the West area of the service. There were continued
      difficulties in identifying lower cost support for shared care and respite.

      The proposed expansion of the direct payments system from 2006/07 will improve the
      delivery of these services to children.

      The over spend on Section 17 preventative care relates to a new Herts care package
      to prevent children going into care and provision of supervised contact for one new child
      and increases for three other children.

      The overspend in Area Looked After Children budgets relates to the costs of
      emergency placements. This includes the use of sessional social workers in both
      areas. There is also ongoing work with Manpower to establish a ‘pool’ of contact
      workers to support such placements, which should reduce overall costs. The impact of
      the action reduced the overspend in March 2006 by £10,000.

1.3.24 Local Area Transport                           £106,000 or 7.9% overspend

      Whilst there has not been an increase in the overall number of children being
      transported there has been an increase in the percentage (3%) of high cost travel
      packages for Looked After Children. These packages provide stability of educational
      placement for these children together with family access. A review of the high cost
      cases is currently being undertaken to see what action can be taken to mitigate this
      overspend in the new financial year.

      In addition there was a significant backlog of invoices for one taxi company in the East
      area which contributed to the overspend (£26,000). Improvements in monitoring
      processes have been made to ensure such backlogs do not recur.

1.3.25 Family Centres                                 £434,000 or 18.6% underspend

      This underspend relates to further slippage on the establishment of a contact service to
      support identification of relevant needs of potential clients in the local areas.
      Recruitment for the contact centre has commenced and the service will be operational
      early in the new financial year.

1.3.26 Over 10’s Family Support Service               £253,000 or 29.4% underspend

      This service is included in the review of adolescent services under Growth and Change
      which aims to provide a more co-ordinated and targeted service for early intervention.
      The current under spend of £253,000 results from vacancies which could not be
      permanently recruited to until the future of the combined service was agreed. Whilst the
      new service is now in place there is an ongoing impact in the 2005/06 budget.



1.3.27 Family Placement Service                       £353,000 or 4.6% overspend

      Over the year there has been an increase in demand for the number of foster
      placements particularly in relation to adolescent placements. Two issues account for
                                                                                                 10
      the increased overspend. Payments relating to Section 24 of the Children’s Act, which
      provides for young people aged 18 plus with continuing support (i.e. in further
      education) has increased. This accounts for £303,000 of the increase. There has also
      been increased demand for additional support on outside school activities which have
      created an overspend of £50,000. The LAC strategy aims to reduce the pressure on the
      service through reduction in overall numbers.

1.3.28 Residential Homes                               £345,000 or 4.8% underspend
                                                       £182,000 carryforward requested

      An element of the overspend (£142,000) relates to the closure of Gables Residential
      home in January 2004 in response to the CSCI Inspection which identified this as an
      unsuitable property. This was in advance of the planned work for new or re-provisioned
      children's homes which is part of the proposed PFI scheme.

      There will be additional costs in 2006/07 relating to this scheme both in relation to the
      start up costs for the refurbished homes alongside the consultants fees for support of
      the scheme which have been greater than anticipated. A carry forward of this resource
      is therefore required.

      The balance of the underspend relates to slippage on the re-opening of the Wilbury
      Road Home together with the Pennine Unit which has impacted on this budget.
      Assessment of need of the children accessing the service could not be made until
      February 2006. This has dictated the refurbishment needs of the centre. These relate
      to Health and Safety requirements for the home to equip it for children with disabilities.
      The refurbishment costs of £40,000 will now fall in 2006/07.

      We would therefore request consideration of a carry forward of £182,000 to support
      these two areas.

1.3.29 Out County                                      £59,000 or 0.3% overspend

      This area previously was reported as an area of concern. Whilst significant progress
      has been made in relation to the reduction of social care placements, the closure of
      Boxmoor School has had a particular impact on this area. This has resulted in a net
      overspend on this budget of £59,000. The Out County Project Group is continuing to
      review all current placements with a view to reducing the overall numbers.

1.3.30 LAC Preventative Strategy                       £505,000 or 42.1% underspend
                                                       £500,000 carryforward requested

      There has been slippage against a number of the planned preventative projects within
      the LAC strategy. Significant work is now being undertaken to establish these projects
      but they will not be fully operational before the end of the financial year.

      In particular the delays related to the establishment of a Placement Team and
      Placement Support Service. These services are aimed at co-ordinating access to
      appropriate LAC Services and preventing placement breakdown. They are also aimed
      at enhancing the capacity of local LAC services to cater for more challenging young
      people. These services will be fully operational in the new financial year. This delay has
      led to an underspend of £500,000 in the current year.

      Social care performance requires significant improvement. Although there have been
      some improvements in the past two years, and we meet ‘minimum standard’ currently,
                                                                                               11
      other local authorities are improving their performance more rapidly than in
      Hertfordshire. Our performance rating for ‘Staying Safe’ is 2006 is thus more uncertain,
      and substantial improvement will be required if we are to achieve a satisfactory
      outcome at Joint Area Inspection in Autumn 2007.There is an urgent need to ‘fine tune’
      some aspects of the new service structure introduced through ‘Growth and Change’,
      particularly relating to the area-based Social Care teams. Successful completion of this
      fine-tuning, will be critical in supporting the required improvements in social care
      performance. To continue to realise the budget savings already identified against the
      LAC strategy it is vital to re-invest the £500,000 in the fine-tuning of the area-based
      teams, and therefore we request that this amount be carried forward to 2006/07.
      Successful completion of this fine-tuning will be critical in supporting the required
      improvements in social care performance, particularly the timely completion of core
      assessments and the quality of casework practice.

1.3.31 Adaptations & loft conversions                  £90,000 or 51.4% underspend

      There have been planning and building regulation complications with a number of the
      adaptations and loft conversions planned for 2005/06. The result is that the work
      programme has not been completed and there is an underspend of £90,000.

1.3.32 Leaving Care Contracts                          £884,000 or 28.9% underspend

      Growth of £714,000 was agreed for 2005/06 to recognise the additional number of care
      leavers under the Leaving Care Act. The strategy for provision is at an initial stage and
      has seen growth in both supported lodgings and housing beds. However, the
      additional planned increase of 50 beds has not been achieved within 2005/06. This will
      be delivered in 2006/07 to meet the projected needs.

      Service provision continues to be difficult to commission whilst demand is still high, this
      has obviously had an effect on planned growth and has meant that across the
      department services have continued to fund Leaving Care provision from within other
      social care budgets. A Leaving Care Strategy Group, comprising of managers across
      the service, is reviewing service delivery requirements and funding for 2006/07.

1.3.33 Interpreting and Translation                    £95,000k or 52.3% overspend

      Greater awareness of the service coupled with increasing numbers of minority ethnic
      families and children likely to benefit from this support, and an increased awareness of
      interpreting and translation support in Child Protection cases has led to an increase in
      the volume of demand for this service. Further review of the budget is being undertaken
      to contain the costs within budget in future years.

1.3.34 Libraries fees and charges                      £172,000 or 10.9% overspend

      There are a number of factors contributing to the shortfall of fees and charges for the
      service. This includes previous decisions to reduce or freeze fees and charges. The
      greater availability of digital TV channels and the fall in price of DVD and videos has
      also impacted on the hire income.

1.3.35 Libraries Non pay                               £100,000 or 1.1% underspend

      The reassessment of the rateable value of a number of Library properties has resulted
      in an underspend of £64,000. In addition a management review of the PC support costs
      has resulted in reduced charges to the IT budget.
                                                                                                12
1.3.36 Carry forward requests less than £75,000 in value

      CSF has one request for a carry forward less than £75,000 as set out below:-

      Twice Excluded                                                            £66,000

      The budget supports 30 students over an academic year. The processing of demands
      for support for reintegration of twice-excluded pupils have been delayed and resulted in
      an under spend on this budget

      The authority is failing to meet its statutory provision for children out of school and there
      is a need to focus resources in this area. The carry forward would allow the continuation
      of the re-integration programme for children currently out of school in this academic
      year.


1.4   ADULT CARE (including Money Advice Unit)

1.4.1 Home Care (for EPD client group)                   £2.762m or 8% overspend

      This budget should be considered alongside the elderly residential and nursing care
      homes budget.

      The outturn position for this budget is an overspend of £2.762m. A projected overspend
      of £2.15m was reported in the last revenue monitor for 2005/06. This is a very volatile
      budget and the migration of data from the client database SSIS to the new client
      database IRIS made monitoring towards the end of 2005/06 even more challenging.

      There has been a large and continuing rise in demand for home care services. For
      example, when the annual survey was undertaken in September 2005, of clients
      receiving a home care service, the number of clients receiving home care was 8% more
      than in September 2004 and the total number of hours delivered had increased by
      about the same percentage.

