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Agenda Item No 6

 

 

The Vale of Glamorgan Council

 

Scrutiny Committee (Corporate Resources): 16th July 2013

 

Report of the Managing Director

 

Closure of Accounts 2012/13

 

Purpose of the Report

1.             The accounts are complete and this report is to inform Scrutiny Committee of the provisional financial position of the Council for the 2012/13 financial year

Recommendations

1.             That Scrutiny Committee are asked to note the slippage requests in Appendix 5 to this report. In order to avoid delays in progressing the schemes, the requests have been approved by the Managing Director exercising emergency powers.

2.             That the remainder of the report and the financial measures taken and proposed be noted.

Reasons for the Recommendations

1.             To note the amendments to the 2013/14 capital programme due to slippage from 2012/13.

2.             To note the remainder of the report and the financial measures taken and proposed.

 

Background

2.             Following the end of the financial year, Scrutiny Committee are provided with provisional outturn figures for the Council. The Statement of Accounts will be approved by Council by the 30th September which will normally follow the audit.

General Fund

3.             The Council on the 7th March 2012 (minute no.951) agreed the Authority’s budget requirement for 2012/13. This represented estimated net expenditure for the Authority of £203,056,490. Total expenditure was to be financed by Revenue Support Grant (£117,667,642), National Non-Domestic Rates contribution (£33,507,488) and Council Taxpayers (£51,881,360). The Standard Spending Assessment (SSA) for the year was £205,294,361.

4.             The revenue estimates have been amended  and approved by Cabinet during the financial year, however they are at the same overall net level as the original estimate £203.556M (before use of General Reserves of £500k). The actual expenditure against this for 2012/13 is £201.221M, which is £2.335M below the amended revenue estimate.

5.             Appendix '1’ amends the revised estimates to take account of the following adjustments. There is no overall effect on the Authority.

6.             IAS 19 Retirement Benefits. The purpose of this standard is to ensure that the operating costs of providing retirement benefits to employees are recognised in the accounting period in which they are earned by the employees. Figures provided by the actuary differ from that estimated and the movements need to be incorporated into the accounts.

7.             Asset Rents. This charge can vary for a year due to an increase / decrease in the valuation of assets. The movements need to be incorporated into the accounts.

8.             Carbon Reduction Commitment Scheme. - The scheme requires the Authority to report on carbon dioxide emissions associated with the use of electricity and gas within its buildings. Payment is then made to the Environment Agency to cover the charge in respect of those emissions. The original estimate to cover the estimated cost was included in Policy; however it has now been re distributed to the relevant service.

9.             Set out below is a table comparing the amended estimate and the actual expenditure for the Authority

Service

Amended Revenue Estimate

Total Provisional Actual

Variance Favourable  () Adverse

 

       £’000

          £’000

             £’000

Learning and Skills

 

 

 

Education and Schools

90,502

90,483

19

Libraries

2,609

2,606

3

Lifelong Learning

199

197

2

Youth Services

1,142

1,139

3

Catering

1,021

1,016

5

 

 

 

 

 

Social Services

 

 

 

Children and Young People

14,092

14,316

(224)

Adult Services

33,914

33,679

235

Business Management and Innovation

293

293

0

YOS

671

655

16

 

 

 

 

Visible Services and Housing

 

 

 

Environment and Visible Services

17,820

17,783

37

Parks and Ground Maintenance

3,319

3,344

(25)

Building Services

25

23

2

General Fund Housing

1,034

1,020

14

 

 

 

 

Development Services

 

 

 

Public Protection

2,469

2,467

2

Private Housing

1,542

1,517

25

Planning and Transportation

5,104

5,096

8

Leisure

4,989

4,831

158

Economic Development

874

874

0

 

 

 

 

Managing Director

 

 

 

Resources

129

53

76

Corporate and Customer Services

349

341

8

General Policy

21,459

19,488

1,971

 

 

 

 

Grand Total

203,556

201,221

2,335

 

 

 

 

 

 

 

 

10.        The main reasons for the variances are set out in the following paragraphs 12 to 58.

Learning and Development

 

11.        Education and Schools has a favourable variance of £19k. Variations within individual budgets within this overall figure follow in paragraphs 12 – 19.

12.        The School Improvement Service shows an underspend of £58k this is attributable to a reduction in the contribution required for the Joint Education Service £35k, reduced contribution to the family learning service £6k, additional grant income £88k and training income £9k. These underspends were offset by an overspend against meeting costs £4k, £22k incurred for pre inspection support and an overspend incurred against the departmental subscriptions due to the reinstatement of the WJEC contribution £43k and increased licence costs £11k.

