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CORPORATE GOVERNANCE SCRUTINY COMMITTEE – 27 JULY 2006

PROVISIONAL REVENUE AND CAPITAL OUTTURN 2005/06

COMMENTARY BY CABINET MEMBER FOR FINANCE

INTRODUCTION

  1. The report by the Head of Finance and Procurement was considered by the Cabinet at its meeting on 21st June and the Cabinet agreed to note the report. This was the basis of the Council’s Statement of Accounts 2005/06 which was submitted to the Audit Committee for approval on the 28th June, prior to Audit.

  2. I would like to make some observations on how the budget has been delivered during the year and comment on the financial position of the Council at the 31st March, 2006.

    3. PROVISIONAL REVENUE OUTTURN

  3. The outturn for the Council shows consolidated balances of £15.883m which is an increase over the year of £4.056m. The revenue outturn by Directorates show a net overspend of £0.470m which is less than 1% variation to the budget (£554.456m) which is satisfactory, nevertheless there has been variations between Directorates and between services within Directorates and I would like to highlight some substantial variations.

  4. After excluding from Directorate carry forwards variations not under the control of Directorates and therefore funded from balances, the following items are worthy of consideration.

    5. LEARNING AND CULTURE

  5. An overspend of £1.335m needs to be set against the City Schools Reorganisation £3.098m to be repaid in later years from the reduction in fixed costs in the fewer number of schools within Oxford. Within these figures Early Years underspent while Adult Learning overspent by £.0477m, this was funded by an in year virement from Early Years of £0.289m and a subsequent supplementary estimate in 2006/07 of £0.188m so that on transfer to the Social and Community Service Directorate this service had no overspend to carry forward.

  6. Balances of Schools delegated budgets show little change with revenue balances of £8.11m at year end and £7.4m devolved capital formula, this is mainly represents slippage on repair and maintenance programmes and the ability to spend Standard Fund allocations up to the end of the academic year. Forecasts during the year were showing reductions in balances which at the end of the year did not materialise for the reasons above.

    7. SOCIAL AND HEALTH CARE

  7. This Directorate showed an overspend of £0.373m, in addition Supporting People budget overspent by £0.471m. Significant overspends in Children and Families emerged early in the year and increased significantly by the end of the year to £1.132m even after granting a supplementary estimate of £0.250m. This overspend has been met by virement of underspends from Older People £0.376m. and Early Years £0.097m together with budget allocation of £0.565m. and a subsequent supplementary estimate of £0.094m, so that again this service which is transferring to Children, Young People and Families can do so without a carry forward overspend.
  8. Learning Disabilities overspend of £0.454m has been allowed for in 2006/07 budget and this service is now within a section 31 pooled budget arrangement with the Health Sector.

    9. ENVIRONMENT AND ECONOMY

  9. This Directorate underspent by £1.567m spread across all services but mainly within Sustainable Development, £1.031m, due to waste recycling centres receiving lower tonnages and changes in contract management costs. Carry forward of £0.235m plus in year underspends of £0.231m are being put in a reserve fund to meet possible fines in 2009 onwards for exceeding landfill allowances. I consider that this fund needs to be built up even further before 2009 when the new restrictions on landfill come into operation.
    10.    
  10. Separate from the main revenue accounts the on-street parking account produced a surplus of £0.920m, after expenditure of £65k to fund capital works during the year and the transfer of £67k to the off-street parking account to offset the reduction in income following the removal of charges at the Council’s park & ride sites, the accumulated surplus in the on-street parking account at the 31st March 2006 is £2.794m.

    11. COMMUNITY SAFETY

  11. Overall this Directorate is nearly in balance. An overspend of £0.279m has been carried forward into 2006/07 and the majority has been written off by the amount provided in the 2006/07 budget (£02.52m). The remainder is being addressed through management action in 2006/07.

    12.  RESOURCES AND CHIEF EXECUTIVE’S OFFICE

  12. An underspend £0.589m is spread across service areas except property services.

    13. STRATEGIC MEASURES

  13. A surplus of £2.692m over budget was achieved due to increased return on balances invested, revision of interest payable on developer contributions and reduced interest payable on long term debt. This represents a very satisfactory outcome achieved by the Treasury Management Team.

    14. CAPITAL PROGRAMME

  14. The capital programme of £85m. was underspent by £8.5m and an opportunity has been taken to capitalize some structural maintenance expenditure so that the Council does not lose any capital borrowing allocations or developer contributions. The released revenue expenditure will make a contribution to the capital reserve to fund the capital programme in future years. The Council should be working towards a more precise delivery of the capital programme within the allocation for any given year, this is now closely monitored by the Capital Steering Group and the Monthly Monitoring Reports.

    15.  REPORTS TO FUTURE CORPORATE GOVERNANCE SCRUTINY

  15. The monthly monitoring reports are available 5 weeks after the end of each month but this does not allow for reporting to scrutiny committee quarterly as the scrutiny committee meets at varying dates during the month. I suggest the following reporting schedule
    16.   Corporate Governance MMR Nos. of Months 5th October July 4 21st December October 3 1st March, 2007 January 2007 3 July, 2007 2006/07 12 Outturn Report

    CONCLUSION

  16. Notwithstanding certain difficulties I feel that the budget agreed by Council in February 2005 was successfully delivered with increased balances to meet possible risks in the future and increased earmarked reserves for specific purposes, giving a sound basis for 2006/07. Can I record my thanks to the central finance team and Directorate teams for achieving this result.

    Charles Shouler. Cabinet Member for Finance 18th July, 2006

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