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Agenda Item No. 6

 

The Vale of Glamorgan Council

 

Scrutiny Committee (Corporate Resources): 21st January 2014

 

Report of the Managing Director

 

Revenue Monitoring for the Period 1st April 2013 to 30th November 2013

 

Purpose of the Report

1.         To advise Scrutiny Committee of the progress of revenue expenditure for the period 1st April, 2013 to 30th November, 2013.

Recommendation

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        

Background

2.         Cabinet on the 18th November 2013 (minute nos. C 2076 and C 2075 respectively) approved the amended 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. Overall, the forecast is to have a favourable variance of £1.030 million.

4.         The forecast is for an estimated balanced budget on the Housing Revenue Account.

 

Directorate/Service                                   2013/14                2013/14          Variance

                                                                 Amended              Projected        (+)  Fav

                                                          Original Budget           Outturn              (-) Adv

                                                                     £'000                     £'000               £'000

Learning and Skills

Education and Schools                              93,879                   93,879                     0

Libraries                                                       2,606                     2,606                     0

 Lifelong Learning                                           193                        193                     0

Youth Service                                              1,127                     1,127                     0

Catering                                                       1,743                     1,743                     0

Social Services

Children and Young  People                      14,587                   14,804              (-)217

Adult Services                                            35,904                   35,980                (-)76

Business Management and                            298                        298                     0

  Innovation

Savings Ahead of Target                                293                            0              (+)293

Youth Offending Service                                 653                        653                      0

Visible Services and Housing

Environment and Visible Services              18,393                   18,393                     0

Parks and Grounds Maintenance                 3,477                     3,477                     0

Building Services                                                 0                            0                     0

General Fund Housing                                 1,150                     1,000              (+)150   

Public Sector Housing                                  8,129                     8,129                      0

Development                  

Public Protection                                          2,564                     2,564                      0

Private Housing                                          11,270                   11,270                      0

Planning and Transportation                        5,329                     5,329                      0

Leisure                                                          4,085                    4,.085                     0

Economic Development                                  950                        950                      0

Managing Director           

Resources                                                       130                        130                      0

Corporate and Customer Services                  379                        379                      0

General Policy                                             21,224                   20,344             (+)880   

Total                                                          228,363                  227,333          (+)1,030

Met from General Reserve                           -1,500                    -1,500                     0

Grand Total                                                226,863                 225,833          (+)1,030

5.         Appendix 1, 2, 3 includes graphs and tables setting out a comparison between the profiled budget and actual to date.

Learning and Skills

6.         It is anticipated that the projected outturn for 2013/14 will be in line with the budget.  This is after making a contribution to the Capital Investment reserve of £503k.   

7.         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.

8.         Schools - The delegated budget relating to schools is expected to balance as any under/over spend is carried forward by schools.

9.         Strategy and Performance - It is predicted that this budget will outturn with an adverse variance of £18k.  This is due to an estimated overspend on further education transport of £82k, rates of £60k and pension costs incurred as part of the Voluntary Early Retirement and Redundancy scheme of £20k. This is offset by favourable variances on Education Finance £34k, Performance Management of £10k, SEN transport £15k and other accumulated underspends of £5k. It should also be noted that the budget for mainstream home to school transport is held within Development Services. Any over or underspend at year end will be transferred to this budget. Currently it is projected that this could be in the region of £80k underspent.

10.      Service Strategy & Regulation - It is predicted that this budget will outturn with a favourable variance of £18k.  This is as a result of efficiencies within the business support unit supplies and services budget.

11.      Education is projecting to transfer £121k 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 £152k required to finance new arrangements under the scheme.

12.      Libraries - There is currently a £43k favourable variance against the profiled budget due to staff vacancies, however, this will be utilised within the service during the coming months to fund one off building works and equipment.  The service is therefore anticipated to outturn on target at year end.

13.      Youth Service - The service is currently breaking even against the profiled budget and is anticipated to outturn on target at year end.

14.      Lifelong Learning - There is currently a £15k favourable variance against the profiled budget due to a staff vacancy which has now been filled, 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.

15.      Catering - There is currently a £34k favourable variance against the profiled budget due to slower than anticipated take up of free Breakfast Club provision.  This underspend will be used to upgrade and maintain kitchens and equipment between now and year end and also supports an increase in meal numbers seen during the autumn term.  It is therefore predicted that the budget will outturn on target at year end.

Social Services

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 £508k.  Any overspend at year end will be funded in proportion to the original contributions made to the joint budget i.e. £457k (90%) Social Services and £51k (10%) Education.  In addition to the joint budget, a high cost placement provision of £1.46m was established as part of the budget setting process for 2013/14.  To date, £223k of the provision has been committed, which is in addition to expenditure incurred within the joint budget.  There are potential underspends elsewhere in Children's Services of around £240k which could be used to offset this position.  The increase in expenditure on the joint residential budget has resulted in a reduction in expenditure of £71k on alternative means of provision and accommodation costs required for the current cohort of children.  In addition, other areas of underspend are £50k on the legal expenses budget, £65k additional adoption income and £20k on administrative staff.  The Business Management and Innovation division is anticipated to underspend and any variance is apportioned to the service areas, therefore £34k of the underspend will be allocated to Children's Services.  It is currently anticipated that there will be a £217k overspend.

