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Agenda Item No.

 

THE VALE OF GLAMORGAN COUNCIL

 

 

SCRUTINY COMMITTEE (SOCIAL CARE AND HEALTH): 28TH NOVEMBER, 2011

 

SCRUTINY COMMITTEE (HOUSING AND PUBLIC PROTECTION): 1ST DECEMBER, 2011

 

SCRUTINY COMMITTEE (LIFELONG LEARNING): 5TH DECEMBER, 2011

 

SCRUTINY COMMITTEE (ECONOMY AND ENVIRONMENT): 6TH DECEMBER, 2011

 

SCRUTINY COMMITTEE (CORPORATE RESOURCES): 20TH DECEMBER, 2011

 

REFERENCE FROM CABINET: 16TH NOVEMBER, 2011

 

 

C1511           INITIAL REVENUE BUDGET PROPOSALS 2012/13 (L) (SCRUTINY - ALL (WITH LEAD SCRUTINY COMMITTEE - CORPORATE RESOURCES) -

 

Cabinet approval for the amended budget for 2011/12 and the Initial Revenue Budget Proposals for 2012/13 were sought in order that they may be submitted to Scrutiny Committees for consultation.  The Council budget was determined largely by the Revenue Support Grant (RSG) settlement set by the Welsh Government.  The provisional RSG settlement was received from WG on 18th October, 2011 and the final settlement was likely in December 2011/Janaury 2012.

 

Appendix 1 to the report set out the necessary transfers to the original estimate for 2011/12, which were required to be made as follows (there was no overall effect on the net budget of the Council):

 

·       Asset Rents, International Accounting Standard (IAS) 19 and Recharges etc. these related to accounting items and expenditure outside the control of services.  They reflected charges to services for the use of capital assets, changes to inter service recharges, superannuation increases not required and adjustments in respect of pensions to comply with accounting standards. 

·       Transfers - to reflect mainly transfers of functions and responsibilities between services.  Primarily this related to:

        -         transfer of £1.896 million from the Education and Schools (Strategy and Performance) Budget to the E&ER Directorate (Planning and Transportation) Budget to ensure budgets more accurately reflected accountability and delivery responsibilities for Mainstream Transport.

        -         transfer of £204,000 from Catering Budget to Education and Schools (Strategy and Performance) Budget to simplify accounting arrangements; this budget was delegated to Secondary Schools to fund catering provision.

        -         transfer of a post of £10,000 from Lifelong Learning to Education Budget.

        -         transfer of £35,000 from Children's Services and £74,000 from Service Strategy to Adult Services, £109,000 to reflect the recharge from Service Strategy heading to the individual budget heads.

        -         savings made by Public Protection of £30,000 and Finance, ICT and Property of £150,000 transferred to Private Sector Housing.

        -         transfer of post for £24,000 from Finance, ICT and Property to Chief Executive (Contact Centre).

        -         transfer of monies to cover post for £40,000 from Policy to Legal and Democratic (Freedom of Information Service).

 

The undermentioned tabled compared the original budget with the projected outturn for 2011/12:

 

 

2011/12

2011/12

Variance

 

Amended

Original

Projected

 (+)Favourable

Directorate/Service

 Budget

Outturn

(-) Adverse

 

£’000

£’000

     £’000

Learning and Development

 

 

 

Education and Schools

89,838

89,838

0

Libraries

2,747

2,747

0

Lifelong Learning 

1,498

1,498

0

Catering

964

964

0

 

 

 

 

Social Services

 

 

 

Children and Young People

13,509

14,780

(-)1,271

Use of Provision

 

(210)

(+)210

Adult Services

33,004

35,404

(-)2,400

Use of Provision

 

(465)

(+)465

Service Strategy

297

297

0

Remedial Measures

 

(2,996)

(+)2,996

Total Social Services

46,810

46,810

0

 

 

 

 

Environmental and Economic Regeneration

 

 

 

Planning and Transportation                  

4,928

4,982

(-)54

Economic Development and Leisure

7,028

7,394

(-)366

Visible Services

21,224

21,054

(+)170

 

 

 

 

Legal, Public Protection and Housing Services

 

 

 

Legal, Democratic and Registrars etc

114

114

0

Public Protection

2,390

2,390

0

Private Sector Housing/Community Safety

2,771

2,771

0

 

 

 

 

Finance ICT and Property

 

 

 

Finance ICT and Property

(67)

(67)

0

Human Resources and Equalities

0

0

0

Building Services

0

0

0

 

 

 

 

General Policy

20,803

20,553

(+)250

 

 

 

 

