HERTFORDSHIRE COUNTY COUNCIL

ENVIRONMENT SCRUTINY COMMITTEE

TUESDAY 12 DECEMBER 2006 AT 10.00 AM

ENVIRONMENTSTANDSTILL BUDGET 2007/08 – 2010/11 (including Strategic Compasses and Results of Annual Tracking Surveys)

Report of Director of Environment and the Finance Director

Author:-Mike Collier

Tel:-01992 556010

Executive Members:- Derrick Ashley and Stuart Pile

1.Purpose of the report

1.1To allow the Scrutiny Committee to consider:

  • cost pressures and efficiency savings relating to the revenue budget
  • service profiles (strategic compasses)
  • the results of recent independent tracking surveys carried out by Ipsos MORI

1.2To make recommendations/comments as appropriate. These will be considered by Cabinet on 5 February 2007, along with the latest information on resources and the outstanding uncertainties. At its meeting on 5 February Cabinet will make its budget proposals. These will then be considered by each of the service scrutiny committees in turn, following which Resources Scrutiny Committee will make consolidated comments to Cabinet. Cabinet on 19 February will recommend a budget to Council. The County Council will agree the budget and council tax level on 27 February.

2.Summary

2.1Appendices 1 and 2 outline the inflation and cost pressures facing the service in 2007/08 and the medium term. This gives rise to a 2007/08 standstill budget for Environment after efficiency savings of £102.632million (excluding capital charges and the FRS17 pension adjustment).

2.2The cashable efficiency savings which have been identified by the departmentare summarised overleaf with further details provided in Appendices 1 and 2.

£’000
Cashable Efficiency Savings
FYE of Previous Efficiencies / 33
2007/08 Gershon Savings / 1,522
2007/08 Other Savings / 287
Total / 1,842

2.3In addition to the cashable efficiencies, a further £711,000 of non cashable efficiency savings have been identified and these are detailed in Appendix 2.

2.4Following on from last year,the“Strategic Compasses” for the service have been updated. These are provided at Appendix 3 and include key national performance indicators and unit costing data and illustrate where the service sees itself to be currently positioned on a grid of performance against cost, also indicating the direction of travel.

2.5In addition to the strategic compass information, further context is given in the briefing reports from Ipsos MORI that are attached at appendices 4 and 5.

2.6Appendix 4 is a report on the overall County Council tracking survey (a face to face survey of 1,000 residents). While Appendix 5 is a report on the more specific Environment tracking survey (a telephone survey of 500 residents). Copies of the full reports from both surveys can be made available on request.

3.Local Transport Plan (LTP)

3.1The County Council bids for Central Government ‘support’ for highway maintenance and other capital schemes through the LTP.

3.2Prior to 2006/07 the support was in the form of capital grant or funding in the County Council’s revenue grant settlement to pay the debt charges on additional borrowing. However, with the change in the way the revenue grant settlement is arrived at, the link between the LTP settlement and supported borrowing was broken. Changes are promised for 2007/08 to restore at least some direct funding but exact details of how this will be achieved are still awaited.

3.3An announcement is expected on December 4th of the overall LTP score in respect of the LTP and Annual Progress Report (APR) as part of the CPA process. However, details of the level of ‘support’ and how this will be reflected in terms of real funding is not expected until the week beginning 18thDecember.

4.Highways Maintenance

4.1Investment in highways maintenance has traditionally come from county revenue, county capital and LTP funds. (With the change to LTP funding mentioned above, the distinction between CountyCapital and LTP funds disappeared in 2006/07.) In addition, the CountyCouncil provided a further £10million to fund the HighwaysExtra programme in 2006/07. This brought the total funds available to £62.4 million.

4.2The budgets for the years since 2003/04 are set out in the table below.