      A series of management actions was implemented at the start of 2005/06 to contain the
      projected overspend. This included rigorous controls that were in place and a
      programme of reviews that was undertaken, aimed at reducing packages of care,
      wherever possible. However, despite the fact that a significant number of reviews were
      undertaken throughout 2005/06 and that the average cost of a new care package was
      reduced by about £20 per week, the overall impact has been to level out expenditure
      rather than achieve a reduction in the projected overspend. Demand from new clients
      continues to rise.

      It has been and will continue to be exceedingly difficult to reduce the level of overspend
      given the department’s statutory responsibilities.

      The department has been holding on the balance sheet provision for uncertainties with
      some home care block contracts. The likelihood of these uncertainties arising has
      reduced substantially and £500,000 has now been returned to the home care budget to
      partly offset the overspend – Cabinet agreed to this transfer on 12 December 2005.
      This transfer has helped the current year position but will not remove the ongoing
      pressure and full year effect. The overspend was £3.262m. before the £500,000 was
      transferred from the balance sheet.
                                                                                                 13
      There is a high probability that this budget will overspend in 2006/07 and hence this
      overspend was highlighted as an uncertainty in 2006/07.

           All possible measures have been taken in other parts of the department’s budget
           to offset the projected overspend (see paragraphs 1.4.2 to 1.4.12 below).

1.4.2 Physical Disability residential and nursing care homes
                                                   £166,000 or 0.2% overspend

      The outturn position for this budget was an overspend of £166,000 (0.2% on a budget
      of £8.572m.). A balanced budget position was reported in the last revenue monitor for
      2005/06.

      There is a tight panel process in place to approve residential and nursing care home
      placements. The 2005/06 budget was increased in real terms compared with the
      2004/05 budget to include provision for increased numbers and dependency levels
      based on previous trends. However, the average cost of a new placement was still
      higher than allowed for in the budget and the number of closed cases was less than
      estimated.

1.4.3 Hertfordshire Equipment Service                 £159,000 or 6.6% overspend

      Rising demand has also impacted on the equipment budget. The Hertfordshire
      Equipment Service pooled budget overspent and the contribution to this overspend by
      Adult Care Services was £159,000 (6.6% overspend on £2.419m.). A projected
      overspend of £200,000 was reported in the last revenue monitor for 2005/06.

      Equipment is provided through integrated health/social care services operated by
      Hertfordshire Business Services.

1.4.4 Learning Disability residential and nursing care homes
                                                   £470,000 or 1.1% underspend

      Huge pressures on this budget were reported throughout 2005/06 and the budget was
      increased by £2.2m during the year to reflect these pressures. Rising demand and
      levels of need were confirmed by independent consultants early in 2005/06.

      A management action plan was in place throughout the financial year to contain
      expenditure as far as possible. Levels of need are such that very close monitoring was
      required to keep costs down. This has meant that some budgeted placements were
      deferred and this has resulted in a budget underspend of £470,000 in 2005/06,
      however, these clients will still need to be placed and costs will still occur in 2006/07.



1.4.5 Learning Disability independent sector day care
                                                  £90,000 or 3.5% underspend

      Delays in placing clients in independent sector residential accommodation (following
      management action) was the main reason for this underspend (see 1.4.4. above).


1.4.6 Transport                                       £242,000 or 3.9% overspend
                                                                                              14
     The two main reasons for the overspend of £242,000 (3.9% on a budget of £6.244m.)
     on the transport budget are –
     i). Wherever possible Learning Disability clients are being supported in the community
     as opposed to being funded in a residential placement. Some of these clients are being
     transported to day centres.
     ii). The need to prevent delayed transfers of care from acute hospital beds (see section
     i. above) has resulted in a relatively small number of clients being placed in residential
     care homes for the elderly that are not close to their relatives. Whenever appropriate
     close relatives have been supported in meeting the additional transport costs to visit the
     homes.

1.4.7 Gypsy site                                       £168,000 or 24% overspend

     The net income budget for gypsy sites was £94,000, whereas the outturn position was a
     net cost of £74,000. Therefore, the budget was overspent by £168,000.

     The vast majority of this overspend (£149,000) relates to electricity charges. Utility
     companies had been using estimated readings since 2001/02 as the basis for charging
     Adult Care Services, whereas the tenants had been recharged by Adult Care Services
     for their electricity usage based on actual usage. Towards the end of 2005/06 the utility
     companies used actual consumption as the basis for charging and this resulted in the
     overspend in 2005/06.

1.4.8 Repairs and Maintenance/Special Equipment £250,000 or 12.5% underspend

     To partly offset the overspends referred to above, a proportion of the repairs and
     maintenance programme was slipped into 2006/07 and the purchase of certain items of
     special equipment was deferred to achieve an underspend of £250,000 in 2005/06.
     Essential work will be unaffected.

1.4.9 Specific Grant underspends                       £951,000 or 1.8% underspend

     Specific grants allocations, particularly for training and carers, increased significantly in
     2005/06 compared with 2004/05. The start dates of some schemes and projects were
     delayed in order to generate a planned underspend on these grants of £951,000. This
     will not create an additional pressure next year.

1.4.10 LPSA pump priming resources                     £120,000 or 100% underspend

      LPSA pump priming resources have been received to achieve targets which are
      supported by expenditure elsewhere within Adult Care Services. This expenditure has
      been charged to the pump priming resources and has generated savings in operational
      budgets of £120,000 (100% of the LPSA monies in 2005/06).

1.4.11 Human Resources Unit                            £200,000 or 10.9% underspend

     The human resources unit budget has underspent by £200,000. The main factors
    contributing to this underspend are –
        Less expenditure on advertising than budgeted for (resulting from the close
           management of staff vacancies)
        Staff support budget underspends, especially expenditure on equipment
        Staff vacancies within the unit

                                                                                                15
1.4.12 Vacancy Management                               £397,000 or 0.8% underspend

      By careful management of vacancies throughout the department and tight management
      of other Centre budgets, an underspend of £397,000 (0.8% underspend) has been
      achieved.

1.4.13 Police Community Support Officers                £369,000 or 15% underspend

      The PCSO budget for 2005/06 was based on the assumption that HCC would fund the
      costs for the whole financial year of 66 PCSOs who would be appointed by
      Hertfordshire Constabulary. However, due to delays in the appointment process it was
      not possible to recruit this number and get them in post by 1 April 2005. As a
      consequence, there will be a projected underspend of £300,000 on salaries and related
      costs in 2005/06.

1.4.14 Learning Disability Development Fund             £89,000 carryforward requested

      The LDDF budget in 2005/06 was £844,000 including a carry forward from 2004/05 of
      £67,000.There have been delays in starting certain schemes and this has resulted in
      expenditure of £755,000 in 2005/06. A carry forward of £89,000 is requested.
      The LDDF is health money transferred to the County Council as the old long stay
      monies (resettlement) reduce. It is used for specific schemes and if the carry forward is
      not permitted, the underspend may have to be returned to PCTs.


1.5   ENVIRONMENT

1.5.1 Passenger Transport                               £405,000 or 3.7% underspend
                                                        £210,000 carryforward requested

      An amount of £150,000 was made available in September 2005 for the purchase of
      vehicle routing software for the Dial-a-Ride service and for the wider use of the
      County’s vehicle services. The money was approved for use over the next two financial
      years, but due to extended tendering regulation requirements, it has become clear that
      all the expenditure will fall in 2006/07

      In addition, it has not been possible to recruit staff for the Dial-a-Ride service as quickly
      as originally anticipated which has meant a delay in the re-launch of the service. In
      order for this to iccur in 2006/07 a carry forward of £60,000 is required.

1.5.2 Waste Management                                  £627,000 or 2.7% overspend

      On a budget as large as Waste Management there is inevitably a variance on the final
      figure compared to the previous estimate. The reasons previously reported for the
      overspend are the increase in transport costs due to fuel price inflation, claims for
      higher recycling activity from the district councils and costs of operating the new Waste
      Electronic and Electrical Equipment (WEEE) regulations.

1.5.3 Strategy, Planning and Information                £193,000 or 3.5% underspend

      The previously reported underspend due to difficulties with the recruitment of
      professional planning staff was slightly lower than forecast.

                                                                                                 16
1.5.4 Carry forward requests less than £75,000 in value

      Environment Department have requested a number of smaller carry forwards relating to
      various areas where relatively smaller underspends have arisen as follows:-

      (i)      Printing for LTP                                            £12,000

      Delays arose in receiving documents

      (ii)     Travel Wise “Mummy can we take the train project”           £11,000

      Delay has been caused by franchise changeover from WAGN to First.


      (iii)    Traffic Calming in Redhill Road, Hitchin                   £10,000

      Extended consultation and approval process.

      (iv)   Reorganisation of Transport Planning and Policy and Monitoring Unit
                                                                    £8,000
      Delay in furniture delivery.

      (v)      360 degree feedback process                                 £6,000

      Delay in progressing due to staff recruitment difficulties.

      (vi)     Letchworth signing review                                   £5,000

      Need to secure approval of funding partners.

      (vii)    Enhanced Maintenance of Town Centres                        £5,000

      Long lead time for specialist materials.

