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Agenda Item No

 

The Vale of Glamorgan Council

 

Cabinet Meeting 9th July 2012

 

Report of the Leader

 

Closure of Accounts 2011/12

 

Purpose of the Report

1.             The accounts are complete and this report is to inform Cabinet of the provisional financial position of the Council for the 2011/12 financial year.

Recommendations

1.             That Members endorse the slippage figures as shown in Appendix '5', and request that the Urgency Procedure set out in article 13 of the constitution be used to approve the slippage. 

2.             That the remainder of the report and the financial measures taken and proposed be approved.

Reasons for the Recommendations

1.             To endorse the amendments to the 2012/13 capital programme due to slippage. The Urgency Procedure is necessary as the next council meeting is not until September 2012.

2.             To approve the remainder of the report and the financial measures taken and proposed.

Background

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

3.             A separate report will be taken to Scrutiny Committee (Corporate Resources).

General Fund

4.             The Council on the 28th February 2011 (minute no.957) agreed the Authority’s budget requirement for 2011/12. This represented estimated net expenditure for the Authority of £201,536,295. Total expenditure was to be financed by Revenue Support Grant (£121,680,773), National Non-Domestic Rates contribution (£28,951,384) and Council Taxpayers (£50,904,138). The Standard Spending Assessment (SSA) for the year was £202,787,877.

5.             The revenue estimates have been amended  and approved by Cabinet during the financial year, however they are at the same overall net level as the original estimate £202,036,295 (before use of General Reserves of £500,000). The actual expenditure against this for 2011/12 is £201.401M.

6.             Certain accounting adjustments have been made to service budgets in respect of:

·               Depreciation of Assets. This charge can vary for a year due to an increase / decrease in the valuation of assets. These movements need to be incorporated into the accounts.

·               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.

·               Single Status - the estimates have been amended as Policy has been charged with the estimated costs for 2011/12.

·               Energy - this estimate was not required for 2011/12 and has been transferred back to Policy from service committees.

·               Carbon Reduction Scheme. - The original estimate for this was included in Policy, however it has now been re distributed to the relevant service.

7.             Appendix ‘1’ amends the revised estimates to take account of the above     adjustments. There is no overall effect on the Authority.

8.             Set out below is a table comparing the amended estimate and the actual expenditure for the Authority

Service

Amended Revenue Estimate

Total Provisional Actual

Variance Favourable  () Adverse

 

       £’000

          £’000

             £’000

Directorate of Learning and Development

Education and Schools

89,081

89,033

48

Libraries

2,657

2,633

24

Lifelong Learning

1,503

1,500

3

Catering

933

929

4

Social Services

Children and Young People

13,202

14,242

(1,040)

Adult Services

32,318

33,670

(1,352)

Service Strategy

297

292

5

Total Social Services

45,817

48,204

(2,387)

Directorate of Environmental and Economic Regeneration

Planning and Transportation

4,810

4,915

(105)

Economic Development and Leisure

6,096

6,193

(97)

Visible Services

20,535

20,331

204

Directorate of Legal and Regulatory

Legal, Democratic and Registrars

113

110

3

Public Protection

2,363

2,361

2

Private Sector Housing / Community Safety

2,721

2,712

9

Directorate of Finance, Information Communications Technology (ICT) and Property

 

Finance, ICT and Property

(32)

(49)

17

Human Resources

4

1

3

General Policy (incl Council Tax Surplus)

24,542

21,651

2,891

Building Services

9

3

6

Chief Executive (including Corporate Partnership)

218

210

8

Youth Offending Service

666

664

2

 

Grand Total

202,036

201,401

635

 

 

9.             The main reasons for the variances are set out in the following paragraphs 10 to 51.

10.        Education and Schools - After a previously agreed transfer to the School Investment Strategy Reserve of £600k and a £5k transfer to the Union Reserve, Education and Schools shows an underspend of £48k, which is made up as follows:-

11.        The School Improvement Service shows a total underspend of £56k, this is attributable to maximising the use of grant income (40k) and an underspend against the budget set aside for specialist intervention (6k). Additional income has been generated as a result of staff being seconded to work for the Central South Consortia (10k).

