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Agenda Item No

 

The Vale of Glamorgan Council

 

Cabinet Meeting: 22 September, 2014

 

 

Report of the Leader

 

Revenue Monitoring for the period 1st April 2014 to 31st July 2014

 

Purpose of the Report

1.         To advise Cabinet of the progress relating to revenue expenditure for the period 1st April 2014 to 31st July 2014.

Recommendations

It is recommended that:-

 

1.         A virement of £350k be made from General Policy to Environment and Visible Services to assist the service with its adverse variance.

2.         The Director of Social Services makes every effort to reduce the level of the overspend by the year end and reports back with the measures to be taken.

3.         The Director of Visible and Housing Services identifies savings within  the service to meet the estimated shortfall of £350k following the virement above and reports back on the proposals to meet the savings target.

4.         The position with regard to the Authority’s 2014/15 Revenue Budget be noted.

Reasons for the Recommendations

1.         To assist the service with its adverse variance

2.         To reduce the level of the overspend.

3.         To identify the savings to meet the estimated shortfall.

4.         That the members are aware of the projected revenue outturn for 2014/15.

Background

2.         Council on the 5th March 2014 (minute no 884 and 882 respectively) approved the Revenue and Housing Revenue Account Budgets for 2014/15. 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 forecast for the 2014/15 revenue budget is for a favourable  variance of £365k. The Housing Revenue Account budget for 2014/15 is forecast to outturn on target.

 

Directorate/Service                                   2014/15                2014/15          Variance

                                                                                             Projected        (+)  Fav

                                                          Original Budget           Outturn              (-) Adv

                                                                     £'000                     £'000               £'000

Learning and Skills

Education and Schools                                93,369                   93,369                     0

Libraries                                                         2,589                     2,589                     0

 Adult Community Learning                              204                        204                     0

Youth Service                                                1,084                     1,084                     0

Catering                                                         1,743                     1,743                     0

Social Services

Children and Young  People                        14,761                   14,561             (+)200

Adult Services                                              36,628                   37,628           (-)1,000

Business Management and                               301                        301                     0

  Innovation

Youth Offending Service                                  664                        664                       0

Visible Services and Housing

Environment and Visible Services               17,912                   18,612               (-)700

Use of Reserves/Other Identified Savings                                    (700)              (+)700

Parks and Grounds Maintenance                  3,528                     3,528                      0

Building Services                                                  0                            0                      0

General Fund Housing                                 1,066                      1,066                      0

Public Sector Housing                                   3,514                     3,514                      0

Development                  

Public Protection                                          2,631                      2,631                       0

Private Housing                                          11,344                    11,344                       0

Planning and Transportation                        5,306                      5,306                       0

Leisure                                                          3,515                     3,515                       0

Economic Development                                 832                          832                       0

Managing Director           

Resources                                                       229                        229                        0

Corporate and Customer Services                  151                        151                        0

General Policy                                             18,974                   17,809            (+)1,165

Total                                                          220,345                  229,980              (+)365

Met from General Reserve                           -2,500                    -2,500                      0

Grand Total                                                217,845                 217,480              (+)365

 

4.         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  31st July 2014 expressed as a %

 

Directorate

Profiled Budget

£'000

Learning & Skills

31,299

Social Services

17,267

Visible Services & Housing

8,761

Development

13,828

Managing Director

77

Corporate & Customer Services

-20

General Policy

6,325



 

Profiled Budget



 

 

Revenue---pie-1

 

Comparison of Individual Actual Spend compared to Overall Total Actual Spend as at  31st July 2014 expressed as a %

 

Directorate

Actual Spend

£'000

Learning & Skills

31,299

Social Services

17,534

Visible Services & Housing

8,329

Development

13,689

Managing Director

77

Corporate & Customer Services

-20

General Policy

5,936

 

Actual Spend



 

Rev-Monitoring---pie-2

 

 

Learning and Skills

 

5.         Overall, the Education Budget is projected to balance as at the end of March 2015. 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.

