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Agenda Item No

 

The Vale of Glamorgan Council

 

Cabinet Meeting: 24 February, 2014

 

Report of the Leader

 

Revenue Monitoring for the period 1st April 2013 to 31st December 2013

 

Purpose of the Report

1.         To advise Committee of the progress of revenue expenditure for the period 1st April, 2013 to 31st December, 2013.

Recommendations

1.         That the position with regard to the Authority’s 2013/14 Revenue Budget be noted.

Reasons for the Recommendations

1.         That the members are aware of the projected revenue outturn for 2013/14        

Background

2.         Cabinet on the 18th November 2013 (minute no C 2076 and C 2075 respectively) approved the amended Revenue Budget and Housing Revenue Account budget for 2013/14. The Budget information is subdivided by cabinet members’ portfolio within each Directorate. Reports monitoring expenditure are brought to this Committee on a regular basis.

Relevant Issues and Options

3.         The projected out turn for the 2013/14 Revenue Budget is shown in comparison with the Revenue Budget in the table overleaf. Overall, the forecast is to have a favourable variance of £1.815 million.

4.         The forecast is for an estimated balanced budget on the Housing Revenue Account.

 

 

 

Directorate/Service                                   2013/14                2013/14          Variance

                                                                 Amended              Projected        (+)  Fav

                                                          Original Budget           Outturn              (-) Adv

                                                                     £'000                     £'000               £'000

Learning and Skills

Education and Schools                              93,879                   93,879                     0

Libraries                                                       2,606                     2,606                     0

 Lifelong Learning                                           193                        193                     0

Youth Service                                              1,127                     1,127                     0

Catering                                                       1,743                     1,743                     0

Social Services

Children and Young  People                      14,587                   14,804              (-)217

Adult Services                                            35,904                   35,980                (-)76

Business Management and                            298                        298                     0

  Innovation

Savings Ahead of Target                                293                            0              (+)293

Youth Offending Service                                 653                        653                      0

Visible Services and Housing

Environment and Visible Services              18,393                   18,393                     0

Parks and Grounds Maintenance                 3,477                     3,477                     0

Building Services                                                 0                            0                     0

General Fund Housing                                 1,150                        950              (+)200   

Public Sector Housing                                  8,129                     8,129                      0

Development                  

Public Protection                                          2,564                     2,564                      0

Private Housing                                          11,270                   11,270                      0

Planning and Transportation                        5,329                     5,329                      0

Leisure                                                          4,085                    4,.085                     0

Economic Development                                  950                        950                      0

Managing Director           

Resources                                                       130                        130                      0

Corporate and Customer Services                  379                        379                      0

General Policy                                             21,224                   19,609           (+)1,615   

Total                                                          228,363                  226,548          (+)1,815

Met from General Reserve                           -1,500                    -1,500                     0

Grand Total                                                226,863                 225,048          (+)1,815     

 

5. Pie charts and tables set out a comparison between the profiled budget and actual expenditure for the year to date.

 

Comparison of Individual Profiled Budget compared to Overall Total Profiled Budget as at 31 December 2013 expressed as a %

Directorate

Profiled Budget £'000

Learning & Skills

74,693

Social Services

38,041

Visible Services & Hsg

22,938

Development

20,613

Managing Director

95

Corporate & Customer Serv

110

General Policy

15,918

  

 

 

 

 

 

pie-chart-1

 

Comparison of Individual Actual Spend compared to Overall Total Actual Spend as at 31 December 2013 expressed as a %

 

Directorate

Actual Spend £'000

Learning & Skills

74,611

Social Services

38,041

Visible Services & Hsg

22,391

Development

20,492

Managing Director

95

Corporate & Customer Serv

110

General Policy

14,303



 

pie-chart-2

 

 

Learning and Skills

6.         Overall, the Education Budget is projected to balance as at the end of March 2014. Any savings identified between now and the end of the year will be available to re-direct into the School Investment Strategy or other reserves.

7.         Schools - The delegated budget relating to schools is expected to balance as any under/over spend is carried forward by schools.

8.         Strategy and Performance - It is predicted that this budget will outturn with an adverse variance of £18k.  This is due to an estimated overspend on further education transport of £90k, rates of £13k.  This is offset by favourable variances on Education Finance £31k, Performance Management of £10k and mainstream transport £44k. 

9.         Service Strategy & Regulation - It is predicted that this budget will outturn with a favourable variance of £18k.  This is as a result of efficiencies within the business support unit supplies and services budget.

10.      Education is projecting to transfer £145k to reserves as part of the Voluntary Early Retirement and Redundancy scheme.  This is made up of £273k received from schools to repay arrangements made in previous years and £128k required to finance new arrangements under the scheme.

