Agenda Item No. 10
The Vale of Glamorgan Council
Scrutiny Committee (Corporate Resources): 19th March 2013
Report of the Managing Director
Revenue Monitoring for the period 1st April 2012 to 31st January 2013
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.
Reasons for the Recommendations
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 outturn 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 Housing Revenue Account is predicted to outturn with a favourable variance of £279k. This would result in a greater HRA Working Balance as at the year end.
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 £186k 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. There has been an adjustment of £8k increasing the ALN budget and reducing the Schools budgets to amend the amount of funding devolved to Secondary Schools for one to one LSA support. This has no overall affect on the Education and Schools budget.
7. Schools - The delegated budget relating to schools is expected to balance as any under/over spend is carried forward by schools.
8. School Improvement - There is a projected overspend of £12k. This is made up of an overspend of £40k due to an amended approach to funding the WJEC subscription which was originally proposed as a saving and also £10k 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 £28k.
9. Access and Inclusion - Additional Learning Needs is projecting an overspend of £269k. This is due to an overspend against the budget for children’s placements in independent schools of £267k, which is partly offset by additional recoupment income of £86k. ALN is also projecting an overspend of £255k against the one to one LSA budget and an additional £43k for Early Intervention support. This has been offset in year by £254k found as a result of decommitting other Pupil Support expenditure and as a result of savings identified as part of the proposed ALN Restructure, £22k additional income to be generated in year and a £14k 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. We have now received confirmation that an additional £50k which has been incurred for Post 16 placements in Independent Schools will be funded by additional grant funding in year. ALN is an extremely volatile budget and various options for offsetting any potential overspend are being investigated.
10. Strategy and Performance - Strategic Planning is projecting an underspend of £95k. £54k is due to the vacant Director post and there are savings against the pensions budgets of £29k, £15k against Directorate office supplies and advertising budgets, £22k in Education Finance due to additional grant funding and employee savings, £67k underspend in ICT and Data due to in year vacancy savings, additional income generated and new arrangements for funding school tests, £29k against ALN transport and £20k against the vacant school buildings officer post. This is offset by a projected overspend of £19k for Schools Rates and a £12k overspend as a result of alternative accommodation arrangements for Albert School. There is also a projected overspend against maternity costs met on behalf of the schools of £110k. 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.
11. 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.
12. In addition to finance the School’s contributions to the Early Retirement/Voluntary Redundancy scheme Education is projecting to transfer £68,000 from Education Reserves. This will be repaid by participating schools over 2013/14 and 2014/15.
13. Libraries - There is currently a £18k favourable variance against the profiled budget. The Service is however, anticipated to outturn within budget, as there are stock purchases to be made prior to year end.
14. The current forecast for Social Services at year end is an underspend of £956k. This is partly 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. There are also other areas of the service where previous overspends have reduced and where underspends have developed as detailed by service area below.
15. Children and Young People's Services - The predicted outturn for this service area is an overspend of £19k, which is an improvement of £104k. There has been a reduction of £44k in the overspend on the Children’s placements budget, which now stands at £200k over and the cost of an expensive post adoption package has been reduced by £60k from the value previously predicted earlier in the year, due to further review. There are still continuing pressures on this service, particularly in respect of accommodation costs for homeless young people.
16. Adult Services - The predicted outturn for this service is an underspend of £975k, which is an improvement of £449k. An over recovery of £212k from income received under the Deferred Payment Scheme is predicted for the year. This scheme allows for the Council to pay for the cost of residential care and take a legal charge on a client's home, allowing income to be received at a later date. It is also predicted that the income received as a contribution towards the cost of non residential care will be over recovered by around £237k. There is continuing pressure on the Community Care Packages budget, which is extremely volatile and 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 has not yet been agreed.
17. 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 and has been included in the projected figures shown for the services above. 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.
18. It should be noted that the underspends from savings made in advance are short term gains as the total savings target for the whole of the Budget Programme, over the 4 year period, has not yet been finalised. The over recovery of deferred income is a one off, which does not follow a pattern and is therefore difficult to predict.
Directorate of Visible and Housing
19. Highways Maintenance & Engineering Design & Procurement - There is currently a £24k adverse variance to the revised profiled budget. This is due to an overspend on potholes as a result of recent cold weather and snow. The revised budget for 2012/13 takes account of the efficiency savings required. The budget will be monitored closely to ensure any overspend is limited, however, it is projected that the Highways section could have an adverse variance of £75k at year end due to the increase in potholing costs.
20. Waste Management - There is currently a £95k 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. Also, the Waste Management section has received levels of income higher than anticipated. The revised budget for 2012/13 takes account of the efficiency savings required. The budget is currently expected to out-turn on target as there are several large purchases to be made before the end of the financial year.
21. Grounds Maintenance - There is currently a £37k 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. It is anticipated that this current adverse variance will be a similar level at the end of the financial year.
22. Support – There is currently a favourable variance of £143k 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, such as those described above. Currently, this budget is projected to out-turn with a favourable variance of £125k to offset the overspend within Highways Maintenance & Engineering Design & Procurement and Grounds Maintenance.
23. Building Services - It is currently anticipated that this area will breakeven at year end.
24. General Fund Housing - The Housing Services General Fund Account is currently showing a favourable variance of £15k on salaries but is expected to outturn on target by year end.
25. Public Sector Housing (HRA) - The Housing Revenue Account is predicted to outturn with a favourable variance of £279k. This variance is made up of an adverse variance on the housing repairs demand led responsive maintenance service of £120k. This variance is offset by favourable variances on salaries of £144k due to vacancies, income of £10k, premises costs of £17k, transport costs of £16k, Council run temporary accommodation of £93k due to the hostel being refurbished last year and other supplies and services of £119k. The implication of this underspend is that at year end, there will be a greater HRA Working Balance to be carried forward into future years.
Directorate of Development
26. Public Protection and Private Sector Housing - Both these areas are predicted to outturn on target.
27. Planning and Transportation - There is currently a £199k 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.
28. Leisure - There is currently a £168k 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.
29. Economic Development - There is currently a £26k 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.
30. An estimated underspending of £250k from within the Policy budget will be used to offset the overspending on the Leisure Service.
31. 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)
32. As detailed in the body of the report.
Sustainability and Climate Change Implications
33. There are no direct implications arising from 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.
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 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