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Agenda Item No. 4

 

The Vale of Glamorgan Council

 

Healthy Living and Social Care Scrutiny Committee: 10th July 2017

 

Report of the Director of Social Services

 

Closure of Accounts 2016/17

 

Purpose of the Report

  1. The accounts are complete and this report is to inform Scrutiny Committee of the provisional financial position for this Committee for the 2016/17 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 make members aware of the provisional financial position and actions that have been taken.

Background

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

Relevant Issues and Options

Revenue

  1. Council on the 2nd March 2016 (minute no.885) agreed the Authority's budget requirement for 2016/17.
  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.

 

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, including transfers to and from reserves, for this Committee. The final column shows the net transfers to reserves for the Committee which have been included within the actual expenditure figures.

Service

Year - 2016/17

Original Revenue Budget

Amended Revenue Budget

Total Provisional Actual

Variance

+Favourable () Adverse

Net Transfer to /(From) Reserve

 

       £000

       £000

       £000

       £000

 
           

Children and Young People

14,858

14,959

14,949

+10

 

Adult Services

39,906

40,264

40,253

+11

 

Resource Mgt & Safeguarding

295

317

304

+13

 

Total

55,059

55,540

55,506

+34

+729

Leisure Services

4,218

4,453

4,492

-39

-170

TOTAL

59,277

59,993

59,998

-5

+559

           
  1. The main reasons for the variances are set out in the following paragraphs.
  2. Children and Young Peoples Services - Favourable Variance of £10k

There have been a number of favourable variances during the year totalling £720k. The Joint Budget for Residential Placements for Looked After Children is held in Social Services and was set up with a 90% contribution from Social Services and 10% from Education. At year end, any variance is split based on these percentages and for 2016/17 there was a favourable variance of £236k relating to Social Services after a transfer of 10% to Education. This underspend within the budget is as a result of success in significantly reducing the number of children placed in residential care. Whilst positive for the current year, this position is not expected to be sustained into the new financial year given the complexities of the children currently being supported. A new agile working pilot had been undertaken during the year which was to be implemented with new ICT tablets, however the equipment was not able to be delivered prior to the end of the financial year and therefore there was an underspend of £63k. Adoption Fees are showing a favourable variance of £85k, which is as a result of the introduction of Vale, Valleys and Cardiff Adoption Collaborative which allowed the cohort of children placed for adoption within the financial year to be placed with adopters assessed within the Collaborative, which does not incur a charge. A favourable variance of £42k has been achieved through maximising grant income and £260k has been achieved by alternative means of provision and accommodation costs required for the current cohort of children, which is as a result of ongoing work to ensure that children are placed in the most appropriate and cost effective placements. A favourable variance in Resource Management and Safeguarding has meant that there has been a reduced internal recharge of £34k to Children and Young People Services.

 

This has allowed a transfer of £710k into Social Services reserves.

  1. Adult Services -Favourable Variance of £11k

There was an adverse variance of £196k relating to community care packages, which included £254k for the over recovery of income received under the Deferred Payment Scheme. It should be noted that the level of deferred income received during 2016/17 was higher than previous years and demonstrates that this type of income can fluctuate and the favourable variance is not guaranteed for future years. During the year, there has been service remodelling, focusing on services which deliver reablement and support people back into independence. Additional work has been carried out to mitigate increases such as schemes funded through the Intermediate Care Fund (ICF) and the year-end position was more favourable than projected.

 

There have been a number of favourable variances during the year totalling £1.097m. There were favourable variances of £398k on staffing and £139k on supplies and services as where possible there was early implementation of future Reshaping Services savings and there had also been difficulty in recruiting to some posts which had been assumed would be filled in the months prior to year end. There was an over-recovery of income from customer receipts resulting in a favourable variance of £61k, mainly due to self-funding clients in Council run residential homes. Additional grant income was received of £429k, some of which was awarded late in the financial year. This grant income has to be assumed to be a one off benefit to the Council as it cannot be guaranteed in future years. The favourable variance in Resource Management and Safeguarding has meant that there has been a reduced internal recharge of £70k to Adults Services.

 

This has allowed a transfer of £890k into Social Services reserves.

 

A transfer of £99k has been made into the Telecare Reserve which is an annual planned transfer in order to set funding aside for future years to replace the equipment and to cover any additional staffing costs.

