Meeting documents

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 June 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

That the Executive:

2.1 Note the expenditure and income position for the Council in the financial year to the end of June and the year end projections detailed in Appendix 1 of this report.

2.2 Approve the virements listed in Appendix 2.

3 THE REPORT

BACKGROUND AND CONTEXT

3.1 The Budget Management Scheme requires that the Council Executive consider the overall revenue budget monitoring position on a quarterly basis.

3.2 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 JUNE 2003

3.3 Appendix 1 outlines the Council's current financial position for the 2003/2004 financial year to the end of June 2003 by portfolio. The Appendix shows a projected year-end overspend of £1,149,000 based on the service monitoring reports prepared to date. 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.

3.4 Social Services are forecasting a year-end overspend of £150,000 due to increased salary costs in Elderly Persons Homes. This is the result of incurring additional costs in providing staffing cover.

3.5 Transportation & Highways portfolio is projecting a year-end overspend of £374,000. This is due to the following factors: Decriminalised Parking setup costs and additional representation officer posts amounting to £118,000, and a shortfall on penalty charge notice income of £165,000. An action plan to tackle this specific overspend is being formulated, and once finalised it is anticipated that the measures taken will, at least reduce the impact of the overspend, with the objective of containing the pressures within budget by the end of the financial year. There is a potential overspend on Concessionary Fares and Bus Revenue Support of £40,000. Measures to meet a £40,000 corporate savings target in transport budgets have not yet been identified. These overspends are partially offset by increased levels of income achieved through the Park & Ride service totalling £23,000. The balance on this portfolio is made up of other minor over and under spends.

3.6 Resources portfolio is projecting an overspend of £112,000. Democratic Services and Members Support are predicting to overspend by £69,000 and £60,000 respectively due to increased operating costs, these figures also assume budgeted savings will not be achieved. The overspends are partially offset by an underspend of £25,000 in modernisation budgets relating to a reduction in IT Service Level Agreement (SLA) charges.

3.7 The Economic Development portfolio is showing a year end over spend of £118,000 consisting of the following service pressures. Corporate Estate budgets are predicting an over spend of £127,000 due to uncertainty over vacation of North Parade Buildings and the re-letting of Abbey Chambers. The balances of the portfolio is made up of overspends in the Economic Development Service of £26,000 and an underspend in Best Value of £35,000.

3.8 Tourism, Leisure & Culture are predicting an overspend of £383,000 due to pressures on the following services. Heritage Services is projecting an overspend of £287,000 as visitor numbers and income in the first quarter were affected by the effect on tourism generally of the war and of Sars on long haul visitors from the Far East. This effect was anticipated immediately prior to the onset of war, and current projections do not allow for the effect to continue into the summer (the main tourist season). Leisure Services is predicting an overspend of £110,000. The operation of sports centres, golf courses and halls has transferred to Aquaterra Leisure from 1^st July, a delay from the original set date of 1^st April. The delay will cause an overspend as the financial plan assumed a full year's contract saving, so there will be a budget deficit arising from both the management fees and operating losses. The financial plan also assumed an even contract saving, reducing the 2003/04 and all future budgets by £250,000. However, the Aquaterra payment profile is higher in initial years, exceeding the budget provision available, whilst delivering greater savings achieved in future. The shortfall in the original 2003/04 budget is £127,000.

3.8 In addition, all set-up and one-off costs of the transfer will be incurred in this financial year, consisting of additional specialist advice, interim management and severance costs. A previous internal loan for transferred equipment will also be repaid in full. These costs amount to £133,000 and according to treatment, will either increase the reported overspend or reduce the Council's revenue balances by this amount.

3.9 Directors Group are currently looking at ways of reducing the potential overspend and action taken to mitigate the above spending pressures will be reported in the next monitoring report. Executive members will be regularly briefed on progress.

VIREMENT REQUESTS 2003/2004

3.10 Budget Transfers (Virements) requiring Council Executive approval are listed in Appendix 2 together with explanations of why the transfer is necessary.

3.11 Appendix 3 indicates the effect upon Service and Portfolio cash limits if these proposals are approved.

3.12 Appendix 2 also lists the effects of the carry forward requests brought forward as part of the Revenue Outturn report (also on this meetings agenda). Appendix 3 shows the effect upon Service and Portfolio cash limits if all the proposed carry forward requests are approved by the Executive and Council.

BALANCES UPDATE

3.13 In July 2003, there was a substantial refund of business rates payable to the Council for previous financial years. The refund was anticipated in the 2003/04 budget setting and was taken as an additional saving at that time. However, after expenses have been paid the refund is in excess of the amount estimated and it is anticipated that around £775k will be returned to balances. This figure has been included in the update to the balances position made in the revenue outturn report elsewhere on this agenda. It does however bring the Council's uncommitted balances closer to £5m. This is before any calls are made on them for over spending or additional items in the current year. But it does include the deductions from balances if Council agrees to write off the overspends and carry forward the underspends from 2002/03 as set out in the outturn report.

3 CONSULTATION

4.1 This report was sent to Trade Unions on 13 August 2003.

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