Meeting documents
Cabinet
Wednesday, 14th January, 2009
Appendix 1
REVENUE BUDGET MONITORING APRIL TO NOVEMBER 2008
1.1 Appendix 2 outlines the Council's current financial position for the 2008/09 financial year to the end of November 2008 by cabinet portfolio. The Appendix show the current forecast outturn position is an underspend of 1.43% or £1.658m.
1.2 Within the current £1.658m forecast underspend 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 Customer Services - forecast £454,000 overspend
The forecast overspend on this portfolio is made up of the following variances:
Planning & Transportation £297,000 overspend mainly due to shortfall of £463,000 in land charge income caused by market downturn & competition, concessionary fare pressures of £276,000, Bath package borrowing costs of £67,000, offset by increased forecasts in Park & Ride income of £158,000 & staffing efficiencies.
Environmental Services £261,000 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, a one-off Passenger Transport fuel grant, waste project economies and higher charges to offset Schedule 2 costs. £84,000 of this overspend relates to a one-off and unanticipated cost, which the Cabinet will consider not requiring the Service to carry forward this overspend in the context of the overall out-turn for 2008/09.
Tourism, Leisure & Culture £104,000 underspend, mainly due to increased non-visitor income & deferral of building investment maintenance in Heritage & increased income from fees & fines in libraries.
1.4 Children's Services portfolio - forecast £224,000 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 £68,000 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 £44,000 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.
Child Placements & Foster Allowances - £240,000 overspend.
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 £22,000 overspend.
Legal Costs associated with Care Proceedings - Due to specific legal issues relating to care proceedings we are projecting a one -off cost in 2008/09 of £220,000. In view of the unavoidable, unpredictable & one-off nature of these costs, the Cabinet will consider not requiring the Service to carry forward this overspend in the context of the overall out-turn for 2008/09.
Mitigating Actions - Utilisation of Grant income, the pooling of inclusion support costs & underspends in service team budgets have released £606,000 to mitigate the overspends identified above.
1.5 Adult Social Services & Housing - forecast £237,000 underspend
Older Peoples Services This budget is overall underspent by £580,000 due to a reduction in purchased placements and changes to clients' assessed contributions. This has been due to a number of factors including the implementation of Individual Budgets, the Intake and Re-enablement Team, and the impact of Continuing Health Care.
Mental Health Services The budget variance is made up of an over spend of £650,000 on purchasing of care for Adults Working Age offset by an under spend of £122,000 on purchase of care for older people and an underspend of £103,000 on in-house services mainly due to existing vacancies
EPH & Supported Living This budget is forecast to underspend by £136,000 largely due to increased income due to high occupancy levels and timing differences in respect of the commencement date of the new contract and the later than budgeted opening of the new Resource Centre in Keynsham.
Learning Difficulties Services Overall the pooled budget is forecast to overspend by £407,000 largely due an increase of Continuing Health Care funded clients. The Continuing Health Care budget is overspent by £270,000. The Council's position after underwriting of £100,000 is an over spend of £149,000.
Other Budgets - These budgets are forecast to underspend mainly due to higher than anticipated vacancy levels in some areas.
1.6 Resources & Support Services Portfolio - forecast £2,099,000 underspend
The forecast underspend on this portfolio is made up of the following variances:
Support Services: £57,000 underspend made up of a £86,000 overspend in finance due to short-term consultancy costs, £45,000 overspend in Audit, Risk & Information due to restructuring & software costs, overspend of £51,000 in Property overhead costs offset by £206,000 of improved productivity & staffing efficiencies in Property, underspend in Policy & Partnerships staffing costs of £43,000 & other overspends of £10,000.
Improvement & Performance: £39,000 underspend due to vacancies & postponement of leadership event.
Council Solicitor: £95,000 underspend due to £20,000 underspend in Democratic Services & a surplus on the legal charges account.
Corporate costs: £1,908,000 under spend is made up of £800,000 additional investment interest from higher than expected cash balances (effect of 2007/08 out-turn including Pension Fund & VAT refund adjustments), £1,048,000 savings in interest payable on long term borrowing, Minimum Revenue Provision & and capital cashflow, £80,000 favourable variance in Agency Framework charging mechanism, 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.
As part of the Budget Strategy for 2009/10 and future years, Cabinet & Council will need to consider how best to balance current year interest savings against the low interest expected to arise from very low interest rates in the foreseeable future.
CAPITAL BUDGET MONITORING - APRIL TO NOVEMBER 2008
1.7 The 2008/09 Capital Programme approved by Council on 19th 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 25th 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 £76.937m which is £17.640m less that the revised budget of £94.577m. The total programme forecast to 2012/13 is for expenditure of £399.683m which is £26.296m or 6.2% less than the budget.
1.10 The £6.323m 2008/09 underspend in respect of Customer Services is mainly due to the £5.136m underspend on the Midland Road relocation project, which has been put on hold.
1.11 The £4.449m current year variance in Children's Services mainly arises from:
- St. John's Development £0.576m slippage
- Writhlington £1.5m slippage
- Schools' Devolved Capital estimated £1m slippage
- Fosseway £1.3m slippage
1.12 The Adult Social Services & Housing £4.135m current year underspend is mainly due to slippage of £2.385m in Social Housing Grants & £1.962m in bath Western Riverside Social Housing contribution.
1.13 Resource & Support Services current year underspend of £2.168m mainly comprises of £1.313m underspend in relation to the former WorkSMART project which is now replaced by a wider Transformation Programme and £0.750m underspend in Land Purchase provision.
1.14 In addition, the 2008/09 Capital Programme includes £4.742m of uncommitted corporate contingency, which will be slipped into 2009/10 if not utilised.
1.15 The effect of slippage & under / overspends will be taken into account in the budget proposals for 2009/10 and future years, being considered by Cabinet in February 2009.
1.16 Forecasting Capital Receipts is made more difficult in light of the current economic conditions. The Council had budgeted for £1.11m receipts, which may not be achieved in the current financial year. However, there is potential to achieve other receipts to off-set this variance, but not at the level that was expected to begin contributing to funds for Public Realm improvements.
1.17 Right to Buy receipts are forecast to be on target of £1m by the end of the year, but if this is the case, it will still be significantly less than has been achieved in previous years.