      (viii)   Environmental Management                                   £5,000

      Delay in IT equipment delivery.

      (ix)     Codicote Village Lighting                                  £2,000

      Delay in obtaining special lanterns.




1.6   RESOURCES PORTFOLIO (CORPORATE SERVICES)

1.6.1 Elections & Other Services                               £87,000 or 6.6% overspend

      .

      The county council accrues funds each year to pay for the county elections, the amount
      set aside is reduced by the cost of yearly by-elections. The elections service overspent
      by £225,000 in 2005/06. The main reason for the increase in costs was the need to
                                                                                            17
      operate postal voting whilst continuing to provide the same number of polling stations
      as provided previously.

      Land Charges, Chief executives initiatives and other budgets generated an underspend
      of £147,000. However, principally due to the elections overspend there was anet
      overspend in this area of £87,000.

      If 2009 is not a joint election with the general election, then the county may need £1.2
      million to run the election. This means that the council needs to increase the amount
      set aside each year from £158,000 to £347,000. This will need to be addressed in
      2006/07.

1.6.2 Chief Executives & Assistants                    £98,000 or 5.8% underspend
                                                       £29,000 carryforward requested

      The Lord Lieutenancy budget received a contribution of £33,000 from the department of
      Constitutional Affairs towards salary costs. The Buddy Mentoring scheme had staff
      vacancies resulting in an underspend of £29,000. The Scrutiny budget had an
      underspend due to the delay in respect of the major reconfiguration of the Health
      Service, Healthy Hospitals and the associated independent consultancy costs. The
      joint Scrutiny committee was delayed due to the elections in London Boroughs. The
      public health seminar was postponed. There were delays in finalising reconfiguration
      plans, and the unit was unable to recruit a secondee until July 2005.
      The carryforward request of £29,000 will be used for the public health seminar that will
      take place in June 2006. Reconfiguration plans will increase pressure on scrutiny
      officers during 2006/07 requiring consultancy support. Funds will be needed to pay for
      the secondment until June 2006.

1.6.3 Human Resources                              £147,000 or 6.5% underspend
                           £33,000 Graduate Trainee scheme carryforward requested
                           £84,000 Recruitment Centre carryforward requested

      County Personnel had an underspend of £20,000 due to staff turnover. There was a
      delay in recruiting a new intake of 3 graduate trainees, resulting in an underspend of
      £33,000. The graduate training programme is proving very effective, but it is
      understood there is latent talent within the organisation that isn’t recognised or
      developed. As part of the council’s talent management strategy it is therefore planned
      to create a Leadership Academy. The carryforward will be used for the development
      and start up costs of the academy. This will include the development and
      implementation of an assessment and development centre to select up to 15 talented
      individuals to undertake a one year programme to prepare them for future leadership
      roles, as well as training mentors and to deliver a range of development activities.

      There was a further underspend of £84,000 on the recruitment centre, this was due to a
      2 month delay after the contract started before all contract staff were recruited. There is
      a backlog of work that must be done so the carryforward would fund additional
      temporary staff in 2006/07. The KPI bonus payments were delayed but are still
      outstanding for 2006/07.

1.6.4 Information Technology                   £358,000 or 5.2% underspend
                       £60,000 Customer Service Centre carryforward requested
                       £288,000 SHARP carryforward requested


                                                                                                 18
      The customer service centre will underspend by £60,000 this financial year. This is as
      a result of deferred set up costs for the new contract, and is requested as a carry
      forward. This is because of the delay of the contractual payments of £50,000 and
      £10,000 to Vertex. These are for the establishment of technology disaster recovery
      (DR) arrangements for the replacement IT infrastructure for the CSC, pending final
      agreement of the detail of that new infrastructure and then the development of an
      appropriate DR plan. Without this expenditure the CSC, as a critical service, would no
      longer comply with the statutory duty for appropriate business continuity arrangements
      as required by the civil contingency act (2004), or with HCC financial regulations which
      requires chief officers to ensure robust business continuity plans are in place.
      The carry forward will be spent on replacement IT infrastructure and the finalisation of
      the Disaster Recovery Plan in early 2006/07.

      The CIS and CICT teams underspent by £10,000 in 2005/06. This was due to delays in
      staff appointments.

      SHARP – Savings of £617,000 achieved as part of the renegotiation of the Managed
      Financial Services contract following SAP implementation and the Serco takeover of
      ITnet were carried forward from 2004/05. These were to help fund the next phases of
      the business process review work associated with SHARP phase 2, to enable the life of
      the SHARP team to be extended in order to generate further efficiency savings. Further
      income of £214,000 has also been released from the settlement of investment funds
      held with ITNet. As project team costs have been contained within revenue budget and
      other income streams, carryforward totalling £287,981 is requested, comprising this
      income and the balance of earlier savings. This will be used to support initiatives
      including the ongoing procurement project and the business process re-engineering
      exercise in Adult Care Services.

1.6.5 Carry forward requests less than £75,000 in value

      Corporate Services have requested a number of smaller carry forwards relating to
      various areas where relatively smaller underspends have arisen as follows:-

      (i)    Strategy & Consultancy                                        £49,000

      There is an underspend in this fund, because of transfers out of the old unit into
      substantive jobs elsewhere in the council. In view of the impending changes to HR and
      possibly finance, it is essential that this is carried forward into 2006/07.

      (ii)   Graduate Trainees                                             £33,000

      There was a delay in recruiting a new intake of 3 graduate trainees, resulting in an
      underspend of £33,060.The graduate training programme is proving very effective, but it
      is understood there is latent talent within the organisation that isn’t recognised or
      developed. As part of the council’s talent management strategy it is therefore planned to
      create a Leadership Academy. The carryforward will be used for the development and
      start up costs of the academy. This will include the development and implementation of
      an assessment and development centre to select up to 15 talented individual to
      undertake a one year programme to prepare them for future leadership roles, as well as
      training mentors and to deliver a range of development activities.


      (ii)   Scrutiny                                                      £29,000

                                                                                             19
      The Scrutiny budget had an underspend due to the delay in respect of the major
      reconfiguration of the Health Service, Healthy Hospitals and the associated
      independent consultancy costs. The joint Scrutiny committee was delayed due to the
      elections in London Boroughs. The public health seminar was postponed. There were
      delays in finalising reconfiguration plans, and the unit was unable to recruit a secondee
      until July 2005.

      The carryforward request of £29,000 will be used for the public health seminar that will
      take place in June 2006. Reconfiguration plans will increase pressure on scrutiny
      officers during 2006/07 requiring consultancy support. Funds will be needed to pay for
      the secondment until June 2006.

      (iv)    County Secretary                                               £25,000

      The carry forward will be used to fund some one –off additional costs as a result of
      reorganisation, including additional office accommodation costs and consultancy costs.

      (v)     Internal Audit                                                 £10,000

      This carry forward is required for the additional work and training to set up audit of DfES
      required financial management standard in schools £5,000. A contribution of £5,000 will
      also be put towards the reduction in income from Herts police Authority of £7,700.

      (vi)    Trading Standards                                             £30,000

      A carry forward of £30,000 is requested to fund the costs of employing Barristers for
      two criminal court cases. These are
      1. The prosecution of 11 defendants including a market operator charged with
      money laundering and counterfeiting. This case is currently progressing through the
      magistrates’ court.
      2. The prosecution of defendants charged with obtaining money by breaking The
      Trade Descriptions Act .This case has been committed to the crown court with the
      trial expected to last 2 weeks in July.

      (vii)   Coroners - Courthouse door & roofing                          £25,000

      The underspend is due to the nature of death referrals in the second half of the year.
      There has not been the expected expenditure on post mortem examinations and
      mortuary services. In addition the carry forward from 20004/05 has not been fully used
      as the multimedia and digital court recording system is now being considered in
      conjunction with hearing loop and PA systems for the courtrooms.

      A £25,000 carry forward is requested to fund the fitting of an external door to the rear
      storage corridor of the courthouse in order to access the garden and to carry out the
      necessary roofing repairs, heating etc to establish a records archive within the rear
      corridor. Works were not completed in 2005/06 as there have been specification
      difficulties regarding establishing a disabled ramp from the exit. Options are currently
      being discussed.



1.7   FIRE & RESCUE

1.7.1 Fire Service Pay Review & Award                   £327,000 or 1.6% overspend
                                                                                                 20
      This overspend relates to stage 3 of the Fire service pay and conditions agreement
      2003 and the 2005 pay award. Stage 3 began to be implemented from July 2004 and
      involved the assimilation of pay moving from a rank based to a role based system.
      Following appeals, the impact of these changes has been confirmed as £327,000.

1.7.2 July 2005 Fire Service Pay Award                £75,000 or 0.45% overspend

      The July 2005 firefighters pay award was 0.45% in excess of agreed inflation and has
      resulted in an overspend of £75,000.

