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The Vale of Glamorgan Council

Cabinet Meeting: 7 September, 2015

Report of the Leader

Revenue Monitoring for the period 1st April to 31st July 2015

Purpose of the Report

1.    To advise Cabinet of the progress relating to revenue expenditure for the period 1st April to 31st July 2015.

Recommendations

It is recommended that :-

1.    That the position with regard to the Authority’s 2015/16 Revenue Budget be noted.

 

2.    Reports will continue to be presented to Cabinet on a quarterly basis.

Reasons for the Recommendations

1.    That the members are aware of the projected revenue outturn for 2015/16.

 

2.    To appraise Cabinet of progress in budget outturn.

Background

2.    Council on the 4th March 2015 (minute no 941 and 939 respectively) approved the Revenue and Housing Revenue Budgets for 2015/16. The Budget information is subdivided by Cabinet members’ portfolio within each Directorate.

Relevant Issues and Options

3.    It is early in the financial year and the forecast for the 2015/16 revenue budget is for an outturn within target as shown in the following table.  The Housing Revenue Account (HRA) budget for 2015/16 is also forecast to outturn on target.

 

 Directorate/Service 

 2015/16

Original

Budget

£'000

 2015/16

Projected

Outturn

£'000

 Variance

(+)  Fav

(-) Adv

£'000

 Learning and Skills      
 Education and Schools  92,731  92,731  0
 Libraries  2,359  2,359  0
 Adult Community Learning  265  265  0
 Youth Service  1,043  1,043  0
 Catering  1,756  1,756  0
 Social Services      
 Children and Young  People  14,497  14,197  +300
 Adult Services  37,418  37,718  -300
 Business Management & Innovation  319  319  0
 Youth Offending Service  672  672  0
 Visible Services and Housing      
 Environment and Visible Services  16,911  16,911  0
 Parks and Grounds Maintenance  3,503  3,503  0
 Building Services  0  0  0
 Council Fund Housing  1,218  1,218  0
 Public Sector Housing (HRA)  (129)  (129)  0
 Development      
 Regulatory Services  2,094  2,094  0
 Coroner  210  210  0
 Private Housing  10,662  10,662  0
 Planning and Transportation  6,525  6,525  0
 Leisure  2,481  2,481  0
 Economic Development  1,210  1,210  0
 Managing Director      
 Resources  963  963  0
 General Policy  18,018 18,018  0
 Total  214,726  214,726  0
 Met from General Reserve  -2,500  -2,500  0
 Grand Total  212,226  212,226  0

 

Learning and Skills

4.    The Learning and Skills Directorate is aiming to outturn at budget, however, there are significant pressures faced by the services as detailed below.

 

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

 

6.    School Improvement & Inclusion - This service is projecting an adverse variance of around £236k, however, this amount can be offset by £70k funded from the Excluded Pupils reserves and therefore an adverse variance of £166k is currently projected at year end.  There are significant pressures within the Inclusion budget due to a decrease in inter authority recoupment income as a result of an increased number of Vale pupils requiring a placement at Ysgol Y Deri, which has meant there are less places available for out of county pupils. The Directorate is seeking ways to mitigate this overspend as part of the longer term Reshaping Services agenda.

 

7.    Strategy & Resources - This service is anticipating a favourable variance at year end of £166k, with favourable variances on the transport budget of £65k, £52k on salaries due to part year vacancies and £49k due to payments to private nurseries as a result of a reduction in non-maintained nursery settings.  There are significant pressures in relation to the Schools Long Term Supply scheme, £200k adverse variance and the Early Retirement and Voluntary Redundancy scheme, £113k adverse variance, however, both these overspends will be funded from the respective reserves.

 

8.    Provision has been made within the budget to make unsupported borrowing debt repayments in relation to the Schools Investment Strategy of £698k per annum and any favourable variance on debt repayments will be directed into the Schools Investment Strategy.

 

9.    Libraries - This service is projecting an adverse variance of £112k, however, this amount can be funded from the Library reserve and therefore a breakeven position is anticipated at year end.  The overspend has arisen as a result of the one off costs associated with the implementation of the Libraries review.

