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ITEM CG17

EXECUTIVE – 16 JUNE 2004

PROVISIONAL REVENUE AND CAPITAL OUTTURN

Report by Head of Finance

Introduction

  1. This report is the provisional outturn for revenue (Part I) and capital (Part 2) as reported at the end of April 2004. The following annexes are attached to the report:

  1. The provisional outturn for the Council shows consolidated balances of £9.463m. This is made up of £3.569m in general reserves and £5.894m in Directorate carry forwards. This represents an increase of £6.065m from the position at the end of 2002/03. Annex 1 sets out the detailed position. The net revenue balances have increased by £2.103m, (£3.7m was added to balances in the 2003/04 budget). The position for Social & Health Care is expected to change once on going work to verify income and debtors figures in this area is finalised. However, no significant changes to the provisional outturn position are expected for any other area of the budget. The breakdown by directorate is shown at Annex 1 and explained in the report.

  2. There will be a final outturn position published in the autumn with explanations for variations to the budget. This publication will form part of a series of financial publications for the Council. The summary Medium Term Financial Plan for 2004/05 – 2008/09 will be available later this month and the Service Analysis for 2004/05 will be available next month. There are individual reports for each Directorate lodged in the Members’ Resource Centre.

    3. Virement Arrangements

  3. Under the current virement arrangements 2004/05 which were approved at Council on 10 February 2004, any proposed virement above the specified limit of £0.250m, or about which the relevant Executive Member(s) have concerns, must be referred to the Executive for approval. The relevant service Director and the Head of Finance (or his nominated officer) are empowered to effect individual virements up to a limit of £0.250m, subject to the agreement of the relevant Executive Member(s) in each case. Details of all proposed carry forwards are set out per directorate in the attached annexes (2-6) (Annexes 2-5 (download as .xls file); Annex 6 (download as .xls file)), subject to the approval of the Executive where the virement is above £0.250m.

    4. Part 1: Provisional Revenue Outturn

    Learning & Culture

  4. The provisional outturn for Learning & Culture is an over spend of £0.804m. This includes £1.166m of standards fund carry forward, which can be spent up to the end of August 2004. This is committed expenditure in 2004/05 and does not help alleviate the underlying overspend. If we ignore the standards fund the ‘real’ position is £1.970m compared with the previously reported position of £2.746m overspending, and represents a movement of £0.776m. The major areas of change relate to health & safety works £0.256m carry forward, joint sports agreements £0.254m carry forward, and £0.156m carry forward on MIS and corporate ICT. Some of this is reported as being committed in 2004/05 as set out at Annex 2 (Annexes 2-5 (download as .xls file).

  5. The planned over spend on City Schools Re-organisation is £4.110m, which is recoverable over the next eight years from savings on the fixed costs of the closed schools.

  6. The latest reported position shows Learning & Culture has a residual over spend of £0.650m in 2004/05, previously reported as £0.554m. The analysis is set out at Annex 2 (Annexes 2-5 (download as .xls file).This will be addressed through the action plan being prepared by the Directorate Leadership Team and reported to the 20 July meeting of the Executive.

  7. Schools’ delegated budgets are provisionally forecast to have carry forward reserves of £6.7m on 31 March 2004. The equivalent figure for 2003 was £7.8m. It appears that the considerable efforts made by schools to manage budgets in-year have been successful. There has been a very small increase in schools with deficits at the end of the financial year, from 70 schools in 2003 to 73 schools in 2004. The 73 schools had a total deficit of £3.3m (compared with £2.7m in 2003). There are 208 schools with a total surplus of £10m (some £0.500m less than a year ago).

    8. Social & Health Care

  8. Social & Health Care are reporting a provisional outturn of £1.901m. This is an increase of £1.032m on the £0.869m previously reported. The increase relates to unringfenced grant available to allocate after all commitments have been met, and was referred to in earlier reports. However, there is still ongoing work on debtors and income accounts, which means that the position for Social & Health Care cannot be finalised until this work has completed. The work is expected to be completed by the end of September. Annex 1 sets out the provisional outturn position for corporate revenue balances, of which £1.3m has been earmarked against these future adjustments. This was previously notified to the 16 March meeting of the Executive.

  9. The forecast outturn position for the pooled budget is a carry forward of £0.853m.

  10. An explanation of how the carry forward is proposed to be allocated is set out at Annex 3 (Annexes 2-5 (download as .xls file).

    11. Environment & Economy

  11. The provisional outturn for Environment & Economy is £2.567m carry forward compared to £2.217m reported last time. This is an increase of £0.350m.

  12. In addition a provision of £0.270m has been created to fund cell works at Dix Pit. This work varies significantly from year to year. In order to minimise the fluctuations on the revenue budget a reserve has been set up to which an annual contribution will be made. Work on the site will then be funded from the reserve as required.

  13. It is proposed that all of the variations are carried forward to the same budget head in 2004/05 as set out at Annex 4 (Annexes 2-5 (download as .xls file). The exception to this is an under spending of £0.300m on the Waste Management Budget, due to lower than expected tonnages in the summer of 2003, which is to be used to set up a ‘ better working investment’ budget fund, subject to Executive endorsement. This would be used to fund one off projects to invest in improved efficiency, effectiveness, innovation and business process for which there is neither base budget provision nor corporate funding.