  1. Resource Management and Safeguarding - Favourable Variance of £13k

The majority of this budget is recharged to Children's and Adult Services. The position before recharges to services is a favourable variance of £117k. £80k has been achieved through maximising grant income, £22k relates to transport, £6k relates to staffing and £9k relates to supplies and services. The favourable variance has meant that there has been a reduced internal recharge to Children's and Adults Services of £104k.

  1. As planned as part of the Social Services Budget Programme, £970k was utilised in year from the Social Services Plan reserve. £1.6m has been transferred in year into Social Services reserves. In recognition of the ongoing pressures on the service from legislative changes, £1.45m has been transferred into the Social Service Legislative Changes Fund of which £50k has been allocated to cover Deprivation of Liberty Safeguards (DOLS) issues. In addition funding has been set aside in the Social Services Development Fund, £87k to provide funding for the implementation of the Welsh Community Care Information System (WCCIS) system and £63k to cover the purchase of IT for the Childrens Service agile working.
  2. Leisure - Adverse variance of £39k

Grounds Maintenance had an adverse variance overall of £29k. This was made up of adverse variances on staffing of £27k and other small adverse variances on internal charges to grounds maintenance totalled £10k. Transport had an adverse variance of £43k however the majority of this was due to the one off purchase cost of vehicles that had reached the end of their lease term. It is anticipated that these purchases will reduce vehicle costs in 2017/18 thus contributing towards the savings target required. There was a favourable variance of £51k, with Premises costs having a favourable variance of £23k due to a reduction in spend on repair costs and £28k relating to income due to carrying out additional work for other departments.

 

Leisure Services had an adverse variance of £10k. This was made up of an adverse variance of £40k. There was an adverse variance of £5k, mainly due to spend required on St Paul's Church and the supplies and services budgets had a small adverse variance of £5k. There was a reduced requirement to draw down £30k funding from the Visible Services reserve for additional play schemes and the funding will be used in 2017/18. Within the leisure and play section there was a favourable variance of £30k on employee costs.

 

£170k of the Visible Services reserve was used for planned improvements to play areas and £15k of the Council Building Fund has been used for works to Leisure Centres.

Capital

  1. Council on the 2nd March 2016 (minute no.884) agreed the Authority's capital budget for 2016/17.
  2. Attached at Appendix 2 is a breakdown of the 2016/17 capital programme by scheme. The overall outturn for this Committee is a variance of £491k. Slippage of £493k has been requested.
  3. Leisure Centre Refurbishment - Slippage of £229k

Various upgrade works are ongoing in the leisure centres. It has therefore been requested that £229k is carried forward to 2017/18 to continue this work.

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 2017.
  4. There have been transfers into reserves for reimbursements from services for works where the initial cost was funded from that specific reserve e.g. the Energy Management Fund.

Resource Implications (Financial and Employment)

         Revenue (Including Savings Targets)

  1. As part of the Final Revenue Budget Proposals for 2016/17, savings targets were set for this Committee. 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 2016/17. The services have been able to find savings to the value of £902k which is 74% of the required target.
  2. Social Services - Within Adult Services, £100k of the full year saving generated from the Hafod homes transfer has been offset against the £300k saving for Residential Services. Options are currently being finalised to achieve this saving going forward. With regard to the Care Package Budget Reduction, while there is significant pressure on this budget and there was an adverse variance at year end, schemes have been put in place to deliver savings in this area by transferring domiciliary care clients to direct payments, by putting in place additional reablement capacity and by establishing a review team and therefore part of the saving is shown as being achieved.
  3. Leisure Services - Vehicle requirements are being reviewed and the full saving has not been achieved this year due to high repairs during the year. Where savings have not been achieved in year, services were able to cover the shortfall on a one off basis from other areas.

          Capital

  1. As a result of the capital underspend in 2016/17, Managing Director's Emergency Powers, have been used to approve slippage into 2017/18. 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 out turn 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 2017.

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, with the exception of the proposed increases to the Capital Programme, which will require Council approval. Slippage has been approved via the use of Managing Director's emergency powers.

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 Performance and Resources.

Background Papers

None

Contact Officer

Carys Lord

Officers Consulted

Corporate Management Team

Responsible Officer:

Lance Carver

Director of Social Services

 

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