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Agenda Item No. 7

 

The Vale of Glamorgan Council

 

Scrutiny Committee (Lifelong Learning) 18th July 2013

 

Report of the Chief Learning and Skills Officer

 

Closure of Accounts 2012/13

 

Purpose of the Report

1.             The accounts are complete and this report is to inform Scrutiny Committee of the provisional financial position of the Directorate for the 2012/13 financial year.

Recommendations

1.             That Scrutiny Committee are asked to note the slippage requests in Appendix 4 to this report. In order to avoid delays in progressing the schemes, the requests have been approved by the Managing Director exercising emergency powers.

2.             That the remainder of the report and the financial measures taken and proposed be noted.

Reasons for the Recommendations

1.             To note the amendments to the 2013/14 capital programme due to slippage from 2012/13.

2.             To note the remainder of 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 the Directorate. 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 7th March 2012 (minute no.951) agreed the Authority’s budget requirement for 2012/13.

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

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 for a year due to an increase / decrease in the valuation of assets. The movements need to be incorporated into the accounts.

7.             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 estimated cost was included in Policy; however it has now been re distributed to the relevant service.

8.             Set out below is a table comparing the amended estimate and the actual expenditure for the Directorate.

Service

Amended Revenue Estimate

Total Provisional Actual

Variance Favourable  () Adverse

 

       £’000

          £’000

             £’000

Education and Schools

90,502

90,483

19

Libraries

2,609

2,606

3

Lifelong Learning

199

197

2

Youth Services

1,142

1,139

3

Catering

1,021

1,016

5

 

 

 

 

Total

95,473

95,441

32

 

 

 

 

9.             The main reasons for the variances are set out in the following paragraphs 10 to 24.

10.        Education and Schools has a favourable variance of £19k. Variations within individual budgets within this overall figure follow in paragraphs 11 – 18.

11.        The School Improvement Service shows an underspend of £58k this is attributable to a reduction in the contribution required for the Joint Education Service £35k, reduced contribution to the family learning service £6k, additional grant income £88k and training income £9k. These underspends were offset by an overspend against meeting costs £4k, £22k incurred for pre inspection support and an overspend incurred against the departmental subscriptions due to the reinstatement of the WJEC contribution £43k and increased licence costs £11k.

12.        Overall the Access and Inclusion budget was overspent by £256k, which is made up as follows. An overspend of £227k against Learning Support Assistants (LSAs) and a further £43k incurred for early intervention LSAs. Costs for agency cover and salary protection amounted to a further £27k. An overspend was also incurred against Children’s placements £267k this was partly offset by additional recoupment income generated in year £90k. To offset these overspends the following budgets were decomitted in year; Secondary Behaviour Budget £118k, base budget funding for looked after children £27k. Savings were made against staffing budgets due to reduced hours; specialist and resource based teachers £86k, Education Psychologists £19k, Mobility Officer £5k and savings against staff advertising and training budgets £20k. The Pupil Referral Unit has overspent by £79k due to the shortfall on Age Weighted Pupil Unit contributions from schools previously reported and repairs and maintenance costs. The overnight stays budget also overspent by £10k and a review of charges needs to take place in this area. Hospital Home Tuition outturned with an underspend of £32k however a review of the level of provision in this area is currently underway.

13.        In addition recoupment income of £69k was generated from other Local Authorities towards the Penarth Learning Community (PLC). This is transferred to the School Investment Strategy Reserve.

14.        The Strategic Planning and Performance Budget was underspent by £59k, this consisted of; vacant Director post savings £51k, savings against the Education Finance budget £37k due to additional grant income received in year and various office budgets, savings of £30k against the pensions budget and a £78k underspend in ICT and Data due to in year vacancy savings, additional income generated and new arrangements for funding school tests, there was an underspend of £43k against salaries budgets. An overspend of £70k has been incurred as a result of costs associated with a number of vacant sites and removal costs for St Cyres, this has been offset by £20k saving against the vacant School Buildings Officer post. The ALN transport budget has reported an underspend of £60k which is as a result of reduced costs due to pupil absence and contractors forfeiting a budgeted 2.81% increase. An overspend of £92k has been reported against the Maternity budget this budget has been delegated to schools for 2013/14 and a self insurance scheme introduced. In addition the discretionary awards budget has overspent by £13k as a result of increased costs and a late invoice relating to 2011/12. An additional contribution of £85k was made to the School Investment Strategy Reserve.

15.        A sum of £190k contributed by schools included within the PLC Scheme has been transferred to the School Investment Strategy Reserve as well as a £271k underspend on the schools long term sickness reserve.

16.        In addition to the underspends and overspends outlined above a contribution from the ringfenced Mainstream transport budget in Development Services of £158k has offset overspends in Education and contributed to the overall underspend.

