BOROUGH OF POOLE
CABINET
17th November 2009
COUNCIL BUDGET MONITORING
(1 APRIL 2009 – 30 SEPTEMBER 2009)
PART OF THE PUBLISHED FORWARD PLAN : YES
1PURPOSE OF THE REPORT
1.1This report gives the Council’s performance against budget for the period 1st April 2009 to 30th September 2009 and also the financial outturn for the year. The purpose of the Council Budget Monitoring reporting process is to:
a)promote principles of sound and effective financial management within the Authority; to promote an efficient closure of the Authority’s accounts with consistency between in year and year-end financial reporting; to ensure there are no surprises in the authority’s year-end financial position.
b)ensure the Council’s budget monitoring process is produced regularly on a timely basis throughout the year with the information presented considered to be reliable, relevant and understandable.
c)ensure the Council manages performance against budget with prompt action being taken when material variances arise or deficits are forecast. The management of these variances being designed to avoid an adverse impact on service delivery or on the achievement of corporate objectives.
1.2All Service Units have confirmed their acknowledgement of the issues raised.
2DECISION REQUIRED
2.1It is recommended that Cabinet:
a)Note the contents of the report.
b)Approve the budget transfers (virement) as set out in sections 4.4, 6.4 & 7.2.1.
c)Approve the actions proposed in sections 9 and 10.
2.2It is recommended that Cabinet recommend to Council:
1)Approval of the Capital budget transfers (virements) as set out in section 6.5
3EXECUTIVE SUMMARY
3.1Financial position and outlook for the year;
In summary, the Council’s in-year forecast surplus is currently estimated to be £367,000. However these potential resources need to be seen in the context of the significant uncertainties facing the Council in respect of growing needs and volatile patterns of demand for particular high cost service activities such as Looked After Children. Particular uncertainties that the Council is currently exposed to include;
- A capacity claim issued by a bus operator in respect of Concessionary Fares (financial risk valued at circa £0.5m).
- The Continuing Health Care (CHC) status of a number individuals in the Learning Disability client group is currently in dispute (financial risk valued at circa £0.5m).
3.2 Appendix A1 summarises the issues, which have been incorporated within the year-end financial outturn (September forecast £367k surplus - August forecast £209k surplus).
All variances which are in excess of £100,000, and those above £50,000, where the variance is greater than + / - 5% above the agreed budget are deemed significant as per the Council’s revised financial regulations. Those arising since the end of August report are set out as follows:
Children’s Services
[1]£105,000Children’s Social Care
During September the costs associated with fulfilling the Council’s corporate parenting role has increased by £105,000 to an overall pressure for the year of £355,000. The increase is associated with staffing costs to manage the increase and complexity of referrals.
Local Economy (Including Transportation)
£63,000Building Control Services
Building Regulation fee income is currently forecast to be £94,000 lower at year-end than the budget estimate due to the overall market conditions. By way of mitigation staff savings of £31,000 have been made, with the balance being drawn down from the specific Building Regulation Account earmarked reserve. This reserve being a statutory account required to provide for the balancing of building regulation income and expenditure over a rolling 3-year basis.
Other Financial Items impacting on the General Fund
(£131,000)In-year revised resource allocations
As highlighted in previous reports, when resources become available within Service Unit budgets, due to a change from the assumptions made within the original budget allocation, these resources will be redirected to support the Council’s Medium Term Financial Plan (MTFP).
During September confirmation has been received from the Local Government Employers (LGE) that agreement has been reached with the unions in respect of the pay award for 2009. The agreement was for an uplift of 1.25% at the lower end and 1% for the majority of grades within the pay structure. As an assumed 1.25% is available within Service Unit budgets (original 1.5% reduced by the impact of the final payaward for 2008/09) then £131,000, which is equivalent to 0.25%, has been redirected in support of the MTFP.
3.3It may aid understanding of Appendix A1 to this Council Budget Monitoring Report to establish that £3,802,000 of the variance reported at the cost of portfolio controlled services level relates to the use of specific earmarked reserves for the purposes they were intended for. Detailed analysis of how earmarked reserves are being drawn down is highlighted within Appendix A3 to Appendix A8.
