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 September 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 September and the year end projections detailed in Appendix 1 of this report.

Note that management actions have substantially reduced the overspending this year, and support the actions being taken to reduce this further.

2.3

2.4 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.

3.3 Appendix 1 outlines the Council's current financial position for the 2003/2004 financial year to the end of September 2003 by portfolio. The Appendix shows that if no further actions are taken, there will be a projected year-end overspend of £1,151,000 (around 1%) based on the service monitoring reports prepared to date, however, further actions currently being identified should reduce this significantly by the end of the year. Continuing annual reductions in service budgets, coupled with legislative and demand pressures, mean that all service budgets are now tight, and it is to be expected that budget management will need to take increasing precedence in the Councils overall management arrangements.

3.4 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.

REVENUE BUDGET MONITORING APRIL TO SEPTEMBER 2003

3.5 Social Services - forecast £450k overspend

Major inroads have been made already to reduce the overspending in Social Services to the current forecast of £450,000 for the year, and further work is being done to identify measures to manage and control this position, which is made up as follows:-

£280,000 on Elderly Persons Homes, due to additional costs in providing staffing cover.

Adult Services are anticipating an overspend of £170,000 due to continued pressures on nursing and residential placements budgets, partially offset by salary underspendings.

3.6Transportation & Highways portfolio - forecast £370,000 overspend

Currently pressures centre on the performance of the de-criminalisation of parking service, which has not achieved the expected target income in the first half of the year. This amounts to around £390,000 but the situation is being managed actively, and target incomes are expected to be achieved over the rest of the year.

Other management actions are being examined to ensure that no overspend is carried forward at the year end.

Off street pay & display parking and park & ride income are predicted to be ahead of target by £31,000 and £30,000 respectively, but measures to meet a £40,000 corporate savings target in transport budgets have not yet been identified.

3.7 The Resources portfolio - forecast £211,000 overspend

Recovery actions and options for dealing with cost pressures in Democratic Services of £41,000, Members Support of £36,000 and Human Resources of £46,000 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 £59,000 due to pressures on leisure, catering and crematoria services, these effects are mitigated by a savings programme across all trading services.

3.8 Tourism, Leisure & Culture - Forecast overspend £91,000

The Heritage Services position has improved since the last report and is now projecting an overspend of £127,000 due to lower visitor numbers and income arising from the effect on tourism generally of the war and of SARS on long haul visitors from the Far East. Savings on maintenance, displays, publicity and staff as well as a revision to the bad debt provision have helped to reduce the adverse effects.

Libraries & Information are predicting an underspend of £32,000 largely due to income from sales of library materials and provisions for staff vacancies following re-structuring.

All set-up and one-off costs of the leisure transfer will be incurred in this financial year, consisting of additional specialist advice, interim management and severance costs. These costs amount to £374,000 and elsewhere on this agenda is a report which requests Council to write off this amount. This amount is however not reflected in the overspend forecast. If not written off it will increase it by £374k.

3.9 Directors Group continue to monitor and manage the position, and expect the situation to improve by at least £400,000 as the year progresses and the impact of actions are delivered. Executive members will be regularly briefed on progress by Directors and given an update in monthly monitoring reports.

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 CONSULTATION

4.1 This report was sent to Trade Unions on 17th November 2003.

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