Meeting documents

1 THE ISSUE

5.1 This report presents the provisional revenue and capital outturn for 2003/04, with some recommended technical adjustments. The report refers to known potential pressures for the current year, as a preface to a request to carry forward specific budget items to 2004/05.

5.2 RECOMENDATION

That the Executive:

5.3 Note the provisional revenue Outturn for 2003/04 in Appendix 1 at £273,000 under spent, rather than the previously reported and expected overspend of £193,000 in January and £67,000 in February 2004.

5.4Agree the carry forward proposals in the tables in Appendix 3 as exceptions to the budget management scheme. In particular, as part of that to consider the request to write off the over spend in the Public Conveniences budget.

5.5 Agree the virements in appendix 4 and the subsequent effects upon cash limits (included as Appendix 5).

5.6 Agree that any resulting surplus arising from decisions made should be set aside and carried forward into the 2004/05 revenue risk contingency budget for potential additional unavoidable costs in 2004/05.

5.7 Notes the final position of the 2003/2004 capital programme (appendix 6);

5.8 approves the adjustments to and incorporation of additional funding to the 2003/2004 programme as detailed in paragraph 4.12;

5.9 Notes the final position of available capital resources.

6 FINANCIAL IMPLICATIONS

6.1 These are contained within this financial report.

7 THE REPORT

BACKGROUND AND CONTEXT

7.1 This report provides information about how the Council did in terms of its spending against its revenue and capital budgets in 2003/04.

7.2 The report follows the format of reporting services by Executive portfolio. Requests for carry forward are also listed according with a reference to Portfolio (see Appendix 3).

7.3 A separate council committee has been set up for approving the statutory final accounts of the Council. That is the accounts in terms of the balance sheet and statutory accounting requirements. This report presents them in the form that is routinely reported throughout the year.

7.4 The Executive received financial reports throughout the year highlighting the known pressure areas, and identifying those actions that can be taken to reduce these to manageable proportions. Since the financial situation last year was initially forecasting a large overspend, actions were taken to limit these overspends and find some additional savings during the last financial year.

7.5 A Budget Management Scheme (BMS) is in force, which specifies how over and under spending should be treated in any year.

7.6 Under the budget management scheme all overspends should be carried forward, subject to a proposal from the service to recover them. At least 60% of any under spends can also be carried forward providing that the management of all overspendings have been agreed within a directors' service areas and also providing these under spends were reported at the latest in January 2004. If not reported by then, they are considered "windfall" and should not be carried forward.

REVENUE OUTURN 2003/04

7.7 Appendix 1 outlines the Council's provisional financial position for the 2003/04 financial year. Before any carry forward rules or approvals are applied, this amounted to a £273,000 under spending against the Budget for the year. This compares to the figures last reported to the Executive in March of a £193,000 over spend.

7.8 The explanations for the variations are given in Appendix 2 and some are highlighted below. The over spend is less than predicted mainly due to the actions taken during the year to relieve spending pressures.

7.9 This final under spend is a historically good position for the Council and is the first reported under spend for several financial years.

7.10 The main area of over spending is the Social Services portfolio. There are under spends in all other portfolios with the exception of Transport, Sustainability and the Environment and Lifelong Learning. However this is a general statement and there is wide variation between services within those broad headings and also the reasons for these over and underspendings. There is more detail available in the appendices (particularly appendix 2) and also in the background papers to this report.

7.11 Only two Directors' areas do not show a net under spend. These areas are Education and Social Services. Following the carry forward proposals made, only the former DEEDs areas and Social Services still show a net overspend. The reasons for this position are outlined in table 5 of appendix 3.

CAPITAL OUTTURN

4.12 AT THE 3RD MARCH MEETING A REVISED CAPITAL PROGRAMME OF £38.04 MILLION WAS APPROVED. THE FOLLOWING REVISIONS HAVE NOW BEEN INCORPORATED INTO THE PROGRAMME GIVING A REVISED TOTAL OF £38.12MILLION:

· Education - A supplementary credit approval of £335,838 has been allocated for works at St Gregory's. Due to the late notification, permission has been given to apply the approval to other education schemes, allowing the Council to carry forward other funding to carry out the work in future years. The Executive Member for Resources has approved the allocation of £50,000 to Chew Valley school sports hall, (£25,000 from Operations provision and £25,000 from leisure revenue funding). Due to a delay in the implementation of the Radstock Schools project a total of £3.4million of supplementary credit approval, approved specifically for this scheme, has been unhypothocated to Education schemes in general. In order to utilise the supplementary credit approval it must be allocated to expenditure in the 2003/04 programme and therefore capital grant funding must be carried forward to future years.