4.3

County Revenue
£m / County Capital
£m / LTP
£m / TOTAL
£m / Highways
Extra
£m
2003/04 / 28.9 / 4.4 / 7.9 / 41.2
2004/05 / 27.4 / 8.1 / 9.3 / 44.8
2005/06 / 28.4 / 11.6 / 8.6 / 48.6
2006/07 / 27.8 / 15.4 / 9.2 / 52.4 / 10.0
2007/08 / 28.1 / 15.9 / 9.2 / 53.2

4.4The majority of the strategic compasses shown in Appendix 3 give an indication of the current performance for the Department split into six key areas with a single direction of travel arrow. The exception is the compass for ‘A safe and efficient transport system’ which has two arrows;one showing the impact of continuing the current base line expenditure, the other showing a continuation of the increased investment that was provided for 2006/07 for ‘Highways Extra’.

4.5This additional investment of £10m has been delivered through a standalone one year contract with Lafarge Aggregates with an option to extend by a second year should further funds be available. By the end of 2006/07 over 350 sites will have been addressed through this programme.

5.Conclusion

5.1The Committee is invited to comment to Cabinet on the standstill budget (including efficiency savings), strategic compasses and tracking surveys.

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061212 Environment Standstill Budget 2007/08 – 2010/11

APPENDIX 1

REVENUE BUDGET 2007/08 – 20010/11

AND MOVEMENT FROM CURRENT YEAR’S BUDGET

ENVIRONMENT

2007/08
£'000 / 2008/09
£'000 / 2009/10
£'000 / 2010/11
£'000
ORIGINAL BUDGET 2006/07
(Excl capital charges & FRS17 adjustment) / 97,889 / 97,889 / 97,889 / 97,889
Less: One-off funding - Highway Maintenance / (1,000) / (1,000) / (1,000) / (1,000)
ORIGINAL BUDGET 2006/07 (less one-off funding) / 96,889 / 96,889 / 96,889 / 96,889
2006/07 Technical Adjustments:
Transfer of Voluntary Sector Budgets from Corp Services / 156 / 156 / 156 / 156
ADJUSTED 2006/07 BUDGET / 97,045 / 97,045 / 97,045 / 97,045
Inflation / 3,283 / 6,506 / 10,729 / 13,952
BASE BUDGET / 100,328 / 103,551 / 107,774 / 110,997
Pressures for Change:
Full Year Effect of Previous Efficiencies
1(a) Employers Liability Insurance / (33) / (33) / (33) / (33)
Total FYE of Previous Efficiencies / (33) / (33) / (33) / (33)
Demography:
2(a) Waste volumes / 400 / 800 / 1,200 / 1,600
2(b) Road length increases - routine maintenance / 190 / 380 / 570 / 760
Total Demography / 590 / 1,180 / 1,770 / 2,360
Legislative Changes:
3(a) Countryside & Rights of Way Act / 25 / 25 / 25 / 25
3(b) Traffic Management Act / (80) / (80) / (80) / (80)