13.        Overall the Access and Inclusion budget was overspent by £256k, which is made up as follows. An overspend of £227k against Learning Support Assistants (LSAs) and a further £43k incurred for early intervention LSAs. Costs for agency cover and salary protection amounted to a further £27k. An overspend was also incurred against Children’s placements £267k this was partly offset by additional recoupment income generated in year £90k. To offset these overspends the following budgets were decomitted in year; Secondary Behaviour Budget £118k, base budget funding for looked after children £27k. Savings were made against staffing budgets due to reduced hours; specialist and resource based teachers £86k, Education Psychologists £19k, Mobility Officer £5k and savings against staff advertising and training budgets £20k. The Pupil Referral Unit has overspent by £79k due to the shortfall on Age Weighted Pupil Unit contributions from schools previously reported and repairs and maintenance costs. The overnight stays budget also overspent by £10k and a review of charges needs to take place in this area. Hospital Home Tuition outturned with an underspend of £32k however a review of the level of provision in this area is currently underway.

14.        In addition recoupment income of £69k was generated from other Local Authorities towards the Penarth Learning Community (PLC). This is transferred to the School Investment Strategy Reserve.

15.        The Strategic Planning and Performance Budget was underspent by £59k, this consisted of; vacant Director post savings £51k, savings against the Education Finance budget £37k due to additional grant income received in year and various office budgets, savings of £30k against the pensions budget and a £78k underspend in ICT and Data due to in year vacancy savings, additional income generated and new arrangements for funding school tests, there was an underspend of £43k against salaries budgets. An overspend of £70k has been incurred as a result of costs associated with a number of vacant sites and removal costs for St Cyres, this has been offset by £20k saving against the vacant School Buildings Officer post. The ALN transport budget has reported an underspend of £60k which is as a result of reduced costs due to pupil absence and contractors forfeiting a budgeted 2.81% increase. An overspend of £92k has been reported against the Maternity budget this budget has been delegated to schools for 2013/14 and a self insurance scheme introduced. In addition the discretionary awards budget has overspent by £13k as a result of increased costs and a late invoice relating to 2011/12. An additional contribution of £85k was made to the School Investment Strategy Reserve.

16.        A sum of £190k contributed by schools included within the PLC Scheme has been transferred to the School Investment Strategy Reserve as well as a £271k underspend on the schools long term sickness reserve.

17.        In addition to the underspends and overspends outlined above a contribution from the ringfenced Mainstream transport budget in Development Services of £158k has offset overspends in Education and contributed to the overall underspend.

18.        An amount of £600k is included in the estimates as a contribution to the School Investment Strategy Reserve. This contribution has been actioned.

19.        For information in total £1.215M has been transferred from the Education and Schools budget into the School Investment Strategy Reserve.

20.        Libraries - Net favourable variance of £3k is after a £2k transfer to reserves. The gross underspend of £5k was primarily the result of an underspend of the energy recharge £11k, underspends within staffing costs £6k, transport £5k, additional library income £3k, £20k of the underspend was reinvested within the service throughout the financial year towards library resources and running costs.

21.        Efficiency savings have been met this financial year from discontinuation of the mobile provision and an associated administration restructure.

22.        Lifelong Learning - Net favourable variance of £2k is after a £1k transfer to reserves. The gross underspend relates to a reduction in energy recharges £3k

23.        Youth Service - Net favourable variance of £3k. This variance primarily represents  a reduction in energy recharges £18k, an underspend within staffing £31k due to vacancies in preparation for future saving requirements and additional grant income £32k received late in the financial year. These savings have been offset by a provision to fund delayed Youth projects £11k and additional staffing costs within NEET prevention and Gateway to Engagement £67k during 2013/14.

24.        Catering - Net favourable variance of £5k is after taking account of a Trading Unit surplus of £99k and a saving in the energy recharge £26k. £120k of the gross underspend of £125k was utilised to fund additional premises costs associated with school kitchen maintenance and repairs required in order to meet the requirements of the Food Hygiene Rating Scheme and the Hazard Analysis of Critical Points Regulations.

25.        The £99k Trading Unit surplus consists of £88k attributable to the Primary school provision resulting from efficiencies within staffing, additional trading days and limited school closures during the financial year with the remaining £11k attributable to a surplus from other catering service provision.

Social Services

 

26.        The budget for all service areas shows a year end underspend of £11k.  This is after a transfer to provisions of £775k and a reduced use of the Social Services Fund of £1M.  As part of the Social Services Budget Programme, £2.544M of the Social Services Fund had been approved for use in 2012/13, however as the service underspent, only £1.544M was required. This underspend is partly as a result of the actual savings identified for the year being £403k in excess of the planned savings required, as set through the Social Services Budget Programme.   In addition, £83k was included in the budget for a central energy recharge which was not required in the year.  The breakdown of this underspend is detailed by service area below.

