Meeting documents

Appendix 1

REVENUE BUDGET MONITORING APRIL TO JULY 2008

1.1 Appendix 2 outlines the Council's current financial position for the 2008/09 financial year to the end of July 2008 by cabinet portfolio. The Appendix show the current forecast outturn position is an overspend of 0.24% or £531k. It is expected that by the end of the financial year that Council Directors will have implemented actions to ensure that spending is in line with budget.

1.2 Within the current £531,000 forecast overspend figure, there are areas of over and under spending which are detailed below along with planned management actions being taken to reduce any overspends.

1.3 Children's Services portfolio - forecast £351,000 overspend

The main areas that make this overspend up are as follows:

Children's and Families - Legal Costs - This budget is estimated to be overspent by £110,000. The main variance is due to ongoing costs legal associated to care proceedings cases for looked after children.

Children's Service - Parking Permits £66,000 overspend Parking permits for children's service staff located in Bath are facing the ongoing increase in permit costs. No additional resources were identified in the 2008/09 service plan and all permits have been reviewed with limited success in reducing numbers.

Training Services £41,000 overspend Training services is reliant on grant allocations from the Learning and Skills Council (LSC) and for 2008-9 there has been a reduction in allocation of funding linked to certain projects. Whilst the service believes that there will be additional resource available during 2008/09 should additional pupils be entered and complete courses of learning the rates of allocation are such that there is anticipated to be a shortfall in income compared to the costs of courses. This issue has been raised through regional networks to press home the issues with the LSC.

Pensions and Redundancy £126,000 overspend. The pension and redundancy budget includes the costs associated with schools pensions and redundancy. These costs are borne by the LA under the schools finance regulations. Efforts have been made to restrict the number of cases in schools using redeployment where possible. Some schools have had their requests rejected as their budget would support continued employment.

Where redundancies exist due to re-organisation of schools the schools forum have been supportive in allowing the dedicated schools grant to be used to support the one off costs as ongoing savings will be generated for schools to utilise. The cases being supported within this overspend are mainly resulting from pupil number reductions in individual schools. The overspend could grow further in 2008/09 as though most cases of redundancy have now been agreed there is a possibility of further cases coming forward.

Other Budgets £8,000 overspend.

1.4 Adult Social Services & Housing - forecast £26,000 over spend

Older Peoples Services This budget is overall underspent by £104,000 which is an improvement over last month, due to a reduction in purchased placements following some attrition and changes to clients' assessed contributions.

Mental Health Services The budget variance is made up of an overspend of £486,000 on purchasing of care for Adults Working Age offset by an under spend of £20,000 on in-house services due to short term vacancies. A recovery plan is being put together by the management team & a savings target of £100,000 is forecast from reviewing placements.

EPH & Supported Living This budget is forecast to underspend by £131,000 largely due to anticipated savings from the In house domiciliary Care service due to a timing difference in respect of the commencement date of the new contract.

Learning Difficulties Services The pooled budget is forecast to overspend by £369,000 largely due to the to a change in funding of two clients living in BANES, previously funded by another Local Authority who have now become Continuing Health Care funded and an increase in supported living placements. After underwriting of £100,000, the Council's share of this over spend is £126,000.

Other Budgets - These budgets are forecast to underspend mainly due to higher than anticipated vacancy levels in some areas. The PCT has also transferred the payment administration arrangements for Continuing Health Care to the Council, which is anticipated to generate savings of £200,000.

The forecast overspend on this portfolio is made up of the following variances:

Planning & Transportation £168,000 overspend due to shortfall of £380,000 in land charge income caused by market downturn & competition, concessionary fare pressures of £101,000, Bath package borrowing costs of £67,000, offset by increased forecasts in Park & Ride income of £163,000, passenger transport fuel grant income and staffing efficiencies.

Environmental Services £132,000 overspend due to unexpected waste pressures (changes in statutory "Schedule 2" collections, additional green waste collections, irrecoverable VAT), uncertainty over car parking income due to driver behaviour changes and a one-off cost from machine vandalism in Charlotte Street car park. These are offset by forecast savings in waste resulting from lower landfill tonnages, waste project economies and higher charges to offset Schedule 2 costs.

1.6 Resources Portfolio - forecast £296,000 overspend

The forecast overspend on this portfolio is made up of the following variances:

Support Services: £761,000 overspend made up of £690,000 on the Costs of holding and selling assets that would previously have been charged to the capital receipt - a virement is proposed to off-set this in Appendix 4 of this report, a shortfall of £105,000 in Commercial Estate income due to stretched targets, £86,000 deficits in Traded Services, an underspend of £95,000 in Policy & Partnerships due to staffing efficiencies & slippage in the Customer Access Programme.

Improvement & Performance: £39,000 underspend due to vacancies

Council Solicitor: £33,000 underspend on recharges.

Corporate and Agency costs: £830,000 under spend is made up of £600,000 additional investment interest from higher than expected cash balances (effect of 2007/08 out-turn including Pension Fund & VAT refund adjustments), £250,000 savings in interest payable on long term borrowing and capital cashflow and an overspend of £20,000 on coroners due to the start up and equipment costs related to the new mortuary which is expected to be operational from 1st February 2009.

CAPITAL BUDGET MONITORING - APRIL TO JULY 2008

1.7 The 2008/09 Capital Programme approved by Council on 19^th February 2008 was £61.631m. Since then, £7.36m of slippage from 2007/08 was approved by the Cabinet, as recommended in the 2007/08 Outturn Report on 25^th June 2008.

1.8 Additional changes to the 2008/09 Capital Programme & rephasing in future years are detailed in Appendix 5(i), and the revised 2008/09 Capital Programme & indicative 2009/10 - 2012/13 programmes are detailed in Appendix 5(ii).

1.9 Appendix 3 outlines the current position for the 2008/09 Capital budget, currently forecasting spend of £55.791m which is £0.781m less that the revised budget of £58.010m. The total programme forecast to 2012/13 is for expenditure of £318.338m which is £10.915m or 3.4% greater than budget, and plans are either in place or being developed to reduce costs and/or increase funding to ensure that the capital programme is financially balanced over the 5 year period.

1.10 The new Programme Director has completed a thorough review of costs on the Bath Package. The principle element of the £12.415m forecast overspend above includes £7.594m in relation to the Bath Package. When expected additional funding is taken into account, this leaves an overall deficit of £4.276m in funding, with £2.694m of this in 2008/09. This is the subject of a pending Single Member decision.

1.11 Midland Road waste site relocation funding remains a cause for concern in relation to both funding and costs. Latest estimated costs are £11.6m, excluding remediation and past expenditure of £1.8m on Pixash Lane land purchase, which leaves a funding gap if £1.3m, after taking account of potential funding from Growth Points. Funding from the BWR is still the subject of negotiation. However, the forecast for 2008/09 is an underspend of £4.402m, which will need to be slipped to future years.

1.12 The Bath Western Riverside Development Agreement is not yet finalised and the Cabinet will need to consider a range of options, taking account of its vision for the area and the financial implications.