Chief Executive

43

43

 0

Corporate Partnership

184

184

 0

Youth Offending Service

761

761

 0

 

 

 

 0

Total

202,036

202,036

 0

 

 

 

 

Met from General Reserve

(500)

(500)

          0

 

 

 

 

Grand Total

201,536

201,536

          0

 

 

Overall the Education Budget was currently projected to overspend by £62,000 at the end of March 2012.  Efforts would need to be made to take the necessary measures to mitigate the overspend.  Any residual overspend would be found from Education Reserves.  This was due to a project £65,000 overspend against the Additional Learning Needs (ALN) Budget off set by a £3,000 underspend against School Improvement due to increased income generated in year.  The ALN overspend was made up of a £5,000 overspend against the PRU.  In addition, there was a projected overspend of £200,000 for Learning Support Assistants support, also additional Independent Schools expenditure had been incurred in the year of £116,000.  As part of the efficiency savings implemented for 2011/12 and 2012/13 £56,000 had been incurred for redundancies in year.  These overspends had also been off-set by increased Recruitment Income and reduced Recruitment Expenditure £245,000, a £42,000 saving had been found from a vacant post in Primary Behaviour Support Team and £25,000 underspend against the Secondary Behaviour Support budget had been identified.

 

In addition, overspends of £75,000 against Rates budgets relating to schools and £35,000 for Private Provider Nursery placements due to an increased birth rate have been off-set by underspends against Non Delegated Schools Budgets £101,000 and Value Added Budget of £9,000.  Provision had also been made within the budget for the annual cost of financing the School Investment Strategy of £600,000. This sum would be transferred to the School Investment Strategy Reserve.  In addition to finance the Schools contributions to the Early Retirement/Voluntary Redundancy Scheme, Education was projecting to transfer £316,000 from Education Reserves this would be repaid by participating schools over 2012/13 and 2013/14.

 

The budgets in relation to Lifelong Learning and Catering were anticipated to outturn in budget. 

 

The projected overspend position for Children's Services was £1.3 million.  An analysis of this position was set out in the below table.  This overspend could be off-set by a Children's Services provision of £210,000 resulting in £1.1 million of savings to be found by the Service in the current financial year:

 

Area Of Spend

£000

Note

Children’s Placement

1,114

There is an increased number of high cost placements

Foster Carers

157

Increased payments to Foster Carers due to the introduction, by the Welsh Government, of the National Minimum Allowance for Foster Carers, which came into force from April 2011

GROSS DEFICIT

1,271

 

Use of Provisions

(210)

 

NET DEFICIT

1,061

 

 

The year end projected outturn for Adult Services was for an overspend of £2.4 million.  An analysis of this position was set out in the below table.  This overspend could be off-set by an Adult Services provision of £465,000, resulting in £1.9 million savings to be found by the Service during the current financial year:

 

Area Of Spend

£000

Note

Care Home Fees

465

An increase in fees required to pay Care Homes over and above the 2% inflation already included in the budget

2011/12 Savings

286

Savings identified for the year but not being achieved

Community Care Packages

2,370

This is made up of both an increase in demand and as a result of the introduction of the Welsh Government First Steps Improvement Package Initiative which introduced a £50 charge cap per week for domiciliary services.

Underspends within Adult Services budget

(721)

This is largely due to staff vacancies

GROSS DEFICIT

2,400

 

Use of Provisions

(465)

 

NET DEFICIT

1,935

 

 

It was noted that the Service Strategy Budget was projected to outturn on budget by the year end. 

 

The year end projected outturn for Social Services was for a projected overspend of £3.7 million in the current financial year.  There were provisions available to off-set this position to the value of £675,000 thus resulting in a net overspend of £3 million.  Accordingly, remedial measures would need to be undertaken in order to reduce this deficit.

 

The year end projected outturn for Planning and Transportation indicated an adverse variance of £54,000 when compared to the amended original budget.  This was because of increase supplies and services and premises costs of £76,000 mainly due to the inclusion of Local Road Safety Grant expenditure within the estimates.  Transport costs had increased by £50,000 primarily as a result of the increase in costs of providing home to school transport.  Customer receipts had reduced by £65,000 as a result of the current economic climate.  This had been off-set by savings on employee costs of £102,000 as a result of holding vacant posts.  There had also been an increase in grant income of £35,000 which was lower than anticipated due to a reduction in the Additional Planning Resources Grant.  Funding the adverse variance would be met from £54,000 of the savings within Visible Services. 

