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The Vale of Glamorgan Council

Cabinet Meeting: 25 January, 2016

Report of the Leader

Revenue Monitoring for the period 1st April to 30th November 2015

Purpose of the Report

  1. To advise Cabinet of the progress relating to revenue expenditure for the period 1st April to 30th November 2015.

Recommendation

It is recommended that :-

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

Reason for the Recommendation

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

Background

  1. On 16th November 2015, Cabinet approved the Amended Revenue and Housing Revenue Account Budgets for 2015/16 (minute no C2975 and C2976 respectively).

Relevant Issues and Options

  1. The forecast for the 2015/16 revenue budget is for a favourable variance of £292k 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

Amended

Budget

£'000

2015/16

Projected 

Outturn 

£'000

Variance

(+) Fav

(-) Adv

£'000

Learning and Skills

     
 Education and Schools  92,524   92,524   0
 Libraries   2,311  2,311  0
 Adult Community Learning  263  263  0
 Youth Service  1,030  1,030  0
 Catering   1,788  1,788  0
 Arts Development  150  150  0
 Social Services      
 Children and Young People  14,540  14,090  +450
 Adult Services   37,579  38,329  -750
 Business Management & Innovation  304   304  0
 Youth Offending Service  679  679   0
 Environment & Housing      
Visible Services  21,707  21,707  0
 Transportation  5,178  5,178  0
 Building Services  0  0  0
 Regulatory Services  2,107  2,107   0
 Council Fund Housing  1,116  1,116  0
 Public Sector Housing (HRA)  1,265  1,265  0
 Managing Director & Resources      
 Resources   558   558   0
 Regeneration  2,562   2,562   0
 Development Management  1,063   1,063   0
 Private Housing  11,308   11,308   0
 General Policy  18,088  17,496   +592
 Total   216,120   215,828 

+292

 Met from General Reserve  -2,500  -2,500  0
 Grand Total  213,620  213,328   +292

 

Learning and Skills

  1. There are significant pressures within the Inclusion Service in relation to inter authority recoupment, however, it is now anticipated that the Learning and Skills Directorate could outturn within budget at year end.
  2. Schools - The delegated budget relating to schools is expected to balance as any under/over spend is carried forward by schools.
  3. School Improvement & Inclusion - This service is projecting an adverse variance of around £688k, however, this amount can be offset by £67k funded from the Excluded Pupils reserve and therefore an adverse variance of £621k is currently projected at year end. The adverse variance on alternative curriculum placements of £67k is projected due to increased demand for the service, however, this will be funded from the Excluded Pupils reserve. An adverse variance of £457k is anticipated on inter authority recoupment income. Increased demand for Vale pupils requiring placements in Ysgol Y Deri has resulted in fewer placements available for other authorities to purchase. An adverse variance of £197k is projected on pupil placements in independent schools and other authorities due to an increase in the number of pupils with significant needs that are unable to be met at Ysgol Y Deri. An adverse variance of £20k is due to increased numbers of pupils accessing the Pupil Referral Unit. These overspends will be offset by a favourable variance of £53k on staffing costs and other income. The Directorate is seeking ways to mitigate this overspend as part of the longer term Reshaping Services agenda.
  4. Service Strategy and Regulation - It is anticipated that this service will outturn with a £11k favourable variance due to efficiencies within the Business Support section.
  5. Strategy & Resources - This service is now anticipating a favourable variance at year end of £598k. A favourable variance of £240k has arisen as a result of a rates refund due to the revaluation of school buildings, which has been backdated up to five years. There continues to be favourable variances on the transport budget of £225k, £54k on salaries due to part year vacancies, £49k due to payments to private nurseries as a result of a reduction in non-maintained nursery settings and other small variances of £30k. There are however significant pressures in relation to the Schools Long Term Supply scheme with an adverse variance of £221k anticipated and the Early Retirement and Voluntary Redundancy scheme also projecting an adverse variance of £200k. Both these overspends will be funded from the respective reserves.
  6. Children and Young Peoples Partnership - It is anticipated that this service will outturn at a favourable variance of £12k due to a part year vacancy in the team.
  7. Provision has been made within the budget to make unsupported borrowing debt repayments in relation to the Schools Investment Strategy of £698k per annum; any favourable variance on debt repayments will be directed into the Schools Investment Strategy.
  8. Libraries - This service is projecting to outturn within budget after a transfer from the Libraries reserve of £103k to fund one off costs in relation to the implementation of the Libraries Review.
  9. Youth Service - It is anticipated that this service will outturn within budget after a transfer of £13k from the Youth Service Reserve. This additional expenditure is being used to fund NEETS and Gateway To Engagement work in schools.
  10. Adult Community Learning - It is anticipated that this service will outturn within budget after a £85k transfer from the Adult and Community Learning reserve. 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. Catering - This service is anticipated to outturn within budget after a transfer of £221k from the Catering reserve. The transfer from the reserve will fund the final payment of the cashless catering system and the conversion of dining centres into kitchens in four primary schools.
  12. Arts Development - It is anticipated that this service will outturn within budget at year end.

Social Services

  1. It is anticipated that the projected outturn for 2015/16 will be an adverse variance of £300k.
  2. Children and Young People's Services - This service is anticipated to outturn £450k 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 £250k 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 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.
  3. Adult Services - This service is currently anticipated to outturn £750k over budget at year end which remains at the same level as projected last month. This overspend is due to a projected overspend on Community Care Packages of £950k as a result of continuing demand for services, particularly for frail older clients. There is continued pressure on this area of the service 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 demand for services, which may increase over the winter months. The annual deferred income budget for 2015/16 has been set at £739k and as at 30th November 2015 income received to date was £112k under-recovered. It is currently being projected that this budget will outturn at £100k over budget by year-end and this adverse variance is included as part of the projected overspend for care packages. It is anticipated that there will be underspends of £200k elsewhere in the budget which can offset part of this overspend with £165k from staffing, £20k from Transport and £15k from premises.

