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Agenda Item No. 5

 

The Vale of Glamorgan Council

    

 

Healthy Living and Social Care Scrutiny Committee: 18th July 2016

 

Report of the Director of Social Services

 

Closure of Accounts 2015/16

 

Purpose of the Report

  1. The accounts are complete and this report is to inform Scrutiny Committee of the provisional financial position for the Committee for the 2015/16 financial year.

Recommendation

It is recommended that:-

  1. Scrutiny Committee note the report and the financial measures taken and proposed.

Reason for the Recommendation

  1. To note the report and the financial measures taken and proposed.

Background

  1. Following the end of the financial year, Scrutiny Committees are provided with provisional outturn figures. The Statement of Accounts will be approved by Council before 30th September, which will normally follow the audit.

Relevant Issues and Options

Revenue

  1. Council on the 4th March 2015 (minute no. 941) agreed the Authority's revenue budget requirement for 2015/16.
  2. Appendix 1 amends the revised budgets to take account of the following adjustments. There is no overall effect on the Authority.

IAS 19 Retirement Benefits -The purpose of this Standard is to ensure that the operating costs of providing retirement benefits to employees are recognised in the accounting period in which they are earned by the employees. Figures provided by the actuary differ from that estimated and the movements need to be incorporated into the accounts.

 

Asset Rents - This charge can vary each year due to an increase / decrease in the valuation of assets. The movements need to be incorporated into the accounts.

 

Recharges - These relate to movements in charges between internal Council services.

 

Carbon Reduction Commitment Scheme - The scheme requires the Authority to report on carbon dioxide emissions associated with the use of electricity and gas within its buildings. Payment is then made to the Environment Agency to cover the charge in respect of those emissions. 

  1. The following table compares the amended budget and the actual expenditure for the Authority:

Service

Year - 2015/16

Amended Revenue Budget

Total Provisional Actual

Variance +Favourable () Adverse

 

       £'000

          £'000

             £'000

       

Children and Young People

14,631

14,626

+5

Adult Services

37,874

37,875

(1)

Business Mgt & Innovation

361

364

(3)

       

Leisure Services

4,475

4,475

0

TOTAL

57,341

57,340

+1

       
  1. The main reasons for the variances are set out in the following paragraphs.
  2. Children and Young Peoples Services - Favourable Variance of £5k

There was a favourable variance relating to the Joint Budget for Residential Placements for Looked After Children of £307k, after a transfer of 10% of the underspend to Education.

 

There were favourable variances of £56k on staffing due to vacancies, £29k relating to transport and £6k for alternative means of provision and accommodation costs required for the current cohort of children.

 

This has allowed a transfer of £393k into the Social Service Legislative Changes reserve. £65k has been allocated to allow for the completion of the Direct Family Services pilot and £50k to complete the Therapeutic Fostering pilot. Both pilots commenced but were not completed in 2015/16 and are assessing the impact of investment in family support and placement stability. The balance of £278k will be used to support future additional funding requirements that occur as a result of legislative changes such as the Social Care and Wellbeing Act.

  1. Adult Services - Adverse Variance of £1k

There was an adverse variance of £412k on community care packages, which includes £91k for the under recovery of income received under the Deferred Payment Scheme. The previously reported position has improved by the receipt of additional year end funding from the Intermediate Care Fund, which is held by Health, of £183k. It should be noted that this additional funding was received on a one off basis and has not been approved for 2016/17.

There were favourable variances of £219k on staffing, £31k on Premises, £66k on Transport and £64k on supplies and services. There was an over-recovery of income from customers receipts resulting in a favourable variance of £49k and additional grant income was received of £97k.

There was a transfer to reserves of £115k to contribute towards the cost implications of legislative changes.

  1. Business Management and Innovation - Adverse Variance of £3k

There is a favourable variance of £72k. This is made up of £41k relating to staffing, £20k relating to transport and £11k on other small variances. £75k was transferred to reserves to contribute towards the cost implications of legislative changes.

  1. As part of the Social Services Budget Programme, £2.075m was utilised in year from the Social Services Plan reserve. In recognition of the ongoing pressures on the service from legislative changes, £341k has been transferred into the Social Service Legislative Changes Fund. In addition, £200k has also been set aside to provide funding to aid the implementation of new developments within the service and as a contingency for emergency works in Social Services properties. The Telecare reserve is funding that is being set aside over a number of years to allow for the eventual replacement of equipment in sheltered accommodation.
  2. Leisure - Breakeven

Grounds Maintenance had a favourable variance overall of £109k. There was an adverse variance of £19k due to a slight overspend on employee costs and other small adverse variances totalled £10k. Premises costs had a favourable variance of £37k due to a reduction in spend on repair costs and reduced waste disposal costs. Transport had a favourable variance of £63k due to the continued drive to reduce vehicle costs. There is however a further saving required in 2016/17. Income budgets had a favourable variance of £174k. This was due to higher than budgeted income from Jenner Park, an increase in income from other departments within the council. There was also an increase in expenditure as a consequence of this increased income and the budget had an adverse variance of £136k.