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

7.         Education is projecting to transfer £145k to reserves as part of the Voluntary Early Retirement and Redundancy scheme.  This income is in respect of reimbursements from schools relating to redundancies and retirements made in previous years, and will be used to assist schools with timing payments for future retirements and redundancies.

8.         Other Services - It is early in the financial year and all other services are currently anticipated to outturn

Social Services

9.         The current year end forecast for the Social Services budget is an overspend of £800k.  In addition to increased demand for services, there is pressure on the Directorate to achieve its savings targets for 2014/15 onwards.

10.      Children and Young People's Services - This service is currently anticipated to outturn £200k under budget at year end.  The major issue concerning this service continues to be the pressure on the children’s placements budget.  At present, it is currently projected that the Joint Budget for Residential Placements for Looked After Children will outturn within budget at year end.  However, it still remains early in the financial year and therefore this position will need to be monitored closely as any increase in the number of children becoming looked after by the Council over the remainder of the year could have a significant impact on the budget, particularly if they require high cost residential placements.  The areas of projected underspend in the budget are currently legal expenses, adoption income and reduced expenditure as a result of the current cohort of children. 

11.      Adult Services - This service is currently anticipated to outturn £1m over budget at year end.  This is due to a projected overspend on Community Care Packages of £1.2m as a result of increased demand for services, particularly for frail older clients.  The service will strive to manage demand, not only to avoid a further increase in the overspend, but also to reduce the overspend.  Whilst every effort will be made to improve this position, it cannot be guaranteed that this position will not deteriorate further by year end as this budget is extremely volatile and under great pressure.  The annual deferred income budget for 2014/15 has been set at £725k and at 31st July 2014 it was £58k behind target.  It is therefore being projected that this budget will under recover by £150k at year end and this position is included as part of the projected overspend on the Community Care packages budget.  The areas of projected underspend in the budget are currently staffing and related travel costs and premises.

12.      The Social Services Directorate is committed to achieving a balanced budget in 2014/15 while delivering the approved savings.

Visible Services and Housing Services

13.      It is currently projected that this service will have a balanced budget at the year end. However this is after the use of the Visible Services Reserve, which will decrease the sum available to fund improvements to the Council's infrastructure.

14.      Highways Maintenance & Engineering Design & Procurement - There is currently an adverse variance of £77k to the profiled budget. The original budget for 2014/15 takes account of the £165k savings required for this financial year. There are also financial savings from previous years that have not yet been made and are putting pressure on the budget. These savings still to be made relate to street lighting (£150k) and car parking (£340k). Reports will shortly be brought before Cabinet, by the Director of Visible Services and Housing, to set out the proposals for both of these savings. Full year savings will not be made in these areas and due to their size it is proposed that the Visible Services Reserve is used to fund the shortfall.

15.      Waste Management -There is currently an adverse variance of £41k. There are 2 main reasons for the current overspend.  Firstly, the bulk of the savings in waste management for this financial year related to the more efficient use of the vehicle fleet. Due to a slight delay in the implementation of the vehicle telemetry software, some of the proposed savings have slipped by a few months. However, this is now in place and reports will shortly be run on vehicle utility so that decisions can be taken on vehicles that are under-utilised thus enabling savings to be made.  Secondly, there has been an increase in the cost of the treatment of dry co-mingled recycling due to a new contract being in place from April 2014. Although there is currently an adverse variance to the budget, the interim contract with Viridor for disposal of black bag waste will achieve significant savings compared to the current cost of disposal. The Vale are due to join this contract in November 2014. This should ensure a balanced year end budget. The original budget for 2014/15 takes account of the £1,020k savings required for this financial year. The budget will be monitored closely to ensure that efficiency savings that are not made are found elsewhere within the budget.

16.      Grounds Maintenance - There is currently an adverse variance of £50k to the profiled budget. Again, there has been some slippage in the savings relating to transport, however, every effort will be made to ensure that savings are made elsewhere in the department. The original budget for 2014/15 takes account of the £40k savings required for this financial year. The budget will be monitored closely to ensure these efficiency savings are achieved.