12.        Overall the Additional Learning Needs Service was underspent by £182k which is made up as follows: additional recoupment income of £79k was received and there was an underspend of £9k on Out of County Recoupment expenditure. There was also savings of £31k on Hospital / Home Tuition, all of these areas of the service are demand led and unpredictable. The Pupil Referral Unit was underspent by £41k, of this £37k was due to delays in establishing suitable providers for pupil placements and £4k due to savings on the Service Level Agreement with Amelia Methodist Trust. In addition Secondary Behaviour Support was also underspent by £89k because planned expenditure was decommited early in the year to offset the projected overspend. However, due to unforseen income and reduced expenditure as outlined the projected overspend did not materialise.These underspends were offset by an overspend of £67k against the Pupil Support and Statemented budget which consisted of £56k Redundancy costs due to implementation of staff savings and £18k in respect of adaptations and repairs. This was offset by additional grant income of £5k and other variances across this area of the budget resulting in further savings of £2k

13.        The Strategic Planning and Performance Budget was overspent by £190k, this consisted of; an overspend of £195k against the Schools Maternity budget as a result of an increased number of schools based staff going on maternity leave in 2011/12. The Schools Rates budget was also overspent by £85k due to the addition of a number of new school premises at an increased cost and retention of one vacant site. The Nursery budget was overspent by £17k due to an increase in eligible children and an increase in provider costs and the repairs and maintenance budget overspent by £58k due to additional required maintenance in schools in 2011/12 and costs associated with the vacant Cowbridge Sixth Form site. Another area of overspend in year was the Director's budget £13k as a result of failing to implement the reduction in Personal Assistant hours proposed as part of 2011/12 savings target. These overspends were offset by underspends against Discretionary Awards £7k, Primary and Secondary non delegated £84k, vacancy savings due to posts held open across Strategic Planning £73k and a £14k contribution from the Planning and Transportation service for an underspend against the ringfenced budget for Mainstream Transport.

14.        Expenditure of £16k for one off costs associated with the roll out of the iPortal project to all schools has been funded by a transfer from the School Invest to Save Reserve.

15.        School's outstanding contributions for Early Retirement £316k have been funded by a transfer from the School Invest to Save Reserve, these contributions shall be repaid by schools over the next two financial years in accordance with the Schools Early Retirement and Redundancy Scheme.

16.        Libraries - Net favourable variance of £24k. This underspend was primarily the result of reduced staffing costs due to vacancies and the implementation of staff changes in preparation for future saving requirements £60k; underspends within transport £9k; and premises £8k resulting from a limited premises repair requirement. The majority of these underspends have been reinvested within the service as a contribution towards the continued implementation of the self service facility £42k and throughout the year on books, electronic resources, computer hardware, software and consumables £11k. Efficiency savings have been met this financial year from discontinuation of the mobile provision and an associated administration restructure.

17.        Lifelong Learning - net favourable variance of £3k following a transfer to the Lifelong Learning reserve £18k, to assist with phasing of the Training Contract receipts. The overall favourable variance for Lifelong Learning was £21k consisting of favourable variances within the Youth Services of £21k due to general staff / service underspends in respect of the Youth Service restructure, a favourable variance within Grant Management fees £20k due to fees exceeding budget and a favourable variance within Lifelong Learning Education and Training Service £33k due to Work Programme income from the SERCO and REHAB contracts exceeding cautious initial income projections. These variances have been partly utilised to offset an adverse variance within Community Enterprise £53k, which was the result of external funding not materialising and delayed service closure.

18.        Catering - Net favourable variance of £4k following a transfer from the Catering reserves £27k and a Trading Unit surplus of £113k. The service adverse variance of £136k was primarily attributable to additional premises costs associated with school kitchen maintenance and repairs required in order to meet the requirements of the Food Hygiene Rating Scheme and the Hazard Analysis of Critical Points Regulations. Efficiency savings have been achieved this financial year from reductions within the Catering Client staff establishment. The £113k Trading Unit surplus consists of £95k attributable to the Primary school provision which resulted from efficiencies within staffing, additional trading days and limited school closures during the financial year. The remaining £18k was attributable to surpluses in other catering service provision.

19.        Social Services – The budget for all divisions shows a year end overspend of £2.387M.  This is after a transfer from provisions of £56k. 

20.        Children and Young Peoples Services – Net Adverse variance £1.040M. This variance is mainly due to an overspend on the Childrens Placement budget of £1.034M as a result of a number of high cost placements.  The fostering budget has also overspent by £221k, which is partly due to the introduction in 2011/12 by Welsh Government of the National Minimum Allowance for foster carers.  There have been underspends on staffing and transport costs of £38k.  There has been an underspend within the Business Management and Innovation Division and this has resulted in a reduced internal recharge to Childrens Services of £121k.  A transfer from provisions of £56k was also made.

