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Agenda Item No 6

 

 

The Vale of Glamorgan Council

 

Scrutiny Committee (Lifelong Learning) 17th July 2014

 

Report of the Director of Learning and Skills

 

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 of the Directorate 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 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 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 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 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 estimated 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 the Directorate.

Service

Amended Revenue Estimate

Total Provisional Actual

Variance Favourable  () Adverse

 

       £’000

          £’000

             £’000

Education and Schools

94,959

94,959

0

Libraries

2,729

2,727

2

Lifelong Learning

203

205

(2)

Youth Services

1,112

1,109

3

Catering

1,780

1,777

3

 

 

 

 

Total

100,783

100,777

6

 

 

 

 

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

11.      Education and Schools - Nil variance as detailed below.

12.      School Improvement and Inclusion - Favourable variance of £60k

There were adverse variances of £58k on statemented children Learning Support Assistants (LSA).  This is a volatile budget dependant on identification of pupils with additional needs which can occur throughout the academic year.  The Additional Needs budget has now been delegated to schools to ensure that budget management and decision making are aligned.  There was a £26k adverse variance on staffing costs of the Specialist Resource units and the sensory impairment provision as a result of an increase in pupils with significant needs and sensory impairments.  There is currently a review of all specialist resource units and sensory provision being undertaken as part of the Learning and Skills medium term budget planning. There were adverse variances of £21k on the Pupil Referral Unit due to backfilling costs of core teaching and LSA staff on long term sick and maternity and also £50k relating to the respite provision at Ysgol Erw’r Delyn, which is intended to be self-funding, therefore, charges have been reviewed and were increased from April 2014.

There is a favourable variance of £60k on recoupment school placement income from other authorities.  This budget is subject to future pressure as pupil support data suggests that more Out Of County (OOC) pupils leave Vale schools than join each year and other authorities, are where possible, finding alternative provision for new pupils.  Children's placements in independent schools and with other authorities have a favourable variance of £49k as a result of finding alternative provision for expensive placements as part of the ongoing OOC placement review. This budget can be volatile, as one high cost placement can cost £150k, however, the inclusion service are monitoring high risk pupils and trying where possible to keep pupils within Vale schools.  There were also favourable variances of £20k for Alternative Curriculum Placements due to the maximisation of the 14-19 grant project, £28k for the Behaviour Support service due to additional training income from other authorities and £58k on efficient use of grant income.

13.      Strategy and Resources – Favourable variance of £79k

There was an adverse variance of £136k within the discretionary further education travel awards budget due to an increase in post 16 pupils requiring transport to their chosen further education course and the need to pay invoices that related to the previous year. There was also an adverse variance of £44k due to unplanned pension back payments for school staff, these payments relate to staff who had not been invited to join the pension scheme when they joined the authority.

There are favourable variances of £69k within the Education finance section due to long term sickness within the admin team not being backfilled and one off savings on disclosure and barring and a further £35k on the union budget used for backfilling teachers on union duties.  There were favourable variances of £37k on the mainstream transport budget, which is managed by Development Services, as a result of contract efficiencies created from linking mainstream schools transport routes with fare paying school routes and £14k on the additional needs home to school transport budget due to increased income.  A £21k favourable variance occurred within the school building planning and repairs budget which is a responsive emergency budget dependant on the urgent needs of the schools and this budget has been reduced as part of the 2014/15 targets.  There was a £16k variance due to efficient use of grant income.    As pressures became clear part way through the year, the Non-Delegated schools expenditure budget was de-committed in order to achieve a balanced budget; this resulted in a further favourable variance of £67k.  This non delegated budget has been reduced as part of the 2014/15 budget process and therefore this flexibility will not be available for future years.

14.      Service Strategy and Regulation – Adverse variance of £139k

There is an adverse variance due to redundancy payment and early pension access, offset by savings in the Business Support Unit from a reduction in non-essential expenditure.

15.      Education Transfers to Reserves - A net transfer of £114k was transferred into the Invest to Save reserve as part of the Schools Voluntary Early Retirement and Redundancy Scheme. This transfer was in respect of payments from schools for teaching staff that had retired in previous years which had been funded centrally in the first instance.  Provision within the budget was made for a £612k transfer into the Schools Investment Strategy Reserve; a further £38k was contributed to this reserve from other authorities through a capital charge for out of county pupils who will make use of Ysgol Y Deri.

