Report:Finance Report

AGM Item No : 8

Date:14th October 2015

Report:Finance Report

Written by:Denise Furlonger

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Purpose of Report

To present the outturn report for 2014/15 and the estimates for the period 2016/17 based on the agreed Core Costs and the proposed contributions to Surrey Hills Enterprises CIC (SHECIC).

Summary

Every year at the AGM the Board agrees the outturn report for the previous year accounts and agrees the core estimates for the following financial year.

In line with the funding formula set out in the AONB Board’s Constitution (paragraph 71) and the 5 year Business Plan (2014 – 2019), the estimates demonstrate how we can afford to maintain thecore staff resource, whilst reducing the annual contribution to Surrey Hills Enterprises.

Salaries are based on the employment of the Director (1 FTE), Office Manager (1 FTE), Communications Officer (0.4 FTE) , Planning Adviser 0.4 FTE), and Project Assistant/Grants Administrator 0.4 FTE). A 1% inflation increase has been added in line with the current year SCC agreement, plus £4k for travel and subsistence and training for the whole unit.

The running costs are showing an increase as it is likely that the National Trust will introduce a rental cost for Warren Farm Barns at the end of the current lease, and service charges have not been reviewed for a few years.

The estimates assume a full budget spend as the Defra grant is paid on expenditure so can not be “banked”.

It is acknowledged that we are uncertain of what our budgets will be for the future because of severe pressure on Defra and local authorities’ finances. Therefore budgets will still need to be reviewed and agreed annually. As yet we have no information on the new Defra 4 year funding settlement and whilst we are hopeful that the budget may remain at a standstill there is an expectation of likely reductions in funding from 16/17 onwards. In line with previous cuts we have looked at the scenario of a possible 20% reduction over 4 years. For 16/17 and 17/18 the estimated reduction has come out of the SDF/Project funding. The estimates were considered for recommendation by the Statutory Members Group on 14th September.

It is likely that at a CSR in late Autumn 2015 Defra will clarify a further 4 year financial commitment (2016/17 to 2019/20).

The Statutory Members Group agreed that as a matter of policy the AONB should in future avoid, if practicable the direct employment of staff outside the core business of the AONB Unit to avoid the cost and complications e.g. redundancy.

The Statutory Members Group reviewed the updated Risk Register on 14th September. It highlights the existing activities undertaken to mitigate the risks. The Risk Register highlights that the highest risk was the reduction in Defra funding and suggests the further mitigation measures the AONB Board should consider once the Defra settlement is confirmed.

Recommendations

The Members are asked to:

-approve the outturn report for 2014/2015

-agree the core estimates for 2016/2017

SURREY HILLS - AONB (CORE)
OUTTURN REPORT FOR 2014-2015
Estimate / Outturn
2014/2015 / 2014/2015
£ / £
1) Core Staff Costs / 151,115 / 148,883
2) Project Staff Costs / 94,700 / 86,189
3) SHE CIC Contr. / 47,000 / 36,070
4) PR and Publicity / 9,463 / 10,950
5) Running Costs / 8,000 / 8,398
6) Project Fund (SDF) / 19,911 / 18,557
Total Core Costs / 330,189 / 309,047
Costs met by:
7) Non-Defra Core Contributions (25%)
Surrey County Council / 26,900 / 26,900
Guildford Borough Council / 5,279 / 5,279
Mole Valley District Council / 5,279 / 5,279
Waverley Borough Council / 5,279 / 5,279
Reigate & Banstead Borough / 2,640 / 2,640
Tandridge District Council / 2,640 / 2,640
Surrey Hills Enterprises/Trust Fund / 4,153 / 0
52,170 / 48,017
8) Defra Core (75%) / 156,508 / 144,050
6) Project Fund (SDF) / 19,911 / 30,252
2) SEEPL/NAAONB / 55,600 / 56,127
2) Woodland Adviser / 40,000 / 21,213
Other Income / 0 / 9,388
Total Core Income / 324,189 / 309,047
Deficit/Surplus current year / 6000 / 0
Deficit /Surplus previous year - Core / 16163 / 16163
Deficit/Surplus previous year - SEEPL/NAAONB (ringfenced) / 5133 / 5133
Balancing Deficit /Surplus / 15296 / 21296
1) Core staff costs (Director, Office Manager, Planning Adviser, Comms, Project Asst)
2) South East & East Protected Landscapes Coordinator and Woodland Adviser
3) Surrey Hills Enterprises contribution including Project Manager salary & costs
4) Communications, including website development
5) Running costs including property service charges, meeting costs, general office costs
6) SDF project fund prioritising Working Groups
7) 25% of budget pro-rata as per Constitution
8) 75% of budget as per Constitution
SURREY HILLS - AONB (PROJECTS)
OUTTURN REPORT FOR 2014-2015
Estimate / Outturn
2014/2015 / 2014/2015
£ / £
North Downs Way / 8,213 / 8,213
Front Line Surrey Hills / 30,000 / 30,003
Landscape Enhancement Programme for Country Lanes / 0 / 1,769
Woodland Adviser / 0 / 8,849
Other Expenditure / 1,500 / 1,688
Total Project Costs / 39,713 / 50,522
Costs met by:
North Downs Way / 8,213 / 10,413
Front Line Surrey Hills / 30,000 / 30,003
Landscape Enhancement Programme for Country Lanes / 0 / 0
Other Income / 1,500 / 2,929
Total Project Income / 39,713 / 43,345
Deficit/Surplus current year / 0 / 7,177
Deficit /Surplusprevious year / 9,712 / 9,712
Balancing Deficit /Surplus / 9,712 / 2,535
Estimates
ESTIMATES 2016/2017
TO BE AGREED BY SURREY HILLS BOARD ON 14th OCTOBER 2015
SURREY HILLS - CORE FUNDING
Estimate / Estimate / Estimate
2015/2016 / 2016/2017 / 2017/18
£ / £
1) / Core Staff Costs / 148041 / 155,900 / 155,900
2) / SHE CIC Contr. / 28916 / 17,000 / 0
3) / Communications / 5531 / 6,000 / 6,000
4) / Running Costs / 9579 / 13,167 / 30,167
Total Core Costs / 192,067 / 192,067 / 192,067
Costs met by:
5) / Non-Defra Core Contributions (25%)
Surrey County Council / 26,900 / 26,900 / 26,900
Guildford Borough Council / 5,279 / 5,279 / 5,279
Mole Valley District Council / 5,279 / 5,279 / 5,279
Waverley Borough Council / 5,279 / 5,279 / 5,279
Reigate & Banstead Borough / 2,640 / 2,640 / 2,640
Tandridge District Council / 2,640 / 2,640 / 2,640
48,017 / 48,017 / 48,017
6) / Defra Core (75%) / 144050 / 144,050 / 144,050
Total Core Income / 192,067 / 192,067 / 192,067
Deficit/Surplus current year / 0 / 0 / 0
Deficit /Surplus previous year - Core / 16163 / 16,163 / 16,163
CORE Balancing Deficit /Surplus / 16,163 / 16,163 / 16,163
1) / Core staff costs (Director, Office Manager, Planning Adviser, Comms, Project Asst)
2) / Contribution to Surrey Hills Enterprises
3) / Communications, including website
4) / Running costs, including property service charges, meeting costs, general office costs.
From 17/18 will include rent and increased service charges
5) / 25% of budget pro-rata as per the Constitution
6) / 75% of budget as per Constitution

Estimates

SURREY HILLS - PROJECT FUNDING
Revised Estimate / Estimate / Estimate
2015/2016 / 2016/2017 / 2017/18
£ / £
1) Working Groups/Projects / 22168 / 11,537 / 12,822
2) SHECIC Contribution / 8084 / 10,000 / 0
3) SEEPL/NAAONB / 56000 / 56,000 / 56,000
4) Tillingbourne / 46,100 / 72,000 / 0
Other expenditure / 10,560 / 0 / 0
Total Project Costs / 142,912 / 149,537 / 68,822
Costs met by:
1) Defra Working Groups/Projects / 22168 / 11,537 / 12,822
2) Defra SHECIC / 8084 / 10,000 / 0
3) SEEPL/NAAONB / 56,000 / 56,000 / 56,000
4) HLF - Tillingbourne / 46,100 / 72,000 / 0
Other income / 9,000 / 0 / 0
Total Project Income / 141,352 / 149,537 / 68,822
Deficit/Surplus current year / 1,560 / 0 / 0
Deficit /Surplus previous year - SEEPL/NAAONB (ringfenced) / 5,133 / 5,133 / 5,133
Deficit /Surplus previous year - Projects / 2,534 / 974 / 974
PROJECTS Balancing Deficit /Surplus / 6,107 / 6,107 / 6,107
1) Business Plan agrees to prioritise spend on Working Groups
2) Defra SDF element towards SHECIC contribution
3) South East & East Protected Landscape Coordinator seconded to National Association for AONBs with full reimbursement
4) HLF funded project
2015/16 / 2016/17 / 2017/18
TOTAL COSTS - Core & Projects / 288,879 / 315,704 / 332,889
TOTAL INCOME - Core & Projects / 287,319 / 315,704 / 332,889