11.      Libraries - There is currently a £50k favourable variance against the profiled budget due to staff vacancies, however, this will be utilised within the service during the coming months to fund one off building works and equipment.  The service is therefore anticipated to outturn on target at year end.

12.      Youth Service -  The service is currently breaking even against the profiled budget and is anticipated to outturn on target at year end.

13.      Lifelong Learning - There is currently a £20k favourable variance against the profiled budget due to a staff vacancy which has now been filled, however, this will either be utilised within the service during the coming months or set aside to assist with future funding reductions from Welsh Government for Adult Community Learning.  The service is therefore anticipated to outturn on target at year end.

14.      Catering - There is currently a £12k favourable variance against the profiled budget due to slower than anticipated take up of free Breakfast Club provision.  This underspend will be used to upgrade and maintain kitchens and equipment between now and year end and also supports an increase in meal numbers seen during the autumn term.  It is therefore predicted that the budget will outturn on target at year end.

Social Services

15.      It is currently projected that services under this Committee will outturn within target at year end.

16.      Children and Young People's Services - The major issue is the need to manage continued pressure on the children’s placements budget.  The current projected outturn for the jointly funded Residential Placements budget for Looked After Children is an overspend of £530k.  Any overspend at year end will be funded in proportion to the original contributions made to the joint budget i.e. £477k (90%) Social Services and £53k (10%) Education.  In addition to the joint budget, a high cost placement provision of £1.46m was established as part of the budget setting process for 2013/14.  To date, £223k of the provision has been committed, which is in addition to expenditure incurred within the joint budget.  There are potential underspends elsewhere in Childrens Services of around £226k which could be used to offset this position.  The increase in expenditure on the joint residential budget has resulted in a reduction in expenditure of £71k on alternative means of provision and accommodation costs required for the current cohort of children.  In addition, other areas of underspend are £50k on the legal expenses budget, £85k additional adoption income and £20k on administrative staff.  The Business Management and Innovation division is anticipated to underspend and any variance is apportioned to the service areas, therefore £34k of the underspend will be allocated to Childrens Services.  It is currently anticipated that there will be a £217k overspend.

17.      Adult Services -The major issue is the continuing pressure on Community Care Packages, the Division's most volatile budget and the one most dependent upon levels of service demand which are not entirely within the Council's direct control.  At present, the projected year end position is an overspend of £685k. Actions, therefore, still need to be taken to review all processes and to address this shortfall.   There are potential underspends elsewhere in Adults Services of around £525k which could be used to offset this position.  These areas are £230k following the closure of Bryneithin, £254k on staffing and £41k on Premises.  With the levels of savings required for 2014/15 and 2015/16, budgets are being re-examined during 2013/14 with a view to their possible realignment as part of the consideration of new models of service delivery . Future savings are planned for these areas and some positions and premises costs are lower than expected as a result of the commencement of some of these plans ahead of schedule.  The Business Management and Innovation division is anticipated to underspend and any variance is apportioned to the service areas, therefore £84k of the underspend will be allocated to Adults Services.  This results in a currently anticipated overspend of £76k.

18.      The table below shows the trend in Adult Services expenditure to budget for the year to date.

graph-1

 

19.      Business Management and Innovation - The majority of this budget is recharged to Childrens and Adult Services and is, therefore, showing a breakeven position at year end.  The position before recharges to services is an underspend of £118k.  This is made up of an underspend on staffing, mainly due to staff vacancies which were held prior to the introduction of the new staffing structure in the Protection and Policy section.  This underspend has meant that there has been a reduced internal recharge to Childrens and Adults Services of £118k.

20.      Areas of savings have been identified this year which are £293k over the required target.  This can be used to offset the overspends identified above and a balanced budget is currently projected for year end.  A major issue which will affect the service between now and the end of the financial year is the impact of winter pressures.  This cannot yet be quantified but will be closely monitored and reported to future meetings.

Visible Services and Housing Services

21.      It is currently projected that services under this service will outturn at £200k underspent at year end.

22.      Highways Maintenance & Engineering Design & Procurement - There is currently a £116k adverse variance to the profiled budget.  This is mainly due to a reduction in the income being achieved by the Engineering section due to a reduction in the number of capital schemes requiring Engineering advice/design. It is anticipated that schemes will become available later in the financial year which should increase the level of income. It is therefore projected that the overall budget will outturn on target 

23.      Waste Management - There is currently a £110k favourable variance to the profiled budget. The saving is mainly linked to vacant posts within the service and a reduction in the amount of waste being sent to landfill. Due to uncertainties around the increased future cost of the recycling treatment service, it is currently projected that the Waste Management budget will outturn on target.