Environment and Housing

  1. It is currently projected that the outturn at year end will be within target.
  2. Highways & Engineering - There is currently a £47k favourable variance against the amended profiled budget. The main reason is the vacant posts currently within the Highways Department. Due to uncertainty around costs which can result from severe weather over the winter months, it is currently projected that the budget will out-turn on target.
  3. Waste Management - There is currently a favourable variance of £31k to the profiled budget. The early implementation of the Prosiect Gwyrdd contract is providing considerable savings for the waste disposal budget, which has been offset by a slight delay in the implementation of some of the other savings within Waste Management. While the Prosiect Gwyrdd site is currently operational, it is running under test conditions and the Council cannot presently 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 budget will outturn on target.
  4. Leisure - Grounds Maintenance is currently showing a £4k favourable variance against the profiled budget, mainly due to a slight underspend to date on repair costs for buildings maintained by grounds maintenance. Due to the potential of increased costs over the winter months it is projected that the budget will out-turn on target. Leisure is currently showing a favourable variance of £17k against profiled budget, due mainly to reduced costs of employees as administration cover for the service has cost less than budgeted. It is anticipated that the overall budget will outturn on target.
  5. Transportation - There is currently a favourable variance of £48k against the profiled budget. Staffing costs within the division are £35k lower than budgeted to date. The service have plans to undertake a programme of education for drivers and some small infrastructure works are required therefore it is anticipated that this service will outturn on target at year-end.
  6. Regulatory Services - The new Shared Service for Bridgend, Cardiff and the Vale of Glamorgan became operational on 1st May 2015. The last staff appointments as a result of the restructure should be completed by Christmas. Work will now be undertaken by the new management team to rationalise current working practices, with the emphasis on agile working across the 3 authorities. It is anticipated that this budget will outturn on target.
  7. Council Fund Housing - The Council Fund Housing budget is likely to outturn at £250k underspent based on current trends. As previously reported, the variance is due to savings being made on the use of temporary accommodation for the homeless. However, due to the uncertain pressures for the remaining part of the financial year on the homeless budget it is felt appropriate at this time to show a balanced budget.
  8. Public Sector Housing (HRA) - The HRA is expected to outturn on target. Any underspends in year will be offset by additional contributions to Capital Expenditure to reduce the reliance on Unsupported Borrowing.

Managing Director and Resources

  1. It is currently projected that overall services under this heading will outturn with a favourable variance of £592k at year end.
  2. Resources - Resources is anticipated to outturn within budget although there is a possibility of a shortfall on Council Tax court income. The service will manage any shortfall from within existing resources.
  3. Regeneration - There is currently a favourable variance of £94k to the profiled budget. As occupancy levels at the Business Service Centre (BSC) are currently high, the budget required to cover costs of carrying vacant units has not been required and is currently £10k below profiled expenditure. In addition, the improved occupancy levels have meant that rates costs across the Economic Development Division's buildings portfolio are lower than budgeted, as tenants are responsible for their own rates. Expenditure on the Employment Training Service (ETS) is currently £15k below budget, as costs of running the down-scaled operation due to nearing the end of the agreed Programme term on 31st March 2016, are greatly reduced. ETS income levels have now also started to reduce so any underspend will be required to offset the drop in income levels. There is additional Countryside division income of £44k from filming and fees so far this year and also staffing and transport costs are £19k lower than profiled to date at our country parks following the restructure within the division. There are other small favourable variances of £6k. There are however, several refurbishment works planned within the Countryside division which are yet to be carried out so expenditure will increase by the end of the year and it is therefore anticipated that this service will outturn on target.
  4. Development Management - There is currently a favourable variance of £149k to profiled budget, mostly due to the planning application fee income being higher than budgeted.  Due to the volume of applications currently being received, an additional staffing resource will be required to maintain service levels. This is presently being investigated. At this stage it is anticipated that this service will outturn on target as costs relating to the Local Development Plan (LDP) examination will be incurred between now and the end of the financial year.
  5. Private Housing - As previously reported, the fee income on Disabled Facilities Grants (DFG's) is higher than originally anticipated due to the high number of applications received during the year. Income on the Renewal Area however, is continuing to lag behind profile, off-setting the favourable variance on DFG's so at this stage it is anticipated that this service will outturn on target at year-end.
  6. General Policy - It is projected that there will be a favourable variance of £592k relating to capital charges. The use of any available underspend at year end will be assessed in light of the overall final financial position of the Council.

Resource Implications (Financial and Employment)

  1. As detailed in the body of the report.

Sustainability and Climate Change Implications

  1. As detailed in the body of the report.

Legal Implications (to Include Human Rights Implications)

  1. There are no legal implications.

Crime and Disorder Implications

  1. There are no crime and disorder implications.

Equal Opportunities Implications (to include Welsh Language issues)

  1. There are no equal opportunity implications.

Corporate/Service Objectives

  1. 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

  1. This is a matter for Executive decision.

Consultation (including Ward Member Consultation)

  1. Each Scrutiny Committee will receive a monitoring report on their respective areas, which will consider the relevant information relating to the respective Scrutiny Committee. In future, the Cabinet and Scrutiny Work Programmes will reflect this arrangement. This report does not require Ward Member consultation.

Relevant Scrutiny Committee

  1. All

Background Papers - None

Contact Officer

Carolyn Michael

Operational Manager - Accountancy

Officers Consulted

All Directors

Responsible Officer:

Carys Lord

S151 Officer

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