Agenda Item No
The Vale of Glamorgan Council
Scrutiny Committee (Lifelong Learning): 26th July 2010
Report from the Director of Learning and Development
Closure of Accounts 2009/10
Purpose of the Report
1.
The accounts are complete and this report is to inform Scrutiny
Committee of the provisional financial position for the 2009/10
financial year. It also constitutes an account of the major
financial issues during 2009/10.
Recommendation
1.
That the Scrutiny Committee note the provisional financial position
for the 2009/10 financial year.
Reason for the Recommendation
1.
That Members are aware of the position with regard to the
provisional financial position for the 2009/10 financial year
relevant to this Scrutiny Committee.
Background
2.
Following the end of the financial year, Scrutiny Committee is to
be provided with provisional outturn figures relating to their
area.
3.
Certain accounting adjustments have been made to original service
budgets in respect of:
·
Government Grant Deferred – These amounts represent the release of
grant to revenue to set off the depreciation that is charged
on the assets.
·
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.
·
Financial Reporting Standard 17 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. The results of an
actuarial valuation means that adjustments are required.
4.
Appendix
1 amends the revised estimates to take account of the
above adjustments. There is no overall effect on the
Authority.
Issues
5.
Set out below is a table comparing the amended estimate and the
actual expenditure for the Authority
|
Net Tfr to /
(from) Reserve
|
Service
|
Amended Revenue Estimate
|
Total Provisional Actual
|
Variance +Favourable () Adverse
|
|
£’000
|
|
£’000
|
£’000
|
£’000
|
|
|
|
|
|
|
|
1,578
|
Education and Schools
|
86,562
|
86,534
|
+28
|
|
(50)
|
Libraries
|
2,577
|
2,577
|
0
|
|
24
|
Lifelong Learning
|
1,983
|
2,011
|
(28)
|
|
|
Catering
|
1,094
|
1,094
|
0
|
|
1,552
|
Total
|
92,216
|
92,216
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
6.
The first column in the table shows the net amount of money
transferred to reserves less that transferred out. The figure is
included in the Total Provisional Actual expenditure.
7.
Provision was included in the estimates for the impact of Single
Status issues. This sum was not required during the year and
therefore a transfer to the Single Status reserve has been made
from the service totalling £82k.
8.
The main reasons for the variances are set out in the following
paragraphs 9 to 16.
9.
Education and Schools - There is a net surplus of £28k. This is
after a transfer to the School Investment Strategy Reserve of
£1.004m. £500k was already provided for in the estimates and
£504k has been previously reported to Cabinet arising from Non
Domestic Rate refund. In addition a further transfer of £343k has
been made to the School Investment Strategy reserve and £50k to the
School Rationalisation reserve. The gross underspend of £421k is
made up as follows:-
10. The School
Improvement Service shows an underspend of £218k which is
attributable to vacancy savings and use of grant funding to offset
staff salaries.
11. Due to uncertainty
associated with predicting the demand from other local authorities
for places in the Vale’s Special Schools, recoupment income is
£326k over budget. Recoupment expenditure is £122k underspent and
Home Tuition £23k underspent, reflecting the volatile nature of the
Additional Needs budget. £351k of the underspend has been
offset by additional expenditure on Learning Support Assistants as
a result of increased demand for individual support and a further
£26k in relation to the Pupil Referral Unit.
12. School Transport
shows an underspend of £252k as a result of retendering contracts
and also fluctuations in demand for specialist arrangements.
£50k was realised following the transfer back to revenue of
the transport provision in the Balance Sheet no longer required.
The underspend was in part utilised to support Primary and
Secondary schools to offset costs associated with increased
maternity leave costs £89k, redundancy and pension costs £47k and
repairs and maintenance incurred on addressing flood and fire
damage £57k.
13. The deficit of £28k
in respect of the Lifelong Learning service has been met from the
remaining surplus.
14. Libraries - Net nil
variance. This is after a transfer of £47k to the Single Status
reserve. This service has out turned on budget with additional net
income generation of £6k which is primarily the result of changes
in the Libraries charging structure effective from August 2009.
This income has been reinvested within the service throughout the
year on books, talking books, electronic resources and DVDs.
Required savings have been met during this financial year by
reductions in the book fund, use of increased DVD income and
reduced staffing costs required to meet a vacancy provision of
£69k. The library fund reserve has also been reduced by £97k to
£106k as contribution towards the implementation of the new library
computer system.