 

The year end projected outturn for Economic Development and Leisure indicated an adverse variance of £366,000 when compared to the amended original budget.  There had been an adverse variance in expenditure categories of £886,000 mainly within supplies and services and employees, including one off costs of £92,000 that had been incurred as a result of the proposed Leisure Centre Partnership and transfer of Dyffryn Gardens to the National Trust (NT).  This was off set by an increase in grant and internal recharge income of £422,000, an increase in contributions from funds of £81,000 and an additional £17,000 in customer receipts.  £250,000 of the adverse variance was due to the Leisure Centre Partnership estimated to be in place three months later than initially anticipated.  The £250,000 adverse variance would be met from savings within Policy.  The remaining adverse variance of £116,000 would be met from savings within Visible Services. 

 

The year end projected outturn for Visible Services showed a favourable variance of £170,000 when compared to the amended original budget.  The Visible Services Head of Service held a budget for any pressures that may arise during the financial year.  It is that budget that had been reduced by £170,000 to off-set the pressures detailed above within Planning and Leisure.  Even though the overall budget had only been reduced by £170,000 there were variances within Visible Services.  It was projected that the employee budget would be £59,000 overspent within Highways and Engineers Services.  Premises and Repairs Budgets were projected to be overspent by £663,000 which was mainly attributed to the level of repairs required to the highway network as a consequence of the last two severe winters plus there had been an increase of 18% in Street Lighting energy costs for 2011/12.  There was also a projected overspend on transport costs of £360,000 with the main contributing factor being the increased cost of fuel and the delay in rolling out co-mingling service which had led to higher than budgeted transport costs.  To off set these projected overspends the Supply and Services Budgets had been reduced by £670,000.  The majority of this saving was in Waste Management due to savings in landfill costs due to reduced tonnage and a re-negotiated contract for treatment of recycling.  In total, £380,000 in reserves was to be used to help fund the increased costs of repairing the highway and the increased cost of Street Lighting energy.  Finally, there had been an increase in the income estimate for Visible Services of £202,000.

 

Legal, Democratic and Registrars etc. were expected to outturn on target.  However, external legal fees (including counsel fees) were projected to outturn approximately £30,000 over budget.  The underspend on employee related posts would fund any overspend. 

 

Building Services was anticipated to outturn on target and overall the recharge to Building Services’ clients for management cost had reduced by £10,000.

 

The projected outturn for Policy shoed a favourable variance of £250,000 when compared to the amended original budget.  This underspend on loan charges would be used to fund the adverse variance shown on the Leisure Centre Partnership in the Economic Development and Leisure Service. 

 

It was noted that all other budgets were anticipated to outturn on target.

 

In regard to an estimated Council Tax surplus for 2011/12 there was a sum of £830,000.  Depending on the final year’s position this would be transferred to the Council Fund. 

 

General Reserves as at 1st April 2011 amounted to £7,858m. 

 

Cabinet approved the Budget Strategy and the Medium Term Financial Plan on 20th July 2011.  The objectives of that Strategy were set out within the body of the report. 

 

A summary of the overall base budget for 2012/13 was attached at Appendix 2 to the report.  This had been arrived at by adjusting the 2011/12 budget for items such as inflation and unavoidable growth. 

 

Asset Rents, IAS19 and Recharges etc - these related to accounting items and expenditure outside the control of services. 

 

They reflected charges to Services for the use of Capital Assets, changes to inter-service recharges, superannuation increases not required and adjustments in respect of pensions to comply with accounting standards.

 

Budget transfers - budget adjustments to reflect mainly transfers of functions and responsibilities between services and these primarily related to the following:

 

·       transfer of £1.869m. from the Education and Schools (Strategy and Performance) budget to the E&ER Directorate (Planning and Transportation) budget to ensure budgets more accurately reflected accountability and delivery responsibilities for Mainstream Transport;

·       transfer of £204,000 from Catering budget to Education  and Schools (Strategy and Performance) budget to simplify accounting arrangements; this budget was delegated to Secondary Schools to fund Catering provision;

·       transfer of post from Lifelong Learning to Education £10,000

·       transfer of £12,000 from Education to Catering in respect of refuse services;

·       transfer of £35,000 from Children’s Services and £74,000 from Service Strategy to Adult Services £109,000 in order to reflect the recharge from the Service Strategy heading to the individual budget heads;

·       savings made by Public Protection of £30,000 and Finance, ICT and Property of £150,000 transferred to Private Sector Housing;

·       transfer of post from Finance, ICT and Property to Chief Executive (Contact Centre) £24,000;

·       transfer of monies from Policy to cover Corporate Governance costs for Legal and Democratic (Freedom of Information) £40,000 and to Finance, ICT and Property (Training) £90,000.

