Agenda Item No
The Vale of Glamorgan Council
Scrutiny Committee (Corporate Resources) Meeting: 16th October 2012
Report of the Managing Director
Revenue Monitoring for the period 1st April 2012 to 31st August 2012
Purpose of the Report
1. To advise Scrutiny Committee of the progress of revenue expenditure for the period 1st April, 2012 to 31st, August, 2012.
1. Cabinet be requested to approve a virement from the Policy Budget to Economic Development and Leisure of £333k.
2. That the position with regard to the Authority’s 2012/13 Revenue Budget be noted.
Reasons for the Recommendations
1. To fund savings not achieved due to delay in transfer of leisure centres.
2. That the Members are aware of the projected revenue outturn for 2012/13.
2. Council on the 7th March 2012 (minute no 951 and 949 respectively) approved the Revenue Budget and Housing Revenue Account budget for 2012/13. The Budget information is subdivided by Cabinet Members’ portfolio within each Directorate.
Relevant Issues and Options
3. The projected outturn for the 2012/13 Revenue Budget is shown in comparison with the Revenue Budget at Appendix ‘1'. The forecast is for the Council to overspend in the sum £255k. This overspend is in respect of Leisure Services estimates and further work will be undertaken to clarify the position.
4. The forecast is for an estimated balanced budget on the Housing Revenue Account.
Directorate of Learning and Skills
5. Overall, the Education Budget is projected to balance as at the end of March 2013, however, this is after transferring £218k from Education Reserves. Any savings identified between now and the end of the year will be available to reduce the use of reserves, or 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. School Improvement - The projected overspend of £53k is due to an amended approach to funding the WJEC subscription which was proposed as a saving and also additional costs for subscriptions and licences paid on behalf of schools.
8. Access and Inclusion - Additional Learning Needs is projecting an overspend of £210k. This is due to an overspend against the budget for children’s placements in independent schools of £258k, which is partly offset by additional recoupment income of £56k. ALN is also projecting an overspend of £200k against the one to one LSA budget which has been offset in year by £208k found as a result of decommitting expenditure which is not required this year, including specific budgets for secondary behaviour support and looked after children. £45k has also been saved in the first half of the year from the vacant Head of Service post. There is also an overspend in ALN of £61k due to the refurbishment costs of the Pupil Referral Unit (PRU) prior to inspection and lower than projected Age Weighted Pupil Unit contributions from schools towards pupils placed in the PRU.
9. Strategy and Performance - Strategic Planning is projecting an underspend of £45k. £54k is due to the vacant Director post and there are savings against the pensions budgets of £46k. This is offset by a projected overspend of £15k for Schools Rates and a projected overspend against maternity costs met on behalf of the schools of £40k. The outturn for maternity is difficult to project accurately and was overspent by £195k in 2011/12 and therefore it will need to be monitored carefully.
10. Provision has been made within the budget for the annual cost of financing the School Investment Strategy of £600,000. This sum will be transferred to the School Investment Strategy Reserve.
11. In addition to finance the School’s contributions to the Early Retirement/Voluntary Redundancy scheme Education is projecting to transfer £66,000 from Education Reserves. This will be repaid by participating schools over 2013/14 and 2014/15.
12. Libraries - There is currently a £29k favourable variance against the profiled budget. The Service is anticipated to outturn within budget
13. Catering - There is currently a £45k favourable variance against the profiled budget. The Service is anticipated to outturn within budget, however this can be affected by external factors and the requirement to meet WG nutritional standards.
14. The current forecast for Social Services is a balanced budget.
15. Children and Young People's Services - There continues to be pressure on the Children’s placements budget, specifically from children with especially complex needs. There is also pressure on the budget in respect of accommodation costs for homeless young people. Any increase in the number of children becoming looked after by the Council over the year could have a significant impact on the service.
