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 2002/2003. 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.

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 SEPTEMBER 2002

3.3 Appendix 1 outlines the Council's current financial position for the 2002/2003 financial year to the end of September 2002 by portfolio. The Appendix shows a projected year-end overspend of £404,000 based on the service monitoring reports prepared to date. This compares to the predicted overspend of £874,000 reported to the Executive on 4^th September. 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 Page 1

As reported to the September meeting of the Executive, the most significant part of the overall predicted overspend relates to Property budgets. The overspending on Corporate Estate is due to unplanned delays in relocating staff to Plymouth House, and in releasing space in Abbey Chambers and The Guildhall. This was intended to enable savings in other properties. This is kept under close review, and the year-end out-turn forecast of £293,000 overspend is the most likely estimate, based on present knowledge. The position for Property, Building and Administration Services has improved since the last report, but an overspend is still forecast of £115,000, mainly due to costs involved with implementing Asset Management Planning. Targets for Commercial Estate rental income were raised in the 2002/03 budget and, in the present commercial letting market, are likely to be underachieved by about £54,000 this financial year. Various actions are under way to reduce costs to address these potential deficits.

3.5 Revised forecasts for Revenues & Benefits are reviewed monthly with the Head of Service to seek reductions in cost or increased income. Given the present level of service delivery problems, it seems likely that the year-end overspend will be around £201,000. This includes best estimates of the cost of clearing the benefits backlog, although a further complication will be the cost of introducing Tax credits later this year.

3.6 Social Services are forecasting a year-end overspend of £100,000. Children's placements are predicted to overspend by £300,000 due to a specific high cost placement. The overspend is partly offset by underspends on fostering budgets and salary budgets within Children's Services.

3.7 Housing Services are projected to overspend by £100,000. There has been a steady growth in demand for temporary accommodation since the transfer of housing stock; this is likely to cause an overspend of £80,000. The post of Group Manager (Assessment & Commissioning) is being held vacant to offset this overspend by £40,000. The final costs of Spa Care Line are predicted to overspend by £60,000, although negotiations over the contract with Somer Community Housing Trust are continuing and the position will become clearer once complete.

3.8 Within Corporate budgets two areas of savings have been identified since the last report. The closure of the Housing Revenue Account (HRA) means that the budgeted £150,000 contribution from revenue to the HRA will no longer be required. The HRA closure was uncertain at the time the 2002/03 budget was set. Secondly, following the re-tendering of the insurance contract, a provision for the estimated increase in insurance premiums of £300,000 was included in corporate budgets for the current year. After allowing for rechargeable premiums, it is estimated that the provision will be underspent by around £100,000. Audit fees are still anticipated to be £153,000 in excess of budget, partly due to increased work required by the Comprehensive Performance Assessment (CPA) programme. The overspend also includes a prediction on the amount of fees that will be charged in respect of legal work following questions on the Council's final accounts. The forecast underspend of the Council's loan debt repayment's has increased by £20,000 to £117,000.

3.9 The first six months of this financial year have produced a strong level of fee income resulting from increased requests for Local Land Searches and Building Regulation approvals. As a result, the Public Protection service is expected to underspend by £141,000 this financial year.

VIREMENT REQUESTS 2002/2003

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 Page 2

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

COUNCIL'S BALANCES

3.12 Since the last monitoring report the Council has received notification of the following payments which have increased the level of balances:-

_ Designated Authority allocation of balances to former Avon CC authorities - £463,000

_ Customs & Excise Tribunal ruling on the VAT treatment of parking excess charges - refund of £116,000 plus interest. It should also be noted that Customs and Excise officials are carrying out an audit on the Council during November to assess whether the correct VAT treatment has been applied to other Council services. Any erroneous treatment could require the Council to make countering payments to the Customs and Excise.

3.13 A rating revaluation of the Council's Household Waste & Recycling Centres has led to a refund of past and current year NNDR charges which amounts to £66,000. There is a virement request included in this report to transfer this money to balances.

3 CONSULTATION

4.1 This report was sent to Trade Unions on 13^th November 2002.

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