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Agenda Item No. 5

 

 

The Vale of Glamorgan Council

 

Scrutiny Committee (Economy and Environment): 15th July 2014

 

Joint Report of the Director of Development Services and the Director of Visible Services and Housing

 

Closure of Accounts 2013/14

 

Purpose of the Report

1.         The accounts are complete and this report is to inform Scrutiny Committee of the provisional financial position for the services within its remit, for the 2013/14 financial year.

Recommendation

1.         That Scrutiny Committee note the report and the financial measures taken and proposed.

Reason for the Recommendation

1.         To note 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 services within their remit. The Statement of Accounts will be approved by Council by the 30th September which will normally follow the audit.

Revenue

3.         The Council on the 6th March 2013 (minute no. 943) agreed the Authority’s budget requirement for 2013/14.

4.         Appendix 1 amends the revised estimates to take account of the following adjustments. There is no overall effect on the Committee.

5.         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.

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

7.         Recharges - These relate to movements in charges between internal Council services.

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 anticipated 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 this Committee.

Service

Amended Revenue Estimate

Total Provisional Actual

Variance Favourable  () Adverse

 

       £’000

          £’000

             £’000

Visible Services

 

 

 

Environment and Visible Services

18,813

18,758

55

Parks and Ground Maintenance

3,582

3,625

(43)

Building Services

70

78

(8)

 

 

 

 

Development Services

 

 

 

Planning and Transportation

5,506

5,448

58

Leisure

4,174

4,239

(65)

Economic Development

996

1,016

(20)

 

 

 

 

Total

33,141

33,164

(23)

 

 

 

 

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

Visible Services

 

11.      Environment & Visible Services - Favourable variance of £55k as detailed below:

12.      Waste Management & Cleansing - Favourable variance of £210k.

There were adverse variances of £133k on the Supplies & Services budgets, mainly due to the contribution to Prosiect Gwyrdd procurement costs and the contribution to procurement costs for the Organic Waste partnership with Cardiff and £8k on technical salary costs from the Engineers section.

There was a favourable variance on staffing of £150k due to a cut back in the level of overtime undertaken by the section and also a reduction in the level of agency staff used in preparation for budget savings required in 2014/15.  There was also a favourable variance on Cleansing transport costs of £96k due to the fleet size being reduced and a reduction in the number of hires of short term vehicles, again this is in preparation for the planned savings in 2014/15.  Income from other departments into the Waste Management & Cleansing section was £105k higher than anticipated.

13.      Highways & Engineers - Adverse variance of £262k.

There were adverse variances of £382k on the Premises budget, which were primarily due to providing for the one-off historical Cesspit costs, £35k on Internal Support and £800k due to a transfer from the Visible Services reserve which was not taken. 

There were favourable variances on staffing of £195k due to several vacant posts not being filled pending the Highways & Engineers restructure and Street Lighting capital work being undertaken by subcontractors at a lower cost than agency staff, £20k on Transport due to a reduced use of one off hire of vehicles, £604k on energy and £136k as a result of undertaking additional capital works for other departments.

14.      Support - Favourable variance of £154k.

This budget is held for any pressures in Visible Services throughout the financial year but was not required.

15.      All of the above were offset by a transfer to the Visible Services reserve of £47k. This is to be set aside to offset any costs that may arise from disposing of vehicles before the end of their useful life. Due to the level of savings required from reducing the vehicle fleet this may become more frequent.

16.      Grounds Maintenance - Adverse variance of £43k.

There were adverse variances on premises of £101k mainly due to increased one off repair costs at Colcot Sports Centre and Jenner Park, £129k on supplies & services due to an increased spend on subcontractors undertaking additional work for other departments and a subcontractor employed for tree maintenance instead of directly employed staff.

There were favourable variances on staffing of £60k mainly due to vacant posts and a reduction in overtime, £16k on Vehicles due to a reduced number of vehicles being hired and £111k additional income.