15. Lifelong Learning -
Net adverse variance of £28k following a transfer of £35k to the
Single Status reserve. The variance has reduced from the projected
£56k previously reported and will be funded from an underspend in
the Education Service. The gross overspend of £28k is attributable
to favourable variances within Youth Services of £24k due to staff
vacancies, Community Enterprise of £31k due to reduced staffing
costs and increased income and the use of grant management fees of
£5k. These have been offset by adverse variances within Adult and
Community Learning of £13k due to delayed student fee increases,
Heritage Skills Centre of £10k due to premises costs, Lifelong
Learning Education and Training of £43k due to a temporary income
shortfall resulting from a change in the funding stream, together
with a provision for bad debts of £22k.
16. Catering - Net nil
variance. This is after the client funding a deficit of £22k
incurred by the Catering Trading Unit. The Trading Unit variance is
primarily due to reduced income generation as a result of
unfavourable weather conditions experienced in the latter part of
the financial year. The Client underspend came from
additional administration fee income.
Capital
17. The overall outturn
for the Directorate of Learning and Development is an underspend of
£159k. The statement at Appendix
2 details the outturn by scheme and the reason for the major
variances are shown below.
Cowbridge Comprehensive School
re-modelling
Overspend £192k
18. There are two reasons
for the overspend of this budget. Firstly, a grant offer from WAG
for a sprinkler installation at the school in the sum of £100k was
received too late to incorporate into the Capital Programme.
Secondly additional costs of £92k were funded from the School
Investment Strategy reserve. Had there been time to include these
in the current 2009/10 allocation, this budget would in fact have
out- turned on target.
Llantwit Major
Comprehensive
Underspend £143k
19. This 100% WAG grant
funded scheme for feasibility studies for a proposed new secondary
school at Llantwit Major was not fully spent as disruption due to
the snow caused delays to planned survey work. As the grant was
underspent, WAG agreed a year-end transfer of the remaining grant
to the Cowbridge Comprehensive School remodelling in order to
maximise use of the grant. The condition attached to that agreement
stated that the Authority agree to fund the transferred amount for
Llantwit Major in 2010/11 in order to complete the studies. As
such, it has been requested that the sum of £143k be included in
the 2010/11 Capital Programme which will be met from the School
Strategy Investment Fund.
Asset Renewal Budgets (2008/09 &
2009/10)
Underspend £226k
20. The Asset Renewal
budget for 2008/09 was part-slipped into the 2009/10
Capital Programme to continue with 6 ongoing schemes. Included
within the budget was £29k for Llangan wind turbine which has still
not been commenced as a suitable site could not be identified. Such
a site has now been donated to the Authority and the Director of
Education is currently looking into possibilities for the wind
turbine as well as a car park to the adjacent Llangan Primary
School. The 2009/10 asset renewal budget for schools was approved
to fund 24 new schemes. All incomplete schemes have been referred
back to the department to fund any outstanding amounts from the
2010/11 asset renewal budget in order to minimise any slippage
requests.
Reserves
21. A reserve is an
appropriation from a revenue account and is not included as part of
the costs of the service until 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.
22. 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.
23. Funds no longer
required as reserves may be transferred to the General Fund to be
used for other purposes.
24. Attached at Appendix
3 is a schedule of the reserves, as at 31st March 2010, within
the remit of this Committee.
Resource Implications (Financial and Employment)
25. Capital slippage
outlined in Appendix
4 was approved by Cabinet on 23rd June, minute number C933, and
by Council on 30th June.
Legal Implications (to Include Human Rights Implications)
26. 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, 2010.
Crime and Disorder Implications
27. There are no crime
and disorder implications resulting from this report.
Equal Opportunities Implications (to include Welsh Language
issues)
28. There are no equality
implications resulting from this report.
Corporate/Service Objectives
29. 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
30. Where relevant,
recommendations in this report will be forwarded to Council for
approval.
Consultation (including Ward Member Consultation)
31. The appropriate Chief
Officers have been consulted on this report. This report does not
require Ward Member consultation.
Relevant Scrutiny Committee
32. Corporate
Resources.
Background Papers
None.
Contact Officer
Carolyn Michael (Senior Group Accountant)
(01446 709778)
Officers Consulted
Director of Learning and Development
Responsible Officer:
Bryan Jeffreys, Director of Learning and
Development