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Agenda Item No. 6

 

 

The Vale of Glamorgan Council

 

Scrutiny Committee (Social Care and Health): 14th July 2014

 

Report of the Director of Social Services

 

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 for 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 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 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 anticipated 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

Social Services

 

 

 

Children and Young People

15,083

15,138

(55)

Adult Services

36,967

36,911

56

Business Management and Innovation

298

294

4

 

 

 

 

Total

52,348

52,343

5

 

 

 

 

10.      The final outturn position for the revenue budget was a £5k favourable variance as detailed below.  As part of the Social Services Budget Programme, £2.241M of the Social Services Fund had been approved for use in 2013/14, however, this funding was not required at year end.

11.      Children and Young Peoples Services – Adverse Variance of £55k

There were adverse variances relating to the Children's Placement budget of £429k due to a number of high cost placements, however, this was reduced by a £40k contribution from Education.  There was a transfer to provisions of £210k to fund future high cost residential placements and a reduction in the use of approved funding from the Social Services Fund of £213k.

There was a favourable variance of £45k on alternative means of provision and accommodation costs required for the current cohort of children, £53k on staffing due to administrative vacancies and during the recruitment of the new Operational Managers, £100k on the legal budget, £209k additional adoption income and a reduction in adoption allowances, additional grant funding £99k, £24k additional income from Health and the Emergency Duty Team recharge from Cardiff Council was £25k less than anticipated.  There are further favourable variances of £105k as a result of the reduced recharge from the Business Management and Innovation Division and the savings achieved ahead of those required of £97k.

12.      Adult Services – Favourable Variance of £56k

There was an adverse variance of £509k on community care packages but with an over recovery of £528k on income received under the Deferred Payment Scheme, the net position at year end was a favourable variance of £19k.  The £200k savings on residential services as a result of negotiations with Hafod were not achieved in 2013/14, however, this will be pursued during 2014/15.  There was a transfer to provisions of £126k to fund potential future increases in Care Home fees in excess of inflation provided in the budget and a transfer to reserves of £205k to contribute towards the cost implications of future legislative changes.  There was also a reduction in the use of approved funding from the Social Services Fund of £2,028k.

There were favourable variances of £235k following the closure of Bryneithin, £174k on staffing, £50k on Transport, £138k on Supplies & Services and £91k on additional grant income.  With the levels of savings required for 2014/15 and 2015/16, budgets were being re-examined during 2013/14 with a view to their possible realignment as part of the consideration of new models of service delivery required to delivery future savings targets. There was a £646k favourable variance due to the receipt of the First Steps grant from Welsh Government and £854k due to the allocation provided for other pressures through the budget setting process.  There are further favourable variances of £212k as a result of the reduced recharge from the Business Management and Innovation Division and the savings achieved ahead of those required of £196k.

13.      Business Management and Innovation – Favourable of £4k

The majority of this budget is recharged to Children's and Adult Services.  The position before recharges to services is a favourable variance of £321k.  This is made up of £130k on staffing, due to staff vacancies being held under the Protection and Policy heading pending a review of service provision which is now complete, the part year vacancy of the Business Manager post and the Operational Manager Safeguarding and Performance post, £11k on transport, £97k from grant and other income and £83k from Energy.  The favourable variance has meant that there has been a reduced internal recharge to Children's and Adults Services of £317k.

14.      The Social Services Fund was not utilised in 2013/14.  As part of the closing process the Social Services provisions were reviewed and £609k has been transferred into the Fund from other available provisions. This will increase the Social Services Fund to £6.224m as at 31st March 2014.  This, therefore, allows the savings targets identified as part of the Social Services Budget Programme to be re-profiled.  It is considered that a longer period is required to deliver the Service Remodelling savings, as a result of collaborative working.  This issue will be considered as part of the Medium Term Financial Plan.  £415k has also been transferred into a new provision to cover grant exit strategies. Grant funded schemes such as Flying Start and Families First only have approval for a set period.  Welsh Government state that redundancy costs cannot be funded from the grant allocation.  If grant funding was to cease, the Council could find itself in a position where it would have to pay redundancy costs.  This provision has been set up to cover this eventuality.

Capital

15.      The overall outturn for the Directorate of Social Services is a variance of £198k.  [Appendix 2]  This is mainly due to the Southway and Cartref Porthceri Home Upgrade scheme which slipped by £149k.  Assessment had to be undertaken to find the best options for delivering the works in a working residential home environment.  Works have commenced and will incorporate the fire precaution works planned for 2014/15. Completion is anticipated during July 2014.

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 2014. 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.  In order to avoid delays in progressing the schemes, the requests have been approved by the Managing Director exercising emergency powers.             

Sustainability and Climate Change Implications

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

Legal Implications (to Include Human Rights Implications)

22.      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 2014.

Crime and Disorder Implications

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

Equal Opportunities Implications (to include Welsh Language issues)

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

Corporate/Service Objectives

25.      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

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

Consultation (including Ward Member Consultation)

27.      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:

Phil Evans, Director of Social Services

 

 

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