4. BUDGET TRANSFERS (VIREMENTS) - REVENUE
4.1A revenue virement is a transfer of resources between or within approved budgets.
4.2Appendix A2 highlights the virements that have been undertaken during September 2009.
4.3In accordance with the Council’s Financial Regulations (as amended by Council on the 9th June 2009) the following rules associated with revenue virements apply;-
- Senior Responsible Officers can approve virements up to £100,000.
- Virements over £100,000 and up to £500,000 require prior Cabinet approval.
- Virements over £500,000 require prior Council approval.
However where the virement is into a new or otherwise unplanned function or activity Senior Responsible Officers can only approve up to £50,000 with prior cabinet approval required for those over £50,000 and up to no more than 10% of business plan income or expenditure.
4.4In accordance with these regulations the following transfers (virements) require the approval of Cabinet
Virements within a Statement of Service
- £456,000Children’s Services – Standard Fund Grants
Additional Standard Funds Grants confirmed for the new academic year for a range of Standards Funds -the main ones beingfor National Challenge (£215k), new specialism’s (£166k) and KS4 English (£45k).
- £133,000Children’s Services – Sure Start Grants
Additional Sure Start Grant funding for 2009-10 for the 2 Year-old Pilot programme starting from September 2009. The programme is to run over 5 terms. Funding is for 502 year-oldchildren from disadvantaged families to receive 10 hours free nursery provisionper week as part of a package of support for the family.
5CAPITAL
5.1The Council’s current capital programme budget for 2009/10 is £34.7m. This can be compared to the original budget for the year of £49.5m. The reduction is the consequence of significant slippage into future years mainly as a result of the latest profile of spend for Poole Bridge and major schemes within Children’s Services.
5.2The actual capital programme spend of £14.2m to the end of September 2009 represents an overall spend of 40.9% against the programme and is lower than might be expected at this point in the financial year if a straight line profile of spend is assumed. It is worth noting however that the spend to date figure compares favourably to the 26.6% for the same period in the previous year.
5.3A full set of individual scheme details is attached as Appendix B.
6. BUDGET TRANSFERS (VIREMENTS) - CAPITAL
6.1A capital virement is a transfer of resources between schemes or the re-phasing of approved scheme expenditure between years.
6.2Appendix B12 highlights the virements to the Capital programme that have been undertaken in September 2009.
6.3In accordance with the Council’s Financial Regulations the following rules associated with capital virements apply;-
- Senior Responsible Officers can approve virements up to £100,000.
- Virements over £100,000 and up to £500,000 require prior Cabinet approval.
- Virements over £500,000 require prior Council approval.
6.4In accordance with these regulations the following transfers (virements) require the approval of Cabinet
Children’s Services
(£346,000)Childrens Centres - Reprofiled into 2010/2011 - due to delays in agreeing fully funded schemes at Branksome and Parkstone.
6.5In accordance with these regulations the following transfers (virements) require the approval of Council
Children’s Services
(£643,000)Improvements for Private Voluntary and Independent Settings - Reprofiled into 2010/2011 – it is necessary to set up legal agreements with various landlords in the PVI sector before improvement works can commence.
7HOUSING REVENUE ACCOUNT (HRA)
7.1Appendix C presents the Housing Revenue Account for the period between 1st April 2009 and the 30th September 2009 as prepared by Poole Housing Partnership (PHP).
7.2The key issue arising since the end of August report, as highlighted on the Appendix C3 commentary is; -
7.2.1Cabinet approval is required for a £350,000 virement request relating to the Kitchens that need to be completed to meet the Decent Homes standard target. The virement is proposed from resources originally made available to a number schemes including a number that relate to non-decent homes planned works.
8BUDGET MONITORING REPORTING ASSUMPTIONS
8.1Financial reports as set out are produced by Financial Services.
8.2Actual expenditure and income included is that posted to the Council’s financial ledger as at 30th September 2009 and covers the period from 1st April 2009.
8.3The profile of expenditure and income is based on service plan estimates as known. All variations to profile have been investigated. Only those items of an exceptional matter or otherwise for member decision are now reported.