 

As for adjustments, these were made up on an adjustment of £378,000 to remove the estimated April 2011 pay award for employees earning less than £21,000 which did not materialise (excluding Schools) from the individual services and included in General Policy.  In addition, the following one off growth items in 2011/12 had been removed from the individual services and included in General Policy:

 

        Planning and Transportation - Planning Fee Income £50,000

        Economic Development and Leisure - Penarth Leisure Centre £150,000

        Visible Services - Highways Service £900,000

        Legal, Public Protection and Housing Services - Land Charges £20,000.

 

The total figure for inflation of £2.798m. related to general price increases (£1.720m) and a 1% allowance for pay awards (£1.078m.).

 

Committed Growth totalled £1.455m. of this £56k. related to insurance charges due to increased premiums and changes in methodology to reflect a greater emphasis on claims value / number.  The balance of £1.399m. related to the following items:

 

·       Individual Schools Budget - £844,000 made up as follows:

 

                Teachers’ Threshold                                                  £223,000

                Teachers’ Leadership                                                  £60,000

                Teaching Increments                                                 £143,000

                Non Teaching Increments                                          £185,000

                Rates                                                                         £163,000

                Pay Award not required                                           (£174,000)

                Superannuation increase not required                      (£57,000)

                Other Growth                                                            £301,000

 

·       Visible Services - £225,000 for Landfill Tax annual increase.

 

·       General Policy - £180,000 increased cost to fund the Capital Programme and £150,000 for Council elections.

 

The total of the Committed Growth in the Individual School Budget (ISB) amounted to £844,000.  Together with a provision for pay awards and inflation of £622,000 this constituted the main increase in ISB required by WG (1.58% increase). 

 

The Medium Term Financial Plan included savings targets for Services for 2012/13 to 2014/15. 

 

Annual Efficiency Savings Targets

2011/12

2012/13

2013/14

2014/15

TOTAL

 

     £000

     £000

     £000

     £000

     £000

Learning and Development (excl. schools)

       642

    1,040

       244

       257

    2,183

Social Services

    1,634

       754

    1,847

    1,333

    5,568

Environmental and Economic Regeneration

   1,744

    1,089

       725

       297

    3,855

Legal, Public Protection and Private Housing

      590

         69

         18

         83

       760

Finance, ICT, Property, HR

      830

         48

           0

       101

       979

Chief Executive (inc. YOS)

      349

       288

         38

         62

       737

Total Required for the Year

   5,789

    3,288

    2,872

    2,133

  14,082

 

The savings of £3.288m. for 2012/13 as indicated above were included in the estimates.  The initial savings approved by Council on 28th February 2011 (Minute No. 957 refers) were in the sum of £3.072m.  The additional savings required of £216,000 was made up of the following:

 

·       Environmental and Economic regeneration - changes to waste collection and disposal arrangements (£140,000)

·       Finance, ICT and Property - review of Office Accommodation (£38,000)

·       Chief Executive - reviewing Contact Centre processes (£38,000).

 

A list of 2012/13 cost pressures as identified by Services was set out in Appendix 3 to the report.  These were not shown in any order of priority.  Altogether these totalled £7.044m. and some would need to be met from Services.  These excluded the cost of redundancies, which may be incurred in order to maintain the budget within resources available and these costs may be significant.

 

Attached at Appendix 4 to the report were the proposed 2014/15 savings shown over Directorates.  More detail was required on these savings and their impact would be considered as part of the budget review following the Local Government elections in May 2012. 

 

The next stage was for the estimates to be submitted to Scrutiny Committees for consultation.  Corporate Resources Scrutiny Committee was the lead Scrutiny Committee and would consider both the Initial Revenue Budget Proposals and any comments that other Scrutiny Committees had made.  The responses of the Scrutiny Committee must be made by no later than 20th December 2011.  It was also proposed to consult on the initial budget proposals with Local Service Board partners. 

 

The Cabinet’s final budget proposals would be considered by Council at its meeting to be held on 7th March 2012. 

 

This matter was for Executive decision.

 

RESOLVED -

 

(1)       T H A T the amended budget for 2011/12 as set out in Appendix 1 to the report be approved.

 

(2)       T H A T the Initial Revenue Budget Proposals for 2012/13 be approved for consultation with Scrutiny Committees.

 

(3)       T H A T the Director of Social Services take the necessary action to bring expenditure in line with the base budget.

 

Reasons for decisions

 

(1)       To incorporate changes in projected spending.

 

(2)       In order that Cabinet be informed of the comments of Scrutiny Committees before making a final proposal on the budget.

 

(3)       To bring Social Services expenditure in line with the base budget.”

 

 

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