17.      Building Services - Adverse variance of £8k.

The Building Services trading unit had a turnover of £9.2m and made a surplus of £77k. This was assisted by the increased level of work Building Services is undertaking on the Welsh Housing Quality Standard.  The Building Cleaning & Security trading unit had a turnover of £3.4m and made a surplus of £44k.  In addition the Courier Service made a surplus of £17k. The Building Services Twin Hat function had an adverse variance of £9k.  All of the above were offset by a reduction in the recharge for maintenance repairs/WHQS works from Building Services to the HRA of £136k.

Development Services

 

18.      Planning and Transportation - Favourable variance of £58k.

There were adverse variances following a transfer to provisions of £60k to cover the costs of potential redundancies within the division and £90k for the electronic scanning and storage of historical planning files, necessary as part of the Space Project at the Dock Office.

There were favourable variances of £35k in the Transportation Division from additional income received from neighbouring authorities as a contribution towards cross boundary bus services during the year and £46k from the School transport service due to linking fare paying school routes with mainstream school transport routes in an effort to reduce contract costs. There were favourable variances of £45k on additional planning receipts due to an increase in the number of major applications received, £62k on staffing due to temporarily vacant posts pending recruitment and a high level of maternity leave and £10k relating to various other small variances.  Provision had also been made within the Transportation budget for the purchase of a Greenlinks vehicle, which is part of the community bus service, however, delays in the manufacturing process meant that the vehicle was not received and a transfer has, therefore, been made to provisions to cover expenditure in 2014/15 but this was £10k less than budgeted.

There has been a transfer to the Building Control reserve of £66k representing the surplus for the year on the Building Control Trading Account

19.      Leisure - Adverse variance of £65k

There were adverse variances of £70k as a result of legal costs relating to access issues at one of the country parks and following the transfer of £30k to provisions to cover the costs of refurbishing Nightingale Cottage, Porthkerry, a £80k transfer to provisions for legal fees within the Division and a transfer of £296k to the Regeneration and Economic Development Fund.

There were favourable variances of £183k on Leisure Centres mainly due to energy, £15k on staffing in the Leisure and Tourism division mainly under the Tourism Section.  There were also favourable variances in the Countryside Division of £135k relating to the lease of Dyffryn Gardens to the National Trust, £40k on salary costs due to long-term sickness and posts being held vacant pending a review of the staffing structure, £15k additional income at Cosmeston Medieval Village, mostly from filming on site and £23k from other small variances.

There has been a transfer to the Heritage Coast reserve of £6k and to the Rural Development Plan reserve of £18k, both representing income received in the year.

20.      Economic Development  - Adverse variance of £20k

There was an adverse variance following the transfer to the Regeneration and Economic Development Fund of £183k.

There was a favourable variance of £63k on the Employment Training Service which is in contrast to the £66k adverse variance in the previous year, prior to its transfer to Development Services.  The £63k is was made up of £41k from additional income from the Work Programme, as higher numbers of applicants are completing placements and the service has restructured and streamlined its operating procedures, resulting in a reduction in the operational costs of running the service of £22k. There were also favourable variances of £22k from income received by the Business Support Centre (BSC) as occupancy was higher than previous years, £29k on Miscellaneous Properties due to reduced maintenance and electricity costs as some of these costs were recharged to tenants, £16k on staffing due to the part year vacancy of the Town Centre Manager post, £17k at the Vale Enterprise Centre due to reduced maintenance costs and £16k from other small variances.

Capital

21.      A breakdown of the final capital programme for 2013/14 is shown in Appendix 2.

Visible Services

22.      The overall outturn for Visible Services was £5,045k.  The major variances are outlined below.

23.      Street Lighting Energy Reduction - Slippage of £157k

The start of this scheme was delayed due to the need to assess the various options to achieve the best way to delivery optimum energy efficiency.  This scheme will continue during 2014/15 and slippage of £157k has been requested. 

 

24.      Coldbrook Flood Risk Management - Slippage of £464k

The construction phase of the scheme was delayed due to a remodelling and redesign exercise, following discuss with Natural Resources Wales.  Design is now substantially complete and discussions are ongoing with WG regarding changes in scheme costs and potential grant funding.  A report is being brought to Cabinet by the Director of Visible Services & Housing detailing progress on this scheme.  Construction will commence following agreement of grant funding with WG.  It has therefore been requested that slippage of £464k is carried forward to 2014/15.