16.      Libraries -Favourable variance of £2k

There was an adverse variance due to a £57k transfer to reserves to assist with grant match funding for Library refurbishment grants.

There were favourable variances on staffing of £40k mainly due to a vacant post, premises £4k and transport £4k, all of which are in anticipation of meeting the 2014/15 savings target. There was also a favourable variance on energy of £11k.

17.      Lifelong Learning - Adverse variance of £2k

There was an adverse variance following a transfer to provisions of £87k, mainly to assist with meeting potential shortfalls following reductions in the Welsh Government allocation and the implementation of service reconfiguration.

There were favourable variances on energy of £3k, £28k on a vacant post which has now been filled, £7k on creche costs and £47k due to delays in course commencement, take up and training.

18.      Youth Service - Favourable variance of £3k

There was an adverse variance of £52k due to a transfer to provisions for committed one-off repairs to premises, restructure relocation costs, youth training and activities, associated staffing costs and potential redundancy costs linked to grant funding.

There were favourable variances on energy of £18k, £8k on the Duke of Edinburgh Awards funding, £5k on grant income, £24k due to delayed training and youth activities/ projects due to insufficient participant numbers, supplier availability and associated staffing costs, however, these have been committed to take place during 2014/15.

19.      Catering - Favourable variance of £3k

There is an adverse variance of £94k following the transfer to a reserve to provide for future Capital repayments in respect of the Cashless Catering System implementation.

There is a favourable variance of £97k due to the Trading Unit surplus consisting of £103k attributable to the Primary School provision resulting from efficiencies within staffing, additional trading days and limited school closures during the financial year offset by a £6k loss within other Catering Services as a result of providing staff cover during absences.

The Catering Client achieved a nil variance with adverse variances of £40k following a  capital repayment for the Cashless Catering System into the Project Fund,  expenditure of £250k to assist funding of kitchen/dining area improvements and school kitchen maintenance and repairs in order to meet the requirements of the Food Hygiene Rating Scheme and the Hazard Analysis of Critical Points Regulations.  Favourable variances used to offset the above were £26k for energy, £22k use of reserves, £242k as there was not full breakfast club take-up by schools and the maintenance and running costs of the Cashless Catering System were not required as full implementation will not be complete until 2014/15.

                       

Capital

20.      The overall outturn for the Directorate of Learning and Skills is a variance of £858k as detailed in Appendix 2. The major variances are outlined below.

21.       Penarth Learning Community - Expenditure brought forward of £1.713m

This major school redevelopment is under construction and is proceeding well on site. For the first time in 2013/14, large capital creditors have been included in the accounts.  An invoice for this scheme of £2m was received and paid in April 2014 but has been included in the 2013/14 accounts, thus showing an additional expenditure increase against budget.  There is no overall effect on the scheme funding as it has been requested that the 2014/15 budget is reduced and is brought forward into 2013/14 to cover this position.

 

22.      Capital Loans for Schools - Favourable variance of £255k 

This was a new initiative that was agreed by Cabinet on 29th July 2013.  It allows schools to receive a loan to undertake capital works and make repayments over a number of years thereby delivering projects in a shorter timescale than if they would have had to accumulate balances prior to work commencing.  There was only one scheme identified in 2013/14 which was at Gladstone School with a value of £45k.  A higher uptake has been received against the £300k funding in 2014/15.

 

23.      Demolition of St Cyres - Favourable variance of £131k

A large double demountable unit was procured and completed at Gwenfo Primary Work on this scheme is now complete but at a lower cost than the original budget.

 

Reserves

24.      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.

25.      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.

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

27.      Attached at Appendix 3 is a schedule showing the Directorate's reserves as at 31st March 2014. The reserves have been reviewed and are currently considered adequate for reported uses.

Resource Implications (Financial and Employment)

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

Sustainability and Climate Change Implications

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

Legal Implications (to Include Human Rights Implications)

30.      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

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

Equal Opportunities Implications (to include Welsh Language issues)

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

Corporate/Service Objectives

33.      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

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

Consultation (including Ward Member Consultation)

35.      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:

Jennifer Hill, Director of Learning and Skills

 

 

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