3(c) Landfill tax / 1,712 / 3,405 / 5,080 / 6,734
3(d) Commons Act 2006 / 0 / 25 / 25 / 25
3(e) Historic Environment Act 2008 / 0 / 25 / 25 / 25
Total Legislative Changes / 1,657 / 3,400 / 5,075 / 6,729
Other Pressures:
4(a) Business rates / 5 / 8 / 9 / 9
4(b) Local Government Pension Scheme / 194 / 363 / 654 / 958
4(c) Revenue effects of capital / 75 / 75 / 75 / 75
4(d) Revenue effects of telecomms / 8 / 21 / 35 / 35
4(e) Regional transport issues / 25 / 25 / 25 / 25
4(f) Local Transport Plan 3 / 0 / 40 / 80 / 80
4(g) Future highways contracts / 140 / 140 / 80 / 80
4(h) Capital Payback / 1,152 / 1,125 / 1,125 / 1,125
4(i) Waste treatment procurement / 100 / 200 / 200 / 0
4(j) Retention of School Travel Team / 0 / 170 / 170 / 170
Total Other Pressures / 1,699 / 2,167 / 2,453 / 2,557
Total Pressures for Change / 3,913 / 6,714 / 9,265 / 11,613
STANDSTILL BUDGET BEFORE EFFICIENCIES / 104,241 / 110,265 / 117,039 / 122,610
Cashable Efficiency Savings - Gershon:
5(a) Herts Highways Partner Efficiency Savings / (500) / (500) / (500) / (500)
5(b) Rationalise Street Light Testing / (300) / (300) / (300) / (300)
5(c) Textiles recycling income / (200) / (200) / (200) / (200)
5(d) Dial-a-Ride savings / (195) / (195) / (195) / (195)
5(e) Streamline Client Support Management / (120) / (120) / (120) / (120)
5(f) EMG project management / (55) / (55) / (55) / (55)
5(g) Review of Overheads / (45) / (45) / (45) / (45)
5(h) Strategy, Planning & Policy - Staffing Review / (37) / (37) / (37) / (37)
5(i) Development Control e-Planning / (30) / (30) / (30) / (30)
5(j) Hertfordshire Highways Client - Staffing Review / (20) / (20) / (20) / (20)
5(k) Partnership Working / (15) / (15) / (15) / (15)
5(l) HBRC/CMS Efficiencies / (5) / (22) / (22) / (22)
5(m) Surveys - Use of new technology / 0 / (134) / (134) / (134)
Total Cashable Efficiency Savings – Gershon / (1,522) / (1,673) / (1,673) / (1,673)
Cashable Savings – Other
6(a) Bus Fare Rises Above Inflation / (125) / (125) / (125) / (125)
6(b) Waterdale Revenue / (80) / (80) / (80) / (80)
6(c) Alternative Funding for Traffic Management Act Pay / (34) / (34) / (34) / (34)
6(d) Increase Road Safety Course Fees / (5) / (5) / (5) / (5)
6(e) Rural estate income / (20) / (40) / (55) / (65)
6(f) Grant replacement/external funding / (20) / (62) / (102) / (156)
6(g) Historic Environment admin/income / (3) / (7) / (12) / (17)
TOTAL Other Savings / (287) / (353) / (413) / (482)
STANDSTILL BUDGET AFTER EFFICIENCIES / 102,432 / 108,239 / 114,953 / 120,455