 

10.    Adult and Community Learning – This service is projecting an adverse variance of £90k, however, this amount can be funded from the Adult and Community Learning reserve and therefore a breakeven position is anticipated at year end.  The overspend is due to redundancy and notice payments to staff, which have arisen as a result of reductions in funding from Welsh Government and Cardiff and the Vale College.

 

11.    Youth Service– This service is projecting an adverse variance of £52k, however, this amount can be funded from the Youth Service Reserve and therefore a breakeven position is anticipated at year end.  This additional expenditure is being used to fund NEETS and Gateway To Engagement work in schools.

 

12.    Catering - The Catering client budget is projecting an adverse variance of £35k however, this amount can be funded from the Catering Reserve and therefore a breakeven position is anticipated at year end.  This transfer from reserves will fund the final instalment of the new cashless catering system within schools.  There are also underspends on the breakfast club, revenue costs for the new catering system and payments to the DSO for school meals which will also be used to fund the cashless catering system.  The trading account is predicting to outturn on target however it is still very early in the financial year.  A more accurate projection will be available following the September schools intake when the level of school meal take up and free school meals eligibility is known.

 

13.    Other Services - All other services are anticipated to outturn within budget.

Social Services

14.    It is anticipated that the projected outturn for 2015/16 will overall be in line with the budget, but with variances between service heads.

 

15.    Children and Young People's Services - This service is still anticipated to outturn £300k under budget at year end.  The key issue for this service continues to be managing the demand for the Joint Budget for Residential Placements for Looked After Children, however, currently it is forecast to outturn with a £100,000 underspend at year end.  Work has been ongoing to ensure that children are placed in the most appropriate and cost effective placements, however, it should be noted that it is still early in the financial year and that due to the potential high cost of each  placement, the outturn  position could fluctuate with a change in the number of looked after children.  There are potential underspends elsewhere in Children's Services of £65k on staffing budgets and £135k on alternative means of provision and accommodation costs required for the current cohort of children.  

 

16.    Adult Services - This service is currently anticipated to outturn £300k over budget at year end.  This is due to a projected overspend on Community Care Packages of £300k 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 there is a continued increase in demand for services.  The annual deferred income budget for 2015/16 has been set at £739k and as at 31st July 2015 income received to date was £18k under-recovered.  As it is early in the financial year, the year-end projection is to breakeven against budget.  

Visible Services and Housing Services

17.    It is currently projected that overall services under this Directorate will outturn within target at year end.

 

18.    Highways Maintenance & Engineering - There is currently a £40k adverse variance against the profiled budget. This is due to the delayed implementation of car parking charges and street lighting part night switch off.  A car parking charging report has now been approved by Cabinet and is subject to consideration by the Economy and Environment Scrutiny Committee and the roll out of part night street lighting commenced in July 2015.  The full year saving will therefore not be achieved in both these areas, however, there are a number of small favourable variances across Highways which can be used to offset the shortfall in these savings, resulting in a projected overspend at year end of around £100k.  The original budget for 2015/16 takes account of the £619k savings required for this financial year.

 

19.    Waste Management - There is currently a favourable variance of £1k to the profiled budget. The main reason for this is that while the early implementation of the Prosiect Gwyrdd contract is providing considerable savings for the waste disposal budget, this has been offset by a slight delay in the implementation of some of the other savings.    While the Prosiect Gwyrdd site is currently operational, it is running under test conditions and the Council cannot rely on the eventual contractual terms and conditions and the facility could close at any point during the testing period.  In view of this, it is projected that the outturn at year end could be an underspend of around £100k.  The original budget for 2015/16 takes account of the £1.264m savings required for this financial year.

 

20.    Grounds Maintenance - There is currently a £19k adverse variance against the profiled budget, mainly due to a slight overspend to date on vehicle budgets. Discussions are ongoing to ascertain if there are further vehicles that are under-utilised with a view to meeting the savings targets set. The original budget for 2015/16 takes account of the £130k efficiency savings required for this financial year. The budget will be monitored closely to ensure these efficiency savings are achieved.