27.        Children and Young Peoples Services – Net Adverse Variance of £224k.  This overspend has occurred as a result of a transfer to provisions of £523k to fund future high cost residential placements.  There has also been a reduction in the use of approved funding from the Social Services Fund of £116k. There have been areas of pressure on this budget which resulted in overspends.  These were the Childrens Placement budget which overspent by £152k due to a number of high cost placements and the Fifteen Plus budget overspent by £143k due to accommodation costs for homeless young people.   There have been underspends on staffing and transport costs of £67k, the legal budget underspent by £139k, £68k additional income was received, and other supplies and services underspent by £166k.  There are further underspends as a result of the underspend within the Business Management and Innovation Division resulting in a reduced internal recharge to Childrens Services of £109k and the savings achieved ahead of those required of £161k

28.        Adult Services – Net Favourable Variance £235k.  This underspend is after a transfer to provisions of £252k has been made to fund potential future increases in Care Home fees in excess of inflation provided in the budget.  There has also been a reduction in the use of approved funding from the Social Services Fund of £884k.  There was an underspend of £406k on community care packages, with an over recovery of £256k from income received under the Deferred Payment Scheme.  There have been underspends on staffing costs of £198k, partly made due to the 1% pay award included in the budget which did not materialise, £71k for transport and £33k on other supplies and services.  There are further underspends as a result of the underspend within the Business Management and Innovation Division resulting in a reduced internal recharge to Adults Services of £165k and the savings achieved ahead of those required of £242k.

29.        Business Management and Innovation - Net Variance Nil - The majority of this budget is recharged to Childrens and Adult Services and is, therefore, showing a breakeven position at year end.  The position before recharges to services is an underspend of £274k.  This is made up of an underspend of £125k on staffing, mainly due to staff vacancies being held under the Protection and Policy heading pending a review of service provision, £20k on transport, £46k from grant and other income and £83k from the central Energy recharge which was not required in the year.  This underspend has meant that there has been a reduced internal recharge to Childrens and Adults Services of £274k.

30.        Youth Offending Service - Net favourable variance of £16k. This consists of an underspend of central energy recharges £4k, an underspend within staffing costs due to staff vacancies / maternity leave/ limited additional hours £78k, an overspend within general running costs and premises £15k which includes one-off contributions towards software upgrades and an overspend within premises due to additional premises expenditure in order to complete building improvements £51k.

Visible and Housing Services

 

31.        Environment and Visible Services favourable variance of £37k. This is made up as follows:

32.        Cleansing favourable variance of £31k. The employee budget was underspent by £50k due to vacant posts. Additional costs at Atlantic Trading Estate for asbestos removal and an annual service charge caused an overspend on the premises budget of £41k. Cleansing also had an overspend on transport costs of £86k due to the popularity of the green waste service and a dedicated fleet of vehicles being used. Supplies & Services budgets were also overspent by £106k mainly due to the contribution to Project Gwyrdd procurement costs. This would normally have been covered by a contribution from the Visible Services Reserve however it was not required. Internal support costs were £67k underspent and Income into the cleansing section was also £147k higher than anticipated.

33.        Highways & Engineers had a favourable variance of £13k. Employee costs were over budget. £38k was due to an overspend on employee costs on the Winter Maintenance budget due to the cold winter and snow events in 12/13. £49k was due to agency costs for which there was no budget, however the Highways & Engineers section had additional income of £112k from these agency staff booking their time to capital schemes. Premises budgets mainly for resurfacing & potholes were overspent by £638k. Provision had been made to cover this from reserves however it was not required. Internal support budgets were underspent by £651k, of which £598k was due to a reduction in the energy recharge. Highways & Engineers also were charged £35k for Capital schemes for which there was no budget. Supplies & Services were £363k over budget however this was largely due to doing additional work for other departments. To offset this, the Highways & Engineers section had additional income of £373k from these schemes.

34.        The Support budget for Visible Services had a favourable variance of £193k. This budget is held for any pressures in Visible services throughout the financial year but was not required.

35.        All of the above were offset by a transfer to the Visible Services reserve of £200k. £160k was set aside to offset a potential shortfall in car park income in 2013/14. £30k will be used in 13/14 for Highways and Engineers feasibility studies and £10k is to be used to improve the overflow car park at Barry Island.

36.        Grounds Maintenance had an adverse variance of £25k. The employee budget was overspent by £73k mainly due to an overspend on agency costs. The premises budget was underspent by £40k mainly due to an underspend on the cost of Court Road Depot. Vehicles were under budget by £43k due to a lower spend than budgeted. The supplies & services budget was overspent by £80k. This was due to increased spend on Rhoose Point for which there is no budget, increased spend on machinery due to the need to replace more frequently due to hand arm vibration legislation and also a combination of various other smaller overspends. To offset this income was £19k more than budgeted. Internal support costs were also underspent by £26k

37.        The Building Services department had a favourable variance of £2k. The breakdown is as follows:

38.        The Building Services trading unit made a surplus of £36k, the Building Cleaning & Security trading unit made a surplus of £7k and the Building Services Twin Hat function had an overspend of £1k.

39.        All of the above were offset by a transfer to the Miscellaneous Building Services Technology reserve of £40k.

40.        General Fund Housing had a favourable variance of £14k after transferring £70k to a provision to fund a Housing Enabler Officer and undertake a traveller study. There were savings of £44k due to vacancies on the Homelessness team; additional Housing Benefit Income £34k; Temporary Accommodation Rent collected £6k; transport £2k; Support Costs £10k, software and licences £10k and other supplies and Services £15k. Set off against this was reduced supporting people commission £26k, and emergency homelessness bed and breakfast accommodation expenditure which exceeded the budget by £11k.