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061212 Environment Standstill Budget 2007/08 – 2010/11

APPENDIX 2

ENVIRONMENT SERVICE
£’000
PRESSURES FOR CHANGE
Previous Policy Decisions
1(a) Employers’ Liability Insurance
The actuaries have reviewed the number and value of claims likely to be successful against the Council. Their estimate of the value of employer liability claims is lower than it was the year before due to improved risk management in the authority. This will result in lower charges to services for insurance. / -33 / All years
Demographic Changes
2(a) Waste volumes
The volumes of household waste that the county council is obliged to dispose of each year continue to rise in common with all waste disposal authorities. / + 400
+ 800
+ 1,200
+ 1,600 / 2007/08
2008/09
2009/10
2010/11
2(b) Road length increases – routine maintenance
With increases in residential developments, the length of roads that the county council has a responsibility to maintain continues to grow each year. It costs an average of just over £7,000 per kilometre to maintain local roads. An additional 27 kilometres were added to the network last year. / + 190
+ 380
+ 570
+ 760 / 2007/08
2008/09
2009/10
2010/11
Legislative Changes
3(a) Countryside & Rights of Way Act
This item reflects the increases in workload and demand for definitive map changes ahead of the 2026 cut-off date as well as materials and labour costs of improving priority routes on the network. / + 25 / All Years
3(b)Traffic Management Act
This item removes a one off pressure that was allowed for in 2006/07 only. / -80 / All Years
3(c) Landfill Tax
Landfill tax is currently £21 per tonne and increasing by a further £3 per tonne per year. / +1,712
+3,405
+5,080
+6,734 / 2007/08
2008/09
2009/10
2010/11
3(d) Commons Act 2006
Although the Commons Act has been enacted actual commencement of certain duties and responsibilities are being phased in and it is expected that the impact on HCC as Commons Registration Authority will in the main not be felt until late 07/08 and 08/09. At this time it is likely that the authority will be required to digitise all records of the commons in the county to make them more accessible and usable. In addition by raising the profile of commons the act will result in more enforcement work for the authority as people realise what rights they have especially in terms of ensuring commons remain unfenced and open where they legally should be. / 0
+25 / 2007/08
Future Years
3(e) Historic Environment Act 2008
It is anticipated that the Act will devolve current English Heritage responsibilities to local authorities. At this stage it is far from clear if money will come with these additional duties but it is expected that there will be a net cost to authorities. Areas of work that will be devolved include the management and granting of scheduled monument consents, all heritage consent associated with listed buildings and as the keeping and management of Historic Environment Records will be made a statutory requirement data will have to conform to certain national standards around both recording and access. / 0
+25 / 2007/08
Future Years
Other Pressures
4(a) Business rates
This relates to the estimated additional costs arising from the 2005 revaluation of property for rating purposes. / + 5
+ 8
+ 9
+ 9 / 2007/08
2008/09
2009/10
2010/11
4(b) LGPS employer’s contributions
Estimated cost of the increase in employer’s contributions to the Local Government Pension Scheme. / +194
+363
+654
+958 / 2007/08
2008/09
2009/10
2010/11
4(c) Revenue effects of capital
These are the revenue consequences of undertaking capital works within the agreed capital programme. / + 75 / All Years
4(d) Revenue effects of telecomms
These are the authority’s revenue consequences of undertaking corporate, telecommunications capital works. / + 8
+ 21
+ 35
+ 35 / 2007/08
2008/09
2009/10
2010/11
4(e) Regional Transport Issues
This is the full year effect of an additional post required to work on Regional Transportation issues, growth areas / infrastructure proposals and representing HCC at various working parties. / +25 / All Years
4(f) Local Transport Plan 3 (LTP3)
Extra costs will be incurred in preparing, producing and consulting upon the next Local Transport Plan. Costs are likely to be considerably higher than for LTP2 because of the requirement for additional consultation and Strategic Environmental Assessment work. There will also be a need to appoint additional temporary staff. / Nil
+ 40
+ 80
+80 / 2007/08
2008/09
2009/10
2010/11
4(g) Future highways contracts
The current Hertfordshire Highways contracts run until September 2009, with a possible extension of a further three years. This item will ensure that resources are in place to develop, tender and let the next generation of contracts. / +140
+140
+80
+80 / 2007/08
2008/09
2009/10
2010/11
4(h) Capital payback
Payback associated with the general capital programme. / +1,152
+1,125 / 2007/08
Future Years
4(i) Waste Treatment Procurement
To implement the Hertfordshire Waste Strategy the County Council, as waste disposal authority, is obliged to secure the facilities and supporting infrastructure to treat residual waste - that part of municipal waste that cannot be recycled or composted. The Strategy sets out various technological solutions which need to be assessed and procured through appropriate financing and contract arrangements. This budget will enable relevant and timely expertise and project management to be put in place. The severe cuts in allowance for landfill in future years is a national situation and it is likely that the county will enter in to joint working arrangements with surrounding authorities to identify and implement the way forward. / +100
