Agenda Item No
The Vale of Glamorgan Council
Scrutiny Committee (Corporate Resources): 19th February 2013
Report of the Managing Director
Revenue Monitoring for the period 1st April 2012 to 31st December 2012
Purpose of the Report
1. To advise Scrutiny Committee of the progress of revenue expenditure for the period 1st April, 2012 to 31st, December, 2012.
1. That the position with regard to the Authority’s 2012/13 Revenue Budget be noted.
Reason for the Recommendation
1. That the Members are aware of the projected revenue outturn for 2012/13.
2. Cabinet on the 19h November 2012 (minute no c 1911 and c 1912 respectively) approved the amended 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 out turn for the 2012/13 Revenue Budget is shown in comparison with the amended Revenue Budget at Appendix ‘1'. The forecast is for the Council to underspend in the sum of £105k.
4. The forecast is for an estimated balanced budget on the Housing Revenue Account.
Directorate of Learning and Skill
5. Overall, the Education Budget is projected to balance as at the end of March 2013, however, this is after transferring £190k 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 - There is a projected overspend of £11k. This is made up of an overspend of £42k due to an amended approach to funding the WJEC subscription which was originally proposed as a saving and also £11k additional costs for subscriptions and licences paid on behalf of schools. This is offset by a reduction in the projected cost of the Joint Education Service of £10k and additional income generated in year and vacancy savings made within the service of £32k.
8. Access and Inclusion - Additional Learning Needs (ALN) is projecting an overspend of £237k. This is due to an overspend against the budget for children’s placements in independent schools of £270k, which is partly offset by additional recoupment income of £64k. ALN is also projecting an overspend of £252k against the one to one LSA budget which has been offset in year by £242k found as a result of decommitting other Pupil Support expenditure and as a result of savings identified as part of the proposed ALN Restructure, £23k additional income to be generated in year and a £36k contribution made from the Transition budget. There is also an overspend in ALN of £80k due to refurbishment and teaching materials for 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, however , this will be funded by a contribution from the Excluded Pupils Reserve. An additional £50k has also been incurred for Post 16 placements in Independent Schools which has not been reflected in the projected outturn. This expenditure is usually funded from grant but as the level of grant the authority will receive is not yet known, it is possible that the Council be required to fund some of this cost. ALN is an extremely volatile budget and various options for offsetting any potential overspend are being investigated.
9. Strategy and Performance - Strategic Planning is projecting an underspend of £58k. £54k is due to the vacant Director post and there are savings against the pensions budgets of £36k, £12k against Directorate office supplies and advertising budgets, £15k in Education Finance due to additional grant funding and employee savings and £76k underspend in ICT and Data due to in year vacancy savings, additional income generated and new arrangements for funding school tests. 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 £120k. 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. From 2013/14 the maternity budget will be devolved to schools and a scheme similar to the one currently operated for long term sickness will be put in place.
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 £84,000 from Education Reserves. This will be repaid by participating schools over 2013/14 and 2014/15.
12. Libraries - There is currently a £42k favourable variance against the profiled budget. The Service is anticipated to outturn within budget.
13. Youth Service - There is currently a £27k favourable variance against the profiled budget. The Service is anticipated to outturn within budget.
14. Lifelong Learning - There is currently a £8k adverse variance against the profiled budget. The Service is anticipated to outturn within budget.
15. Catering - There is currently a £2k favourable variance against the profiled budget. The Service is anticipated to outturn on budget, however this can be affected by external factors and the requirement to meet WG nutritional standards
16. The current forecast for Social Services at year end still remains as an underspend of £403k. This is as a result of the savings identified for the year and anticipated to be achieved, being £403k in excess of the actual savings required for the year, set as part of the Social Services Budget Programme. While this is an achievement for the Directorate, it should be noted that this is only a short term gain as the total savings target for the whole of the Budget Programme, over the 4 year period, has not yet been finalised. The Directorate is still under considerable pressure from several areas which could affect the eventual year end outturn.
