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Agenda Item No

 

The Vale of Glamorgan Council

 

Scrutiny Committee (Lifelong Learning) 23rd July 2012

 

Report of the Chief Executive

 

Closure of Accounts 2011/12

 

Purpose of the Report

1.             The accounts are complete and this report is to inform Scrutiny Committee of the provisional financial position for the 2011/12 financial year.

Recommendation

1.             That the Scrutiny Committee notes the provisional financial position for the 2011/12 financial year. 

Reason for the Recommendation

1.             That Members are aware of the position with regard to the provisional financial position for the 2011/12 financial year relevant to this Scrutiny Committee.

Background

2.             Following the end of the financial year, 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 28th February 2011 (minute no.957) agreed the Authority’s budget requirement for 2011/12.

4.             Certain accounting adjustments have been made to service budgets in respect of:

·               Depreciation of Assets. This charge can vary for a year due to an increase / decrease in the valuation of assets. These movements need to be incorporated into the accounts.

·               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.

·               Single Status - the estimates have been amended as Policy has been charged with the estimated costs for 2011/12.

·               Energy - this estimate was not required for 2011/12 and has been transferred back to Policy from service committees.

·               Carbon Reduction Scheme. - The original estimate for this was included in Policy, however it has now been re distributed to the relevant service.

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

6.             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

Directorate of Learning and Development

Education and Schools

89,081

89,033

48

Libraries

2,657

2,633

24

Lifelong Learning

1,503

1,500

3

Catering

933

929

4

 

Grand Total

94,174

94,095

79

 

7.             The main reasons for the variances are set out in the following paragraphs 8 to 16.

8.             Education and Schools - After a previously agreed transfer to the School Investment Strategy Reserve of £600k and a £5k transfer to the Union Reserve, Education and Schools shows an underspend of £48k, which is made up as follows:-

9.             The School Improvement Service shows a total underspend of £56k, this is attributable to maximising the use of grant income (£40k) and an underspend against the budget set aside for specialist intervention (£6k). Additional income has been generated as a result of staff being seconded to work for the Central South Consortia (£10k).

10.        Overall the Additional Learning Needs Service was underspent by £182k which is made up as follows: additional recoupment income of £79k was received and there was an underspend of £9k on Out of County Recoupment expenditure. There was also savings of £31k on Hospital / Home Tuition, all of these areas of the service are demand led and unpredictable. The Pupil Referral Unit was underspent by £41k, of this £37k was due to delays in establishing suitable providers for pupil placements and £4k due to savings on the Service Level Agreement with Amelia Methodist Trust. In addition Secondary Behaviour Support was also underspent by £89k because planned expenditure was decommited early in the year to offset the projected overspend. However, due to unforseen income and reduced expenditure as outlined the projected overspend did not materialise.These underspends were offset by an overspend of £67k against the Pupil Support and Statemented budget which consisted of £56k Redundancy costs due to implementation of staff savings and £18k in respect of adaptations and repairs. This was offset by additional grant income of £5k and other variances across this area of the budget resulting in further savings of £2k

11.        The Strategic Planning and Performance Budget was overspent by £190k, this consisted of; an overspend of £195k against the Schools Maternity budget as a result of an increased number of schools based staff going on maternity leave in 2011/12. The Schools Rates budget was also overspent by £85k due to the addition of a number of new school premises at an increased cost and retention of one vacant site. The Nursery budget was overspent by £17k due to an increase in eligible children and an increase in provider costs and the repairs and maintenance budget overspent by £58k due to additional required maintenance in schools in 2011/12 and costs associated with the vacant Cowbridge Sixth Form site. Another area of overspend in year was the Director's budget £13k as a result of failing to implement the reduction in Personal Assistant hours proposed as part of 2011/12 savings target. These overspends were offset by underspends against Discretionary Awards £7k, Primary and Secondary non delegated £84k, vacancy savings due to posts held open across Strategic Planning £73k and a £14k contribution from the Planning and Transportation service for an underspend against the ringfenced budget for Mainstream Transport.

12.        Expenditure of £16k for one off costs associated with the roll out of the iPortal project to all schools has been funded by a transfer from the School Invest to Save Reserve.

13.        School's outstanding contributions for Early Retirement £316k have been funded by a transfer from the School Invest to Save Reserve, these contributions shall be repaid by schools over the next two financial years in accordance with the Schools Early Retirement and Redundancy Scheme.