9 PROPOSED ACTION - REVENUE
9.1The Head of Building Control Services reports to Cabinet on the position in respect of the decline in Building Regulation fee income including an assurance that any in-year deficit will be contained within the Building Regulation Account earmarked reserve.
10PROPOSED ACTIONS - CAPITAL
10.1It is requested that the relevant Lead Officers review the progress of the following schemes and provide updates in respect of any reprofiling requirements.
Lead Officer / Service Unit / Capital SchemeClare Freeman / Leisure Services / Playbuilder Schemes
Harry Capron / Housing & Community Services / Learning Disability Campus Closure Programme
11.FINANCIAL IMPLICATIONS
11.1 Financial implications are as outlined within the report.
12LEGAL IMPLICATIONS
12.1There are no legal implications.
13RISK MANAGEMENT IMPLICATIONS
13.1There are no risk management implications.
14EQUALITY IMPLICATIONS
14.1Any variations to budget require the responsible officers to be mindful of the equality implications within the Borough. Individual Budget Holders will consider and address these implications in line with their service specific equality impact assessments.
15CONCLUSION
15.1The Council continues to forecast a broadly balanced budget position for 2009/10. This position is predicted to be achieved during what is commonly referred to as a global economic crisis and a difficult and challenging national picture. Any surpluses that do arise at the financial year-end will be earmarked to support the Council’s Medium Term Financial Plan (MTFP).
16UPDATE ON PREVIOUS COUNCIL BUDGET MONITORING REPORT ACTIONS
16.1This section of the Council’s monthly budget monitoring report updates Members on the status of agreed actions from previous monitoring reports. The actions required by Cabinet and an update on the position against each are set out as follows:
Exhibit 1 Update on Previous Council Budget Monitoring Report Actions- Revenue
Agreed Action / Update commentary / Suggested Further Action1 / The Head of Property Services reports to Cabinet on steps to improve the delivery of planned maintenance works to Council Owned Assets within the financial year provided for. / Report to be included as part of the August 2009/10 Council Budget Monitoring Report. / Attached as
Appendix A9
2 / The Director of Social Services reports in the September monitoring report whether there are further actions that will be required in order to deliver the priorities of Adult Social Services within the allocated resources for 2009/10 further to the Action Plan report to Cabinet on the 14th July 2009 arising out of the recent care quality commission inspection. / Report to be included as part of the September 2009/10 Council Budget Monitoring Report. / Attached as
Appendix A10
3 / The Director of Children’s Services reports to Cabinet as part of the September Budget monitoring report on the actions being taken to mitigate and minimise costs associated with;
- increasing number of Children Looked After within the context of maintaining the safety of young people.
- costs ofcollegeand school transport.
4 / The Head of Transportation reports to Cabinet on the position in respect of Concessionary Fares including an update on the capacity claim issued by a bus operator. / Report to be included as part of the September 2009/10 Council Budget Monitoring Report. / Attached as
Appendix A11
Exhibit 2 -Update on Previous Council Budget Monitoring Report Actions – Capital
Agreed Action / Update commentary / Suggested Further Action5 / The below listed Lead Officers review the progress of the following schemes and provide updates in respect of any reprofiling requirements.
Lead Officer / Service Unit / Capital Scheme
Stuart Twiss / CYP - SQI / Poole Grammar School
Vicky Wales / CYP - IS / Learning Support Centre
(Targeted Capital Fund)
Vicky Wales / CYP - IS / Improvements for Private Voluntary and Independent Settings
Vicky Wales / CYP - IS / Phase 3 Children’s Centres
/ Updates have been incorporated within the updated capital programme with any changes referenced on Appendix B12.
The profile for Learning Support Centre will be updated once full planning approval for the development has been obtained. / No further action.
6 / The Head of Transportation Services in consultation with the Chief Financial Officer updates Cabinet on the outturn position for the Canford Bridge Maintenance Scheme / Report to be included as part of the September 2009/10 Council Budget Monitoring Report. / Update report will now be included as part of the October report.
E WILKINSON
HEAD OF FINANCIAL SERVICES
Contact Officer Adam Richens Head of Accountancy
Telephone: (01202) 63.3399
email:
Background Papers: Nil
Date: 20th October 2009
[1] Saving, Pressure, compared to the previously reported position.