Top

Top

Agenda Item No 4

 

The Vale of Glamorgan Council

   

Scrutiny Committee (Lifelong Learning) 20th July 2015

 

Report of the Director of Learning and Skills

 

Closure of Accounts 2014/15

 

Purpose of the Report

1.         The accounts are complete and this report is to inform Scrutiny Committee of the provisional financial position for the Directorate for the 2014/15 financial year.

Recommendation

It is recommended that :-

 

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

Reason for the Recommendation

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. The Statement of Accounts will be approved by Council before 30th September, which will normally follow the audit.

Relevant Issues and Options

Revenue

3.         The Council on the 5th March 2014 (minute no.884) agreed the Authority’s budget requirement for 2014/15.

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

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.

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.

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

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 budget to cover the estimated cost was included in Policy; however it has now been re distributed to the relevant services.

5.         Set out below is a table comparing the amended budget and the actual expenditure for the Authority:

 

Service

 

Year - 2014/15

Amended Revenue Budget

Total Provisional Actual

Variance +Favourable  () Adverse

 

       £’000

          £’000

             £’000

Learning and Skills

 

 

 

Education and Schools

93,026

93,036

(10)

Libraries

2,567

2,560

+7

Adult Community Learning

254

252

+2

Youth Services

1,076

1,063

+13

Catering

1,792

1,772

+20

 

 

 

 

TOTAL

98,715

98,683

+32

 

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

7.         Education and Schools - Adverse variance of £10k

The favourable variance of £455k as detailed below has been offset by a transfer to the Libraries reserve of £255k and a transfer to the Schools Rationalisation reserve of £210k.

8.         School Improvement and Inclusion - Favourable variance of £43k

There was an adverse variance of £30k on the Pupil Referral Unit and Alternative Curriculum Placement budget but this was offset by a transfer of £30k from the Excluded Pupils reserve.  There were also adverse variances of £22k relating to statements as a result of a number of pupils requiring additional support in mainstream schools and £50k on Inter Authority Recoupment.

There is a favourable variance on employee costs of £115k.

9.         Strategy and Resources – Favourable variance of £275k

There was an adverse variance of £72k on emergency school repairs due to St Cyres flood damage repairs not being covered by insurance, a replacement boiler being required at St Andrews Primary school, various health and safety works being undertaken in schools and other small adverse variances of £11k.  There was an adverse variance of £134k due to one off costs in relation to school reorganisations however this was fully offset by a transfer from the Schools Rationalisation Reserve.

There was a favourable variance on transport of £225k.  This resulted from a combination of a £159k underspend on the mainstream transport budget managed, within Development Services, following a tender exercise undertaken in June 2014, the optimisation of routes and unaccounted inset days and monies not paid to operators due to service failures, a £44k favourable variance on Post 16 discretionary travel awards due to a decrease in the charges passed on from the colleges and a £22k underspend on Special Educational Needs transport due to savings arising from the two week closure of Ysgol Y Deri.  There were other favourable variances resulting from Non Delegated School costs of £15k, employee costs of £62k due to temporary vacancies throughout the year and payments to private nurseries of £56k due to a reduction in registered providers.  There was an underspend on debt repayment of £322k which was transferred to the Schools Investment Strategy fund.

10.      Service Strategy and Regulation – Favourable variance of £17k

There is a favourable variance of £17k due to a planned reduction of expenditure in the Business Support Unit. 

11.      Childrens and Young Peoples Partnership - Favourable variance of £120k

There is a favourable variance of £120k as the required savings for 2015/16 have been implemented ahead of schedule, some projects have been withdrawn and temporary changes to the funding of childcare umbrella groups.

12.      Education Transfers to/from Reserves - There was a net transfer of £152k to the Schools Early Retirement and Voluntary Redundancy reserve in respect of repayments from schools from previous retirements, a transfer of £58k to the Schools Investment Strategy Reserve in respect of capital charges to other authorities for pupils at Ysgol Y Deri and a net transfer of £408k from the Schools Long Term Supply reserve in respect of the 2014/15 deficit on the long term supply scheme.

13.      Libraries - Favourable variance of £7k

There were favourable variances on staffing of £73k due to posts being held vacant pending the Libraries review, income generation of £14k, £7k on a reduced energy recharge and £8k on other supplies and services. There was a transfer into the Libraries reserve of £95k to fund future costs in relation to the implementation of the Libraries review.

14.      Adult Community Learning - Favourable variance of £2k

There was an adverse variance due to funding reductions from Welsh Government and Cardiff and Vale College which resulted in an overspend on the Adult Community Learning, Family Learning and Schedule 2 franchise of £10k.

There were favourable variances of £23k in respect of the underspend on the Cardiff University funded Welsh for Adults programme and £2k against the energy recharge budget.

There was a net transfer into the Adult Community Learning reserve of £13k, which will be used to fund future pilot projects and possible restructuring costs due to the new Welsh for Adults contract. 

15.      Youth Service - Favourable variance of £13k

There were adverse variances of £54k relating to premises costs which included Area 41 dilapidation and relocation costs to achieve 2014/15 savings, £47k to assist with the implementation of the Youth Engagement and Progression Framework in schools and £18k on resources, teaching materials and ICT equipment.  As previously reported, this was partially offset by a transfer of £78k from the Youth reserve.