16. Adult Services - There is continuing pressure on the Community Care Packages budget. This budget is extremely volatile and can be adversely affected by outside influences such as last year's introduction of the First Steps Initiative by the Welsh Government which capped charging for non residential services to £50 per week. The impact of this change will continue to be monitored as the year progresses and discussions with the Welsh Government regarding the issue will continue. Another issue to affect the year end position will be the 2012/13 fee we set in respect of personal care costs for residents placed by the Council in residential and nursing homes provided by the independent sector. Currently, 2% is included in the budget. Another pressure on the Service is the need to achieve the savings targets, set as part of the Social Services Budget Programme.
Directorate of Visible and Housing
17. Highways Maintenance & Engineering Design & Procurement - There is currently a £26k adverse variance to the profiled budget. This is mainly due to a slight overspend on employee costs. The budget for 2012/13 takes account of the efficiency savings required. The budget will be monitored closely to ensure these savings are met and it is expected that the budget will outturn on target.
18. Waste Management - There is currently a £89k favourable variance to the profiled budget. The current underspend is mainly due to tonnages to landfill dropping as the food waste and co-mingled recycling programmes increase in popularity therefore saving on costly landfill disposal. The budget for 2012/13 takes account of the efficiency savings required. The budget is currently expected to outturn on target
19. Grounds Maintenance - There is currently a £63k adverse variance to the profiled budget. This is mainly due to an overspend on new machinery as new legislation has come in to force for Hand Arm Vibration. The budget for 2012/13 takes account of the efficiency savings required. The budget will be monitored closely to ensure these savings are met and the budget outturns on target.
20. Support – There is currently a favourable variance of £48k to the profiled budget. This budget is to be held for any cost pressures within Visible Services that may arise throughout the financial year. Currently this budget is also projected to outturn on target.
21. Building Services - It is currently anticipated that this area will breakeven at year end.
Directorate of Development
22. Economic Development and Leisure - The leisure partnership agreement was finalised on 1st August consequently there is a shortfall in achieving the £1m efficiency savings target set for the year which equates to £333k in 4 months. The budget for Economic Development and Leisure needs to be increased to reflect this change which will be compensated by a corresponding reduction in the Policy budget. This amendment has been reflected in Appendix 1.
23. After the above, there is an adverse variance on Leisure Services of £255k. Part of this is due to timing issues whereby some staff costs, such as those paid on timesheets, are paid a month in arrears and therefore when the centres transferred an additional month was paid (£55k). Also income received via direct debits on a monthly basis partly covered a period in advance for a future month and likewise an adjustment has to be made to reduce income at the point of transfer (£95k). This leaves an overspend of £105k arising as a result of the general uncertainty prior to the start of the contract, leading to a reduction in income, an increase in staff costs and additional work undertaken due to the transfer. The figures shown are based on Leisure Services estimates and further work will be undertaken to clarify the position and therefore the funding for the adverse variance will be addressed in the revised estimates report to Cabinet in November 2012.
24. There is an adverse variance of £92k on Lifelong Learning Education and Training Services as a result of the receipts from the Government Work Programme not achieving the target to date and this is currently under review in order to achieve outturn within budget by year end.
25. Planning and Transportation - There is currently a £137k favourable variance to the profiled budget. This is predominately due to income from planning fees for major schemes now being in advance of profiled estimate. The timing of their receipt will impact on the budget variance. It is anticipated that the division will outturn on budget.
26. An estimated underspending of £333k from within the Policy budget will be used to offset the overspending on the Leisure Service.
27. All Other Services may come under financial pressure during the year, however at this time they are expected to outturn on target.
Resource Implications (Financial and Employment)
28. As detailed in the body of the report.
Sustainability and Climate Change Implications
29. There are no direct implications arising from the report.
Legal Implications (to Include Human Rights Implications)
30. There are no legal implications.
Crime and Disorder Implications
31. There are no crime and disorder implications.
Equal Opportunities Implications (to include Welsh Language issues)
32. There are no equal opportunity implications.
33. 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
34. This report is in accordance with the Policy Framework and Budget.
Consultation (including Ward Member Consultation)
35. 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 Head of Strategic, Planning and Performance (Learning and Development), Directors of Visible Services and Housing, Development Service, Social Services and Resources have been consulted on the contents of this report.
Sian Davies, Managing Director