AGENDA ITEM 6
BOROUGH OF POOLE
CABINET
8th December 2009
COUNCIL BUDGET MONITORING
(1 APRIL 2009 – 31 OCTOBER 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 31st October 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 section 5.4 of the Report.
c)Approve the actions proposed in Section 8 of the Report.
3EXECUTIVE SUMMARY
3.1Financial position and outlook for the year;
In summary, the Council’s in-year forecast is currently estimated to be a net (£365,000) surplus. However it should be noted that this is a net position of a number of significant variances reported due the course of the year todate, including;
- £1m overspend in a combination of Adult and Children’s Social Care costs.
- (£610k) saving from in-year resource reallocations due to events such as one-off National Non Domestic Rate (NNDR) rebates, a lower pay award than originally assumed, as well as savings compared to the provisions made for energy costs.
- (£245k) additional grant income including the Local Authority Business Growth Incentive Scheme (LABGI) and the Growth Fund revenue allocations.
- (£176k) saving on Treasury Management interest on borrowing costs which were the result of the decision to repay £5m of Public Works Loan Board debt as a means of mitigating against the continued high counterparty risk (risk that the banks the Council has invested with fail).
- (£150k) saving on the provision for debt repayment (Minimum Revenue Provision) as a consequence of the slippage between years of various capital schemes financed by borrowing.
- (£96k) Value Added Tax (VAT) refund.
- (£70k) additional rent. Based on the actual performance of the Dolphin Shopping Centre in 2008/09.
3.2For planning purposes the Council are not currently assuming that this forecast surplus will be available at year-end to underpin either the budget for 2010/11 or the Medium Term Financial Plan (MTFP). This is on the basis that the overspends in both Adult’s and Children’s Social Care continue to steadily rise and, as previously reported, the Council is exposed to a number of risks which could impact on the final outturn for the year. These include the Continuing Health Care (CHC) status of a number of individuals in the Learning Disability client group that are currently in dispute and a capacity claim from a bus operator in respect of the Concessionary Fares Scheme.
However this position will be reviewed on an ongoing basis especially as the Council has recently requested that all Service Units consider both the need to fill any vacancies that arise, and the need to incur any expenditure not already committed, as a means of potentially increasing the in-year surplus and making a future contribution to the MTFP.
3.2 Appendix A1 summarises the issues, which have been incorporated within the year-end financial outturn - October forecast (£365k) surplus - September forecast (£367k) surplus.
All individual 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 financial regulations. Such variances are then required to be separately reported, however there have been no such significant variance since the end of September report.
3.3It may aid understanding of Appendix A1 to this Council Budget Monitoring Report to establish that £3,794,000 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.
4CAPITAL
4.1The Council’s current capital programme budget for 2009/10 is £34.4m. 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 spends for Poole Bridge and major schemes within Children’s Services.
4.2The actual capital programme spend of £16.2m to the end of October 2009 represents an overall spend of 47% 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 33.2% for the same period in the previous year.
4.3A full set of individual scheme details is attached as Appendix B.
5. BUDGET TRANSFERS (VIREMENTS) - CAPITAL
5.1A capital virement is a transfer of resources between schemes or the re-phasing of approved scheme expenditure between years.
5.2Appendix B12 highlights the virements to the Capital programme that have been undertaken in October 2009.
5.3In 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.
5.4In accordance with these regulations the following transfers (virements) require the approval of Cabinet.
Environmental Areas
£150,000Workshop Ramps – Estimated cost of ramp installation at Hatchpond depot to be funded by a direct revenue contribution.
(£130,000)Coastal Protection – Poole Frontage Management Works – Reduction in total cost. As the scheme is grant funded there is no impact on the net capital programme
Housing Areas
£200,000Disabled Facilities Grants - Transfer of part of 2010/2011 Private Sector Renewal budget allocation to support Disabled Facilities Grants spend profile.
(£200,000)Private Sector Renewal Grants – Funds not required for 2009/2010 programme transferred to support Disabled Facilities Grants.
Resources
(£111,000)Corporate ICT and E-Government – Spend profile updated resulting in reprofiling to future years.
6HOUSING REVENUE ACCOUNT (HRA)
6.1Appendix 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).
6.2There are no key issue arising since the end of September report.
7BUDGET MONITORING REPORTING ASSUMPTIONS
7.1Financial reports as set out are produced by Financial Services.
7.2Actual expenditure and income included is that posted to the Council’s financial ledger as at 31st October 2009 and covers the period from 1st April 2009.
7.3The 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.
8PROPOSED ACTIONS - CAPITAL
8.1It is requested that the relevant Lead Officers review the progress of the following scheme and provide an update in respect of any reprofiling requirements.
Lead Officer / Service Unit / Capital SchemeLynne Wait / Transportation Svs / Pay & Display machines on street parking & surface car parks
8.2That the Capital Programme is updated based on the recommendations of a report being presented to the Transportation Advisory Group on the 26th November 2009, once subsequently approved by the relevant Portfolio Holder. The report is an update on the 2009/10 Capital Programme from the Head of Transportation Services.
9.FINANCIAL IMPLICATIONS
9.1 Financial implications are as outlined within the report.
10LEGAL IMPLICATIONS
10.1There are no legal implications.
11RISK MANAGEMENT IMPLICATIONS
11.1There are no risk management implications.
12EQUALITY IMPLICATIONS
12.1Any 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.
13CONCLUSION
13.1The Council’s forecast year-end position continues to be consistent with previous months and a broadly balanced position for 2009/10. Service Units have though been requested to consider if additional savings can be generated through either not filling vacancies or through expenditure not currently committed. The position will be continually reviewed to consider the risks associated with any year-end forecast and the extent that any surplus could potentially be used to underpin the Medium Term Financial Plan.
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14UPDATE ON PREVIOUS COUNCIL BUDGET MONITORING REPORT ACTIONS
14.1This 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 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.
2 / The 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. / Report to be included as part of the October 2009/10 Council Budget Monitoring Report. / Attached as Appendix A9.
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
Clare Freeman / Leisure Services / Playbuilder Schemes
Harry Capron / Housing & Community Services / Learning Disability Campus Closure Programme
/ Updates have been incorporated within the updated capital programme with any virements referenced on Appendix B12. / 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 delayed – originally due to be included as part of the September 2009/10 Council Budget Monitoring Report. / To Follow.
E WILKINSON
HEAD OF FINANCIAL SERVICES
Contact Officer Adam Richens Head of Accountancy
Telephone: (01202) 63.3399
email:
Background Papers: Nil
Date: 30th November 20
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