Development Services

 

41.        Public Protection The net favourable variance is £2k after transferring £91k to the Public Protection Reserve. Staff related savings were £107k arising from Licensing/Trading Standards £80k, Environmental Health Services £15k & other areas £12k. There were also savings resulting from additional income of £26k, arising mainly from prosecution costs. The underspend has been partly offset by an overspend of £17k on general running expenses and a deficit on the Coroners service of £23k. The deficit on the Coroners service is mainly in respect of increased costs on mortuary facilities and long inquest fees.

42.        Private Sector Housing/Housing Benefits - the net favourable variance is £25k after transferring £60k to the Public Protection Reserve, £320k to the Disabled Facilities provision and a contribution of £226k to the cost of VCAS Telecare upgrade. Other variances were attributable to the following:-

43.        Private Sector Housing – Additional income of £107k from grants agency and renewal area fees, partly offset by an overspend of £11k on staff related costs and £32k on general running expenses.

44.        Rent Allowances/Council Tax Benefits – An underspend of £245k on rent allowances and council tax benefit payments due to recovered overpayments and associated subsidy, audit fee savings of £22k and a saving of £300k on the payment of rent allowances/council tax benefit.

45.        Planning and Transportation – there is a favourable variance of £8k. The under spend is as a result of a £153k under spend on transport, additional customer receipts of £85k, a reduction in employee costs by £62k and a £1k saving on premises. This was offset by a £64k over spend on supplies on services.  A planned transfer from reserves of £119k to cover the shortfall in planning fee income was not required and there was a decrease in grant income of £9k and a net decrease in internal and support recharges of £1k. This is offset by a transfer of £100k to the Local Development Plan Provision.

46.        Leisure including Countryside – favourable variance £158k - the variance is due to the impact of the lease of Dyffryn Gardens to the National Trust during 2012/13.

47.        The Leisure Centres achieved a balanced budget. This is made up of increased employee costs of £95k, a £72k overspend on supplies and services and a £56k shortfall in customer receipts. This was offset by a £199k reduction in energy recharge and a net £24k saving on premises, third party payments.

48.        Economic Development – achieved a balanced budget. Details of this is shown below:

49.        A general under spend of £56k came from a saving of £38k on premises costs, £17k on employee costs and £15k on supplies and services. Internal recharge income was down £13k as a result of reduced technical salary income and there was a £1k shortfall in customer receipts.

50.        This underspend was offset by an adverse variance in the Community Enterprise Centre £2k and an adverse variance within Employment Training Service £66k, less a favourable variance within the Communities First Management charges £12k

51.        The variance within the Employment Training Service was primarily the result of income having not reached the original projected targets. A service restructure and relocation has been introduced to align future expenditure with income generated through the Work Programme during 2013/14.

Managing Director

 

52.        Resources - there is a net favourable balance of £76k and is due to:

53.        Human Resources. The underspend of £57k is in respect of employee and running costs.

54.        Finance & ICT. The under spend of £4k is after a transfer of £109k to the Welfare Reform reserve, £81k to the Exchequer/Revenues provision and a contribution of £285k to capital in respect of computer equipment. Other variances were attributable to staff related savings of £521k arising from Efficiencies, Accountancy & Audit £240k, Revenues/Benefits £180k, Transact/Exchequer £55k and ICT £46k. There was also savings resulting from additional income of £50k mainly from additional Department for Works and Pensions funding. The under spend has been partly offset by a deficit on general running expenses of £92k arising mainly from ICT related costs across the department.

55.        Property and Office Accommodation - the under spend of £10k is after transferring £405k to the Miscellaneous Building Repairs Fund. Savings were attributable to  repairs to buildings £140k, lower rent payable  than anticipated £41k, additional recharges to external services £160k and lower agency costs £74k,

56.        Legal & Democratic Services - the net favourable variance of £5k is after transferring £103k to the Legal Services Reserve. There were savings on general running expenses of £49k mainly arising from savings on external legal costs and savings on staff related expenditure £7k. There were also savings resulting from additional income of £35k mainly in relation to undertaking external legal work for Cardiff County Council and additional Registrar's income of £34k. These were offset by a shortfall on land charges income of £17k.

57.        Customer and Corporate Services - the net favourable variance is £8k after transferring £75k to the Customer Corporate Services Reserve. There were staff related savings of £39k relating to the Contact Centre £18k, Equalities £24k, Corporate Partnership £17k offset by an overspend in Communications of £20k. There was also an underspend resulting from additional income of £46k arising mainly from the Contact Centre. The underspend has been partly offset by an overspend of £2k on general running expenses

58.        General Policy - Net favourable variance of £1.971M, includes £1.480M Council Tax surplus and transfers to reserves re Events £250k, Renewals Fund £700k, Visible Services £1.5M, School Investment Strategy Fund £820k. Other variances are a lower recharge in respect of Housing strategy £213k, Corporate Governance running costs £700k,  support imbalances £300k, capital charges £1.063M, single status £458k, Youth and Catering support not required £263k, general supplies and services £363k, Carbon Reduction costs £74k, Audit Fees £109k and additional interest on investments £218k.