1.7.3 Incident in Stevenage                           £230,000 or 100% overspend

      Following the incident at Harrow Court, Stevenage where two fire-fighters lost their
      lives, in accordance with the grey book conditions of service payments have been made
      to the fire-fighters’ partners, totalling £230,000.

1.7.4 Buncefield Oil Terminal Fire                                                £1.9m

      The additional costs incurred by the service in dealing with the Buncefield Oil Terminal
      Fire amounted to £1.9m by the end of March 2006. This expenditure forms the major
      part of the council’s claim for central government funding support via the Bellwin
      Scheme. Latest information now indicates that the total cost incurred to date by the
      Council in responding to the incident, is £2.5m. However, there remain some highways
      related works that remain to be completed once access to all roads around the
      perimeter of the site is available. Under the Bellwin scheme the council will be required
      to cover the first £2.1m from its own resources and will receive grant to cover 85% of
      expenditure incurred above this threshold.

1.8   OFFICE RATIONALISATION

1.8.1 The Way We Work                                 £1.605m or 100% underspend
                                                      £1.605m carryforward requested

      There is an underspend on the offices rationalisation project of £1,605,000. This was
      due to delays in the release of the programme of offices to be reused or sold. The full
      amount will be requested as a carryforward.




3.    CAPITAL BUDGET

3.1   Projected Outturn and Variances

      Expenditure for the Capital Budget is estimated to be £69.335m below the latest budget
      at outturn. Analysis of this variance by portfolio is shown in table 3.

      Table 3

       Executive Member Portfolio            LAB            Outturn         Variance
                                            £'000            £'000            £'000
       Education & Children's Services     103,066          69,269          (33,797)
       Cultural Services                    2,976            1,936           (1,040)
                                                                                                21
 Adult Care                                12,999              3,655            (9,344)
 Environment & Transport                   55,216              52,573           (2,643)
 Community Safety: Fire & Rescue
 Service                                   8,471               2,944             (5,527)
 Resources                                 35,891              18,938           (16,953)
 Community Safety: Trading
 Standards & Registration                    58                  27               (31)
 TOTAL                                     218,677             149,342          (69,335)




The variance of £69.335m can be analysed as technical overspends of £2.038m
underspends of £3.370m and slippage of £68.003m. The variance is analysed by
portfolio in table 4 below:

Table 4


                                                                                 Total
                                   Slippage          Overspends   Underspends    Variance

                                    £000               £000              £000    £000
Education & Children's
Services                           (35,175)            1,673          (296)             (33,798)
Cultural Services                   (1,040)               0              0               (1,040)
Adult Care                          (8,211)               0          (1,133)             (9,344)
Environment & Transport             (2,629)              31            (45)              (2,643)
Community Safety: Fire &
Rescue Service                      (4,244)              63          (1,346)             (5,527)
Resources                          (16,673)             271           (550)             (16,952)
Community Safety: Trading
Standards & Registration             (31)                0              0                   (31)
Total                              (68,003)            2,038         (3,370)            (69,335)

Note: - Table 5 shows those projects with material variances from approved budget.




Table 5

 Executive                                                              Para.   Forecast
 Member                                                                 Ref.    variance
 Portfolio                         Description                                    £000




                                                                                                   22
Education &   Stevenage Secondaries                 3.2.2   (2,643)
Children’s    Lonsdale School                       3.2.2     (202)
Services      Heathcote Secondary                   3.2.2     (472)
              South West Herts Schools              3.2.3   (1,500)
              Hoddesdon Review                      3.2.4     (651)
              Knights Templar School                3.2.5     (325)
              Larwood                               3.2.6     (475)
              Round Diamond Primary School          3.2.7     (202)
              Sir John Lawes School                 3.2.8     (192)
              Primary Autism Base                   3.2.9     (146)
              Secondary Autism Base                3.2.10     (150)
              Sarratt JMI                          3.2.11     (364)
              Tudor JMI                            3.2.11     (266)
              Bedmond JMI                          3.2.11     (132)
              Grove Junior                         3.2.11     (124)
              Bengeo JMI                           3.2.11     (116)
              Turnford School                      3.2.12   (2,517)
              Presdales Secondary Sports Hall      3.2.13   (1,673)
              Verulam School                       3.2.14     (930)
              Pilot Key Stage 4 Centre, P. Bar     3.2.15     (668)
              Breachwood Green                     3.2.16     (531)
              Stevenage Primaries                  3.2.17     (510)
              Boxmoor House                        3.2.18     (393)
              IRIS Development                     3.2.19     (377)
              Youth Programmes Unit/KS4 learning   3.2.20
              centre, Hemel                                  (300)
              Widford School                       3.2.21    (275)
              Richard Hale School                  3.2.22    (267)
              CSF Family Assessment Centre         3.2.23    (250)
              Martins Wood Primary School          3.2.24    (233)
              Birchwood High                       3.2.25    (223)
              DOH Grant for ICS                    3.2.26    (219)
              Falconer School                      3.2.27    (197)
              Sandridge School                     3.2.28    (178)
              Sandon Primary                       3.2.29    (106)

              School managed Projects

              St Clement Danes School              3.2.30   (3,486)
              St Georges School                    3.2.31     (562)
              Chancellor’s School                  3.2.32     (223)
              St Marys RC School                   3.2.33     (179)




                                                                      23
Education &   Forward Funded Schemes
Children’s    Goffs School
Services

              Annual Provisions                    3.2.34    1,674
              Structural Repairs and Maintenance

              Self Financing Schemes
              Howe Dell                            3.2.35   (2,492)
              St Marys Cheshunt
              Watford School for Music
                                                   3.2.36   (7,062)
                                                   3.2.37     (687)
                                                   3.2.38     (200)


Cultural      General Funded Schemes
Services      2005/06

              Hertford Library Reprovision         3.2.39    (506)
              DDA Lifts Watford & Hemel
              Hempstead                            3.2.40    (203)
              HALS Accommodation                   3.2.41    (166)


Adult Care    General Funded Programme

              Replacement of Marsh Lane Day
              Centre (Ware)                        3.3.1    (1,761)
              Replacement of Jubilee Day Centre    3.3.2      (215)
              LD Independent Living Unit           3.3.3      (657)

              Externally Funded

              Balmoral Day Centre                  3.3.4    (1,468)
              LD Day Centre Modernisation          3.3.5      (446)
              Jupiter Drive Reprovision            3.3.6    (1,467)
              LD Independent Living Unit           3.3.7      (450)
              Gypsy Sites                          3.3.8      (233)
              Three Cherry Trees                   3.3.8      (250)
              Berkhamstead Day Centre              3.3.9    (1,135)

              Three Cherry Trees 0405              3.3.10    (383)
              Three Cherry Trees 0506              3.3.11    (750)




                                                                      24
      Environment General Funded
      & Transport Household Waste Recycling                      3.4.1           (695)
                  DfT Funded Integrated Transport
                  Measures                                       3.4.2          (1,042)
                  Baldock Bypass                                 3.4.4            (380)
                  Road Marking Refurbishment                     3.4.5            (170)
                  Safety at Road/Rail Interfaces                 3.4.6            (150)
                  Annual Provisions – Capital Element            3.4.7            (143)


      Resources       General Funded
                      C Hall Roof, Structural R&M                3.5.1          (315)
                      Corp Finance and HR Systems                3.5.2        (1,017)
                      Central and Shared DDA                     3.5.3          (585)
                      Starter Home Initiative                                   (212)
                      The Way We Work                            3.5.4       (11,410)
                      Herts Together                                            (200)
                      Customer Service Centre                    3.5.5          (117)

                      Annual Provisions
                      Borehamwood                                3.5.6          (1,768)
                      Langleybury                                3.5.7          (1,000)
                      Energy Conservation                        3.5.8            (248)
                      IT                                         3.5.9            (221)
                      Vehicle Replacement Programme             3.5.10              228


      Community       Bovingdon Fire Station                     3.6.1          (1,233)
      Safety: Fire    Watford Fire Station                       3.6.2          (3,994)
      and Rescue

                      Variances < £100,000                                    (3,549)
                      Total Variance                                         (69,335)



3.2   Education & Children’s Services

3.2.1 Summary

      The CSF capital monitor reflects a revised approach to reporting on capital within CSF
      and has changed the way that external funding and contributions for self-financed
      schemes. This has impacted on the overall level of slippage across the programme
      and in particular the movement of £7.149m across self-financing schemes. The report
      provides details on the overall position against each scheme taking account of all
      funding sources.

      The outturn position also reflects the service’s prudent approach to a number of
      schemes in the context of area reviews and the potential funding through Building
      Schools for the Future. This accounts for £5.468m of slippage across schemes within
      the Stevenage, South West Herts and Hoddesdon areas.

      Detailed information on each scheme is set out in the paragraphs below.

                                                                                            25
3.2.2 Building Schools for the Future

      The Authority submitted a bid for funding to the DfES under the “Building Schools for
      the Future” programme. However, we were not prioritised to receive funding in the first
      three waves of this programme. Consideration of the unallocated £3.318m set aside for
      Stevenage schools will be made in light of decisions regarding this funding.