  14. The On-Street Parking revenue surplus for 2003/04 was £0.864m. The accumulated surplus on the account at 1 April 2003 was £1.114m. Of this, £0.838m has been applied to meet part of the capital costs of eligible projects within the Oxford Transport Strategy and the two new Park and Ride car parks and £0.120m has been used to meet the balance of the operating costs of the Park and Ride sites as previously agreed. The accumulated surplus on the account at the end of 2003/04 is £1.020m. This does not form part of the general revenue account and a statement of actual income and expenditure in the account is included at the end of the report, at Annex 9 (download as .doc file).

    15. Community Safety

  15. Community Safety is reporting a provisional outturn of £0.251m. The majority of this relates to the Fire & Rescue Service which has a carry forward of £0.244m. This is £0.145m more than previously reported, and results mainly from two one-off government grants of £50,000, each of which is to be carried forward and spent in 2004/05. Analysis of the carry forward is shown at Annex 5 (Annexes 2-5 (download as .xls file).

    16. Resources & CDC

  16. The provisional outturn for Resources and Corporate & Democratic Core is a £1.979m carry forward, which is an increase of £0.312m on the position reported last time. This is mainly due to increased carry forward on ICT (£0.737m carry forward) and property (£0.122m carry forward). The carry forward on ICT is primarily due to resources for implementing electronic government, which were not spent in 2003/04 but will be required in the current financial year to ensure that the Council achieves the targets agreed with the Government. The remaining carry forward for Resources will be used to meet Directorates’ and corporate priorities. The latter will include helping to address issues arising from the current review of SAP.

    17. Movement on the General Reserves In-Year

  17. There have been a number of changes that have affected general reserves during the year. These are shown at Annex 7. The net effect of all these changes is that general reserves have increased marginally during the year from £7.529m to £7.679m.

    18. Part 2: Provisional Capital Outturn

  18. The provisional capital outturn summary at Annex 8 (download as .xls file) shows an underspending of £20.1m compared to a programme of £102.7m. These under spendings will be carried forward into 2004/05 and will be funded by resources not utilised in 2003/04 as a result of the under spendings, i.e. capital receipts and grants reimbursements and contributions (see further below).

  19. The main area of underspending is the Learning & Culture main programme, which is underspent by £12.7m. Of this, £4.8m relates to delayed spending of Devolved Formula Capital delegated to schools. The remainder is due to rephasing, delays and retentions. The Oxford City Schools Reorganisation capital programme is also underspent by £1.9m, mainly as a result of slippage and late starts.

  20. The biggest element of the £3.0m under spend on the Environment & Economy programme relates to rephasing a number of elements of the Oxford Integrated Transport Strategy into 2004/05. In 2002/03 the proposed £1m revenue/capital switch in respect of highways works to be added to the Budget Reserve could not be accommodated within the capital programme and the shortfall had to be met from balances. The Environment & Economy outturn position for 2003/04 includes capitalisation of £1.0m of highways structural maintenance to reinstate this temporary use of balances.

  21. Of the £20.1m underspending some £10.9m is offset by a reduced usage of grants, reimbursements and contributions. This leaves a net underspending of £9.3m. These are available to fund slippage in payments into 2004/05.

  22. Of the other expenditure items the repayment of the City Schools Reserve, (£2.5m) will be used in turn to reinstate the Insurance Fund Reserve which is needed to fund the 2003/04 Revenue Budget. The payment to reinstate the interest on Developer Contribution accounts (£2.4m), which was set aside to fund the cashflow on the City Schools Reorganisation, will be implemented in 2004/05. It was not possible to do this in 2003/04 due to insufficient expenditure of a capital nature in the revenue accounts. For the same reason it has not been possible to set money aside in the Homes for Older People reserve. This will be undertaken in 2004/05.

  23. On the financing side the net capital receipts achieved in 2003/04 totalled £32.6m. Of these only £19.6m is required to fund the programme leaving £13.0m to be carried forward as capital receipts unapplied. This will cover the £3.5m required for the City Schools’ Reserve and the HOPs reserve in 2004/05 and £9.5m to fund the slippage on payments on the capital programme into 2004/05.

    24. RECOMMENDATIONS

  24. The Executive is RECOMMENDED to:

          1. note the provisional revenue and capital outturn set out in the report;

          2. note the Directorate carry forwards set out in Annex 2-6 (Annexes 2-5 (download as .xls file); Annex 6 (download as .xls file)) and approve those where there is a virement above the specified limit of £0.250m;

          3. agree that the surplus in the On-Street Parking Account at the end of the 2003/04 financial year, so far as not applied to particular eligible purposes in accordance with Section 55(4) of the Road Traffic Regulation Act 1984, be carried forward in the account to the 2004/05 financial year.

CHRIS GRAY
Head of Finance

Background Papers: Nil

Contact Officers:
Jenny Hydari Revenue Part 1 Tel. 01865 815401
Mike Petty Capital Part 2 Tel. 01865 815622

June 2004

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