59.        A contribution from General Reserves of £500k is not required, and £1.835M will transfer into General Reserves increasing the balance from £7.993M to £9.828M.

Housing Revenue Account

 

60.        The 2012/13 housing revenue account resulted in a deficit of £1.311M compared to the revised estimate deficit of £1.832M (appendix 2).  The working balance opened at £14.881M and closed at £13.570M.

61.        The net favourable HRA revenue budget variance of £521k is identified over the following areas:-

62.        Supervision and Management General – Favourable Variance £479k

This variance is made up of favourable variances in Management Costs £89k, Incentive to Move Schemes £55k, Staff through vacancies £178k, Tenant Participation £42k, Homes 4U advertising £21k, Software/Hardware £49k, tenants removal (decant) £14k, other £31k.

 

63.        Supervision and Management Special Services – Favourable Variance £264k

This budget is split into three areas, Ty Iolo Homeless hostel, vale temporary accommodation and Vale Special Services.  The term Special services relates to Communal costs for all housing areas throughout the Vale of Glamorgan, including Sheltered accommodation, such as grass cutting, rubbish removal, communal lighting, security, warden salaries and environmental improvements.

 

64.        The favourable variance of £264k is a combination of the following :-

Ty Iolo underspend of £91k which reflects the reduction in revenue expenditure required after the hostel was refurbished in 2011/12; Temporary Accommodation underspend of £21k down to furniture and fixtures and fittings; and special services favourable variance £152k which is made up of underspends on energy bills £52k, Security £35k, Wardens £16k, Cleaning £22k, Treatment Works £20k, fixtures £12k, Environmental Improvements £20k, other favourable £23k offset by adverse variances on grounds maintenance £28k and Rubbish Removal £20k.

 

65.        Housing Repairs – Adverse Variance £159k. 

This 6% adverse variance is due to high demand in relation to emergency responsive repairs.

 

66.        Capital Financing Costs – favourable variance £9k

Both principal and interest charges were lower than anticipated

 

67.        Rents, Rates, Taxes and Other Charges – favourable variance £186k

This underspend is largely due to a favourable council tax variance of £91k for void properties. The historic budget included voids at Penarth heights which the vale no longer needs to account for.  Favourable variances of £37k on Insurance, £42k on legal fees and other £16k contributed to the overall variance.

 

68.        HRA Subsidy Payable – favourable variance £6k

The HRA negative subsidy payment for 2012/13 was less than budgeted.

 

69.        Increase in the Provision for bad and doubtful debts – favourable variance £9k

The increase in the provision required to allow for current and former arrears was not as high as anticipated.

 

70.        Capital Expenditure from Revenue Account – adverse variance £155k

A higher contribution was required than budgeted towards the Housing Improvement Plan, mainly due to lower usable capital receipts than estimated.

 

71.        Rent Collected on Dwellings and Non Dwellings – adverse variance £101k

Lower net rent collected than estimated. (represents 0.65% of actual).

 

72.        Interest Received – Adverse Variance £19k

The average London Interbank Bid rate for the year was lower than anticipated.

 

73.        Charges for Services and Facilities – favourable variance £4k

Insurance Fund

74.        The total Insurance Fund comprises of both a provision and reserve. It is used to pay premiums to external insurance companies and the settlement of claims. It receives sums charged to service revenue accounts and income from insurance repayments from claims. Sets out below are the gross movements on the fund for 2012/13

                                                                                                                       £'000

           Opening Balance                                                                                4,172

           Costs                                                                                                 (1,985)

           Income                                                                                                2,361

           Closing Balance                                                                                  4,548

 

75.        Of the closing balance £3.821M is held as a provision, representing potential liabilities on known claims and £727k as a reserve for claims not yet made.

Trading Operations

76.        The Trading Organisations referred to in this section are made up of Building Maintenance, Caretaking & Security and Building Cleaning and Vale Catering Services.

77.        The provisional figures for the Trading Services show an overall gross surplus of £122k. The details are below: 

 

Building Mtce

Building Cleaning

Caretaking and Security

Catering

Total

 

£,000

£,000

£,000

£,000

£,000

 

 

 

 

 

 

(Surplus)/ Deficit

(36)

19

(6)

(99)

(122)

 

 

 

 

 

 

 

78.        Explanations of the variances are shown in the relevant services above.

                       

Capital

79.        The overall position on the revised 2012/13 Capital Programme was a net underspend of £2.625M. The statement at Appendix 3 details the outturn by scheme.

Directorate of Learning and Skills 

80.        The overall outturn for the Directorate of Learning and Skills is an over spend of £265k. The major variances are outlined below.

81.         Penarth Learning Community                                                         Over spend £564k

This major school redevelopment is now under construction and is proceeding well        on site. As the rate of progress exceeded the anticipated plan, the sum of £564k was spent in excess of the approved budget for the year. It is requested that this sum be slipped from the existing 2013/14 allocation to cover this accelerated expenditure.