21.        Adult Services – Net Adverse Variance £1.352M. The main reason for this overspend is due to the continuing pressures on the Community Care budget which overspent by £2.041M.  The community care position by service areas was an overspend on Elderly £1.064M, an overspend on Elderly Mentally Infirm (EMI) by £549k, an overspend on Physical Disabilities by £689k, an underspend on Learning Disabilities by £33k. Income is extremely difficult to predict as it is affected by the clients circumstances and their ability to pay and the budget recovered additional income of £228k.

22.        There were areas of underspending within the service.  These included £176k on staffing due to vacancies, £107k for the proposed pay award of £250 for staff earning under £21,000 which did not materialise, £80k on transport, £177k on supplies and services.     There has been an underspend within the Business Management and Innovation Division and this has resulted in a reduced internal recharge to Adults Services of £149k.

23.        Service Strategy – Net Variance £5K.  The overall favourable variance of £5k is made up of savings of £101k on staffing, £42k on premises, £13k on transport, £51k on supplies and services and £68k from grant and other income.  This underspend has meant that there has been a reduced internal recharge to Childrens and Adults Services of £270k.

24.        Planning and Transportation –There is an adverse variance of £105k.This is due to Planning fee income being reduced by £144k due to the current economic climate. There was a net increase in Support, Internal Recharge expenditure and income of £38k due to the need to provide staff cover and a reduction in technical salary income. A £117k over spend on transport and third party costs is more than offset by an additional  £127k in other grant income contributions towards the provision of bus services. There was a £43k saving on employee costs across the division and an additional £24k in Government Grant income as a result of extra one off funding from the Planning Improvement Grant.

25.        Funding of the adverse variance has been met from savings within Visible Services.

26.        Economic Development and Leisure- There is a net adverse variance of £97k, after transferring £38k to a provision to cover staff restructuring costs.

27.        The net overspend of £59k was as a result of a £92k overspend on premises costs across the division. There was an overspend of £54k on employee costs and £20k on supplies and services. There was additional expenditure on revenue contributions to capital of £3k.

28.        This was offset by a net underspend on third party, internal recharge expenditure and income of £62k. Income increased by £30k across the division and there were savings on transport costs of £18k.

29.        Funding of the adverse variance and the transfer to the provision (in total £97k) has been met from savings within Visible Services.

30.        Visible Services - Net favourable variance of £204k. This is made up as follows –

31.        Cleansing favourable variance of £40k. The underspend was due to the employee budget being underspent by £58k due to vacant posts. As tonnages to landfill have also fallen this produced a saving of £125k. Cleansing also had an underspend on transport costs of £67k due to less vehicles being used for the residual collection service than budgeted for. Income into the cleansing section was also £19k higher than anticipated. These savings were offset by Project Gwyrdd procurement costs which were funded by cleansing at a cost of £229k.

32.        Grounds Maintenance had an adverse variance of £18k. The employee budget was underspent by £15k due to vacant posts. The premises budget was overspent by £7k mainly due to the increased cost of utility bills. Due to new legislation for Hand Arm Vibration the majority of hand tools within Grounds Maintenance at a cost of £15k for which there was no budget. The supplies & services budget was also overspent by £11k.

33.        Highways & Engineers had a favourable variance of £6k. Employee costs were over budget by £65k due to agency costs for which there was no budget, however the Highways & Engineers section had additional income of £51k from these agency staff booking their time to capital schemes. Supplies & Services were £1.280M over budget however this was largely due to doing additional work for other departments. The Highways & Engineers section had additional income of £1.300M from these schemes. In addition monies had been set aside within the Support budget of £176K which has been utilised to achieve a balanced Directorate budget.

34.        Legal and Democratic Services - Net favourable variance of £3k. This is made up as follows:

35.        Legal Services - total underspend was £24k. This was attributable to staff related savings of £53k and additional income of £86k. The underspend was offset by an overspend on general running expenses of £115k arising from external legal costs.

36.        Democratic Services - total overspend was £21k. There was a shortfall on land charges of £69k. This has been offset by additional Registrar's income of £25k, staff related savings of £13k and general running expenses of £10k.

37.        Public Protection - Net favourable variance of £2k after transferring £38k to the Public Protection Reserve. The overall favourable variance is £40k and is made up of staff related savings £53k arising from Licensing / Trading Standards / Environmental Services £37k and Emergency Planning £16k. The underspend has been offset by an overspending on the Coroner's service £13k attributable to increased costs on mortuary facilities.

38.        General Fund Housing - The net favourable variance is £9k after transferring £443k to reserves made up of £15k for a Prison Leavers Housing Advisor and Welfare Reform £428k. The overall favourable variance of £452k is attributable to:

39.        Housing Services - a favourable variance of £34k is attributable to net additional income of £47k from grants / agency fees. This has been offset by an overspend of £13k attributable to a greater number of homelessness being housed in bed and breakfast.