      Stevenage Secondaries – slippage £2.643m (Basic Needs)
      Lonsdale School – slippage £202,000 (Basic Needs)
      Heathcote Secondary – slippage £472,000(Basic Needs)

3.2.3 South West Herts Schools - slippage £1.5m (County Funded)

      This allocation was initially well over £2million. A significant amount was spent at
      Queens School to provide additional places on the Bushey side of Watford and at the
      same time the Authority began negotiations with Rickmansworth School (Foundation) to
      create more places which was unsuccessful. There may be a requirement for further
      secondary places in South West Herts, the extent of which will not be decided until
      further review work has been completed.

3.2.4 Hoddesdon Review - slippage £651,000 (Basic need)

      This allocation of Basic Need monies for Hoddesdon is being held pending the
      Hoddesdon Primary Review.

3.2.5 Knights Templar School– slippage £325,000 (County funds £35k, New Pupil Places
       £180k, Modernisation Grant £110k)

      The current estimated cost was above the original budget level and cabinet has agreed
      the additional funding to complete the scheme from New Pupil Places. This scheme
      will commence in the new financial year.

3.2.6 Larwood (Care Regulation Standards) -slippage £475,000 (County funds £350k,
       New Pupil Places £125k)

      The estimated cost of the scheme was above the original budget and agreement by
      cabinet was needed for additional funding to complete the scheme from New Pupil
      Places. This scheme will commence in 2006/07.

3.2.7 Round Diamond Primary School – retention £202,000 (County Funded)

      This scheme has reached practical completion but the final payments will not be
      processed until after the defects liability period has ended, hence the retention shown
      above.

3.2.8 Sir John Lawes School– retention £192,000 (County Funded)

      This scheme is complete but the final payments will not be processed until after the
      defects liability period has ended.



3.2.9 Primary Autism Base – underspend £146,000 (County Funded)
                                                                                                26
      In November 2004 a detailed autism update report went to the Education Panel. This
      set out the difficulties that there had been in finding suitable schools to host a
      mainstream autism base. Because of these difficulties, as well as the continued rise in
      numbers of children identified with autism, an alternative model to bases was
      recommended. The Autism Scrutiny Topic Group reconvened to discuss an alternative
      support model in more detail. It was agreed that instead of bases the specialist advisory
      service staffing would be increased so that more intensive and frequent support could
      be provided to individual children with high levels of need within their local mainstream
      school. Given this the capital funding is no longer required.

3.2.10 Secondary Autism Base – underspend £150,000 (Modernisation grant)

      Similar difficulties have been experienced in finding suitable secondary schools to host
      a mainstream autism base. Therefore this funding is no longer required.

3.2.11 Primary schemes

      Following detailed feasibility studies the following schemes have commenced later than
      anticipated in the 2005/06 financial year. Most of the expenditure will fall in 2006/07.

      Sarratt JMI –slippage £364,000 (County Funded 200k, Modernisation grant £164k)
      Tudor JMI – slippage £266,000 (County Funded)
      Bedmond JMI – slippage £132,000 (County Funded)
      Grove Junior – slippage £124,000 (County Funded)
      Bengeo JMI – slippage £116,000 (County Funded)

3.2.12 Turnford School – slippage £2.517m (County Funded)

      Success in obtaining Targeted Capital Funding for this scheme and the need previously
      to obtain cabinet agreement to fund the scheme in the absence of an expected capital
      receipt from the sale of the current St Mary’s School site, has led to delays with this
      scheme resulting in altered cash flows. This project is now on site.

3.2.13 Presdales Secondary Sports Hall – slippage £1.673m (County Funded)

      This scheme has been delayed due to planners objections to the location of the sports
      hall. The planners preferred location for the sports hall is on the site of existing tennis
      courts but this would require re-location of the tennis courts at extra cost to elsewhere
      on the site. As a result there was a requirement for top-up funding, which has now
      been identified in 2006/08 CSF Capital Programme.

3.2.14 Verulam School- Slippage £930,000 (County Funded 628k, New Pupil Places
       £128k, Modernisation Grant £179k)

      In order to fit in with the school requirements this project is on site slightly later than
      expected therefore the bulk of the expenditure will be in 2006/07

3.2.15 Pilot KS4 Potters Bar - slippage £668,000 (County Funded)

      Work to translate behaviour achievement strategy into practical building requirements
      has resulted in the scheme being delayed. The project was also waiting approval of
      additional funding in 2006/07 before the project could proceed, which has been granted.
      The project is now on site with completion due October 2006.
                                                                                                    27
3.2.16 Breachwood Green JMI - slippage £531,000 (County Funded)

      Complex design issues have lengthened the design process. Work is being undertaken
      to try to contain works within existing budget.

3.2.17 Stevenage Primaries – slippage £510,000 (New Pupil places)

      This scheme was delayed due to additional public consultation, on the future of
      Stevenage Primaries. The scheme started in January 2006 and completion is expected
      within 2007.

3.2.18 Boxmoor House – slippage £393,000 (County Funded)

      This scheme is on hold pending a decision on the closure of Boxmoor House and on-
      going discussions about its possible replacement. This budget is being held pending a
      decision on the site.

3.2.19 IRIS Development – slippage £377,000

      This scheme relates to IRIS enhancements that will not now be undertaken until
      summer 2006/07. Work has been deferred whilst the detailed requirements and
      specifications are defined.

3.2.20 Youth Programmes Unit/ Key Stage 4 Learning centre, Hemel Hempstead –
       slippage £300,000 (County Funded)

      This development now forms part of the overall strategy for Key stage 4 learning
      centres, which is subject to the 2006/08 capital programme. The scheme is to be
      progressed in 2006/07

3.2.21 Widford School – slippage £275,000 (Modernisation grant)

      This scheme has been delayed due to town planning and English Heritage concerns.
      This scheme is expected to start later in 2006

3.2.22 Richard Hale School- slippage £267,000 (Modernisation grant £140k, New Pupil
       Places £127k)

      In order to gain efficiencies, this scheme was linked to a major R&M window walling
      replacement. This caused some delays in the start of this project which is now on site.

3.2.23 CSF Family Assessment Centre – slippage £250,000 (County Funded)

      The identification and agreement to the use of a redundant school site for the location
      of the Centre, and the need to bid for additional resources for a revised scheme within
      the 2006/07 capital programme process resulted in slippage to the start of this scheme.




3.2.24 Martins Wood Primary School– slippage £233,000 (Modernisation grant)


                                                                                                28
      This scheme was delayed due to slightly protracted design phase. This project is now
      on site.

3.2.25 Birchwood High – slippage £223,000 (County Funded)

      The complex sequential multi phase nature of this project has led to some slippage in
      the programme between financial years. Targeted capital was approved and cash flow
      reprofiled for the 2006/08 programme.

3.2.26 DOH Grant for Integrated Children Services - slippage £219,000

      Whilst work has commenced on the procurement and development of critical CSF
      systems, this has taken longer than previously anticipated. Work was also needed to
      align business processes to the technology available and there have been delays in the
      procurement of the software to comply with EU legislation, this includes work on the
      ICS technology.

3.2.27 Falconer School – slippage £197,000 (County Funded)

      This scheme was delayed as further funding was required due to design and planning
      problems. This was given in the 2005/06 programme however this has impacted on
      cash flows. This scheme is now on site.

3.2.28 Sandridge School – slippage £178,000 (Modernisation grant)

      This scheme was delayed as further funding was required; this was given in the
      2006/07 modernisation programme. This scheme is now on site and no further delays
      are anticipated.

3.2.29 Sandon Primary – slippage £106,000 (Basic need)

      The allocation for the Sandon area was held back because of pressure for places at
      one of the other local villages and the possible need to fund any additional
      accommodation. As a result of fluctuating pupil numbers, it has been thought prudent
      to monitor these numbers before committing to capital expenditure that may not
      subsequently be required. This has now been included in the capital package identified
      in the bid included in the CSF 2006/07 Capital Programme for Ashwell Primary.

      School Managed Projects

3.2.30 St Clement Danes School – slippage £3.486m (County funds £1m, New Pupil
       Places £1.7m, Basic need 2001/02 £786k).

      The scheme is now in the design stage following school agreement to proceed.

3.2.31 St George’s School – slippage £562,000 (New Pupil Places)

      This is a large school managed project to provide additional places. Enabling works are
      now on site.


3.2.32 Chancellor’s School – slippage £223,000 (Modernisation grant)

      This is a foundation school managed project, started later than anticipated.
                                                                                             29
3.2.33 St Marys RC School – slippage £179,000 (New Pupil Places)

      Some complexities of this is a VA school managed project has resulted in some
      slippage on the project.

      Forward Funded Schemes

3.2.34 Goffs School - Forward funded £1.674m (County funds £1.325m, New Pupil
       Places, Basic Need & School Contribution £348k).