 

82.        Gladstone Primary School - Ground Floor rewire                          Under spend £44k

This £44k budget was put on hold whilst the Barry College vacated the property and plans for use of the space were re-evaluated. It has since been agreed that the school will occupy the space but additional works are proposed, including new main entrance, staff office, kitchen refurbishment and ICT installations. As the scheme has grown, it is proposed to amalgamate the £44k rewire budget, the 2013/14 approval of £50k for replacement ground floor windows plus £65k from the dilapidations sum received from Barry College. In addition, a further £65k will be contributed towards the internal refurbishment works by the school itself. As such it is requested that slippage of the 2012/13 electrical works budget of £44k be approved, when this is added to the £65k dilapidations, the £65k school contribution and the existing budget it will result in an overall 2013/14 budget of £224k.

 

83.        Llancarfan and Gwenfo Demountable                                               Under spend  £161k 

A large double demountable unit was procured and completed at Gwenfo Primary School but original plans to replace three demountable units at Llancarfan were not possible within the existing budget. Investigations determined that one unit needed only slight remedial works, a second was purchased whilst the remaining budget was initially thought to be insufficient to replace the last unit. The specifications of the final unit have been reviewed to ensure that the project would be within budget. As the disruption involved in decanting the pupils means that works would need to be undertaken during summer holidays it became necessary to slip the budget into 2013/14. Since this re-design, at the end of 2012/13, WG offered the Authority a general schools grant of £574k which then released Council funding for 2013/14. Some £106k of this figure has now been approved, together with slippage of £154K, by way of Managing Director's emergency powers, to establish a £260k budget for the Llancarfan demountable in the 2013/14 capital programme. In addition, slippage of £7k for retention on the Gwenfo demountable was also approved under the same emergency powers request.

 

Directorate of Social Services

84.        The overall outturn for the Directorate of Social Services is an under spend of £39k. The major variances are outlined below.

Day Care Re-configuration at Gardenhurst                            Under spend £37k

Structural issues were identified at the property which have meant that further intrusive property condition surveys were needed to be undertaken. This has caused delays in the progress of the scheme and it is requested that the budget of £12k be slipped into 2013/14 so that an in depth building survey can be completed before continuing with renovation works.

 

Directorate of Visible Services and Housing

85.        The overall outturn for the Directorate of Visible Services and Housing is an under spend of £525k. This comprises an under spend of £186K on the Housing Services £9.24M budget and an under spend of £339k on Visible Services' budget of £7.1M. The major variances are outlined below.

86.        Housing Improvement Programme                                             Net under spend £191k

Several major housing improvement budgets were established in 2012/13, including replacement kitchen and bathrooms as well as rewiring and central heating installations, aimed at achieving the Welsh Housing Quality Standard for our council dwellings. The total under spend of £191k represents just 2% of the total £9M budget. It is requested that the sum of £186k (net available Housing Services under spend) be slipped into 2013/14 to continue the works programme.

 

87.        Five Mile Lane                                                                                    Under spend £47k

WG offered the sum of £1.411M grant funding for traffic management works at the Sycamore Cross junction of the Five Mile Lane. Final costs for the main scheme were lower than estimated as works on alignment along the Five Mile Lane and lining works at Waycock Cross did not progress as planned due to inclement weather conditions. 

 

88.        Structural Repairs of Eastern Shelter, Barry Island                         Under spend £85k

An inspection of the site has identified deterioration in the stonework at the Eastern Shelter. Waste Management officers commissioned a structural survey to be undertaken at the site, with a view to ascertaining what structural works need to be made.  The structural report has now been received and it estimates that over £200k will be needed to be spent on the shelter. The works to the shelter have been delayed in order to incorporate any proposed changes/improvements in the Barry Regeneration Programme (Public Realm). To enable the full works required to be undertaken, additional funding will be required. Therefore, it is requested that the £85k capital budget be slipped into 2013/14 and used as matchfunding for potential WG grant income for the regeneration of Barry Island.

 

89.        Vehicle Replacement Programme                                                    Under spend £52k

There was, at year-end, a £52k under spend on the £1.982M budget (original budget was £2.376M less £394k previously slipped into 2013/14). £14k has been committed towards vehicles ordered before 31st March so it is requested that this sum be slipped into 2013/14.

 

90.        Gileston to Old Mill Highway Improvements                         Under spend £115k

The 100% Welsh Government grant funded scheme for highway improvements (£250k approved) included, amongst other costs, estimates for Dwr Cymru/Welsh Water fees; advance works and material testing. The Dwr Cymru/Welsh Water fees came in at 50% of the estimate and the advance works and material testing was not required. It is now requested that the under spend of £115k be slipped into 2013/14 to form part of the next phase. WG have confirmed that they will continue to provide this funding in 2013/14.

 

Directorate of Development Services

91.        The overall outturn for the Directorate of Development Services is £1.943M under spent. The major variances are outlined below.           