40.        Rent Allowances/ Council Tax Benefits - the favourable variance of £418k is attributable to an underspend of £231k on rent allowances and council tax benefit payments due to recovered overpayments and associated subsidy, audit fee savings £27k and a saving £160k on the payment of rent allowances / council tax benefit.

41.        Finance ICT and Property - The net underspend of £17k is after a transfer of £160k to the Welfare Reform reserve and £437k to the Miscellaneous Building Fund. The overall favourable variance of £614k is attributable to:

42.        Finance, ICT - the net underspend of £166k was due to staff related savings £344k arising from Efficiency Section / Accountancy / Audit  £95k, Revenue's / Benefits £140k, Transact / Exchequer £30k, ICT £29k and an unused graduate trainee fund of £50k. This was offset by an overspending of £140k arising from ICT related costs across the department and a shortfall on Council Tax court income £38k.

43.        Property - the net underspend of £448k was due to staff related savings of £64k, a greater recharge to capital £264k and a saving of £120k premises cost.

44.        Human Resources - The net favourable variance is £3k is after transferring £68k to the Human Resources Reserve. The overall favourable variance of £71k is attributable to staff related savings £55k and £16k on general running expenses.

45.        General Policy - Net favourable variance of £2.891M, including £1.050M Council Tax surplus. The favourable variance of £1.841M is attributable to a lower recharge in respect of Housing strategy £221k, Corporate Governance running costs £253k,  support imbalances £327k, capital charges (including revenue contributions to capital) £2.052M, miscellaneous properties £91k, Youth and Catering support not required £237k, general supplies and services £91k, additional interest on investments £139k and Energy budget not required £1M. These are offset by transfers to reserves of £500k for Events, £828k for Visible Services, £414k for I.T and £828k for the Project Fund.

46.        The overall variance is after reallocating the Single Status £3.023M and Energy £1M estimates from Services back to Policy. The estimated cost of Single Status / Job Evaluation has been charged to Policy and is covered by the £3.023M re allocation.

47.        The Building Services department had a favourable variance of £6k. The breakdown is as follows:

48.        The Building Services trading unit made a surplus of £3k. The Building Cleaning & Security trading unit (including the Courier Service) made a surplus of £65k. The main reason for this being the reduced levels of sickness within this labour intensive area. The Building Services Twin Hat function underspent by £55k mainly due to vacant posts and staff being seconded to other departments. These were offset by a transfer to the Miscellaneous Building Repairs reserve of £117k.

49.        Chief Executive - net variance is £8k after transferring £29k to the Chief Executive Reserve and £175k to the Miscellaneous Building Fund. The overall favourable variance of £212k is attributable to: staff related savings £70k relating to Programme Management £79k, Corporate Partnership £12k offset by an overspend in Communications £21k. There was an underspend of £126k on general running expenses arising from Policy and Corporate Governance £46k, Equalities £54k, Corporate Partnership £15k and Communications £11k. There was also an underspend of £16k on the cost of premises, this is due to savings on utilities in the Contact Centre.

50.        Youth Offending Service - Net favourable variance of £2k. This is made up of reduced staffing costs due to staff vacancies / maternity leave/ limited additional hours £37k, underspends within general running costs having fully utilised grant funding £22k and an overspend within premises costs due to additional one-off expenditure funding building improvements £57k.

51.        The net final underspend of £635k means that the original proposed use of General Reserves of £500k is not required, and £135k will transfer into General Reserves increasing the balance from £7.858M to £7.993.M.

Housing Revenue Account

52.        The Housing Revenue Account for 2011/12 shows a surplus of £2,755k compared to the Revised Estimated surplus of £2,204k (appendix 2). The working balance opened at £11,375k and was increased during the year by a transfer from the Repairs Reserve of £752K.  The working balance closed at £14,882k.

 

        The main reasons for the variances are as follows: -

·               Supervision & Management General – Favourable £410k. The favourable result came from Management Costs of £92k (lower employment costs) Adaptations Team (incentive to move scheme take up was not as high as anticipated) £23k, Tenant Participation (lower employment costs) £68k, Tenant groups £8k, Welsh Housing Quality Standards (WHQs) (software budget not fully used) £44k and Homes 4 U £22k. The remaining £153k favourable result came from Central Support and Operational Buildings Charges being lower than had been anticipated.

·               Supervision & Management Special – Favourable £95k – Housing Special services came in below budget by £119k due to lower energy costs, less furniture and fittings purchased in the year and a saving on the removal of rubbish. The savings were reduced by Ty lolo Hostel (formerly Treharne Hostel) being delayed in opening and additional costs being incurred.

