Agenda Item No
The Vale of Glamorgan Council
Scrutiny Committee (Corporate Resources): 20th March 2012
Report of the Director of Finance ICT and Property
Revenue Monitoring for the period 1st April 2011 to 31st January 2012
Purpose of the Report
1. To advise Scrutiny Committee of the progress of revenue expenditure for the period 1st April, 2011 to 31st, January, 2012.
1. That the position with regard to the Authority’s 2011/12 amended Revenue Budget be noted.
2. That it be noted that the Director of Social Services will take the necessary action to bring expenditure in line with the base budget.
3. That it be noted that a budget virement of £500k be made to the Economic Development and Leisure Service from Policy.
Reasons for the Recommendations
1. That the Members are aware of the projected revenue outturn for 2011/12.
2. To bring Social Services expenditure in line with the base budget
3. To fund the overspend resulting from the delay in implementing the Leisure Centre Partnership.
2. Cabinet on the 16th November 2011 (minute nos. C1511 and C1512 respectively) approved the amended Revenue Budget and Housing Revenue Account budget for 2011/12. 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 outturn for the 2011/12 Revenue Budget is shown in comparison with the amended Revenue Budget at Appendix '1'. The forecast is for the Council to have a balanced Revenue Budget.
4. The forecast is for an estimated balanced budget on the Housing Revenue Account.
5. The Education budget is projected to overspend by £109k. This is primarily due to an overspend of £136k against the maternity leave budget that is held centrally on behalf of schools. When school based staff go on maternity the salary costs are picked up centrally and the school pays for any cover that is put in place. Options for delegating maternity cover funding to schools in future will be examined in consultation with the Schools Budget Forum. If the overspend of £109k is realised it will be met by a contribution from Education reserves.
6. The Additional Learning Needs budget is now projected to outturn on target, however this remains a volatile budget that is demand led and will continue to be closely monitored for the rest of the year. It is possible that the position may change due to increased recoupment income or additional expenditure on out of county placements.
7. Children and Young People's Services - The projected overspend position for this service is £1.25m. The main area of overspending is the Children's Placement budget which is overspent by £1.1m, due to an increased number of high cost placements. Managers are currently reviewing the placements and considering the options for alternative provision both in the short and long term. This overspend can be offset by a Children’s Services provision of £210k resulting in £1.04m of savings to be found by the service this financial year.
8. Adult Services - The projected overspend position for this service is £2.32m. The main area of overspending is the Community Care Packages budget. This is overspent for a number of reasons including increased demand in service (£1.6m), an increase in care home fees over and above the 2% inflation included in the budget (£0.5m) and the First Steps Initiative introduced by the Welsh Government which caps charges for non residential services to £50 per week (£0.6m). Existing Community Care packages are being examined in order to review the level of the packages and their associated costs and the method of service delivery. Managers are also currently assessing all areas of the service to identify where further savings can be made. This overspend can be offset by an Adult Services provision of £465k, resulting in £1.86m of savings to be found by the service this financial year.
9. Service Strategy – This budget is anticipated to outturn on target.
10. Overall, it is projected that the Social Services budget as a whole could overspend by £3.57m this year. There are provisions available to offset this position to the value of £675k resulting in a net overspend of £2.9m. There are considerable pressures on both Children's and Adults Services from increasing demand, new requirements from the Welsh Government for which adequate funding has not been received and the need to achieve budget savings. Discussions are currently on going with the Welsh Government regarding the First Steps Initiative. It should be noted that the overspend on Community Care packages could increase further by year end if the value of additional packages approved exceed the value of packages that reduce.
11. The Director of Social Services is taking immediate action to curtail overspending within the Directorate. The Directorate is committed to reducing this overspend and the Budget Plan is currently being refined so that it demonstrates a viable plan to bring spending back to the base budget. This will take into consideration the 2012/13 budget proposals. A multi-disciplinary project team and project board have been set up to further develop the plan and oversee and facilitate its delivery. Regular progress reports will be presented to Committee.
Planning and Transportation
12. There is a projected overspend on this service of £100k due to a fall in planning fees as a result of a delay in submission of some major schemes. The overspend will be met from savings within Visible Services.
13. It is now anticipated that Mainstream Education transport will be balanced.
Economic Development and Leisure
14. There is a projected overspend on this service of £170k which relates to an increase in Leisure Centres running costs and a reduction in anticipated income, this will be funded from savings in the Visible Services budget.
15. An overspend of £500k has previously been reported to Committee which related to the delay in implementing the Leisure Centre Partnership, this was to be funded from Policy. To regularise the position Cabinet has been requested to agree to the virement of £500k to this service from Policy. The amended revenue budget as shown at Appendix '1' takes account of this virement.
16. Waste management - The budget is expected to outturn with a £100k favourable variance. The underspend is mainly due to tonnages to landfill dropping as the food waste and co-mingled recycling programme's are rolled out therefore saving on costly landfill disposal. Also officers have managed to renegotiate the contract for recycling treatment which will mean a lower spend than was budgeted. The estimated favourable variance will be used to offset the projected overspend within the Planning Section.
17. Support – There is a projected £170k favourable variance on this service which represents monies included in the budget which are no longer required. The estimated favourable variance will be used to offset the projected overspend in the Economic Development and Leisure service.
18. The projected underspending of £2.5m is attributable to an anticipated surplus on Council Tax collection of £1m, savings on capital charges £1.485m, superannuation no longer required £265k, housing recharge £200k and corporate governance £50k, offset by £500k being used to assist the Leisure Centre budget overspend. The net sum of £2.5m is likely to be required to cover Social Services to the extent to which they are unable to find the necessary savings; this sum will be ring fenced for this purpose. For this reason Appendix '1' shows Policy with a balanced budget.
19. A virement of £500k from Policy to the Economic Development and Leisure Service is to be made (see above).
20. For Other Services, outturn will be as previously reported.
Resource Implications (Financial and Employment and Climate Change, if appropriate)
21. As detailed in the body of the report.
Legal Implications (to Include Human Rights Implications)
22. There are no legal implications.
Crime and Disorder Implications
23. There are no crime and disorder implications.
Equal Opportunities Implications (to include Welsh Language issues)
24. There are no equal opportunity implications.
25. 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
26. Report is in accordance with the Policy Framework and Budget.
Consultation (including Ward Member Consultation)
27. Each Scrutiny Committee will receive a monitoring report on their respective areas. This report does not require Ward Member consultation.
Robert Ingram (Principal Accountant) (01446 709252)
The Directors of Learning and Development, Environment and Economic Regeneration and Legal, Public Protection and Housing Services and Social Services have been consulted on the contents of this report.
Sian Davies, Director of Finance, ICT and Property