92.        Rural Local Development Plan - Business Plan 2                             Over spend £703k

The next generation of rural development grants, Business Plan 2 commenced during 2011/12, the first of a three year programme. Schemes involved include Pride in Our Villages, Pride in Our Heritage, encouraging home grown food and Pride in the Vale. A good take-up has been achieved so far. A large variance is shown as the budget for the scheme is for the Council's match funding (£60k) only; whereas the expenditure shown reflects not only the Council's costs but also payments by the Authority in respect of other organisations projects included in this Plan (circa £717k) which is funded by the receipt of external grants. Slippage of £14k on the budget of £60k is requested. 

 

93.        Barry Regeneration Partnership                                                       Under spend £108k                This budget comprises various smaller value projects, such as Nells Point Study and Thompson Street Public Art. Similar to the previous year, resources have been re-directed from this budget in order to ensure completion on WG's Barry Regeneration Area grants awarded in the year. As this budget is regarded as match funding for these grants, it has been requested that the sum of £99k (net available figure after other overspends) be slipped into 2013/14 towards future regeneration projects. 

94.        Barry Island Footbridge                                                                        Under spend £53k

Works on this part Department for Transport grant funded scheme were substantially completed during 2012/13 and the bridge was formally opened in February 2013. There are outstanding snagging issues to be resolved before the final account can be agreed and it is requested that the remaining available budget of £53k be slipped into 2013/14 in order to cover these committed costs as well as the release of retention currently held on the contract.

 

95.        Dyffryn House Partial Restoration                                                      Under spend £123k

The initial capital budget for this part-heritage Lottery Fund grant aided scheme to restore a number of state rooms at Dyffryn House was established before the final dates on the National Trust (NT) transfer were confirmed. The under spend on this budget reflects that not all planned works were completed whilst the house was in the control of the Council. The outstanding works will be undertaken by NT and the Council will agree funding issues with them. It is requested that the sum of £20k be slipped into 2013/14 to accommodate the Authority's outstanding commitment to the scheme.

 

96.        Alexandra Gardens Community Centre                                              Under spend £63k

The scheme, to re-build the recently demolished community centre within the Buttrills ward of Barry, was part-grant funded from WG during 2012/13 (£261k). Works were still on-going at the end of the financial year but had progressed well enough that full WG grant could be claimed. Works were continued into 2013/14 and are now completed. The £243k previously slipped into 2013/14 on this budget is expected to be sufficient to cover final costs on the scheme so further slippage will not be necessary. 

 

97.        Leisure Centres Refurbishment                                                         Under spend £2.040M  

This budget was established at £1.143M improvement works, to include the new cafe and gym extension at Barry Leisure Centre, new gym and coffee shop at Penarth Leisure Centre and new gym and dance studio at Llantwit Major Leisure Centre, £146k for renewal of the central heating plant at Penarth as well as £2M for property condition survey works. All works were to be procured and progressed by Parkwood Leisure. Delays in Parkwood completing surveys/testing required to inform a prioritised backlog maintenance schedule has adversely affected the works completed to date.  It is requested that the sum of £2.040M be slipped into 2013/14 to continue with the programmed works.

98.        Penarth Renewal Area                                                                          Under spend £76k

A £30k budget had been approved in 2012/13 for the release of retentions to contractors working on the group repair works at Penarth during 2010/11. Not all of these retentions have been released to date due to on-going issues with the works. In addition, a higher than budgeted level of owners' contributions on the scheme were received during 2012/13. Both factors account for an overall under spending on this budget. A request for £16k to be slipped into 2013/14 has been made in order to release these final retention payments.

 

Directorate of Resources

99.        The overall outturn for Resources is an under spend of £383k. The major variances are outlined below.

Disabled Access Audit and Improvements                                      Under spend   £110k         

The budget covered works at various locations such as Pencoedtre Park toilet and various community centres, including Colwinston,  Colcot and Glyndwr. The provision of a disabled toilet on the ground floor of the Civic Offices was planned to be undertaken during 2012/13 but has now been programmed to be incorporated into the works proposed for the Council chamber in order to avoid disruption to the users of the building (the works are scheduled during the summer recess). Slippage of £110k is requested to complete currently committed works, including the Civic Offices ground floor disabled toilet during 2013/14.

 

100.    CASH Grants                                                                                         Under spend £47k

The budget covers various small scale grants to community councils within the Vale. The budget is fully committed on projects but there has been a delay in the councils completing the works/procurement and claiming the grants. It is requested that the sum of £43k be slipped forward into 2013/14 in order to fund the grants when claimed.           

 

101.    Civic Offices Hot Water Upgrade                                                      Under spend £49k

The planned works to upgrade the water heating system included a new boiler incorporating solar panels. The boiler works were completed in January 2013. The solar panel works are now to be carried out in conjunction with the planned roofing works which will ensure that installation warranties are not compromised by having multiple contractors. As a result, slippage of £36k into 2013/14 is requested.

