Agenda Item No 4
The Vale of Glamorgan Council
Scrutiny Committee (Corporate Resources): 15th October 2013
Report of the Managing Director
Revenue Monitoring for the Period 1st April 2013 to 31st August 2013
Purpose of the Report
1. To advise Scrutiny Committee of the progress of revenue expenditure for the period 1st April, 2013 to 31st August, 2013.
1. That the position with regard to the Authority’s 2013/14 Revenue Budget be noted.
Reason for the Recommendation
1. That the Members are aware of the projected revenue outturn for 2013/14
2. Council on the 6th March 2013 (minute nos. 943 and 941 respectively) approved the Revenue Budget and Housing Revenue Account budget for 2013/14. 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 2013/14 Revenue Budget is shown in comparison with the Revenue Budget at Appendix '1'. Overall, 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.
Learning and Skills
5. Overall, the Education Budget is projected to balance as at the end of March 2014. Any savings identified between now and the end of the year will be available 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 - Currently, there is a £34k overspend projected for year end. It is anticipated that this will be due to overspends of £20k due to the failure to achieve the vacancy provision, additional support required by the School Improvement Service of £12k, additional hours worked in Governor Support of £2k.
8. Access and Inclusion - Currently, there is a £34k underspend projected for year end. It is anticipated that there will be an overspend of £67k against Learning Support Assistants, an overspend of £97k against placements that do not fall under the joint funding arrangement. This will be offset by additional recoupment income generated from out of county placements of £233k. Also included within the Access and Inclusion projected outturn is an overspend of £35k against the jointly funded budget for Residential Placements for Looked After Children.
9. Provision has been made within the budget for the annual cost of financing the School Investment Strategy of £612,000, after allowing for technical fees. This sum will be transferred to the School Investment Strategy Reserve. A further contribution to the reserve of £44k will be made for other local authorities contribution to the Penarth Learning Community.
10. Education is projecting to transfer £170k to reserves as part of the Voluntary Early Retirement and Redundancy scheme. This is made up of £273k received from schools to repay arrangements made in previous years and £103k required to finance new arrangements under the scheme.
11. Libraries - There is currently a £20k favourable variance against the profiled budget due to staff vacancies, however, this will be utilised within the service during the coming months and the service is therefore anticipated to outturn on target at year end.
12. Youth Service - The service is currently breaking even against the profiled budget and is anticipated to outturn on target at year end.
13. Lifelong Learning - There is currently a £24k favourable variance against the profiled budget due to staff vacancies, however, this will be utilised within the service during the coming months and the service is therefore anticipated to outturn on target at year end.
14. Catering - There is currently a £64k favourable variance against the profiled budget. The service can be affected by external factors such as snow closure and the requirement to meet WG nutritional guidelines and therefore it is currently predicted that the budget will outturn on target at year end.
15. The current forecast for Social Services is an overspend at year end of £876k. This is after deducting savings identified for the year of £2.04m.
16. Children and Young People's Services - The major issue is the need to manage continued pressure on the children’s placements budget. The current projected outturn for the jointly funded Residential Placements budget for Looked After Children is an overspend of £353k. This is an increase of £121k from July's position, mainly due to one young person moving into a residential placement due to an adoption breakdown. It is currently anticipated that this level of overspend can be offset by underspends elsewhere within Children's Services; therefore, a breakeven position is anticipated.
17. Adult Services - The major issue is the continuing pressure on Community Care Packages, the Division's most volatile budget and the one most dependent upon levels of service demand which are not within the Council's direct control. At present, the projected year end position is an overspend of £1.635m but this is after the reduction in budget to accommodate the savings target for the year of £685k. A decision on the allocation of additional funding identified by Welsh Government for the First Steps initiative, which resulted in the introduction of the £50 cap for non residential services, has not yet been received, however, any grant received will reduce this overspend. Actions are being taken to review all processes and to address this shortfall. There are potential underspends elsewhere in Adult Services of around £466k which could be used to offset this position, resulting in an overall projected overspend at year end of £1,169k.
18. Areas of savings have been identified this year which are £293k over the required target. This can be used to offset the overspend on Adult Services, resulting in a projected overspend for Social Services at year end of £876k.
19. Corporate Resources Scrutiny Committee on 10th September 2013 requested a report on the current financial position and the steps which can be taken to mitigate further expenditure. Work is currently being undertaken to prepare this report and the final version will be brought to this Committee once complete.