      This is a school managed scheme which has been forwarded funded. The 2006/07
      programme has additional funding for this scheme.

3.2.35 Annual Provisions – slippage £2.492m (County funds £1.062m, Modernisation
       Grant & borrowing £1.430m)

      The 2005/06 repairs & maintenance budget was fully committed by 31 March 2006. The
      majority of planned maintenance works are commissioned early in the financial year.
      However difficult to detect deteriorating and failing fabric and services, necessitate a
      substantial amount of reactive maintenance for which a contingency is held. Slippage
      has mainly occurred due to works that cannot be commissioned until late in the year
      and projects that are delayed during the design or implementation phases due to
      complications or changed scope. In some cases the contracting industry cannot
      respond quickly enough to the demand.


      Self Financing Schemes

3.2.36 Howe Dell - slippage £7.062m (self financing £6.434m)

      This scheme was delayed due to the complex nature of the S106 agreement and the
      re-consideration by Cabinet in June 2005 of the size of school to be built. Approval was
      given to additional funding to build it as a 2 form entry primary school. In addition the
      site did not come into the County Council's ownership until December 2006. The
      scheme is due to complete in April 2007.

3.2.37 St Marys Cheshunt - slippage £687,000

      There have been delays due to town planning, judicial review, land sale and
      development technicalities. Planning permission for development of the existing school
      site has recently been received, and the completion of technical land deals is awaited
      so that a final application to the DfES for the release of the funding can be made.

3.2.38 Watford School for Music – slippage £200,000

      This is a school managed project dependant on disposals. The scheme was delayed
      due to planning design issues and to fit in with school requirements.


      Cultural Services

      General Funded 2005/06

                                                                                             30
3.2.39 Hertford Library Reprovision – slippage £506,000

      A start date for the scheme is not available as negotiations are continuing with the site
      owners prior to their appointment of a developer for the overall scheme.

3.2.40 DDA Lifts, Watford & Hemel Hempstead Libraries – slippage £203,000

      Full intrusive surveys at both libraries have resulted in significantly higher estimates and
      both cannot be completed in the funding available.
      The position in Hemel will need to be reviewed in 2006:it will not be prudent to proceed
      with this lift until it is clear what the life expectancy of the existing building will be.
      At Watford extensive exploratory works and surveys have had to be carried out to
      locate a position where it is possible to install it. These works have now been carried
      out. The design work to achieve this has now been completed and works will be carried
      out from March 20th to May 19th 2006.

3.2.41 HALS Accommodation – slippage £166,000

      Significant contingencies set aside on this project have not been used as costs were
      lower than anticipated. Mace was able to significantly reduce the cost of the building
      works by negotiating on prices with a smaller number of contractors than originally
      anticipated. This reduced the costs of management fees, materials and labour. It also
      serviced to achieve an early delivery of the building, which reduced the fees to the main
      contractor. Allowance had been made for a back-up generator and plant house to be
      built, however the store has proved to be stable over a 24 hour period, meeting BS5454
      requirements in the event of plant failure, therefore this element was not required.

      The capital allocation for HALS' new archive store was committed to provide a solution
      to HALS' accommodation problems. The new archive store has achieved this,
      preventing the loss of designated public records from Hertfordshire. However, future
      inspections by The National Archives will cover the whole service.

      The remaining element of HALS' accommodation to be addressed is the Undercroft
      archive store. Steps have already been taken to improve the security and fire safety of
      the store. However it suffers from fluctuations in temperature and humidity, reflecting
      changes in the outside weather. These are the worst conditions in which to keep
      archives and mould has been found on some of the documents. There should be a
      stable temperature and relative humidity within the ranges 13-18C and 55-65%, which
      the Undercroft does not currently meet. The under spend would cover the estimated
      cost of fitting air conditioning to the Undercroft to address these issues.

      Approval for a capital virement of £166,000 from the capital provision for HALS
      Accommodation to fund air conditioning in the Undercroft storage is therefore
      requested.




3.3   Adult Care

      General Funded

3.3.1 Replacement of Marsh Lane Day Centre (Ware) – slippage £1,761m
                                                                                                31
      The delay on this scheme was partly due to the problems in identifying a suitable site
      and of obtaining planning permission for the replacement of this day centre. The
      projected start date on the new site in Ware Road, Hertford is now expected to be
      August 2006 with a completion date of June 2007. As a consequence, there is now
      slippage of £1.761m on a budget for 2005/06 of £1.883m. The original start date was
      October 2005.
      This scheme is still the department’s first priority and the latest estimated cost is £3.5m
      which is an increase of £409,000 compared with the estimated cost of £3.091m in
      August 2005. The increase in the overall cost of this scheme is mainly due to a
      combination of delays in the start date, changes to the scheme to meet planning
      requirements and extra costs for the diversion of statutory services.
      It is requested that these additional costs funded through virement of £409,000 from the
      2006/07 budget provision for the Jubilee Day Centre. An updated business case for the
      replacement of the Jubilee day Centre will be considered as part of the development of
      the 2007/08 Capital programme.


3.3.2 Replacement of Jubilee Day Centre – slippage £215,000

      Only fees were incurred on this project in 2005/06 and the expected start date is now
      June 2007.

3.3.3 LD Independent Living Unit – slippage £657,000

      Negotiations are still underway with a Housing Association about how this unit will be
      provided and as a result the start date has been delayed. This scheme was originally
      planned for the Hazelgrove site (Welwyn) which is now in emergency school use.

3.3.4 Balmoral Day Centre – slippage £1.468m

      Although gateway 3 approval has been signed and members have agreed the funding
      this project hadn’t started at the year end. However a start has now been made on the
      Queens Road element of this scheme which is due to be completed in August 2006.

3.3.5 Learning Disability Day Centre Modernisation (including Hornbeams) – slippage
      £446,000
      Although the funding package for the modernisation of a number of Day Centres has
      been approved it was not possible to start work on site during 2005/06. As a result
      slippage of £446k on a budget of £500k is required. Work is due to start on the
      Hornbeams site in September 2006.

3.3.6 Jupiter Drive Reprovision – slippage £1.467m

      This falls under the remit of the Learning Disability Accommodation Review and a
      project team is in place. It is now expected that new build will start on site during
      2006/07 and as a result £1.467m on a budget of £1.5m is required to be slipped.

3.3.7 LD Independent Living Unit (SW Herts) – slippage £450,000

      This project, which will provide residential accommodation for clients in an independent
      setting, will be funded by the Learning Disability Development Fund (LDDF). The LDDF
      is health money transferred to the County Council as the old long stay monies

                                                                                               32
      (resettlement) reduce. It has not been possible to identify a suitable site in 2005/06.
      Further work to find a site is continuing and as a result £450k needs to be slipped.

3.3.8 Gypsy Sites – slippage £483,000

      Part grant funded schemes (gypsy sites)
      There has been further slippage on the County Council element of the Tolpits Lane and
      South Mimms Gypsy sites and this amounted to £233,000 in 2005/06.
      In addition there has been slippage of £250k on the County Council element of the
      Three Cherry Trees site. The revised bid for this site of £1m was not accepted by the
      ODPM and although a smaller project to utilise the Council funding was developed this
      was put on hold until the full effect of damage caused by the Buncefield fire could be
      identified. No variance was reported in the final monitor for 2005/06. A further bid for
      2006/07 is being made to fully refurbish the site and these funds will be required for this
      scheme. The decision on this further bid has been delayed until the end of May 2006.

3.3.9 Berkhamstead Day Centre – underspend £1.135m

      As a result of The Way We Work and changes to the local Primary Care Trust the
      relocation of the day centre is still under consideration and these funds may still be
      required.

3.3.10 Three Cherry Trees 0405 Adjustment – underspend £383,000

      In 2004/05 a capital bid of £510k was made to the Office of the Deputy Prime Minister
      (ODPM), as it was then called, to refurbish part of The Three Cherry Trees gypsy site.
      However, the bid was not successful - approval was not received from the ODPM. 75%
      of the bid (£383k) was to be met from government grant with the balance of £127k
      being met from County Council funding. The underspend of £383k, as now reported,
      relates to the grant element of the bid, as, in closing the 2004/05 accounts the whole of
      the £510k was slipped, whereas only the County Council element should have been,
      with the underspend of £383k being reported in 2004/05. There is not an overall saving
      to the County Council since the £383k was the proportion of the total costs to be funded
      by government grant.

3.3.11 Three Cherry Trees Gypsy Site 2005/06 – underspend £750,000

      A capital bid of £1m was made to the ODPM to refurbish The Three Cherry Trees gypsy
      site. However, the bid was not successful. 75% of the bid (£750k) was to be met from
      government grant with the balance of £250k being met from County Council funding.
      There is not an overall saving to the County Council since the £750k was the proportion
      of the total costs to be funded by government grant.