17. Children and Young People's Services - The year end projected outturn is an overspend of £123k. An underspend in the Social Services Business Management and Innovation Division will reduce the recharge to Children and Young Peoples Services and thus reduce the overspend. The service itself is actually projected to overspend by £177k. 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 and on the adoption budget due to a high cost post adoption support package. Any increase in the number of children becoming looked after by the Council over the year could have a significant impact on the service.
18. Adult Services - The year end projected outturn is an underspend of £526k. An underspend in the Social Services Business Management and Innovation Division will reduce the recharge to Adults Services and thus increase the underspend. The service itself is actually projected to underspend by £391k. There is continuing pressure on the Community Care Packages budget, which 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 however a higher increase is being sought by the sector. The remainder of the year could also be a testing time for this service, due to winter weather conditions and health related problems.
19. Business Management and Innovation - The year end projected outturn is an underspend of £189k however this will be recharged to other areas of Social Services showing a breakdown position under this heading. The reason for this underspend is mainly due to staff vacancies being held under the Protection and Policy heading pending a review of service provision. The budget shown is the net budget after recharges have been deducted.
Directorate of Visible and Housing
20. Highways Maintenance & Engineering Design & Procurement - There is currently a £44k favourable variance to the revised profiled budget. This is mainly due to increased levels of income being achieved by the Highways Section. The revised 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 out-turn on target.
21. Waste Management - There is currently a £3k favourable variance to the revised profiled budget. The current underspend is mainly due to a continuing decrease in the level of waste taken to landfill, therefore saving on costly disposal. The revised budget for 2012/13 takes account of the efficiency savings required. The budget is currently expected to out-turn on target
22. Grounds Maintenance - There is currently a £40k adverse variance to the revised 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 revised 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 out-turns on target.
23. Support – There is currently a favourable variance of £128k to the revised 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 out-turn on target.
24. Building Services - It is currently anticipated that this area will breakeven at year end
25. General Fund Housing - The Housing Services General Fund Account is currently showing a favourable variance of £11k on supplies and services but is expected to outturn on target.
26. Public Sector Housing (HRA) - The Housing Revenue Account is predicted to outturn on target and there is currently a favourable variance of £134k against the profiled budget. This variance is made up of an adverse variance on the housing repairs demand led responsive maintenance service of £65k, which will be monitored closely throughout the year to attempt to bring expenditure within budget. This variance is offset by favourable variances on Salaries (£40k), Income (£28k), Premises Costs (£21k), Transport (£9k) and other Supplies and Services (£101k).
Directorate of Development
27. Public Protection and Private Sector Housing - Both these areas are predicted to outturn on target.
28. Planning and Transportation - There is currently a £231k favourable variance to revised profiled budget. This is predominately due to income from planning fees for major schemes now being in advance of the profiled estimate. It is anticipated that the year end outturn will be a favourable variance of £59k, which will be used to fund overspend elsewhere in the division.
29. Leisure - There is currently a £167k adverse variance to the revised profiled budget, primarily due to overspending in the leisure centres as previously reported. It is anticipated that the outturn at year end will be an adverse variance of £168k. Part of this variance will be offset by savings from within Planning and Transportation.
30. Economic Development - There is currently a £37k adverse variance to the revised profiled budget. This variance is primarily attributable to the Employment and Training Services, as a result of the Government Work Programme receipts having not reached the profiled income targets to date. This service is currently under review to enable a return to within budget in 2013/14. It is anticipated that the outturn at year end will be an adverse variance of £36k.
31. An estimated underspending of £250k from within the Policy budget will be used to offset the overspending on the Leisure Service.
32. All Other Services may come under financial pressure during the year, however at this time they are expected to out turn on target.
Resource Implications (Financial and Employment)
33. As detailed in the body of the report.
Sustainability and Climate Change Implications
34. There are no direct implications arising from the report.
Legal Implications (to Include Human Rights Implications)
35. There are no legal implications.
Crime and Disorder Implications
36. There are no crime and disorder implications.
Equal Opportunities Implications (to include Welsh Language issues)
37. There are no equal opportunity implications.
38. 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
39. This report is in accordance with the Policy Framework and Budget.
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