(OPEN TO THE PUBLIC) / ITEM NO.11A
REPORT OF THE STRATEGIC DIRECTOR OF HOUSING AND PLANNING
TO THE LEAD MEMBER FOR PLANNING on 4th DECEMBER 2006
TITLE:BUDGET MONITORING REPORT FOR APRIL 2006 TO OCTOBER 2006
FOR PLANNING
RECOMMENDATIONS :
That Lead Member notes the key budget areas and receives further regular reports throughout the remainder of the year.
EXECUTIVE SUMMARY :
The report details the current position for the 2006/07 Planning Division Budget.
BACKGROUND DOCUMENTS :Budgetary Control File 2006/07
(Available for public inspection)Financial Information from SAP
ASSESSMENT OF RISK :Failure to monitor the budget and instigate appropriate actions of findings can lead to significant over/underspends in 2006/07 that will affect the financial health of the City Council.
THE SOURCE OF FUNDING IS : Not applicable as the report concerns budget monitoring.
LEGAL ADVICE OBTAINED :Not required for this report.
FINANCIAL ADVICE OBTAINED :
Report prepared by the Out-stationed Group Accountant for Planning Services.
CONTACT OFFICER :Stephen Bayley 0161 793 2584
WARD(S) TO WHICH REPORT RELATE(S) :All
KEY COUNCIL POLICIES :City Council Revenue Budget 2006/07
DETAILS (Continued Overleaf)
1.0Background Information
1.1The table below shows the split of the approved Development Services budget for 2006/07 split between the three areas of responsibility.
Budget Area / Expenditure / Income / Net Budget£M / £M / £M
Council Budgets / 21.258 / 10.725 / 10.533
Managed Budgets / 9.276 / 1.871 / 7.405
Joint Venture Company Management Fee / 23.791 / 13.959 / 9.832
Total / 54.325 / 26.555 / 27.770
1.2The Council Budgets comprise those budgets that remained with the Council when Urban Vision was created. These include the budgets for mainly Planning staff that have not transferred to Urban Vision, capital charges and insurances.
1.3Managed Budgets are primarily the Maintenance budgets for Highways and Property, the payment to the contractor for Decriminalisation of Parking Enforcement and the running costs of Corporate Properties.
1.4The Joint Venture Company Management Fee is the agreed fee paid to Urban Vision for the delivery of the service. This is paid monthly to Urban Vision who then refund the Council the actual salary costs incurred through the payroll run.
1.5The main headings that make up the budgets are listed in Appendix 1 and the main areas that need to be brought to the Lead Member’s attention are as follows: -
2.0Council Budgets
2.1Property Income
2.1.1This includes income from property management, industrial estates, commercial rents and markets.
2.1.2Currently, this area is showing a favourable variance of £93K and it is hoped that this will continue through to the year end.
2.1.3This will now need to contribute to the funding of the additional running costs of Emerson House, currently £137K, being charged by Urban Vision.
2.1.4This was to be funded by the disposal of three satellite offices currently occupied by Community, Health and Social Care. However, the savings are unlikely to be realised this financial year.
2.2Building Control Fees
2.2.1Building Control Fees are currently showing an adverse variance to budget of £32K and it is anticipated that this variance will be maintained at a similar level until the year end.
2.2.2These fees are dependent upon the level of business and may alter throughout the year.
2.2.3The annual monitoring return for the Building Control service submitted to the Department for Communities and Local Government showed a surplus of income over expenditure of £143K for 2005/06.
2.2.4Whereas income is shown on a separate line in Appendix 1, expenditure is contained within the management fee figure.
2.2.5The Departmental guidelines (Regulation 5) advises that Authorities that return significant surpluses over a three year period,take steps to avoid this situation in future years.
2.3Development Control Fees
2.3.1Development Control Fees are showing a favourable variance to budget of £228K. It is anticipated that this variance will not have altered significantly by the end of the year.
2.4Local Development Framework (formerly UDP)
2.4.1The available budget for 2006/07 is £376K. This includes £80K carried forward from the previous year.
2.4.2£84K has been spent up to the end of October, leaving £292K still available.
2.4.3Commitments and likely areas of expenditure have been identified and will be used to monitor expenditure.
2.5Planning Delivery Grant (PDG)
2.5.1The Planning Delivery Grant budget for 2005/06 was £1.13M. During 2005/06 £359K was spent leaving £773K to carry over into 2006/07.
2.5.2The grant settlement for 2006/07 is £453K, which means that there is a total of £1.226M available to fund expenditure.
2.5.3Commitments and likely areas of expenditure have been identified and will be used to monitor expenditure.
2.6Inquiry Costs
2.6.1There is currently a small budget for Legal costs arising from Planning applications. However, the current major inquiries that are ongoing and envisaged will mean that this budget will be totally inadequate.
2.6.2Currently, Development Control expenditure is showing an adverse variance of £327K. This is due to the Salford Reds Inquiry, which had a successful outcome and will be of great benefit to Salford.
2.6.3It is possible that a proportion ofthis can be accommodated from additional Planning fees, which are currently showing a combined favourable variance of £196K. However, this will have to be monitored closely in order to assess whether this course of action is feasible at year end.
2.7Employee Budgets
2.7.1The budget for employees for the Housing and Planning Directorate for 2006/07 is £8.62M. Currently an adverse variance of £6K is being reported.
3.0Managed Budgets
3.1Highways
3.1.1The Highways budget is £4.8M against which £2.1M has been charged. This includes actual costs up to the end of October and estimated costs for November and has resulted in a favourable variance of £435K.
3.1.2It is forecast by Urban Vision that this budget will be fully utilised by the end of the financial year.
3.1.3Lead Member will recall that on 16th November a meeting was requested with Urban Vision to review the proposed expenditure in this area.
3.2Markets
3.2.1The expenditure for markets falls within the Managed Budgets area and is showing an adverse variance of £38K.
3.2.2It is anticipated that an adverse variance of approximately £50K will have occurred by year end. This is because of the rise in rental expenditure.
3.2.3It is hoped to cover this adverse variance from additional Property income.
3.3Reporting mechanisms
3.3.1A suite of information is being developed by Urban Vision that will be prepared on a monthly basis. The first reports have been received and, hopefully, when these have been developed fully they will enable the client to be able to monitor and report on the budgets that are under the management of Urban Vision.
3.3.2Inaddition,a monthly contract monitoring meeting takes place covering all aspects of the contract including outputs and budgets.
4.0Management Fee
4.1The management Fee represents the charge by Urban Vision to the Council for the running of the service. This can only be altered by the change control process. Currently eleven change control documents have been processed since the beginning of the contract, which have had the effect of raising the fee from the baseline position by £1M.
4.2Currently, the budget stands at £9.8M, against which £5.74M has been charged up to the end of October. This is broadly in line with expectations, but this will be the subject of close scrutiny.
5.0Conclusions
5.1Urban Vision needs to supply the client with more timely, accurate and meaningful information regarding the budgets they manage.
5.2The change control procedure needs to be strictly adhered to.
6.0Recommendations
6.1The Lead Member notes the report and receives further regular reports for the remainder of the year.
LM Budget Mon oct 06 (2)June 06