17.      General Fund Housing - There is a variance due to savings being made on the use of Temporary Accommodation for the homeless. If the current trend continues, it is anticipated that the General Fund Housing budget could outturn at around £250,000 underspent at year end.  This is not yet shown in the above table as it still remains early in the financial year, however, Committee will be updated on any further change to this position as the year progresses.

18.      Public Sector Housing (HRA) - The proposed restructure for Housing Services, has yet to be implemented and as a result, there is an underspend on profiled budget.  In addition, there are underspends on premises costs at Ty-Iolo Hostel and community facilities at the sheltered complexes. However at this stage, it is still anticipated that the HRA will outturn on target, as a rationalisation of budgets is due to take place in the coming months to identify any surplus resources and target them where expenditure is needed.

Development Services

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

20.      Public Protection - There is currently an adverse variance of £1k to the profiled budget.  The budget is currently expected to out-turn on target.

21.      Private Sector Housing/Comm Safety - There is currently an adverse variance of £35k to profiled budget. This is due mainly to the additional Occupational Therapist temporarily employed to assist with the throughput of Renovation Grant applications. It is projected that there will be sufficient under spend within the division at year-end to cover this cost.

22.      Planning and Transportation - There is currently a favourable variance of £122k to profiled budget. This is due mainly to a higher than anticipated level of fee income received to date. Some additional staffing may be needed to assist with the additional workload within the division and therefore at this stage the budget is still projected to out-turn on target. The need for staffing and the manner in which this need could be catered for is currently being addressed.

23.      Leisure -There is currently a favourable variance of £35k to profiled budget. This is due mainly to vacant posts within the Countryside division being held pending a restructure within the Division.  However, as it is still early in the financial year the budget is currently expected to out-turn on target.

24.      Economic Development - There is currently a favourable variance of £18k to profiled budget.  This is due mainly to higher than anticipated income in the Employment Training Services section although pre-established changes in terms of the JobFit agreement mean that attachment payments are likely to reduce from August 2014 and so the surplus is likely to diminish. The budget is currently expected to out-turn on target.

Managing Director

25.      General Policy - The forecast is for a favourable variance of £1,165k as at the year end. This has arisen from a reduction in capital charges £1,065k and an increase in external interest receivable £100k.

26.      All other services are currently estimated to outturn within budget.

Resource Implications (Financial and Employment)

27.      The Social Services and Environment and Visible Services Directorates are anticipating an overspend of their 2014/15 revenue budget.  The sums involved are significant and put financial pressure on the Council.

28.      It is therefore imperative that the Director of Social Services makes every effort to reduce the level of the Directorate's overspend.

29.      One of the reasons why the Environment and Visible Services Directorate is experiencing budgetary pressure is because of previous year's savings that are still to be made. Reports on these savings are to be brought to a future Cabinet by the Director of Visible Services and Housing. It is accepted that there have been difficulties in implementing some of these savings.

30.      In view of the above it is proposed to vire £350k from the General Policy budget to the Environment and Visible Services budget to fund half of the estimated adverse variance. If the virement is agreed by Cabinet, the remaining £350k shortfall will need to be found from savings within the Directorate to avoid depleting the Visible Services reserve.

31.      Following the above virement the estimated overall favourable variance would fall to £15k from the position shown in paragraph 3 of £365k This could change depending on the extent to which the Directors for Social Services and Environment and Visible Services are able to curtail their overspends..

Sustainability and Climate Change Implications

32.      As detailed in the body of the report

Legal Implications (to Include Human Rights Implications)

33.      There are no legal implications

Crime and Disorder Implications

34.      There are no crime and disorder implications

Equal Opportunities Implications (to include Welsh Language issues)

35.      There are no equal opportunity implications

Corporate/Service Objectives

36.      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

37.      This report is a matter for Executive decision.

Consultation (including Ward Member Consultation)

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

Relevant Scrutiny Committee

39.      All

Background Papers - None

Contact Officer

Robert Ingram (Principal Accountant) (01446 709252)

 

Officers Consulted

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

 

Responsible Officer:

Sian Davies Managing Director  

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