Meeting documents
Cabinet
Wednesday, 3rd March, 2004
11111
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Bath & North East Somerset Council |
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MEETING: |
Council Executive |
PAPER |
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DATE: |
3rd March 2004 |
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TITLE: |
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WARD: |
All |
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AN OPEN PUBLIC ITEM |
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List of attachments to this report: App
1: Financial Monitoring Statement: All Council Spending |
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1 THE ISSUE
1.1 This report presents the latest budget monitoring information for the Authority as a whole for the financial year 2003/2004 to the end of December 2003. The report also includes a number of budget transfer requests that require Council Executive agreement or are reported for information purposes as prescribed by the Budget Management Scheme.
2 RECOMMENDATION
The Council Executive is asked to:
2.1 Note the expenditure and income position for the Council in the financial year to the end of December and the year end projections detailed in Appendix 1 of this report.
2.2 Approve the virements listed in Appendix 3 and Appendix 5.
2.3 Delegate responsibility to agree the 2004/05 opening cash limits for the individual service headings within the Social Services Portfolio, in line with the total budget for the portfolio as agreed at Council on 18th February, to the Executive Member for Social Services.
3
FINANCIAL IMPLICATIONS
3.1 The financial implications are contained within the body of the report.
4 THE REPORT
BACKGROUND AND CONTEXT
4.1 The Budget Management Scheme requires that the Council Executive consider the overall revenue monitoring position on a quarterly basis.
4.2 Where overspent, services are expected to seek compensating savings to try and bring budgets back to balance. The Budget Management Scheme states that if overspending occurs it must be recovered.
REVENUE BUDGET MONITORING APRIL TO DECEMBER 2003
4.3 Appendix 1 outlines the Council's current financial position for the 2003/2004 financial year to the end of December 2003 by portfolio. The Appendix shows that there will be a projected year-end overspend of £280,000 based on the service monitoring reports prepared to date. The figures include the effects of management action to significantly reduce the previously reported overspend of £1,151,000.
4.4 Significant areas of over and under spend are highlighted in this report, but further explanations of the reasons for over and under spends in the current year are provided within the notes to Appendix 1.
4.5 Social Services portfolio - forecast £547,000 over spend
The service continues to experience pressure on nursing and residential placements budgets, partly offset by salary underspends. As reported to the December meeting of the Executive, major inroads have already been made to reduce the overspending in Social Services to the current forecast, and further work is being done to identify measures to manage and control this position.
4.6 Transport & Highways portfolio - forecast £40,000 over spend
The decriminalised parking service is now achieving target income levels, although the shortfalls against targets experienced in the first half of the year amount to £320,000.
Off street pay & display parking and park & ride income are predicted to be ahead of target by £83,000 and £33,000 respectively. In addition to further underspends in the Traffic & Safety team (£43,000) and Public Transport (£66,000), capitalisation of revenue spending on highways has taken place to ensure no overspend is carried forward at the year end.
Measures to meet a £40,000 corporate savings target in transport budgets have not yet been identified.
4.7 The Resources portfolio - forecast £78,000 under spend
Recovery actions and options for dealing with cost pressures in Members Support of £34,000 and Electoral Services of £25,000 are being identified, and it is hoped that this will be largely contained by the year end.
Other budget overspends in Resources services are being contained, and should have little impact on future years.
Operations trading services are predicted to under achieve their contribution target by £139,000 due to pressures on leisure, catering and crematoria services, these effects are partially offset by a savings programme across all trading services.
In Corporate budgets, cashflow has been better than expected, resulting in lower costs of temporary borrowing in the third and fourth quarters with extra interest earned on cash balances. Together with a reduction of £16,000 in ex-Avon loan charges, the total resulting under spend in loan charges and interest budgets amounts to £140,000. It is also anticipated that the revenue funding of capital provision of £74,000 with not be required in 2003/04 due to slippage on the capital programme.