 

25.      Llanmaes Flood Risk Management - Slippage of £1.050m

The construction phase of the scheme was again delayed due to a remodelling and redesign exercise, following discuss with Natural Resources Wales.  Remodelling is still being undertaken but will be completed shortly.  Discussions regarding  the outcome will then take place with WG prior to work commencing.  It has, therefore, been requested that slippage of £1.050m is carried forward to 2014/15.

26.      Flood Risk Management - Slippage of £216k

There are four flood alleviation schemes which are outstanding as it was not possible to undertaken works and investigations due to environmental restrictions and staff resources.  Schemes are at varying stages of design, however, construction is anticipated during 2014/15 and slippage of £216k is requested.

27.      Cross Common Road Bridge - Slippage of £624k

Detailed design for a deck replacement has now been completed.  Further consultation is currently underway prior to delivering this scheme in 2014/15. It is, therefore, requested that slippage of £624k is carried forward to 2014/15.

28.      Gileston to Old Mill Highway Improvements - Slippage of £2.135m

Work has now commenced on site and is progressing well.  Slippage of £2.135m is required in order to complete the scheme.

Development Services

The overall outturn for Development Services is a variance of £320k. The major variances are outlined below

29.      Creative Rural Communities - Variance of £1.244m

Schemes include Pride in Our Farming Families, Cycleway and Village grants and Youth Heritage. A good take-up has been achieved so far. The large variance reflects the total expenditure on the grants which is funded from WG grants whereas the budget reflects purely Council match funding on the scheme. It is requested that Council match funding of £145k is carried forward to 2014/15. 

 

30.      Barry Regeneration Area Partnership - Slippage of £228k

Welsh Government provided £3.3m of grant funding for the Barry Island Regeneration scheme in 2013/14.  Work on site was delayed due to severe weather conditions through the winter months and will continue into 2014/15.  WG could only provide the grant for 2013/14 expenditure.  It was agreed with WG that other works, already identified to be funded from Council monies, could be claimed against the grant and that the released Council funding would be set aside to be carried forward into 2014/15 to fund the completion of the works. It has therefore been requested that the Barry Regeneration budget for 2014/15 is increased by £779k to reflect capital slippage of £228k from the Barry Regeneration scheme, £175k from schemes elsewhere in the capital programme, £110k from revenue contributions to capital and a transfer of £216k from the Visible Services reserves, all released by expenditure claimed from the grant in 2013/14 and in addition a £50k contribution from Leisure reserves. 

31.      St Paul's Church - Slippage of £250K                 

A report to Cabinet on 24th March 2014, minute no. C2256 agreed that authority be granted to market an opportunity for the use of St Paul's Church, Penarth for community/recreational uses or as a mixed use scheme including community/recreational uses and other appropriate uses, subject to the relevant planning processes.

 

32.      Leisure Centres Refurbishment - Slippage of £624k  

During the year, formal agreement was reached for the scope of condition survey works that were required.  Works were completed during May 2014, however, the final account is yet to be settled and, therefore, £624k slippage is required. £1.058m of the works undertaken in 2013/14 were funded from the Leisure Management Strategy reserve.

Reserves

33.      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.

34.      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.

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

36.      Attached at Appendix 3 is a schedule showing the reserves which fall within this Committee’s remit as at 31st March 2014.  The reserves have been reviewed and are currently considered adequate for reported uses.

Resource Implications (Financial and Employment)

37.      Capital slippage as outlined in Appendix 4 has been requested.  In order to avoid delays in progressing the schemes, the requests have been approved by the Managing Director exercising emergency powers.

Sustainability and Climate Change Implications

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

Legal Implications (to Include Human Rights Implications)

39.      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 2014.

Crime and Disorder Implications

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

Equal Opportunities Implications (to include Welsh Language issues)

41.      There are no equality implications resulting from this report.

Corporate/Service Objectives

42.      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

43.      The Managing Director has approved the slippage via Managing Director's emergency powers.

Consultation (including Ward Member Consultation)

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

Background Papers

None

 

Contact Officer

Carolyn Michael

Operational Manager – Accountancy 01446 709778

 

Officers Consulted

Not applicable

 

Responsible Officer:

Rob Thomas

Miles Punter

 

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