Visible Services and Housing Services
20. The current overall forecast is for a balanced budget.
21. Highways Maintenance and Engineering Design and Procurement - There is currently a £238k adverse variance to the profiled budget. This is mainly due to the continued pressure on the budget for repairing potholes. The amount of pot-holes should start reducing during the year due to the ongoing resurfacing works being undertaken and the Big Fill initiative, therefore the overall budget is currently expected to outturn £103k overspent. The original budget for 2013/14 takes account of the savings required. The budget will be monitored closely to ensure these savings are achieved.
22. Waste Management - There is currently a £84k adverse variance to the profiled budget. The main reason for the current overspend is the reduction in the revenue element of the Sustainable Waste Management grant. The grant has reduced by 7.8% from last year and this has only recently been notified to the Council. The original budget for 2013/14 takes account of the savings required and good progress has already been made to achieve this. The budget is currently expected to outturn on target as various other budgets will be held to offset the reduced grant.
23. Grounds Maintenance - There is currently a £115k adverse variance to the profiled budget. The main reasons for this overspend are continuing costs at Rhoose Point for which there is no budget and the expiration of grant income from Victoria Park. The original budget for 2013/14 takes account of the savings required. Efforts will be made to reduce the current level of overspend and it is projected that the budget will outturn on target at year end.
24. Support – There is currently a favourable variance of £43k 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 projected to be £103k underspent at year end.
25. General Fund Housing - The Housing General Fund is currently showing a favourable variance of £225k. The reason for this favourable variance is a reduction in the number of homeless individuals requiring emergency accommodation due to a long term increased focus on prevention by the homeless team. As a result, unit costs have decreased dramatically and only one individual is currently in Bed and Breakfast accommodation. This change of approach has been supported through an expansion of shared accommodation options within the private sector. Again this success is to be welcomed, but it must be reiterated that the use of the private rented sector has significant risks, particularly as a result of the changes already introduced through Welfare Reform and the challenges posed by the Universal Credit. This could have an adverse effect on the availability of future private rental options if the Homeless client group are considered by Landlords to be a risk to guaranteed income or increased homelessness if landlords choose to only let to those in employment. The Council has identified Welfare Reform as a significant risk and mitigation measures are already in place. Officers will continue to closely monitor the situation to keep any adverse effect to a minimum. Due to the possible risks outlined above, it is projected that the budget will outturn on target at year end.
26. Public Sector Housing (HRA) - The Housing Revenue Account is currently showing a favourable variance of £326k. There are adverse variances on income due to voids of £77k. Turnaround time for void properties is now on target and any further deviations from budget should be minimised. The adverse variance is offset by favourable variances on salaries of £141k due to vacancies in the housing teams, hostel and temporary accommodation running costs of £21k, sheltered accommodation £26k, public sector management £46k, legal fees of £14k, Incentive to Move schemes of £18k, Estate Management of £14k, Housing repairs £29k and other net costs £94k. Further resources will be required in the coming months to deal with Health and Safety issues such as asbestos management and fire safety risk assessments therefore an outturn on target is projected.
27. The current overall forecast is for a balanced budget.
28. Planning and Transportation - There is currently a favourable variance of £182k to the profiled budget. This is primarily due to planning fees and Highway Development income being in advance of the profiled estimate, however, as it is still early in the year and the receipt of income can be unpredictable, it is currently projected that the budget will outturn on target.
29. Leisure - There is currently a favourable variance of £39k to the profiled budget. This is primarily due to employee savings as a result of holding vacant posts pending a restructure. Improved weather over the summer has improved seasonal income. The Rights of Way budget however, is currently behind profile and therefore a year end outturn on target is projected.
30. Economic Development - There is currently a favourable variance of £9k to the profiled budget mainly due to a vacant post not yet being filled. There is however, a slight drop in income at the Vale Enterprise Centre, which will be closely monitored and therefore an outturn on target is currently projected.
31. Other services are anticipated to outturn on target by year end.
Resource Implications (Financial and Employment)
32. As detailed in the body of the report. The Social Services overspend of £876k will be funded from the Social Services Fund.
Sustainability and Climate Change Implications
33. As detailed in the body of 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 for Executive decision by the Cabinet.
Consultation (including Ward Member Consultation)
39. 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)
Chief Learning and Skills Officer, Directors of Social Services, Visible Services and Housing, Development Services and Resources.
Sian Davies, Managing Director