 

Leisure Services had a favourable variance of £47k. With regard to Leisure Centres, there was a favourable variances of £5k in respect of customer receipts and £11k for supplies and services. Within the rest of the leisure division there was an adverse variance due to the need to make a contribution to capital of £9k relating to an overspend on the Community Centres asset renewal budget. This was offset by favourable variances of £23k on supplies and services and £7k on transport. Premises costs showed a favourable variance of £10k due to savings on venue hire.

The favourable variances above have allowed the transfer of £156k to the Visible Services reserve.

 

Capital

  1. Council on the 4th March 2015 (minute no. 940) agreed the Authority's capital budget for 2015/16.
  2. Attached at Appendix 2 is a breakdown of the 2015/16 Capital Programme by scheme. The outturn for Social Services is a variance of £104k and the outturn for Leisure Services is a variance of £480k.
  3. Leisure Centre Refurbishment - Slippage of £374k

While work has been completed, there are outstanding invoices to be paid pending the submission of the required documentation from the Leisure Centre operators. It has therefore been requested that £374k is carried forward to 2016/17.

 

Reserves

  1. A reserve is an appropriation from a revenue account and does not constitute a cost of service until the expenditure is eventually incurred. A reserve does not cover a present obligation or liability and is a voluntary means of setting aside monies for future requirements either capital or revenue.
  2. A provision is a charge to revenue and is included as part of the cost of the relevant service at the point the provision is created. A provision covers a present obligation or liability that has occurred to a past event and is compulsory under accounting regulations.
  3. Attached at Appendix 3 is a schedule showing the Committee's reserves as at 31st  March 2016.

Resource Implications (Financial and Employment)

Revenue (Including Savings Targets)

  1. As part of the Final Revenue Budget Proposals for 2015/16, savings target were set for the services within this Committee's remit. Progress on the achievement of these savings has been monitored and reported to Committee during the year. Appendix 4 to this report confirms the final status of these savings at the end of 2015/16.
  2. While the Care Package budget overspent in 2015/16, the £125k savings target for the year was allocated to the Learning Disabilities and Mental Health services. These savings were to be achieved by the promotion of independent living options. At year end, these budget areas were underspent and so the required saving has been achieved.
  3. The Residential Services saving was to be achieved by the transfer of Ty Dyfan and Ty Dewi from Hafod back to the Council. This took place during November 2015, thus realising a part year saving of £260k. In previous years, a savings target of £200k had also been set, in anticipation of the transfer and was still outstanding. Therefore, £200k has to be set against this saving first before the remaining £60k can be set against the 2015/16 target of £300k, leaving a shortfall in year of £240k. The full year effect of the saving due to the transfer is calculated at £600k and so fully covers the previous year and the 2015/16 saving and also leaves £100k to contribute towards the 2016/17 Residential savings target.

Capital

  1. As a result of the capital underspend in 2015/16, Managing Director's Emergency Powers have been used to approve slippage into 2016/17. This will fund the completion of schemes as shown in Appendix 5.

Sustainability and Climate Change Implications

  1. There are no sustainability and climate change implications resulting from this report.

Legal Implications (to Include Human Rights Implications)

  1. The provisional outturn figures for the Council has been used in the preparation of the Statements of Accounts, which under the Accounts and Audit Regulations, must be certified by the Section 151 Officer by the 30th June 2016.

Crime and Disorder Implications

  1. There are no crime and disorder implications resulting from this report.

Equal Opportunities Implications (to include Welsh Language issues)

  1. There are no equality implications resulting from this report.

Corporate/Service Objectives

  1. To provide sound financial and reliable advice in relation to all issues affecting the Council including the production of the statutory accounts.

Policy Framework and Budget

  1. This is a matter for Executive decision.

Consultation (including Ward Member Consultation)

  1. The appropriate Chief Officers have been consulted on this report. This report does not require Ward Member consultation.

Relevant Scrutiny Committee

  1. Corporate Resources.

Background Papers

None

Contact Officer

Carolyn Michael, Operational Manager - Accountancy

Officers Consulted

Director of Social Services

Responsible Officer:

Phil Evans, Director of Social Services

 

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