Agenda Item No. 5

The Vale of Glamorgan Council

Learning and Culture Scrutiny Committee: 16th October 2017

Report of the Director of Learning and Skills

Revenue and Capital Monitoring for the period 1st April to 31st  August 2017

Purpose of the Report

1. To bring to the attention of this Scrutiny Committee, the position in respect of revenue and capital expenditure for the period 1st April to 31st August 2017 regarding those revenue and capital budgets, which form this Committee's remit.

Recommendation

It is recommended that :-

1. Scrutiny Committee consider the position with regard to the 2017/18 revenue and capital monitoring.

Reason for the Recommendation

That Members are aware of the position with regard to the 2017/18 revenue and capital monitoring relevant to this Scrutiny Committee.

Background

2. Council on the 1st March 2017 (minute no 864 and 863 respectively) approved the Revenue and Capital Budgets for 2017/18. Reports monitoring expenditure are brought to this Committee on a regular basis.

Relevant Issues and Options

Revenue

3. The forecast is showing an overspend of £86k after an anticipated use of reserves however the Directorate is requested to look at ways of mitigating this position to deliver an outturn within budget at year end.

4. A graph and table setting out the variance between profiled budget and actual expenditure to date is attached at Appendix 1.
5. Schools - The delegated budget relating to schools is expected to balance as any under/over spend is carried forward by schools.
6. Strategy, Culture, Community Learning & Resources - It is projected that the service will outturn at a favourable variance of £73k after drawing down £105k from reserves. There is an adverse variance of £66k relating to the schools long term supply scheme, however, premiums will be increased from April 2018 to ensure the scheme is sustainable in the future. There are also adverse variances of £24k in relation to primary school rates revaluations and £7k relating to legal fees. This is offset by favourable variances of £89k relating to staff vacancies, £46k on ICT SLA income from schools, pension payments of £28k and union backfilling of £7k. The Schools Invest to Save Reserve will be used to cover the £50k adverse variance in relation to redundancies in schools, which is covered by a statutory requirement to be funded centrally. £22k from the Rationalisation Reserve will be used to fund one off staffing costs at Penarth Learning Community and a further £20k of the Rationalisation Reserve will be used to fund the cost of Welsh immersion for primary pupils transferring from English medium to Welsh medium schools. £13k of the Adult Community Learning reserve will be used due to a reduction in funding from Cardiff and Vale College however the service will be restructured to operate within the available grant.
7. Strategy and Regulation - It is anticipated that this service will breakeven at year end.
8. Achievement for All - This service is currently predicted to outturn with an adverse variance of £448k which will be partially met by transfers from reserves of £241k resulting in an adverse variance at year end of £207k. A £354k adverse variance is projected on the recoupment income budget. This budget is set for recouping income from other Local Authorities that purchase placements at Ysgol Y Deri. The budget has been under pressure for a number of years as a result of a demographic increase in the number of Vale pupils presenting with complex needs which has resulted in less placements available for other Authorities to purchase. In addition, other Authorities have developed their own provision and the level of demand has reduced. The adverse variance will be partially offset by a transfer from the School Placement Reserve of £200k. A £87k adverse variance is projected for the pupil placements budget. Occasionally the needs of very complex pupils cannot be met within the Vale of Glamorgan resources and placements are purchased from independent schools or other Authorities. Unit costs are typically very high and as a result this budget can be volatile as one new pupil can have a dramatic effect on the outturn. The above will be offset by a favourable variance on staffing of £34k. Reserves will also be used to meet the costs of the remodelled guidance to engage provision which is a NEETS prevention scheme within the Social Inclusion and Wellbeing service resulting in £34k of the Youth Service reserve being utilised and £7k from the Excluded Pupil reserve will fund the overspend on alternative curriculum.
9. School Improvement - It is anticipated that this service will underspend by £48k due to a part year vacant senior post.
10. Provision has been made within the budget to make unsupported borrowing debt repayments in relation to the Schools Investment Strategy of £598k per annum and any favourable variance on debt repayments will be directed into the Schools Investment Strategy.