3.4   Environment & Transport

3.4.1 Household Waste Recycling – slippage £695,000



                                                                                               33
      A delay has been experienced due to difficulties in reaching agreement on the scheme
      at Stevenage. This means that the budget of £399,000 will need to be slipped into next
      year.

      To recap, the total underspend of £695,000 on this budget heading consists of the
      £399,000 for Stevenage plus the previously reported underspend of £558,000 for
      Rickmansworth less the overspends of £200,000 at Royston and £62,000 at Waterdale

3.4.2 DfT Funded Integrated Transport Measures – slippage £1.042m

      It has previously been reported that this underspend consists of two component parts,
      the Croxley Rail scheme and the Cheshunt Station Forecourt scheme. Progress on the
      second of these has been less than previously thought which has increased the
      underspend. The amount will be carried forward to next year as capital slippage.

3.4.3 Essex Road Bridge, Budget Adjustment £1m

      A substantial contribution has been made from a developer under a section agreement
      and the amount added to the budget.

3.4.4 DfT Funded Baldock Bypass – slippage £380,000

      The underspend at the year end was a little higher than previously anticipated. The
      balance will be carried forward as slippage to help meet the costs still to be incurred.

3.4.5 Road Marking Refurbishment – slippage £170,000

      Preparation for the scheme took longer than anticipated, to the extent that it was not
      ready for delivery until relatively late in the year when the early winter road salting runs
      made it unwise to proceed. The project will be delivered as soon as the weather
      improves once more which will inevitably be after the end of March and capital slippage
      will be required.

3.4.6 Safety at Road Rail interfaces – slippage £150,000

      A high turnover in staff has disrupted the preparations for the delivery of this scheme
      which can not now be carried out until after March, so that capital slippage will be
      required.

3.4.7 Annual Provisions – slippage £143,000

      The amount spent at the end of the year was slightly lower than previously forecast
      producing a small increase in the amount to be carried forward.


3.5   Resources

3.5.1 County Hall Structural Repairs and Maintenance – slippage £315,000

      The timing schedule of the County Hall repairs and maintenance means that there will
      only be expenditure of £200,000 this financial year. The slippage of £315,000 is
      required, in addition to the £500,000 budget for 06/07, as part of an £800,000 project in
      06/07 to replace the external envelope of the Old Block. Work on this is expected to
      start in March/April 2006.

                                                                                                 34
3.5.2 Corporate Finance and HR Systems – slippage £1.017m

     £1,017m capital budget was carried forward from the SHARP implementation project, to
     fund the team's continuing work supporting the system to ensure efficiencies are
     achieved and also to identify further business process improvements and savings.
     Funding has also been obtained during 2005/06 through the use of existing systems
     budgets and settlements from the ITnet managed services and FM budgets.

     These mean that the capital funding has not been required in 2005/06, but will be
     needed to fund the team through to the end of 2006/07 when the one off funding
     sources will not be available. The team will continue to support the system and identify
     savings in line with the business case requirements.

3.5.3 Central and Shared DDA – slippage £585,000

     This budget has underspent because expenditure on it is linked to the TWWW project.
     Some DDA work will be required at the new office bases although the amounts will not
     be known until possession of Apsley 2 is achieved and the new A1 base is identified.

3.5.4 The Way We Work Project – slippage £11.41m

     The original approval for this programme provided for extension works at New Barnfield
     to provide a central training facility (£6.1M including F&E and Fees), and for the
     completion of the fit out of new rented office provision in the Southwest of the County,
     with expected payments in the current financial year of some £17M.

     A more recent review of the options to achieve the New Ways of Working project
     concluded that the New Barnfield site extension would not provide sufficient facilities to
     allow for all training to be provided from the extended buildings. Alternative options for
     meeting the premises needs for training will mean that the expenditure of £6.1M will
     now be incurred in 2006-07.

     The Apsley site, which was chosen for the Southwest office, consists of two separate
     buildings. The fit out and commissioning of the smaller building, Apsley One, along with
     associated ICT works, has now been completed. The larger building, Apsley Two,
     required more extensive works to be completed by the Landlord before handover for
     HCC commissioned fit out and related ICT works to start. The handover of this building
     is not now expected until May 2006, with all HCC financed works, associated ICT, and
     the majority of fees being paid in 2006-07.

     The actual capital payments on the rationalisation project in 2005-06 are therefore now
     only £5.590m after allowing for contributions, and that the balance of £11.410m will now
     be required in 2007/08

3.5.5 Customer Services Centre - Information Technology – slippage £117,000

     The budget for premises relocation is now required in 2006/07 when the relocation
     takes place.

3.5.6 Borehamwood - Slippage £1.768m

      Reprovision of the Lair. HCC have a planning obligation to re-provide youth facilities.
      The original plan was to re-build this on the same site but this has changed. HCC are
      now investing in a new multiple use building at All Saints Village Hall. This is a
                                                                                              35
      partnership scheme with Hertsmere B.C and the Church. Mace have taken over as the
      project managers and work will commence in 2006/07.

      Hertswood Playing Fields. Work on this was delayed until approval was received
      from the Secretary of State to sell the Lyndhurst and Furzehill school playing fields.
      These have been sold and Mace have commenced work on this project.

      Hillside Sports Hall. Work on this has been delayed because the purchasers of the
      school, The Jewish High School Trust wanted changes made to the original plans that
      had been agreed by Hertsmere B.C. to better suit their own circumstances. The new
      planning permission has now been received and work will commence in March.

3.5.7 Langleybury - Slippage £1m

      The sale of Langleybury was originally expected to take place during 2005/06
      negotiations are currently taking place with the sale now anticipated in 2006. Slippage
      of £1m is required because as a listed building there is a likelihood that, as the current
      owners, HCC will be served a Repairs Notice by English Heritage. If served HCC will be
      legally required to comply with it.

3.5.8 Energy Conservation - Slippage 248,000

     Slippage is requested to continue the programme of work with Optimal to implement the
     roll-out of electronic monitoring of energy consumption across all sites. There is
     currently a pilot on 20 sites.

3.5.9 Information Technology - Slippage £195,000

     Hyperwave. Work has started and infrastructure ordering is in process, however the
     project will not be completed this financial year. £165,000 will be needed next year to
     complete the project.

     County Hall Server. £30,000 slippage. The County Hall Server project cannot be
     completed until the Hyperwave work is completed.

3.5.10 Vehicle Replacement Programme – overspend £228,000

      As reported in the final monitor for 2004/05, a review of the vehicle replacement
      programme concluded that over the useful life of vehicles (7-10 years) purchase rather
      than leasing will deliver significant savings – (up to £800,000. Therefore the capital
      programme for 2005/06 will now be adjusted to reflect this change in procurement
      policy.

      When HCC switched from leasing to purchasing, the volatility of this budget, particularly
      in the first couple of years of transition, was highlighted as an issue and the budget was
      set to be the average expected capital expenditure on replacement vehicles each year.
      This volatility has been seen in 05/06, the second year of purchasing, as the timing of
      payments for replacement vehicles settles down. The expenditure next year will be
      £228,000 less than the budgeted £3m.

3.5.11 SERCO / SHARP set up costs

      As part of contract negotiations when serco took over the Serco contract, arrangements
      for funding the set up costs of the SHARP project were reviewed in the light of the
                                                                                               36
      increased flexibility offered by the prudential code. It was concluded that the council
      would save up to £300,000 a year by taking over the contractor's initial investment in
      system set up costs and if necessary, funding this through additional prudential
      borrowing. This arrangement is now reflected in the 2005/6 programme on an invest to
      save basis. This adjustment to borrowing levels will not cause the council's approved
      2005/06 prudential limits to be exceeded.

3.5.12 New Manpower Recruitment Centre Contract set up costs

      A similar Invest to save opportunity as described in paragraph 3.5.2 arises in the setting
      up of the new recruitment centre contract development. It is estimated that if the
      council takes responsibility for the set up costs currently estimated at up to £500,000 for
      the new systems needed to support the operation of the contract and funds them
      through prudential borrowing then additional annual savings of £13,000 can be made on
      this contract. This can be achieved without requiring any changes to our existing
      prudential borrowing limits.

3.6   Community Safety : Fire and Rescue

3.6.1 Watford Fire Station – slippage £3.994m

      Delays in negotiations over the site and design of the station have delayed this project

3.6.2 Bovingdon Fire Station – underspend £1.233m

      At the time of compiling this monitor, Bovingdon Fire Station remains the subject of
      discussion between the council and representatives of the Fire Brigades Union around
      Relating to the potential closure of the fire station.

      A decision to replace the station will depend on the outcome of these discussions.

4     Monitoring of prudential indicators

4.1   As part of the 2005/06 budget, the county council approved a set of prudential
      indicators to set the framework for capital investment and borrowing plans for the year.
      The Finance Director is responsible for monitoring these indicators and reporting and
      potential issues / breaches of the limits set.

