Agenda Item No 8

The Vale of Glamorgan Council

 

Corporate Performance and Resources Scrutiny Committee: 19th July 2018

 

Report of the Managing Director

 

Revenue Monitoring for the period 1st April to 31st May 2018

Purpose of the Report

  1. To advise Scrutiny Committee of the position relating to the revenue budget for the period 1st April to 31st May 2018.

Recommendations

It is recommended that:-

  1. The position with regard to the Authority's 2018/19 Revenue Budget be considered.
  2. That the virement of £25k from the Strategy, Resources, Culture and Community Learning budget to the Schools Improvement budget be noted.

Reasons for the Recommendations

  1. That Members are aware of the projected revenue outturn for 2018/19.
  2. To allocate savings targets for the year.

Background

  1. On 28th February 2018, Council approved the Revenue and Housing Revenue Account (HRA) Budgets for 2018/19 (minute no 746 and 744 respectively).  There is no planned drawdown from the Council Fund in 2018/19.

Relevant Issues and Options

  1. It is early in the financial year and the forecast for the 2018/19 Revenue and HRA budgets is for an outturn within target, however, services are anticipating using reserves and may have difficulty in achieving the savings target in full.
  2. The Revenue Budget shown in the table below now includes the allocation of the Reshaping Tranche 3 Establishment Review savings to services which were previously held centrally as part of the Final Revenue Budget Proposals 2018/19.

Directorate/Service

2018/19 Budget

2018/19  Projected Outturn

Variance Fav (+) Adv (-)

 

£000

£000

£000

Learning and Skills

     

Schools

84,458

84,458

0

Strategy, Culture, Community Learning & Resources

11,555

11,555

0

Directors Office

232

232

0

Achievement for All

4,650

4,650

0

School Improvement                    

1,033

1,033

0

Social Services

     

Children and Young  People       

15,235

15,235

0

Adult Services

46,644

46,644

0

Resource Mgt & Safeguarding

201

201

0

Youth Offending Service

728

728

0

Environment & Housing

     

Neighbourhood & Transport Services

26,842

26,842

0

Building Services

0

0

0

Regulatory Services

2,239

2,239

0

Council Fund Housing

1,383

1,383

0

Public Sector Housing (HRA)

(21)

(21)

0

Managing Director &Resources

     

Resources

497

497

0

Regeneration

2,055

2,055

0

Development Management

1,076

1,076

0

Private Housing

11,007

11,007

0

General Policy

12,218

12,218

0

Total

222,032

222,032

0


Learning and Skills

  1. It is anticipated that the directorate will outturn on budget in the current financial year after a transfer from reserves.
  2. Schools - The delegated budget relating to schools is expected to balance as any under/over spend is carried forward by schools.
  3. It is projected that a transfer of £212k will be required from the Schools Rationalisation reserve to fund one off costs in relation to the transformation of secondary schools in Barry.
  4. There is pressure on the school bus contracts. This is mainly due to an increase in price in certain contracts since a contractor had their licence revoked. These routes have therefore been retendered however there was a general increase in prices. It is anticipated that the overspend against the School Bus contracts could be in the region of £100k.
  5. The initial saving target for the year relating to the Reshaping Tranche 3 Procurement has been re-apportioned across the directorate and therefore the following budget virement, which has not been included in the table above, is required :-
 

Virement

£'000

School Improvement

+25

   

Strategy, Community Learning & Resources

-25

   

TOTAL

0

Social Services

  1. As it is very early in the financial year, the forecast for Social Services is shown as a balanced budget.  However, there will be considerable pressure on this service in the coming year and this position may not be achieved. 
  2. Children and Young People Services - The major issue concerning this service for the coming year will be the pressure on the children's placements budget given the complexities of the children currently being supported.  Work continues to ensure that children are placed in the most appropriate and cost effective placements.  However, it should be noted that due to the potential high cost of each placement, the outturn position could fluctuate with a change in the number of looked after children and/or the complexity of need. 
  3. Adult Services - The major issue concerning this service for the coming year will continue to be the pressure on the Community Care Packages budget.  This budget is extremely volatile and is influenced by legislative changes such as the National Living Wage.  At this early stage of the year, the outturn position is difficult to predict.  The service also continues to be affected by the pressures of continued demographic growth, an increase in the cost of service provision and the Community Care Packages budget will have to achieve further savings this year.  The service will strive to manage growing demand and will develop savings initiatives which may be funded via regional grants.  Welsh Government has continued to provide Intermediate Care Fund (ICF) grant to Cardiff and Vale University Health Board to allow collaborative working between Health and Cardiff and the Vale Councils however the level of grant funding is not guaranteed on an ongoing basis. 