4.8 Tourism, Leisure & Culture portfolio - forecast £111,000 under spend
The Heritage Services position has improved since the last report and is now projecting an underspend of £52,000. Savings on maintenance, displays, publicity and staff as well as a revision to the bad debt provision have helped to reduce the previous adverse effects.
Libraries & Information are predicting an underspend of £75,000 largely due to recovery of £65,000 VAT arising from changes in Customs rules, income from sales of library materials and provisions for staff vacancies following re-structuring.
4.9 Directors Group continue to monitor and manage the position, Executive members will be regularly briefed on progress by Directors and given an update in monthly monitoring reports.
CARRY FORWARD REQUESTS
4.10 The Budget Management Scheme (BMS) allows the carry forward of underspend subject to a number of conditions being met. An extract of the BMS relating to carry forwards is attached at Appendix 2 for reference. All carry forward requests will be considered by the Council Executive when the final revenue out-turn report is presented.
4.11 However there may be some requests for underspends that, if approved for carry forward, will increase the reported overspend. Any requests will be considered at the appropriate time. Directors' will be aware of the BMS, section 15 c) which refers to the need to recover overspending positions before requests for carry forward are made.
VIREMENT REQUESTS 2003/2004 & 2004/2005
4.12 Budget Transfers (Virements) requiring Council Executive approval are listed in Appendix 3 and Appendix 5 together with explanations of why the transfer is necessary.
4.13 Appendix 4 and Appendix 6 indicates the effect upon service and portfolio cash limits if these proposals are approved.
4.14 Individual service budgets for 2004/05 within the Social Services portfolio (Appendix 6) are not available in time for this report. It is requested that once available, they be reported to the Executive Member for Social Services for agreement through the decision register process. The total budget for the Social Services portfolio will remain the same as agreed by Council on 18th February and is shown in Appendix 6.
5 RATIONALE
5.1 This report is presented as part of the reporting of financial management and budgetary control required by the Council.
6 OTHER OPTIONS CONSIDERED
6.1 There are no other options to be considered at this stage of the financial year.
7 CONSULTATION
7.1 This report was sent to Trade Unions on 23/02/04.
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Contact person(s) |
Anne Feakes. 01225 477320, Tony Bartlett, 01225 477302 |
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Background papers |
Budget Management Scheme |
APPENDIX 2
Extract of the Budget Management Scheme
Carry Forward
14. With effective budget planning and management, overspending should not occur. If, however, one occurs it must be recovered.
a) The Head of Service is responsible for making proposals for the recovery of any overspend to their Strategic Director in the first instance. Further reporting requirements will then be determined, depending on the size and nature of the problem.
b) Overspends will normally be expected to be recovered within the following year. However, a period of up to 3 years may be allowed for the recovery of overspends, depending on the level of overspend and the subsequent impact of recovery on service delivery. The decision as to whether a longer period is to be allowed will be made following consideration of the proposals submitted by the Head of Service.
c) Any recovery plan is to be recommended by the Director and relevant portfolio holder for approval by the Council Executive.
15. Heads of Service will be able to carry forward under spends on their cash limits subject to the conditions below.
d) Heads of Service are responsible for putting forward proposals to their Strategic Director in the first instance for the utilisation of underspends in advance of the end of the financial year. Such proposals should be approved by the relevant portfolio holder(s) and recorded on the decision register in advance of the end of the financial year in which they occur.
e) Proposals will be reported to the Council Executive for approval. Carry forward is not automatic but subject to the approval of proposed schemes.
f) No proposal for carry forward of underspendings will be considered on any Strategic Director's service areas unless and until the management of all overspendings have been agreed.
g) Unplanned or "windfall" underspends will not be carried forward, nor those funded as service developments that have not occurred. Underspendings will be considered `windfall' if they are not identified and reported to the relevant portfolio holder and Council Executive by the end of January in the year in which they occur.
h) To provide for the possible write-off of overspendings, up to 40% of actual Service underspendings will be unavailable for carry-forward. The Council Executive will agree the percentage to recommend to Council after consideration of recovery proposals.