·               Contribution to Repairs Fund – Adverse £293k – This overspend was mainly due to a greater number of responsive repairs being undertaken and the cost of those repairs being greater than budgeted.

·               Capital Financing Costs – Adverse Variance £33k.  The budget had been calculated on a lower principal amount, therefore the interest charged for the year was greater than budgeted.

·               Rents, Rates Taxes and Other Charges – Favourable £59k – the variance is largely due to savings on council tax for properties vacant for more than six months (Penarth Heights no longer included lowering these costs substantially) in addition Legal fees were lower as the budget was to cover post ballot costs that did not occur.

·               HRA Subsidy Payable – Favourable £54k – the estimated subsidy payable to Welsh Government for 11/12 was higher than is now expected.

·               Bad & Doubtful Debts – Adverse £2k, the increase in provision is slightly higher than expected.

·               Capital Expenditure from Revenue Account – Favourable £203k – Variance was due to the Usable Capital Receipts being greater than estimated enabling less contribution from the revenue account.

·               Rent collected on dwellings and garages - £8k and £3k favourable – a small favourable variance exists for Dwellings and non dwellings.

·               Interest received – Favourable £31k – the favourable variance is due to the surplus on HRA being greater than estimated allowing for greater interest to be received.

·               Charges for Services and Facilities – Favourable £16k – mainly due to invoices raised on a newly leased property.

53.        The Housing Repairs Fund has existed for many years and for 2011/12 opened at £752k but to enable the repairs costs to be shown in one area it was agreed to transfer the full amount into the overall Housing Revenue Account rather than have a separate fund.  This took place in 2011/12 and as shown in Appendix 2 is now in the main Balance carried forward of £14,882.

54.        The overall result for housing is a favourable movement of £551k compared to budget, £493k being lower expenditure and £58k being greater income.

Insurance Fund

55.        The total Insurance Fund comprises of both a provision and reserve. It is used to pay premiums to external insurance companies and the settlement of claims. It receives sums charged to service revenue accounts and income from insurance repayments from claims. Sets out below are the gross movements on the fund for 2011/12

                                                         £'000

           Opening Balance                                                                                4,016

           Costs                     (2,024)

           Income                                                                                                2,180

           Closing Balance                                                                 4,172

 

56.        Of the closing balance £3,148k is held as a provision, representing potential liabilities on known claims and £1,024k as a reserve for claims not yet made.

Trading Operations

57.        The Trading Organisations referred to in this section are made up of Building Maintenance, Caretaking & Security and Building Cleaning and Vale Catering Services.

58.        The provisional figures for the Trading Services show an overall gross surplus of £178k. The details are below: 

 

Building Mtce

Building Cleaning

Caretaking and Security

Catering

Total

 

£,000

£,000

£,000

£,000

£,000

 

 

 

 

 

 

(Surplus)/ Deficit

(3)

(18)

(44)

(113)

(178)

 

 

 

 

 

 

59.        Explanations of the variances are shown earlier in the report.

Capital

60.        The overall position on the revised 2011/12 Capital Programme was a net underspend of £11,884,000, once various overspends had been funded. It should be noted however that some £8,400,000 of this figure relates to unspent budgets for the proposed transfer of Dyffryn House to the National Trust, which has been delayed. The statement at Appendix 3 details the outturn by scheme.

Directorate of Learning and Development     

The overall outturn for the Directorate of Learning and Development is an under spend of £428,000. The major variances are outlined below.

School IT Leases                                                                              Under spend £81,000

This budget is used to fund IT equipment for schools who then repay the Authority on an internal lease basis over an agreed term. There was a shortfall in the requests for this funding from the schools during 2011/12 so the whole budget was not required.

 

Penarth Learning Community                                              Under spend £79,000

This budget has been approved to progress the initial design phase of this major school redevelopment scheme. External design consultants, Davis Langdon, have been employed in these early stages of the project and although detailed design has progressed well it is requested that the remaining budget of £79,000 be slipped into 2012/13 in order to continue with the scheme

 

St Brides Major School Remodelling                     Under spend £89,000

A grant of £133,193 had been approved by WG as a contribution towards this school-led refurbishment scheme. Delays with the procurement process by the school meant it was necessary during the year to request that WG approve the transfer of £89,000 to fund the Welsh Medium School (Barry) scheme in order to maximise expenditure on the grant.  As the works to St Brides still need to be completed it is requested that the sum of £89,000 be slipped into 2012/13 to complete the works. This will be funded from Council reserves which would otherwise have funded the Welsh Medium School (Barry) scheme during 2011/12.