4.2   Appendix C to this report shows the position for the second quarter of the 2005/06
      financial year, which indicates that no prudential limits have been breached. In
      addition, projecting the position forward the Finance Director advises that there is no
      reason to consider that any of the limits are likely to be breached for this year. The
      overall capital expenditure position for the year is higher than the original estimate as
      the projection now takes account of slippage from 2004/05. This does not impact on
      any of the other prudential indicators as this slippage has already been financed.




                                                                                                  37
                                                                                                          Appendix A
         COUNTY SUMMARY REVENUE BUDGET MONITOR AS AT 31 March 06
                                                                 (all figures in £'000)
SERVICE                                Original        Carry  Approved   Latest  Projected Projected   Carry
                                       Budget         Forward Virements Approved Spend at Variance Forwards
                                                       from    & Tech    Budget  Year End             2006/07
                                                      2004/05     Adj                                Requested
CSF Schools                              605,055             0       (721)    604,334     601,641     (2,693)      66
CSF Education Non-Schools                 70,995           115     (1,858)     69,252      69,081       (171)     120
Subtotal CSF Education                   676,050           115     (2,579)    673,586     670,722     (2,864)     186
CSF Children's Services                   84,602           941     (3,435)     82,108      80,338     (1,770)     897
CSF Cultural Services                          0            30     19,899      19,929      20,007          78       0
Children, Schools & Families             760,652         1,086     13,884     775,623     771,067     (4,556)   1,083

Adult Care (including Money Advice       204,152           67        2,549    206,768     207,790      1,022      89
Unit)
Adult Care Crime & Drugs Strategy                 0       258        2,678       2,936      2,591      (345)
Unit

Environment                              109,743           48        3,648    113,440     113,411        (29)    274

Libraries, HALS, Arts & Trading Stds      22,924            0 (22,924)               0          0          0
Information Technology                     1,163            0  (1,163)               0          0          0

Community Safety:
Crime and Drug Strategy Unit               2,685            0      (2,685)          0           0          0
Fire and Rescue Service (including        36,205            0        2,637     38,842      41,470      2,628
Pensions)
Civil and Emergency Planning                 629            0           (7)        622        628           6
Trading Standards and Consumer                 0            0        2,578       2,578      2,533        (45)     30
Protection
Registration Service                         860            0          (36)       824         823         (1)
Coroners Service                             839           30          127        996         925        (71)     25
Total Community Safety                    41,217           30        2,615     43,863      46,379      2,516      55

Resources Portfolio (Corporate            11,397         1,150       1,171     13,718      13,129      (589)     578
Services)
Central Capital Financing and             22,962            0          461     23,423      23,861        438
Interest on Balances
Contingency                                  935            0        2,715      3,650           0     (3,650)
Special Provision                          5,300            0      (2,645)      2,655           0     (2,655)
Precepts                                   2,012            0            0      2,012       2,012           0
Additional Capital Programme              12,200            0            0     12,200      12,200           0
Support
Office Rationalisation Project             2,300            0        (695)       1,605          0     (1,605)   1,605
Capital Charges non operational            6,797            0          (4)       6,793      7,616         823
assets
Asset Management Revenue               (108,538)            0 (11,579) (120,117) (121,763)            (1,646)
Account
Pensions Int Cost & Expected RoA          22,569            0            0      22,569      22,569         0
Pension Reserve Appropriation           (28,784)            0        9,289    (19,495)    (19,495)         0
Local Authority Business Growth                0            0            0           0       (459)     (459)
Incentive Scheme Grant

NET REVENUE BUDGET                     1,089,002         2,639            0 1,091,642 1,080,907      (10,734)   3,684
Funded from Balances                     (14,500)                         0 (14,500) (14,500)               0
COUNTY FUND TOTAL                      1,074,502         2,639            0 1,077,142 1,066,407      (10,734)   3,684

                                                                                                                    38
                                      Capital Budget Monitor as at 31 March 2006                 APPENDIX B
                                                Adjustments    Previous
                                     Original   and            Year                   Spend at   Year End
Executive Member Portfolio           Budget     Virements      Slippage   LAB         Year End   Variance *
                                      £000          £000          £000     £000         £000          £000
Education & Children's Services
General Funded                         16,795        (1,775)      3,349    18,369        8,155         (10,214)
Externally Funded                      49,529        (2,035)     19,579    67,073       51,701         (15,372)
Self Financing                          9,912              0          4     9,916        2,767          (7,149)
Annual Provisions                       7,420              0        288     7,708        6,646          (1,062)
Total Education & Children's
Services                               83,656        (3,810)     23,220   103,066       69,269         (33,797)

Cultural Services
General Funded                          1,972              0        530     2,502        1,473          (1,029)
Externally Funded                           0             27          0        27           24              (3)
Self Financing                              0              0          0         0            0                0
Annual Provisions                         414           (60)         93       447          439              (8)
Total Cultural Services                 2,386           (33)        623     2,976        1,936          (1,040)

Adult Care
General Funded                          3,198             0       1,698     4,896        1,268          (3,628)
Externally Funded                       1,429             0         498     1,927          728          (1,199)
Self Financing                          2,300             0       2,302     4,602           85          (4,517)
MH SCE R                                    0           337         159       496          496                0
Annual Provisions                         850             0         228     1,078        1,078                0
Total Adult Care                        7,777           337       4,885    12,999        3,655          (9,344)

Environment & Transport
General Funded                         13,953         1,022         331    15,306       14,228          (1,078)
Externally Funded                      37,026         (100)       1,338    38,264       36,842          (1,422)
Self Financing                              0             0           0         0            0                0
Annual Provisions                       1,554             0          92     1,646        1,503            (143)
Total Environment & Transport          52,533           922       1,761    55,216       52,573          (2,643)

Community Safety: Fire & Rescue Service
General Funded                            600             19      1,461     2,080          781          (1,299)
Externally Funded                           0             73         51       124          124                0
Self Financing                          3,750              0      1,999     5,749        1,658          (4,091)
Annual Provisions                         418           (19)        119       518          381            (137)
Total Community Safety: Fire &
Rescue Service                          4,768            73       3,630     8,471        2,944          (5,527)

Resources
General Funded                         18,811         2,376         999    22,186        8,215         (13,971)
Externally Funded                           0           708           0       708          701              (7)
Self Financing                              0             0           0         0            0                0
Annual Provisions                       4,429         8,275         293    12,997       10,022          (2,975)
Total Resources                        23,240        11,359       1,292    35,891       18,938         (16,953)

Community Safety: Trading Standards & Registration
General Funded                              0             0           0           0          0                 0
Externally Funded                           0             0           0           0          0                 0
Self Financing                              0             0           0           0          0                 0

                                                                                                          39
Annual Provisions                            0              58           0          58        27        (31)
Total Community Safety: Trading
Standards & Registration                     0              58           0          58        27        (31)


Budgets Vired from Old Structure in Budget Book to Executive Member Portfolio

IT - vired to Resources
General Funded                               0         (1,134)       1,134           0         0            0
Externally Funded                          150           (608)         458           0         0            0
Self Financing                               0               0           0           0         0            0
Annual Provisions                          373           (508)         135           0         0            0
Total IT                                   523         (2,250)       1,727           0         0            0

Trading Standards - vired to
Community Safety: Trdg Stds and
Registration
Annual Provisions                           23            (40)          17           0         0            0

Registration - vired to Community
Safety: Trdg Stds and Registration
Annual Provisions                           18            (18)           0           0         0            0

Total                                  174,924           6,598      37,155      218,677   149,342   (69,335)
   * underspends shown in brackets




                                                                                                       40
                                                                                 APPENDIX C

                PRUDENTIAL INDICATORS 2005/2006 – 31st MARCH 2006

                                           Projected        Original Indicator
                                         Position at 31st      for 2005/06
                                           Mar 2006
1.    Capital Expenditure                  161,378k             174,924k
2.    Capital Financing Requirement        348,728k             358,395k
      (CFR)


                                         Position at 31st   Original Indicator
                                           Mar 2006            for 2005/06
3.    Treasury Position
      Borrowing                             345,273k            345,000k
      Investments                           265,689k            180,000k
      Net Borrowing                          79,584k            165,000k
4.    Net Borrowing Less than CFR              
5.    Authorised Limit (against             345,273k            388,000k
      maximum position)
6.    Operational Boundary                  345,273k            350,000k
7.    Upper limited on fixed interest        100%                100%
      rates (against maximum
      position)
8a.   Upper limits on variable                 0%                 30%
      interest rates (against
      maximum position)
8b.   Limits on Fixed Interest Rates        345,273k            358,000k
      Limits on Variable Interest              0                108,000k
      Rates71-
9.    Maturity structure of fixed rate
      borrowing (against maximum
      position)
      Under 12 months                         0.01%               25.00%
      12 months to 2 years                    0.01%               40.00%
      2 years to 5 years                      0.02%               60.00%
      5 years to 10 years                     0.21%               80.00%
      10 years and above                     99.74%              100.00%
10.   Investments greater than 364            £6m                 £10m
      days (Maximum Limit)




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