2017/18 Savings Targets

11. Attached at Appendix 2 is a list of savings to be achieved this year for this Committee. It is anticipated that the savings target will be met this year.

Capital

12. Appendix 3 details financial progress on the Capital Programme as at 31st August 2017.
13. Cogan Primary School Boiler Renewal - A delegated authority request has been approved to vire £15k from this scheme to Sully Primary School Boiler Renewal scheme. Sully Primary School Boiler Renewal scheme included costs for the replacement of the hot water boiler in association with the heating boiler replacement. Cogan Primary School did not require a new hot water boiler.
14. Holton Primary Electrical Rewire Phase 1 - A delegated authority request has been approved to vire £25k to the above scheme. £20k has been vired from the Albert Primary Drainage Renewal scheme and £5k from the Dinas Powys Primary Drainage Renewal Scheme. Following an analysis of the quotations returned it would appear that the strengthening economy and potentially fluctuations in the price of copper have increased costs for contractors and resulted in a higher quote than anticipated. Following the receipt of quotes for the drainage schemes, funding was available for the virement while still retaining sufficient funds to complete the works.
15. Barry Comprehensive School Internal and External Refurbishment Works - It was advised as part of the Closure of Accounts 2016/17 report that there is a reduced scope of works being implemented for this scheme following discussions with the school. It was also stated that the final use of the unused monies be reported to Cabinet. It has been requested that the budget for this scheme is reduced by £350k and that the funding is to remain within the School Investment Strategy Reserve. This funding will then be used to contribute towards the Council's 21st Century Band B Programme which will commence in 2019/20.
16. Oakfield Playing Fields - Retention of £53k is left to pay in regard to the Oakfield scheme. The budget for this is held against the Ysgol Gwaun Y Nant / Oakfield scheme. It has been requested to vire £63k from this scheme to the Education Asset Renewal Contingency scheme.
17. St. Richard Gwyn R/C Comprehensive High Window Renewal Phase 1 - The school are contributing £33k towards the cost of additional windows. It has been requested that the budget is increased by £33k, to be funded by a contribution from the school.
18. St. Andrews Major CIW Primary Fencing - The £66k budget for this scheme was based on metal railings around the whole perimeter of the school. Due to a reduced amount of fencing required and also a different type of secure fencing being used only £20k is required for the scheme. It has been requested that this budget is reduced by £46k which will result in a higher balance being available in the Schools Rationalisation Reserve.
19. Eagleswell Demolition - This scheme is complete and is underspent due to works costing less than originally anticipated. Tenders were very competitive and potential risks for which contingency sums were included did not materialise. It has been requested to vire £118k to Education Contingency Budget.
20. Education Asset Renewal Contingency - This is an unallocated budget which Learning and Skills can request to use throughout the year if unforeseen schemes arise. If Education schemes underspend during the year, any unspent allocations can be transferred to this budget, as highlighted in the paragraphs above. The current budget is £203k before the request to vire £181k from other schemes as requested above. It is considered that following this virement, the budget should be reduced by £150k in 2017/18 and the funding be made available as a contribution towards the Council's 21st Century Band B Programme which will commence in 2019/20.

Resource Implications (Financial and Employment)

21. As detailed in the body of the report.

Sustainability and Climate Change Implications

22. As detailed in the body of the report.

Legal Implications (to Include Human Rights Implications)

23. There are no legal implications.

Crime and Disorder Implications

24. There are no crime and disorder implications.

Equal Opportunities Implications (to include Welsh Language issues)

25. There are no equal opportunity implications.

Corporate/Service Objectives

26. 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

27. The report is in accordance with the Policy Framework and Budget.

Consultation (including Ward Member Consultation)

28. The appropriate Chief Officer has been consulted. This report does not require Ward Member consultation.

Background Papers

None

Contact Officer

Carolyn Michael

Operational Manager - Accountancy

Officers Consulted

Head of Strategy, Community Learning & Resources

Responsible Officer:

Paula Ham

Director of Learning and Skills