 

Asset Renewal  Under spend £116,000

This is a composite budget of £721,000 for various smaller projects. Several of the schemes were completed below budget whilst others encountered delays due to planning permission. In order to complete those schemes not able to be completed during the year, it is requested that slippage of £56,000 into 2012/13 be approved.

 

Directorate of Social Services

The overall outturn for the Directorate of Social Services is an underspend of £414,000. The major variances are outlined below.

 

Joint Equipment Store                                              Under spend £328,000

The sum of £336,000 from WG towards the establishment of a shared facility for Vale of Glamorgan and Cardiff County Council Social Services is the remainder of a five year grant allocation. The project was led by Cardiff County, who arranged all procurement. Though several requests for updates on expenditure were directed to Cardiff we were informed that there was no further need for the funding as all requirements had been met. As such, despite a small £7,775 spend, the majority of the grant allocation will not be required.

 

Day Care Re-configuration at Gardenhurst                                   Under spend £52,000

One of several budgets for a major re-configuration of the Authority's day care service provision, it had been anticipated that works would have advanced beyond the original approved budget of £62,367 and so a request was made to bring the sum of £50,000 from the approved £100,000 2012/13 bid back into 2011/12 to increase the 2011/12 budget to £112,367. However, the actual works completed by year-end however fell short of what was expected because the transfer of the service of meals on wheels could not happen as anticipated due to electrical supply problems. This had a knock on effect of the kitchen refurbishment at Gardenhurst not being able to proceed as planned. It is requested that the sum of £38,000 be slipped into 2012/13 to continue the works. 

 

Directorate of Legal, Public Protection and Housing Services

The overall outturn for the Directorate of Legal, Public Protection and Housing is an underspend of £627,000. The major variances are outlined below.

 

Window and Door Replacement                                                     Under spend £73,000

This budget has been increased twice during the year in order to maximise the level of improvements to our housing stock.  As with the central heating budget referred to above, all efforts were made to achieve full spend by year-end, though this was not quite achieved.  Slippage of £73,000 is requested in order to complete these contracts in 2012/13.

 

Central Heating and Boiler Renewal           Under spend £94,000    This key Housing Improvement Programme budget was increased during the year to £2,650,000. Though maximum effort was put in to achieve a full spend there was an element of work that could not be completed in time for the year-end. In order to continue these works in 2012/13, slippage of £94,000 is requested. 

 

Harbour View lease re-purchase                            Under spend £79,000

The legal process of securing the buy-back of the lease on the remaining tenant at Penarth Heights is now complete.

 

Penarth Renewal Area                                                                     Under spend £91,000

A 2011/12 budget had been set aside for the release of retentions to contractors working on the group repair works at Penarth during 2010/11. Not all of these retentions have been released to date due to on-going issues with the works. In addition, a higher than budgeted level of owners' contributions on the scheme were received during 2011/12. Both factors account for an overall under spending on this budget. A request for £30,000 to be slipped into 2012/13 is required in order to release these final retention payments.

 

 

Castleland Renewal Area                                        Under spend £202,000

This grants budget has under spent because works on phases 1c and 1d were delayed initially due to problems in obtaining homeowners' written agreement to the facelift scheme, due to the large number of let properties in the area. Further issues were then encountered with the performance of some contractors which further delayed progress. As well as £165,000 which was slipped earlier during the year, further slippage of £202,000 is requested in order to complete these phases in 2012/13.

 

Directorate of Environmental and Economic Regeneration

The overall outturn for the Directorate of Environmental and Economic Regeneration is £9,804,000 underspent. The major variances are outlined below.

 

Visible Services Asset Renewal Under spend £109,000

The total allocation of £771,000 incorporates various projects within Highways, Parks and Waste Management Divisions. Although many projects were completed on time and within budget there are several that did not proceed, e.g. Friar's Point fencing (due to problems in gaining approval from the adjoining land owner) and Knap Gardens bridge repair (works no longer required), and several that were not contractually committed by year-end, e.g. Coastal Protection schemes and Highways Structures. The sum of £23,000 has been set aside from this budget to fund an over spend on the Road Safety Capital Grant 2011/12 budget in the Department's Planning Division. Slippage of £45,000 is requested in order to contribute to a 2012/13 scheme for strengthening pier structures along the A48 as well as a total of £7,000 for release of retentions for works at Burton Bridge and Harbour Road bridge, both completed during 2011/12.