· Environment - Additional supplementary credit approval of £5,270 has been approved for Air Quality Monitoring giving a total of £47,427 for 2003/04. Also, in order to avoid leasing an automatic toilet for Midsomer Norton, which may have compromised our debt free position before the end of the financial year it was decided to purchase the item outright. The cost of £103,000 will be funded from slippage and repaid over a period of years similar to the lease agreement.

· Spa Project - An adjustment has been made to the 2003/04 budget to take account of additional expenditure accrued in 2002/03 following audit of the final accounts. The budget has been reduced by £408,493, this being the amount of expenditure carried back into 2002/03.

4.13 Spend to the 31^st March totalled £33.07million (£26.48million net of grant funded Stone Mines and SRB expenditure, or 91% of profiled spend). Profiled spend to 31st March, excluding grant funded Stone Mines expenditure, was £29.2million.

4.14 Details of the outturn position are given in Appendix 6.

CURRENT SPENDING - 2004/05 BUDGET POSITION

7.1 The first monitoring report for the current year will now be presented to the Executive in September. Monthly reports will be circulated to Executive members from early July onwards for both revenue and capital expenditure. To date a number of early financial pressures have already come to light in the current year. These are primarily in Social Services where costs and client demands have exceeded the plans made to date. The implications of these are significant in financial terms.

DECISIONS REQUIRED RELATING TO OVER AND UNDER SPENDS

5.4 Decisions are needed on some of the items in Appendix 3 relating to under and over-spending in 2003/04. Each section of Appendix 3 is clearly marked for information or for decision. In particular, decisions are required in tables 3 to 6 of Appendix 3. If all these items are approved, this would give a final under spend of £53,500, compared to a forecast overspend in March of £193,000. The budget approved included did not set aside balances specifically to meet overspending pressures, but it did increase unallocated balances by £1.15M. Therefore any use of balances to write off overspends (if that is the agreed net position) would require Council approval.

5.5 If a decision is made to carry forward all the items listed in appendix 3, and write off the over spends and carry forward the remaining balance to the risk contingency budget, then the final outcome will be a balanced position for 2003/04. Therefore Council will not need to be asked to approve using a further amount of balances to finance any shortfall.

5.6 Appendix 3 also contains three requests to write off overspends that cannot be recovered in 2004/05. These relate to Social Services, the savings in public conveniences and corporate transport savings.

Revenue and Capital Resources

5.7 A statement of balances is included as Appendix 7. This was also reported in February 2003 at the time of budget setting and has been updated for known changes (these are highlighted in the appendix in the "movement" column). If the requests in 2.2 and 2.4 are approved by Council the overall situation would be as follows:

5.8For information movements in school balances are also included in appendix 7. These increased in 2003/04.

5.9 Details of revised capital resources are as follows:

5.10 There was an overall reduction of £800,000 in estimated capital receipts, resulting in £200,000 less of useable receipts. General Fund receipts were marginally higher than anticipated, whilst actual Right-to-Buy receipts slowed in the latter part of the financial year achieving a total of £8m against the £9m estimated.

5.11 The table above shows resources of £1.9 million to be carried forward, which have been taken into account in the Financial Plan for 2004/05 and future years.

5.12 We are also required to report to you how the 2003/04 programme is to be financed. This is as follows:

6 RISK MANAGEMENT

A risk assessment related to the issue and recommendations has been undertaken, in compliance with the Council's decision making risk management guidance.

7 RATIONALE

7.1 The recommendations made in section 2 are based upon the budget management scheme and a consideration of the Council's latest financial position.

8 OTHER OPTIONS CONSIDERED

8.1 Appendix 3 lists all options that can be considered in making a decision on carry forwards and write offs in 2003/04 budgets. The options for the capital programme for 2004/05 and balances are being considered in a separate report elsewhere on the agenda.

9 CONSULTATION

9.1 This report has been circulated to Directors and their supporting finance staff. It will be sent to Trade Unions on 24 June 2004.