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Agenda Item No

 

The Vale of Glamorgan Council

 

Scrutiny Committee (Social Care and Health): 16th July 2012

 

Report of the Director of Social Services

 

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 note 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 redistributed 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

Social Services

Children and Young People

13,202

14,242

(1,040)

Adult Services

32,318

33,670

(1,352)

Service Strategy

297

292

5

Total Social Services

45,817

48,204

(2,387)

 

7.             Social Services – The budget for all divisions shows a year end overspend of £2.387M.  This is after a transfer from provisions of £56k. The main reasons for the variances are set out in the following paragraphs 8 to 11 below.

8.             Children and Young Peoples Services – Net Adverse Variance £1.040M. This variance is mainly due to an overspend on the Childrens Placement budget of £1.034M as a result of a number of high cost placements.  The fostering budget has also overspent by £221k, which is partly due to the introduction in 2011/12 by Welsh Government of the National Minimum Allowance for foster carers.  There have been underspends on staffing and transport costs of £38k.  There has been an underspend within the Business Management and Innovation Division and this has resulted in a reduced internal recharge to Children's Services of £121k.  A transfer from provisions of £56k was also made.

9.             Adult Services – Net Adverse Variance £1.352M. The main reason for this overspend is due to the continuing pressures on the Community Care budget which overspent by £2.041M.  The community care position by service areas was an overspend on Elderly £1.064M, an overspend on Elderly Mentally Infirm (EMI) by £549k, an overspend on Physical Disabilities by £689k, an underspend on Learning Disabilities by £33k. Income is extremely difficult to predict as it is affected by the clients' circumstances and their ability to pay and the budget recovered additional income of £228k.

10.        There were areas of underspending within the service.  These included £176k on staffing due to vacancies, £107k for the proposed pay award of £250 for staff earning under £21,000 which did not materialise, £80k on transport, £177k on supplies and services.     There has been an underspend within the Business Management and Innovation Division and this has resulted in a reduced internal recharge to Adults' Services of £149k.

11.        Service Strategy – Net Favourable Variance £5K.  The overall favourable variance of £5k is made up of savings of £101k on staffing, £42k on premises, £13k on transport, £51k on supplies and services and £68k from grant and other income.  This underspend has meant that there has been a reduced internal recharge to Children's and Adults' Services of £270k.

Capital

12.        The overall outturn for the Directorate of Social Services is an underspend of £414,000. The major variances are outlined below and the statement at Appendix 2 details the outturn by scheme.

Joint Equipment Store                                              Under spend £328,000

The sum of £336,000 from WG towards the establishment of a shared facility for Vale of Glamorgan and Cardiff County Council Social Services is the remainder of a five year grant allocation. The project was led by Cardiff County, who arranged all procurement. Though several requests for updates on expenditure were directed to Cardiff we were informed that there was no further need for the funding as all requirements had been met. As such, despite a small £7,775 spend, the majority of the grant allocation will not be required.

 

Day Care Re-configuration at Gardenhurst                                   Under spend £52,000

 

One of several budgets for a major re-configuration of the Authority's day care service provision, it had been anticipated that works would have advanced beyond the original approved budget of £62,367 and so a request was made to bring the sum of £50,000 from the approved £100,000 2012/13 bid back into 2011/12 to increase the 2011/12 budget to £112,367. However, the actual works completed by year-end fell short of what was expected because the transfer of the Meals On Wheels Service could not happen as anticipated due to electrical supply problems. This had a knock on effect on the kitchen refurbishment at Gardenhurst and was not able to proceed as planned. It has been requested that the sum of £38,000 is slipped into 2012/13 to continue the works. 

Reserves

13.        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.

14.        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.

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

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

Resource Implications (Financial and Employment and Climate Change, if appropriate)

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

18.        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.

Legal Implications (to Include Human Rights Implications)

19.        The provisional outturn 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

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

Equal Opportunities Implications (to include Welsh Language issues)

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

Corporate/Service Objectives

22.        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

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

Consultation (including Ward Member Consultation)

24.        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

Director of Social Services.

 

Responsible Officer:

Phil Evans, Director of Social Services

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