 

Vehicle Replacement Programme                                     Under spend £849,000

This budget, established for the on-going renewal of the Authority’s council vehicle fleet, has under spent through procurement and delivery delays during the year. Initial problems were encountered in procuring vehicles through the All Wales Public Sector Framework Agreement though that was resolved mid-year. The Fleet Manager has reported lengthy delays in build times from several manufacturers which meant late vehicle delivery and numerous vehicles not being received as anticipated by year-end. Slippage of £762,000 is requested in order to fund the vehicles on order but not received by 31st March 2012.  

 

Dyffryn House National Trust Contribution Under spend £1,500,000

This budget, established as a contribution to the National Trust for investment and improvements at the property.  Though it had been anticipated that this agreement could be achieved by the end of March, unfortunately this was not possible and so slippage of this budget is requested.

 

Dyffryn House Refurbishment                                              Under spend £6,900,000

The sum of £6,900,000 had been set aside for major remedial works at the Dyffryn Estate which were highlighted as being required following a survey of the estate. It was decided to hold off pursuing these works until agreement had been made with the National Trust.  This will be required during 2012/13 so slippage of this budget is requested.

 

 

 

Rural Local Development Plan                                Under spend £420,000

This successful rural grants regime budget has now completed and been replaced by Business Plan 2 (see below). Various projects, to the value of some £6M (including external match funding) have been completed since 2007, including improved services for the rural economy and population, village renewal, tourism activities and conservation and upgrading of rural heritage in the Vale. The under spend does not reflect any reduction in activity, rather the final year budget was over estimated. 

 

Rural Local Development Plan - Business Plan 2 Over spend £557,000

The next generation of rural development grants, Business Plan 2 commenced during 2011/12, the first of a three year programme. Schemes involved include Pride in Our Villages, Pride in Our Heritage, encouraging home grown food and Pride in the Vale. A good take-up has been achieved so far. The large over spend reflects the total expenditure on the grants which is funded from WG grant. A separate budget is shown is Appendix 3 for the element of this scheme that is Council funded.

 

Barry Regeneration Partnership (BRP)                  Under spend £71,000 This budget comprises various smaller value projects, such as Nells Point Study and Thompson Street public art. Similar to the previous year, resources have been re-directed from this budget in order to ensure completion on WG's Barry Regeneration Area grants awarded in the year. As this budget is regarded as match funding for these grants, it is requested that the under spend of £71,000 be slipped into 2012/13 towards future regeneration projects. 

 

Barry Regeneration Area (BRA) Grants                             Under spend £151,000

Some 7 projects were awarded BRA grants from WG during 2011/12 within this Directorate, e.g. Porthkerry Forest Lodge, Barry Island Adizone and Thompson Street Public Realm Improvements.  Works on all schemes have been completed within the year but, despite some retention figures still being payable in 2012/13, WG have been informed of the underspend and all final grant claims have been made. Slippage of £22,000 is requested to cover retention figures.

 

Barry Waterfront Park & Ride                                              Over spend £17,000

The overspend is based on the approved budget as shown. However, additional late WG grant approvals were received which increased the scheme total to £742,000. The position would then show an underspend of £36,000. This sum is covered by WG grant and slippage of this sum is requested.  A separate Cabinet report will be brought to Cabinet by the Project Manager to explain the issues with this scheme.

 

Policy

The overall outturn for Policy is an underspend of £611,000. The major variances are outlined below.

Disabled Access Audit and Improvements            Under spend   £83,000       This budget covered DDA works at various locations such as the Civic Offices, Cosmeston Country Park, Pendoylan playground and various community centres throughout the Vale. It was not possible to achieve a full spend on this budget due to staffing issues. Slippage of £62,000 is requested to complete currently committed works during 2012/13.

 

Carbon Management Fund                          Under spend £95,000

This budget represents a self-financing reserve for small energy-reducing measures, such as loft insulation, lighting dimmer equipment, pool covers etc. The cost of these works are charged to this capital budget initially and clients repay the Energy Management Fund over an agreed payback period, funded from savings achieved from the measures taken. It is requested that slippage of £95,000 into 2012/13 is requested in order to allow officers to continue these self-financing works.

 

Safety Glazing at Council Buildings                        Over spend £10,000

Works have progressed ahead of schedule on this safety scheme and it has become necessary to use some of the 2012/13 budget allocation for this scheme to cover this over spend in 2011/12.  It is requested that the sum of £10,000 be transferred from the existing 2012/13 £50,000 budget into 2011/12.