Environment and Housing

  1. Neighbourhood & Transport Services is currently projected to outturn on budget, however, there are some areas of concern to highlight and reserves will be utilised.
  2. Within the Waste Collection service there is still pressure on employee and transport budgets due to downtime involved in travelling to Cardiff to dispose waste. £200k has again been set aside within the Neighbourhood Services Reserve for this reason. Due to changes within the recycling market and China's decision to reject elements of mixed recycling there is also a pressure within the Recycling Treatment budget. Again funding has been set aside in reserves for 2018/19 to cover this pressure however this is only a one-off funding stream and there will be a cost pressure on the budget in 2019/20 of approximately £430k.
  3. The Reshaping Services savings target for Neighbourhood Services for 2018/19 is £775k.   £375k of this saving relates to the remaining balance to be found from the recent restructure within Neighbourhood Services. The restructure has been effective from 1st April 2018 however due to the timescales and notice periods required, some staff currently remain in post.   This may have some effect on the level of savings achievable. Plans for the remainder of the savings are currently being developed and will be reported to Cabinet shortly.
  4. Regulatory Services - The allocation of £2.239m represents the Vale of Glamorgan's budget for its share of the Shared Regulatory Service (SRS).  A separate set of accounts is maintained for the SRS and periodically reported to the Shared Regulatory Service Joint Committee.  At this stage in the year it is anticipated that the SRS will outturn on target.
  5. Council Fund Housing - At this early stage of the year, it is anticipated that this budget will outturn on target.
  6. Public Sector Housing (HRA) - The HRA is expected to outturn on target and any underspends in year will be offset by additional contributions to Capital Expenditure thus reducing the reliance on Unsupported Borrowing.

Managing Director and Resources

  1. It is early in the financial year, however, it is currently projected that this service will outturn within target at year end.
  2. Resources - It is anticipated that this service will outturn within budget.
  3. Regeneration - This budget covers the Countryside, Economic Development and Tourism & Events functions. Although the forecast is again shown as a balanced budget, there remains concern over the income targets for car parking charges and commercial opportunities within the Countryside Division, where historic savings targets are unlikely to be achieved this year. Efforts will however be made to maintain a balanced budget by year-end, but the situation will need to be monitored.
  4. Development Management - As it is very early in the financial year, the forecast is shown as a balanced budget. However, the planning fees budget will be monitored closely given planning application fee income has fallen short of the target in recent years. The Section will continue to pursue the use of Planning Performance Agreements and other income generation such as pre planning application advice to help support this regulatory process.
  5. Private Housing - As it is very early in the financial year there is currently no variance to budget to report.
  6. General Policy -   It is anticipated that this service will outturn within budget.

2018/19 Savings Targets

  1. As part of the Final Revenue Budget Proposals for 2018/19, a savings target of £6.298m was set for the Authority.  Attached at Appendix 1 is a statement detailing all savings targets for 2018/19.  Some services are in the process of finalising options prior to full implementation and some savings may not be achieved in full by year end.  Updates on progress will be provided to Members during the year.

Resource Implications (Financial and Employment)

  1. As detailed in the body of the report.

Sustainability and Climate Change Implications

  1. As detailed in the body of the report.

Legal Implications (to Include Human Rights Implications)

  1. There are no legal implications.

Crime and Disorder Implications

  1. There are no crime and disorder implications.

Equal Opportunities Implications (to include Welsh Language issues)

  1. There are no equal opportunity implications.

Corporate/Service Objectives

  1. Effective monitoring assists in the provision of accurate and timely information to officers and Members and in particular allows services to better manage their resources.

Policy Framework and Budget

  1. This report is for Executive decision by the Cabinet.

Consultation (including Ward Member Consultation)

  1. Each Scrutiny Committee will receive a monitoring report on their respective areas. This report does not require Ward Member consultation.

Relevant Scrutiny Committee

  1. All

Background Papers

None

Contact Officer

Carolyn Michael

Operational Manager - Accountancy

Officers Consulted

All Directors

Responsible Officer:

Rob Thomas

Managing Director