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Agenda Item No. 9

 

 

The Vale of Glamorgan Council

 

Scrutiny Committee (Social Care and Health): 15th July 2013

 

Report of the Director of Social Services

 

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 this 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 this 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 Authority.

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

Social Services

 

 

 

Children and Young People

14,092

14,316

(224)

Adult Services

33,914

33,679

235

Business Management and Innovation

293

293

0

YOS

671

655

16

 

 

 

 

Total

48,970

48,943

27

 

 

 

 

9.             The main reasons for the variances are set out in the following paragraphs 10 to 14.

10.        The budget for all service areas shows a year end underspend of £27k.  This is after a transfer to provisions of £775k and a reduced use of the Social Services Fund of £1M.  As part of the Social Services Budget Programme, £2.544M of the Social Services Fund had been approved for use in 2012/13, however as the service underspent, only £1.544M was required. This underspend is partly as a result of the actual savings identified for the year being £403k in excess of the planned savings required, as set through the Social Services Budget Programme.   In addition, £83k was included in the budget for a central energy recharge which was not required in the year.  The breakdown of this underspend is detailed by service area below.

11.        Children and Young Peoples Services – Net Adverse Variance of £224k.  This overspend has occurred as a result of a transfer to provisions of £523k to fund future high cost residential placements.  There has also been a reduction in the use of approved funding from the Social Services Fund of £116k. There have been areas of pressure on this budget which resulted in overspends.  These were the Childrens Placement budget which overspent by £152k due to a number of high cost placements and the Fifteen Plus budget overspent by £143k due to accommodation costs for homeless young people.   There have been underspends on staffing and transport costs of £67k, the legal budget underspent by £139k, £68k additional income was received, and other supplies and services underspent by £166k.  There are further underspends as a result of the underspend within the Business Management and Innovation Division resulting in a reduced internal recharge to Childrens Services of £109k and the savings achieved ahead of those required of £161k.

12.        Adult Services – Net Favourable Variance £235k.  This underspend is after a transfer to provisions of £252k has been made to fund potential future increases in Care Home fees in excess of inflation provided in the budget.  There has also been a reduction in the use of approved funding from the Social Services Fund of £884k.  There was an underspend of £406k on community care packages, with an over recovery of £256k from income received under the Deferred Payment Scheme.  There have been underspends on staffing costs of £198k, partly made due to the 1% pay award included in the budget which did not materialise, £71k for transport and £33k on other supplies and services.  There are further underspends as a result of the underspend within the Business Management and Innovation Division resulting in a reduced internal recharge to Adults Services of £165k and the savings achieved ahead of those required of £242k.

13.        Business Management and Innovation - Net Variance Nil - The majority of this budget is recharged to Children’s and Adult Services and is, therefore, showing a breakeven position at year end.  The position before recharges to services is an underspend of £274k.  This is made up of an underspend of £125k on staffing, mainly due to staff vacancies being held under the Protection and Policy heading pending a review of service provision, £20k on transport, £46k from grant and other income and £83k from the central Energy recharge which was not required in the year.  This underspend has meant that there has been a reduced internal recharge to Children’s and  Adults Services of £274k.

14.        Youth Offending Service - Net favourable variance of £16k. This consists of an underspend of central energy recharges £4k, an underspend within staffing costs due to staff vacancies / maternity leave/ limited additional hours £78k, an overspend within general running costs and premises £15k which includes one-off contributions towards software upgrades and an overspend within premises due to additional premises expenditure in order to complete building improvements of £51k.            

Capital

15.        The overall outturn for the Directorate of Social Services is an underspend of £39k.   Appendix 2 provides details by individual schemes. The Day Care Re-configuration at Gardenhurst scheme underspent by £37k.  Structural issues were identified at the property which have meant that further intrusive property condition surveys are needed to be undertaken. This has caused delays in the progress of the scheme and it has been requested that £12k be slipped into 2013/14 so that an in depth building survey can be completed before continuing with renovation works.

Reserves

16.        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.

17.        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.

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

19.        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)

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

21.        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

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

Legal Implications (to Include Human Rights Implications)

23.        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

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

Equal Opportunities Implications (to include Welsh Language issues)

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

Corporate/Service Objectives

26.        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

27.        The Managing Director has approved the slippage via Managing Director's emergency powers.

Consultation (including Ward Member Consultation)

28.        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:

Phil Evans Director for Social Services

 

 

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