 

21.    Council Fund Housing - There are some savings against profile on Supplies and Services and the Temporary Accommodation budget, however, the introduction of Universal Credit during this financial year is anticipated to increase the level of expenditure on Temporary Accommodation, therefore, currently it is anticipated that the Council Fund Housing budget will outturn on target.

 

22.    Public Sector Housing (HRA) - Whilst vacancies in the new structure still exist, there are some savings on salary costs and there are also underspends in the Premises budget particularly at Ty Iolo hostel.  Any underspends this year will be offset by additional contributions to Capital expenditure in order to reduce the reliance on Unsupported Borrowing. The HRA is therefore expected to outturn on target.

Development Services

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

 

24.    Regulatory Services - The management positions within the Shared Regulatory Service have now been appointed and work is underway to populate the lower tiers of staff. Work is also on-going to apportion the costs of the service amongst the partner authorities, Bridgend, Cardiff and the Vale. At this stage it is anticipated that the Shared Regulatory Service will outturn on target.

 

25.    Private Housing - There is currently a favourable variance of £8k to profiled budget. The fee income from the Renewal Areas continues to be below budget due to the transition from the Castleland facelifting scheme to the Upper Holton Road scheme which has less scope for management fees. However, this is more than offset by a higher than anticipated level of fees from the Disabled Facilities Grants. At this stage, therefore, it is anticipated that this service will outturn on target.

 

26.    Planning and Transportation - There is currently a favourable variance of £49k to profiled budget. This is due mostly to a higher than budgeted level of planning fee income.  At this stage however it is anticipated that this service will outturn on target.

 

27.    Leisure - There is currently a favourable variance of £48k to profiled budget. There are reduced costs due to staff vacancies in the Leisure & Tourism and Countryside Divisions. In addition, filming fees at Cosmeston Medieval Village have exceeded the budgeted figure. Officers are still working on proposals for the introduction of car parking charges at Country Parks and whilst the aim is to report this matter to Cabinet in the near future, at this later stage in the year, the targeted savings for the Division will now not be achievable. Any underspends will now need to be used to offset any income shortfall. At this stage the overall budget is anticipated to outturn on target.

 

28.    Economic Development - There is currently a favourable variance of £19k to profiled budget. Although expenditure on the Employment Training Service (ETS) is currently below budget, income levels are set to reduce as the programme winds down so any underspend will be required to offset the drop in income levels. It is therefore anticipated that this service will outturn on target.

Managing Director

29.    General Policy - It is early in the financial year and it is projected that this budget will outturn within target.

 

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

2015/16 Savings Targets

31.    As part of the Final Revenue Budget Proposals for 2015/16, a savings target of £6.847m was set for the Authority.  Attached at Appendix 1 is a statement showing the progress against these targets.  Services are projecting to achieve the majority of their savings and where savings may not be achieved, further information is provided.  The appendix shows that currently there is a £138k projected shortfall against the target.  The Prosiect Gwyrdd scheme is projected to exceed its target, however, there are other savings in Visible Service which will not be achieved and will therefore offset this favourable position.  In addition, Visible Services also have savings from previous years which have yet to be achieved in full, however, progress will be made this year in their implementation.  The last section of the appendix detailed the savings identified in previous years and which have yet to be fully achieved.

Resource Implications (Financial and Employment)

32.    As detailed in the body of the report.

Sustainability and Climate Change Implications

33.    As detailed in the body of the report

Legal Implications (to Include Human Rights Implications)

34.    There are no legal implications

Crime and Disorder Implications

35.    There are no crime and disorder implications

Equal Opportunities Implications (to include Welsh Language issues)

36.    There are no equal opportunity implications

Corporate/Service Objectives

37.    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

38.    This is a matter for Executive decision.

Consultation (including Ward Member Consultation)

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

Relevant Scrutiny Committee

40.    All

Background Papers - None

Contact Officer

Carolyn Michael (Operational Manager - Accountancy) (01446 709778)

Officers Consulted

All Directors

Responsible Officer:

Rob Thomas Managing Director   

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