There were favourable variances on staffing of £51k due to the restructuring of the youth centres and delays in appointing new staff and temporary vacancies and a £3k underspend against the energy recharge.

16.      Catering - Favourable variance of £20k

The 2014/15 Trading Unit surplus was £57k which consisted of a £74k surplus attributable to the primary school provision and a deficit of £17k attributable to the non-school provision as a result of the closure of the Alps canteen. The £57k net trading unit surplus was used to contribute towards the capital repayment into the Project Fund for the Cashless Catering System.

The Catering Client service outturned with a £20k favourable variance, after transferring £31k from the Catering Improvements reserve to fund equipment to improve schools kitchen and dining facilities and the remainder of the costs were used to contribute towards the capital repayment into the Project Fund for the Cashless Catering System.  The total adverse variance on equipment was £153k which has been met partially from the reserve transfer and partially from other favourable variances within the service.  The favourable variances within the client budget are as follows; a £40k underspend on the breakfast club provision as not all schools have signed up to the breakfast club scheme yet, £37k underspend on revenue costs of the cashless catering system as the scheme is not yet fully rolled out, £15k on premises costs, £20k energy recharge, £20k on recharges paid to schools as one school opted out of the Vale Catering contract and £10k on supplies, services and transport.    

Capital

17.      The overall outturn for this Committee is a variance of £1.456m and the statement at Appendix 2 details the outturn by scheme.

18.      Penarth Learning Community – Slippage of £535k 

Asbestos in the old St Cyres Comprehensive School building resulted in delays to the planned programme, therefore £535k has been carried forward to 2015/16.

19.      Overboarding Ceilings - Expenditure brought forward of £139k

Emergency works to schools have been undertaken as a matter of priority and as a result, the budget for 2014/15 has been exceeded by £204k.  This has been offset by an underspend on the Victorian Schools scheme of £65k.  There is a budget to continue these works in 2015/16 and therefore there is no overall effect on the  total scheme funding, as it has been requested that the 2015/16 Victorian School budget is reduced by £139k and the funding is brought forward into 2014/15 to cover these costs. 

20.      Romilly/Llanfair Demountables – Slippage of £351k  

Both buildings were late additions to the 2014/15 Capital Programme. This presented a number of challenges during the planning, tendering and construction phases. Factors contributing to a delay in expenditure included a need for a negotiated tender process for superstructure works, restrictions on site, close proximity of high pressure gas and electrical mains and ground conditions. It has therefore been requested that £351k is carried forward into 2015/16 in order to complete the scheme.

21.      Evenlode New School Hall -  Slippage of £178k

This project is to be funded by receipts from the sale of land and issues were encountered during this process.   The resultant funding gap has been bridged by the allocation of £100k from the 2015/16 capital loan scheme.  Due to the above, it has been requested that £178k is carried forward into 2015/16.

22.      Cashless Catering and Management Information System – Favourable Variance of £146k

Initial project delays have resulted in a delayed roll out throughout the project.  The Cashless Catering Company has had restricted available dates to complete the work and it is anticipated that work will be completed in July 2015, with the exception of Oakfield School which will be completed in September 2015.  To allow the scheme to be completed £98k has been carried forward into 2015/16.

Reserves

23.      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.

24.      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.

25.      As part of the 2015/16 revenue budget setting process, each specific reserve had been reviewed and considered in light of the Council's priorities.  It had been deemed necessary to move funding from lower priority areas to higher priority areas and as a result, £3.5m of specific reserves were unearmarked and transferred to the Schools Investment Strategy reserve to allow for the continued investment in school buildings and their development.  In addition, as part of the Final Revenue Budget Proposals for 2015/16, a transfer to the Schools Investment Strategy reserve of £1.485m was approved, which was to be funded by the projected revenue underspend in 2014/15.  It is now considered that a further £735k is required to fund future works and has therefore been transferred into the fund.  Education has also transferred £380k into the fund, partly as a reimbursement for capital charges.

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

27.      Attached at Appendix 3 is a schedule showing the Committee's reserves as at 31st March 2015. 

Resource Implications (Financial and Employment)

28.      As part of the Final Revenue Budget Proposals for 2014/15, a savings target of £1.051m was set for this Committee.  Progress on the achievement of these savings has been monitored and reported to Committee during the year.  Appendix 4 to this report confirms the final status of these savings at the end of 2014/15 and all savings have been achieved.   

29.      As a result of the capital underspend in 2014/15, an allocation of £1.221m has been approved via Managing Director's Emergency Powers on 16th June 2015, as slippage into 2015/16 for this Committee.  This will fund the completion of schemes as shown in Appendix 5.

Sustainability and Climate Change Implications

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

Legal Implications (to Include Human Rights Implications)

31.      The provisional out turn figures for the Council has been 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, 2015

Crime and Disorder Implications

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

Equal Opportunities Implications (to include Welsh Language issues)

33.      There are no equality implications resulting from this report

Corporate/Service Objectives

34.      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

35.      Slippage has been approved via the use of Managing Director's emergency powers.

Consultation (including Ward Member Consultation)

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

Relevant Scrutiny Committee

37.      Corporate Resources.

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

 

Share on facebook Like us on Facebook