+200
+200 / 2007/08
2008/09
2009/10
4(j) Retention of School Travel Plan Team
Government Funding for this team ends in March 2008. This item is for retention of four staff and manager in order to meet the LTP2 target and support some work on Business Travel Plans and work as a result of Faith Transport Review. It supports the Congestion challenge. In addition, the new Education Bill includes a duty for LEAs to prepare a strategy each year for promoting sustainable modes of travel. / 0
+170 / 2007/08
Future Years
Cashable Efficiency Savings – Gershon
5(a) Hertfordshire Highways
While they have not yet been identified, further efficiency savings should be possible from within the Hertfordshire Highways contract. / -500 / All Years
5(b) Rationalise Street Light Testing
Street lights are currently tested using both aural and ultrasound testing. This may lead to a need for an increase in reactive maintenance work but should still save £300,000 per year. / -300 / All Years
5(c) Textiles Recycling Income
A new contract involving the collection and recycling of textiles at Household Waste Recycling Centres will generate £200,000 per year / -200 / All Years
5(d) Dial-a-Ride Savings
When the Dial-a-Ride service was re-tendered in 2005the contract was awarded to the in-house team, allowing the opportunity to integrate the service with other transport provision while making substantial savings. / -195 / All Years
5(e) Streamline Client Support Management
A new method of project management will be introduced which will reduce the use of the design team consultants producing a saving of £120,000 per year. / -120 / All Years
5(f) Environmental Management – project management
Streamlining project management work within this group will enable savings to be made. / -55 / All Years
5(g) Review of overheads
A saving of £45,000 per year is achievable from reviewing the department’s overhead budgets. / -45 / All Years
5(h) Strategy Group – staffing review
A review of staffing in the units within the Strategic Planning & Partnerships Group has identified savings of £37,000 per year. / -37 / All Years
5(i) Development Control e-Planning
Implementation of an electronic planning application and monitoring system will provide greater efficiency and improve performance in this area. / - 30 / All Years
5(j) Hertfordshire Highways Client – staffing review
A review of staffing in the units within the Hertfordshire Highways Client operation has identified savings of £20,000 per year. / -20 / All Years
5(k) Partnership Working
Improving partnership working between the county council and Herts prosperity should enable efficiencies to be made. / -15 / All Years
5(l) HBRC/CMS Efficiencies
Further integration of the Hertfordshire Biological Records Centre and the Countryside Management Service will allow administrative savings to be made. / -5
-22 / 2007/08
Future Years
5(m) Surveys
A new system of conducting carriageway condition surveys should enable savings to be made from 2008/09 / 0
-134 / 2007/08
Future Years
Cashable Savings – Other
6(a) Bus fare Rises Above Inflation
Bus fare rises of 5% above inflation are estimated to yield an additional £125,000 per year, after allowing for a slight fall-off in demand / -125 / All years
6(b) Waterdale Revenue
Increased volumes of trade waste at Waterdale should lead to additional income of £80,000. / -80 / All Years
6(c) Traffic Management Act
A review of what costs can be charged against the income from section 74 has revealed the possibility of increasing income from this source / -34 / All Years
6(d) Increased Road Safety Course Fees
Increasing charges for advanced driver, advanced motorcyclist and driver advantage courses and income from speed awareness courses will achieve this additional income. / -5 / All Years
6(e) Rural Estate Income
It is estimated that income from land-based, non-farming tenancies will secure these additional sums. / -20
-40
-55
-65 / 2007/08
2008/09
2009/10
2010/11
6(f) Grant Replacement
Replace HCC contribution with funding from external sources. / -20
-62
-102
-156 / 2007/08
2008/09
2009/10
2010/11
6(g) Historic Environment Income
Increased charges for the work of the Unit will result in higher levels of income. / -3
-7
-12
-17 / 2007/08
2008/09
2009/10
2010/11
NON-CASHABLE EFFICIENCY SAVINGS
(a) Hertfordshire Highways Partnership Savings
While specific savings for 2007/08 have not yet been identified, work continues with our partners to achieve both cashable and non-cashable savings from the HertsHighways contracts. / -500 / All Years
(b) Staff Accommodated at Highways House
The number of staff accommodated at Highways House has increased in recent years within the existing space. / -168 / All Years
(c) Increased Definitive Map Turnover
The number of definitive map cases dealt with has increased due to revised working methods while staff numbers have remained constant, resulting in this noncashable saving. / -40 / All Years
(d) Home-grown Timber
Timber from the rural estate that would previously have had no value is now being used to make signs for the Rights of way network / -3 / All Years