14.        Libraries - Net favourable variance of £24k. This underspend was primarily the result of reduced staffing costs due to vacancies and the implementation of staff changes in preparation for future saving requirements £60k; underspends within transport £9k; and premises £8k resulting from a limited premises repair requirement. The majority of these underspends have been reinvested within the service as a contribution towards the continued implementation of the self service facility £42k and throughout the year on books, electronic resources, computer hardware, software and consumables £11k. Efficiency savings have been met this financial year from discontinuation of the mobile provision and an associated administration restructure.

15.        Lifelong Learning - net favourable variance of £3k following a transfer to the Lifelong Learning reserve £18k, to assist with phasing of the Training Contract receipts. The overall favourable variance for Lifelong Learning was £21k consisting of favourable variances within the Youth Services of £21k due to general staff / service underspends in respect of the Youth Service restructure, a favourable variance within Grant Management fees £20k due to fees exceeding budget and a favourable variance within Lifelong Learning Education and Training Service £33k due to Work Programme income from the SERCO and REHAB contracts exceeding cautious initial income projections. These variances have been partly utilised to offset an adverse variance within Community Enterprise £53k, which was the result of external funding not materialising and delayed service closure.

16.        Catering - Net favourable variance of £4k following a transfer from the Catering reserves £27k and a Trading Unit surplus of £113k. The service adverse variance of £136k was primarily attributable to 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. Efficiency savings have been achieved this financial year from reductions within the Catering Client staff establishment. The £113k Trading Unit surplus consists of £95k attributable to the Primary school provision which resulted from efficiencies within staffing, additional trading days and limited school closures during the financial year. The remaining £18k was attributable to surpluses in other catering service provision.

Capital

17.        The overall outturn for the Directorate of Learning and Development is an under spend of £428,000. The major variances are outlined below and the statement at Appendix 2 details the outturn by scheme.

 

School IT Leases                                                                               Under spend £81,000

This budget is used to fund IT equipment for schools who then repay the Authority on an internal lease basis over an agreed term. There was a shortfall in the requests for this funding from the schools during 2011/12 so the whole budget was not required.

 

Penarth Learning Community                                              Under spend £79,000

This budget has been approved to progress the initial design phase of this major school redevelopment scheme. External design consultants, Davis Langdon, have been employed in these early stages of the project and although detailed design has progressed well it has been requested that the remaining budget of £79,000 be slipped into 2012/13 in order to continue with the scheme

 

St Brides Major School Remodelling                     Under spend £89,000

A grant of £133,193 had been approved by WG as a contribution towards this school-led refurbishment scheme. Delays with the procurement process by the school meant it was necessary during the year to request that WG approve the transfer of £89,000 to fund the Welsh Medium School (Barry) scheme in order to maximise expenditure on the grant.  As the works to St Brides still need to be completed it has been requested that the sum of £89,000 be slipped into 2012/13 to complete the works. This will be funded from Council reserves which would otherwise have funded the Welsh Medium School (Barry) scheme during 2011/12.

 

Asset Renewal  Under spend £116,000

This is a composite budget of £721,000 for various smaller projects. Several of the schemes were completed below budget whilst others encountered delays due to planning permission. In order to complete those schemes not able to be completed during the year, it has been requested that slippage of £56,000 into 2012/13 be approved.

Reserves

18.        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.

19.        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.

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

21.        Attached at Appendix 3 is a schedule showing the Directorates' reserves as at 31st March 2012.

Resource Implications (Financial and Employment)

22.        Capital slippage as outlined in Appendix 4 has been requested.

23.        Given anticipated on-going cuts in capital funding for future years it is vital that all 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 underspend on the Programme to be retained and ploughed back into funding the future Capital Programme.

Sustainability and Climate Change Implications

24.        There are no sustainability and climate change implications resulting from this report.

Legal Implications (to Include Human Rights Implications)

25.        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 Director of Finance ICT and Property by the 30th June,2012. 

Crime and Disorder Implications

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

Equal Opportunities Implications (to include Welsh Language issues)

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

Corporate/Service Objectives

28.        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

29.        The Chief Executive will be requested to approve the slippage via the Urgency Procedure.

Consultation (including Ward Member Consultation)

30.        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 (Senior Group Accountant) (01446 709778)

Officers Consulted

Chief Executive

Responsible Officer:

John Maitland Evans - Chief Executive