24.      Grounds Maintenance - There currently stands a £30k favourable variance to the profiled budget. The main reason for this current underspend is a reduction in levels of overtime.  The Grounds Maintenance department need to replace a large amount of machinery before the end of the financial year and therefore, a balanced budget is currently anticipated.

25.      Support – There is currently a nil variance to the profiled budget.

26.      General Fund Housing - The Housing General Fund is currently showing a favourable variance of £304k.  The reason for this favourable variance is mainly due to the reduction in the number of homeless individuals requiring emergency accommodation due to a long term increased focus on prevention by the homeless team. This change of approach has been supported through an expansion of shared accommodation options within the private sector.  Again this success is to be welcomed, but it must be reiterated that the use of the private rented sector has significant risks, particularly as a result of the changes already introduced through Welfare Reform and the challenges posed by the Universal Credit. This could have an adverse effect on the availability of future private rental options if the Homeless client group is considered by Landlords to be a risk to guaranteed income or increased homelessness if landlords choose to only let to those in employment.  The Council has identified Welfare Reform as a significant risk and mitigation measures are already in place. Officers will continue to closely monitor the situation to keep any adverse effect to a minimum.  Due to the possible risks outlined above, it is projected that the budget will outturn at £200k underspent at year end.

27.      Housing Public Sector Housing (HRA) -The Housing Revenue Account is currently showing a favourable variance of £219k. The main reasons for the favourable variance are as follows: an underspend on premises costs (£52k) such as furniture and fittings at the sheltered schemes and Ty Iolo Hostel, further underspends on the Incentive to Move scheme budgets (£40k) and staff vacancies (£74k) particularly within the Housing Management Team. In addition, the Welfare Advice Team's expenditure to date is less than anticipated (£23k).  There is a further saving of (£11k) on anti-social behaviour support from external bodies.   Other savings of £19k to date over various headings have also contributed to the current underspend.  Based on the current budget position and the need to deal with Health and Safety issues such as asbestos management in the coming months, it is predicted that the HRA will outturn at £107k underspent.  Any underspends in the Housing Revenue Account  are ring-fenced, and as such, can be invested into the stock in coming years, improving the position of the HRA Business Plan

Development Services

28.      Public Protection - There is currently an £80k favourable variance against the profiled budget.  This is primarily due to the staff vacancies within the Division which have been held pending the outcome of the proposed collaboration project with Cardiff and Bridgend Councils. It is anticipated that this underspend could be in the region of £100k by year end, however, any underspend will be set aside to meet future liabilities.

29.      Planning and Transportation - There is currently a favourable variance of £5k to the profiled budget.  Although there has been higher than anticipated income to date, there is anticipated expenditure within the service which is expected to result in a balanced budget at year end.

30.      Leisure - There is currently a £16k favourable variance to the profiled budget.  This is mainly due to current staff vacancies within the Countryside Service. There has been, however, a need to repair the thatched roof at Cosmeston Medieval Village and it is expected that this will mean that any under spend within the service will be used to fund this additional expenditure, resulting in a balanced budget at the end of the year.

31.      Economic Development - There is currently a favourable variance of £5k to the profiled budget.  It is currently projected that this budget will outturn within target.

Managing Director

32.      General Policy - the projected outturn is a favourable variance of £1.615M This is made up of a saving on capital charges £445k, additional interest £240k, a saving in election costs £50k and a sum of £880k  included in  policy as a provision for the incremental effect of job evaluation. The Council's financial strategy is for services to fund the cost of increments and therefore the budget is no longer required.

33.      All other services are estimated to outturn on budget.

Resource Implications (Financial and Employment)

34.      As detailed in the body of the report. In addition the provision for legal costs in respect of single status claims (£1M) is no longer required. This amount will be returned to revenue and allowed to feed into the general reserve.

Sustainability and Climate Change Implications

35.      As detailed in the body of the report

Legal Implications (to Include Human Rights Implications)

36.      There are no legal implications

Crime and Disorder Implications

37.      There are no crime and disorder implications

Equal Opportunities Implications (to include Welsh Language issues)

38.      There are no equal opportunity implications

Corporate/Service Objectives

39.      Effective monitoring assists in the provision of accurate and timely information to officers and members and in particular allows services to better manage their resources

Policy Framework and Budget

40.      This report is for Executive decision.

Consultation (including Ward Member Consultation)

41.       Each Scrutiny Committee will receive a monitoring report on their respective areas. This report does not require Ward Member consultation.

Relevant Scrutiny Committee

42.      All

Background Papers

None

 

Contact Officer

Robert Ingram (Principal Accountant) (01446 709252)

 

Officers Consulted

Chief Learning and Skills officer, Directors of Social Services, Visible Services and Housing, Development Services and Resources.

 

Responsible Officer:

Sian Davies Managing Director  

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