 

102.    Miscellaneous Buildings Asset Renewal 2011/12                          Under spend £80k

Initial delays on the Barry Leisure Centre Security & Re-modelling scheme, within the above budget, related to the alignment of this scheme with the major works undertaken by Parkwood Leisure which have taken longer to progress than was initially anticipated. There have been further delays during 2012/13 due to complications encountered with a Welsh Water sewer at the site. This has now been resolved. Works are now underway and slippage of £86k is requested in order to complete works. (An overspend of £6k on Wick pavilion boiler, also within the 2011/12 Miscellaneous Buildings Asset Renewal, is covered by under spends elsewhere within the Resources capital budgets)         

Reserves

103.    A reserve is an appropriation from a revenue account and does not constitute a cost of service until the expenditure is eventually incurred. A reserve does not cover a present obligation or liability and is a voluntary means of setting aside monies for future requirements either capital or revenue.

104.    A provision is a charge to revenue and is included as part of the cost of the relevant service at the point the provision is created. A provision covers a present obligation or liability that has occurred to a past event and is compulsory under accounting regulations.

105.    Funds no longer required as reserves may be transferred to the General Fund to be used for other purposes.

106.    Attached at Appendix '4' is a schedule showing the Council's reserves as at 31st March 2013. The reserves have been reviewed and are currently considered adequate for reported uses.

Resource Implications (Financial and Employment)

107.    The revenue underspending previously reported means that the General Reserve will increase from £7.993M to £9.828M.

108.    The under spend on the revised capital programme in 2012/13 is £2.625M, which is greatly reduced from the 2011/12 under spend of £11.884M.

109.    The table below shows how the capital programme has been financed in 2012/13.

Source of Funding

Outturn

(£000)

General Capital Funding

4,325

Capital Receipts – Housing

159

WG/Lottery/WEFO Grants

15,022

Revenue/Reserves

             11,401

Provisions

6,900

Unsupported Borrowing

2,230

Other

1,480

 

 

TOTAL

41,517

 

           

110.    General Capital Funding - Capital expenditure in the year was sufficient to cover the General Capital Funding provided by the Welsh Government.  Where schemes originally planned to be financed from General Capital Funding have underspent, other schemes, planned to be funded from capital receipts or reserves, have been substituted in their place. 

111.    Capital Receipts - . The existing capital receipts balance as at 31st March 2013 was £12.419M, all relating to the General Fund.  The sum of £1.883M was received from the sale of assets and mortgage repayments during 2012/13, as follows: 

                                                                                                                        £'000

                        Sale of Council Houses                                                         *588      

                        Sale of Land and Buildings                                               1,232

                        Mortgage repayments on council house sales                      46

                        Mortgage repayments on private homes                              17

 

*these receipts are gross and normally the Council only treats 25% as 'usable' to finance Housing Revenue Account capital expenditure, as the Subsidy   Determination assumes the 75% is used to 'reduce loan debt’.

                

112.    As a result of the capital under spend in 2012/13, an allocation of £2.667M is requested as slippage into 2013/14 to fund the completion of schemes as shown in Appendix 5. Of this figure, the sum of £9k will be funded from capital receipts and £2.658M will be provided from revenue, reserves or external sources.

113.    Major Repairs Allowance - The Major Repairs Allowance (MRA) is a grant given to the Authority by the Welsh Government and can be used for capital expenditure on Housing Revenue Account (HRA) assets.  The Authority’s MRA for 2012/13 was £2.8M. Works totalling £9.039M were spent on major improvements to the Council's housing stock, £2.8M of which was funded from the MRA, £159k from Housing capital receipts and £5.520M from Housing revenue and reserves as well as £560K of supported borrowing.  A further Major Repairs Allowance of £2.800M has recently been awarded to the Authority for 2013/14.

114.    Given anticipated on-going cuts in capital funding for future years it is vital that funding uncommitted capital expenditure be retained for future use on prioritised schemes. As such, Directorates have once again been informed that whilst committed capital schemes would be allowed slippage, those which were not contractually committed could not be funded. This enables some of the under spend on the Programme to be retained and ploughed back into funding the future capital programme

Sustainability and Climate Change Implications

115.    There are no Sustainability and Climate Change implications resulting from this report

Legal Implications (to Include Human Rights Implications)

116.    The provisional out turn figures for the Council will be used in the preparation of the Statements of Accounts, which under the Accounts and Audit Regulations, must be certified by the Section 151 Officer by the 30th June, 2013

Crime and Disorder Implications

117.    There are no crime and disorder implications resulting from this report

Equal Opportunities Implications (to include Welsh Language issues)

118.    There are no equality implications resulting from this report

Corporate/Service Objectives

119.    To provide sound financial and reliable advice in relation to all issues affecting the Council including the production of the statutory accounts.

Policy Framework and Budget

120.    The Managing Director will be requested to approve the slippage via Managing Director's emergency powers

Consultation (including Ward Member Consultation)

121.    The appropriate Chief Officers have been consulted on this report. This report does not require Ward Member consultation.

Background Papers

None

Contact Officer

Clive Teague

Head of Financial Services (Section 151 Officer)

 

Officers Consulted

Not applicable

Responsible Officer:

Clive Teague

Head of Financial Services (Section 151 Officer)

 

 

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