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 entirely within the Council's direct control.  At present, the projected year end position is an overspend of £685k. Actions, therefore, still need to be taken to review all processes and to address this shortfall.   There are potential underspends elsewhere in Adult Services of around £609k which could be used to offset this position.  These areas are £230k following the closure of Bryneithin, £254k on staffing and £41k on Premises.  With the levels of savings required for 2014/15 and 2015/16, budgets are being re-examined during 2013/14 with a view to their possible realignment as part of the consideration of new models of service delivery . Future savings are planned for these areas and some positions and premises costs are lower than expected as a result of the commencement of some of these plans ahead of schedule.  The Business Management and Innovation division is anticipated to underspend and any variance is apportioned to the service areas, therefore £84k of the underspend will be allocated to Adult Services.  This results in a currently anticipated overspend of £76k.

18.      Business Management and Innovation - The majority of this budget is recharged to Children's and Adult Services and is, therefore, showing a breakeven position at year end.  The position before recharges to services is an underspend of £118k.  This is made up of an underspend on staffing, mainly due to staff vacancies which were held prior to the introduction of the new staffing structure in the Protection and Policy section.  This underspend has meant that there has been a reduced internal recharge to Children's and Adult Services of £118k.

19.      Areas of savings have been identified this year which are £293k over the required target.  This can be used to offset the overspends identified above and a balanced budget is currently projected for year end.  A major issue which will affect the service between now and the end of the financial year is the impact of winter pressures.  This cannot yet be quantified but will be closely monitored and reported to future meetings.

Visible Services and Housing Services

20.      Highways Maintenance & Engineering Design & Procurement - There is currently a £80k adverse variance to the profiled budget.  This is mainly due to a reduction in the income being achieved by the Engineering section due to a reduction in the number of capital schemes requiring Engineering advice/design. It is anticipated that schemes will become available later in the financial year which should increase the level of income. It is therefore projected that the overall budget will outturn on target 

21.      Waste Management - There is currently a £56k favourable variance to the profiled budget. The saving is mainly linked to vacant posts within the service and a  reduction in the amount of waste being sent to landfill. Due to uncertainties around the increased future cost of the recycling treatment service, it is currently projected that the Waste Management budget will outturn on target.

22.      Grounds Maintenance - There currently stands a £27k adverse variance to the profiled budget. The main reason for this current overspend is Transport costs, however, many vehicles have now been off-hired, therefore, a balanced budget is currently anticipated.

23.      Support – There is currently a nil variance to the profiled budget.

24.      General Fund Housing - The Housing General Fund is currently showing a favourable variance of £191k.  The reason for this favourable variance is mainly due to the reduction in the number of homeless individuals requiring emergency accommodation due to a long term increased focus on prevention by the homeless team. 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 is 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 at £150,000 underspent at year end.

25.      Public Sector Housing (HRA) - The Housing Revenue Account is currently showing a favourable variance of £63k. The main reasons for the favourable variances are underspends on the Incentive to Move scheme budget (£40k) and staff vacancies (£23k).  Further resources will be required in the coming months to deal with Health and Safety issues, such as asbestos management, therefore, an outturn on target is projected.

Development Services

26.      Planning and Transportation - There is currently a favourable variance of £3k to the profiled budget.  This is due to income being slightly in advance of the profiled estimate.  With such a small variance it is currently projected that the budget will out-turn on target.

27.      Leisure - It is currently projected that this budget will outturn within target.

28.      Economic Development - It is currently projected that this budget will outturn within target.

Managing Director

29.      General Policy - the projected outturn is a favourable variance of £880k.  A sum of £880k is included in policy as a provision for the incremental effect of job evaluation. The Council's financial strategy is for services to fund the cost of increments and therefore the budget is no longer required.

30.      All other services are estimated to outturn on budget.

31.      For Committee's information the amount of Council Tax Reduction Scheme payments to recipients totalled £9.148 million (number of live claims 10,858) as at the 30th November 2013 for 2013/14. The amount included in the estimates for 2013/14 is £9.4 million. There is a potential underspend on this estimate, however claims may still be made and therefore the exact amount is uncertain at this time.

Resource Implications (Financial and Employment)

32.      As detailed in the body of the report.

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.

Corporate/Service Objectives

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.

Background Papers

None

 

Contact Officer

Robert Ingram (Principal Accountant) (01446 709252)

 

Officers Consulted

Chief Learning and Skills officer, Directors of Social Services, Visible Services and Housing, Development Services and Resources.

 

Responsible Officer:

Sian Davies, Managing Director