17.        An amount of £600k is included in the estimates as a contribution to the School Investment Strategy Reserve. This contribution has been actioned.

18.        For information in total £1.215M has been transferred from the Education and Schools budget into the School Investment Strategy Reserve.

19.        Libraries - Net favourable variance of £3k is after a £2k transfer to reserves. The gross underspend of £5k was primarily the result of an underspend of the energy recharge £11k, underspends within staffing costs £6k, transport £5k, additional library income £3k, £20k of the underspend was reinvested within the service throughout the financial year towards library resources and running costs.

20.        Efficiency savings have been met this financial year from discontinuation of the mobile provision and an associated administration restructure.

21.        Lifelong Learning - Net favourable variance of £2k is after a £1k transfer to reserves. The gross underspend relates to a reduction in energy recharges £3k

22.        Youth Service - Net favourable variance of £3k. This variance primarily represents  a reduction in energy recharges £18k, an underspend within staffing £31k due to vacancies in preparation for future saving requirements and additional grant income £32k received late in the financial year. These savings have been offset by a provision to fund delayed Youth projects £11k and additional staffing costs within NEET prevention and Gateway to Engagement £67k during 2013/14.

23.        Catering - Net favourable variance of £5k is after taking account of a Trading Unit surplus of £99k and a saving in the energy recharge £26k. £120k of the gross underspend of £125k was utilised to fund 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.

24.        The £99k Trading Unit surplus consists of £88k attributable to the Primary school provision resulting from efficiencies within staffing, additional trading days and limited school closures during the financial year with the remaining £11k attributable to a surplus from other catering service provision.              

Capital

25.        The overall outturn for the Directorate of Learning and Skills is an over spend of £265k.  A detailed breakdown of the schemes is shown in Appendix 2. The major variances are outlined below.

26.         Penarth Learning Community                                                         Over spend £564k

This major school redevelopment is now under construction and is proceeding well        on site. As the rate of progress exceeded the anticipated plan, the sum of £564k was spent in excess of the approved budget for the year. It has been requested that this sum be slipped from the existing 2013/14 allocation to cover this accelerated expenditure.

 

27.        Gladstone Primary School - Ground Floor rewire                          Under spend £44k

This £44k budget was put on hold whilst the Barry College vacated the property and plans for use of the space were re-evaluated. It has since been agreed that the school will occupy the space but additional works are proposed, including new main entrance, staff office, kitchen refurbishment and ICT installations. As the scheme has grown, it is proposed to amalgamate the £44k rewire budget, the 2013/14 approval of £50k for replacement ground floor windows plus £65k from the dilapidations sum received from Barry College. In addition, a further £65k will be contributed towards the internal refurbishment works by the school itself. As such it has been requested that slippage of the 2012/13 electrical works budget of £44k be approved, when this is added to the £65k dilapidations, the £65k school contribution and the existing budget it will result in an overall 2013/14 budget of £224k.

 

28.        Llancarfan and Gwenfo Demountable                                               Under spend  £161k 

A large double demountable unit was procured and completed at Gwenfo Primary School but original plans to replace three demountable units at Llancarfan were not possible within the existing budget. Investigations determined that one unit needed only slight remedial works, a second was purchased whilst the remaining budget was initially thought to be insufficient to replace the last unit. The specifications of the final unit have been reviewed to ensure that the project would be within budget. As the disruption involved in decanting the pupils means that works would need to be undertaken during summer holidays it became necessary to slip the budget into 2013/14. Since this re-design, at the end of 2012/13, WG offered the Authority a general schools grant of £574k which then released Council funding for 2013/14. Some £106k of this figure has now been approved, together with slippage of £154K, by way of Managing Director's emergency powers, to establish a £260k budget for the Llancarfan demountable in the 2013/14 capital programme. In addition, slippage of £7k for retention on the Gwenfo demountable was also approved under the same emergency powers request.

Reserves

29.        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.

30.        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.

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

32.        Attached at Appendix 3 is a schedule showing the Directorate's reserves as at 31st March 2013. The reserves have been reviewed and are currently considered adequate for reported uses.

Resource Implications (Financial and Employment)

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

34.        Given anticipated on-going cuts in capital funding for future years, it is vital that the funding of 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 under spend on the Programme to be retained and ploughed back into funding the future capital programme.

Sustainability and Climate Change Implications

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

Legal Implications (to Include Human Rights Implications)

36.        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, 2013.

Crime and Disorder Implications

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

Equal Opportunities Implications (to include Welsh Language issues)

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

Corporate/Service Objectives

39.        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

40.        The Managing Director will be requested to approve the slippage via Managing Director's emergency powers.

Consultation (including Ward Member Consultation)

41.        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

Not applicable

 

Responsible Officer:

Jennifer Hill

Chief Learning and Skills Officer