 

IT Equipment 2011/12                                                                      Under spend £149,000

This budget comprises various smaller IT projects such as continued upgrade of IT infrastructure, new wireless local area network, telephony lines upgrades as well as a large £640,000 budget for the replacement Wide Area Network (WAN). The WAN project was delayed due to some isolated problems with planning permission and listed buildings consent delaying the installation at several sites which has meant that although all equipment had been purchased by year-end there are still some installations yet to be completed during 2012/13, as well as release of the contract retention payment. In order to complete the outstanding contracts slippage of £149,000 is requested

 

Miscellaneous Buildings Asset Renewal 2011/12            Under spend £116,000

This composite budget included funding for three separate projects - Penarth library roof, Wick pavilion boiler replacement and Barry Leisure Centre security and remodelling. The under spend is due to Wick pavilion scheme needing further design considerations and Barry Leisure Centre works being directly linked to the new Leisure Partnership arrangements which have taken longer to finalise than was expected, pushing the programme back. Slippage of £116,000 is requested.

Reserves

61.        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.

62.        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.

63.        Funds no longer required as reserves may be transferred to the General Fund to be used for other purposes.

64.        Attached at Appendix '4' is a schedule showing the Council's reserves as at 31st March 2012.

Resource Implications (Financial and Employment and Climate Change, if appropriate)

65.        The revenue underspending previously reported means that the General Reserve will increase from £7.858M to £7.993M.

66.        The under spend on the revised capital programme in 2011/12 is £11,884,000, which is £8,222,000 higher than the previous year although large budgets for the Dyffryn House transfer to the National Trust (at £8,400,000) account for the majority of the under spend.  Excluding these budgets, the under spend would, in fact, be less than the previous year.

67.        The table below shows how the capital programme has been financed in 2011/12.

Source of Funding

Outturn

(£000)

General Capital Funding

4,620

Capital Receipts – Housing

2,372

Capital Receipts – General Fund

                    60

WG/Lottery/WEFO Grants

13,202

Revenue/Reserves

               3,975

Other

372

 

TOTAL

24,601

 

General Capital Funding - Capital expenditure in the year was sufficient to cover the General Capital Funding provided by the Welsh Government.  Where schemes originally planned to be financed from General Capital Funding have under spent, other schemes, planned to be funded from capital receipts or reserves, have been substituted in their place. 

 

68.        Capital Receipts - . The existing capital receipts balance as at 31st March 2012 was £11,810,781, all relating to the General Fund.  The sum of £533,000 was received from the sale of assets and mortgage repayments during 2011/12, as follows:

                                                            £'000

                        Sale of Council Houses                                            79         

                        Sale of Land and Buildings  380

                        Mortgage repayments on council house sales                  63

                        Mortgage repayments on private homes                           11

 

69.        As a result of the capital underspend in 2011/12, an allocation of £10,875,000 is requested as slippage into 2012/13 to fund the completion of schemes as shown in Appendix 5. Of this figure, £8,728,000 will be provided from revenue, reserves or external sources while the sum of £2,147,000 will be required from capital receipts not utilised as planned in 2011/12.  

70.        Major Repairs Allowance - The Major Repairs Allowance (MRA) is a grant given to the Authority by the Welsh Government and can be used for capital expenditure on Housing Revenue Account (HRA) assets.  The Authority’s MRA for 2011/12 was £2,700,000. Works totalling £5,704,378 were spent on major repairs of housing stock, £2,700,000 of which was funded from the MRA, £2,176,183 from Housing capital receipts and £828,195 from Housing revenue reserves.  A further Major Repairs Allowance of £2,800,000 has recently been awarded to the Authority for 2012/13.

71.        Given anticipated on-going cuts in capital funding for future years it is vital that all uncommitted capital expenditure be retained for future use on prioritised schemes. As such, Directorates have once again been informed that whilst committed capital schemes would be allowed slippage, those which were not contractually committed could not be funded. This enables some of the underspend on the Programme to be retained and ploughed back into funding the future capital programme

Legal Implications (to Include Human Rights Implications)

72.        The provisional out turn figures for the Council will be used in the preparation of the Statements of Accounts, which under the Accounts and Audit Regulations, must be certified by the Director of Finance ICT and Property by the 30th June,2012. 

Crime and Disorder Implications

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

Equal Opportunities Implications (to include Welsh Language issues)

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

Corporate/Service Objectives

75.        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

76.        The Chief executive will be requested to approve the slippage via the Urgency Procedure.

Consultation (including Ward Member Consultation)

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

Relevant Scrutiny Committee

78.        Corporate Resources.

Background Papers

None

 

Contact Officer

Sian Davies

Director of Finance ICT and Property

Tel (01446 709202)

 

Officers Consulted

 

Responsible Officer:

Sian Davies

Director of Finance ICT and Property

 

 

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