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061212 Environment Standstill Budget 2007/08 – 2010/11

APPENDIX 3

ENVIRONMENT: Strategic Compass

Service Outcome:Improved transport choice and access

Service: Highways and Transportation

High

Performance

Low Cost

Supporting Evidence:

Context:
Against the background of nationally increasing traffic levels and decreasing bus usage, the County Council is seeking to:
a)maximise the capacity of its existing Highway network, and
b)facilitate and encourage greater use of more environmentally sustainable transport modes, i.e. rail, bus, cycling and walking
The County Council is working to achieve this within the context of a range of legislations including, most recently, the Traffic Management Act 2000.
The county has significant commuter traffic with London and other neighbouring towns like Harlow and Luton. Hertfordshire has a greater length of motorways than any other county and traffic flows on principal roads are 35% above the national average. CIPFA statistics show that Hertfordshire's population per kilometre at 207 is the highest of any shire county and more than 1.75 times higher than the average. Hertfordshire's relative wealth means that car ownership is consistently amongst the highest in the country.
The County Council currently provides contracted bus services to the value of £5 million annually which carry approximately 10 million passengers each year.
Surveys of residents show increases in levels of satisfaction with bus services, including route coverage and reliability. Travel plans for schools are perceived by the public as having the greatest potential positive impact upon congestion.
Performance information:
The County Council’s performance in this area is measured by six Best Value Performance Indicators. The results for 2005/2006 are shown below (with national averages, where available, in brackets Not yet available).
BV100Number of days temporary traffic controls or road closure on traffic sensitive roads caused by local authority road works per kilometre of traffic sensitive roads
0.37
(?)
BV102Total number of passenger journeys made annually on local buses within Hertfordshire 29.3m
BV103Percentage of users satisfied with local provision of public transport information 39% (50%)
BV104Percentage of users satisfied with local bus services55% (54%)
BV165 Percentage of pedestrian crossings with facilities for the disabled 56% (?%)
BV178The percentage of the total length of footpaths and other rights of way that were easy to use by members of the public 75.4%
(?%)
In addition, internal indicators include :
LTP2 14Bus punctuality89%
LTP2 20Percentage of schools with school travel plans51%
LTP2 21Speed limit compliance30mph 44%
40mph 24%
Percentage of bus stops with comprehensive and up-to-date information 73%
Quality of vehicle fleet – Percentage of buses which are low emission and accessible for elderly and disabled people
97%
Cost information:
Figures available from the Audit Commission show Hertfordshire’s spending in this area is relatively high – on a par with Surrey.
Hertfordshire’s costs are increased because it invests in the child concessionary bus scheme (£1.4 m) and the countywide Dial a Ride Scheme (£0.6m).
Trend analysis:
The following shows the last three years’ results for the best Value Performance Indicators :
BVPI2003/042004/052005/06
BV100Number of days temporary traffic controls or road closure on traffic sensitive roads caused by local authority road works per kilometre of traffic sensitive roads 1.55 1.68 0.37
BV102Total number of passenger journeys made annually on local buses within Hertfordshire 31.1m 30.7m 29.3 m
BV103Percentage of users satisfied with local provision of public transport information 39% n/a n/a
BV104Percentage of users satisfied with local bus services55% n/a n/a
BV165 Percentage of pedestrian crossings with facilities for the disabled 30% 43% 56%
BV178The percentage of the total length of footpaths and other rights of way that were easy to use by members of the public 71.8% 61.7% 75.4%
Service Aim:
The County Council’s key aims of this service are:
To maximise the capacity of its existing Highway Network
To facilitate and encourage greater use of more environmentally sustainable transport modes, i.e. rail, bus, cycling and walking.
Delivery Strategy:
The County Council has a number of programmes that contribute to these aims:
Integrated programmes of construction work aimed at facilitating and encouraging the use of sustainable transport modes (walking, cycling, buses and trains)
A programme of Passenger Transport infrastructure and information, including encouraging improvements in the quality of vehicles.
Seeking innovations and greater flexibility in the passenger transport sector including, through the Local Area Agreement, pursuing changes to rules.
Rights of Way Improvement Plan, setting out a programme of priorities including exploiting the networks capacity to contribute to sustainable transport.
Provision of cost effective contracted bus services to meet HCCs obligations with regard to routes not catered for by private sector.
Influencing national policy-makers to get greater flexibility over rail transport.

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