- This report presents
the overall financial position of the Council in 2001/02. It sets out
the financial issues identified to date and updates the Executive on
progress towards achieving the 2001/02 budget targets. It also looks
at some issues concerning the budget for 2002/03.
Financial Position –
2001/02
- Details of the
Council’s financial position are contained in the following Annexes:
Annex
1 Projected year end variations compared with the 2001/02 budget
(download as .rtf file)
Annex
2 An Estimate of Provisions, Reserves and Balances at 31 March 2002
compared with provisional actuals at 1 April 2001 (download
as .rtf file)
Annex
3 Analysis of Committee Carry Forward Reserve (download
as .rtf file)
Annex
4 Revenue Grants (download as .rtf file)
Carry
forwards from 2000/01 and balances as at 1 April 2001 are based on the
Statement of Accounts 2000/01.
- Additionally,
for completeness and background information, full Quarterly Financial
Reports for the six programme areas are contained in the following annexes:
Annex
A Education
Annex
B Social Services
Annex
C Environmental
Annex
D Public Protection
Annex
E Cultural Services
Annex
F Operations
Reserves and Balances
- The current projected
outturn position on the Council’s main reserves and balances are shown
in Annex 2, the principal ones being:
| |
Provisional
Balance
1
April 2001
£’000
|
Projected
Movement
£’000
|
Estimated
Balance
31
March 2002
£’000
|
Estimated
Balance, Last Quarterly Financial Report
£’000
|
|
Schools’
Reserves
|
10,671
|
1,500
|
12,171
|
14,000
|
|
County Fund
Balance
|
3,508
|
-460
|
3,048
|
3,038
|
|
Committee
Carry Forward Reserve
|
3,213
|
-7,396
|
-4,183
|
-4,031*
|
*
Includes £1.0m projected overspend on urgent repair & maintenance.
Virements and Supplementary
Estimates (Annex 1, Column 5)
- Supplementary
estimates of £0.627m previously approved by the former Strategy &
Resources Committee and the Executive are reflected in Annex 1, Column
5. Additionally there have been some approved virements between services
and within services. Virements are reported to the Executive on a quarterly
basis.
Committee Carry Forward
Reserve
- An analysis of
the Committee Carry Forward reserve at provisional outturn 2000/01,
actual outturn 2000/01 and current estimated outturn 2001/02 is shown
at Annex 3. The table demonstrates that if all services spend in line
with current projections, there will be a deficit of £4.183m by March
2002. This is a slight worsening of £0.152m since the forecast position
reported in the last quarterly report. Further details on each service
area are outlined below.
Education
- Based on the latest
information available, Education are reporting a net overspend of £0.345m,
an improvement of £0.941m compared to the reported position in December
of a forecast £1.286m overspend. The latest forecast consists of an
underspend of £1.434m offset by the planned revenue overspend on the
City Schools Re-organisation of £1.779m. Whilst there are a number of
over and underspendings which have emerged since the December report,
the factors contributing to the underspending are: £0.5m underspend
on Standards Funds since the Department for Education & Skills spending
deadline is now end of August 2002 (a 17 instead of 12 month spend period),
and £0.647m of one off special grant received from the DfEE in 2000/01.
This sum, which has been held on the balance sheet pending the signing
off of the grant claim by the District Auditor on 31 January 2002, has
now been transferred to the revenue account.
- There are budget
pressures and commitments of £1.646m in 2002/03, of which £0.5m relates
to the Standards Funds underspend, £0.4m is the estimated carry forward
included in support of the 2002/03 budget and £0.257m and £0.122m relate
to pressures on Out County and Transport not allowed for in the 2002/03
budget. The remainder of £0.367m is made up of various commitments.
Taking into account the commitments and budget pressures then currently
a sum of £0.212m is unfunded in 2002/03 and will need to be addressed
by management action.
- The latest estimate
on schools balances is that there is likely to be growth of £1.5m, bringing
the total at the end of year to around £12.2m. In addition £1.1m of
balances is lodged with the County Council to help fund the City Schools
Re-organisation. This is a slightly lower figure than the £14m previously
estimated.
Social Services
- The forecast overspend
in December for Social Services programme area was £6.7m with current
year’s savings plans of £3.5m giving a forecast deficit of £3.2m. The
situation has steadily worsened since then and been reported to members
through the Social Services Member/Officer Budget Working Group and
monthly monitoring reports to the Executive. The report to the 20 February
meeting gave a forecast deficit of £4.875m. This has now deteriorated
to £5.3m,with total pressures in 2001/02 of £7.0m and savings plans
of £1.7m.
Environmental
- Environmental
Services is forecasting an underspend of £1.087m (made up of an overspend
of £0.457m in 2001/02 offset by carryforward from 2000/01 of £1.544m).
This is an improvement of £0.254m, mainly due to increased underspendings
on public transport revenue support, rural bus services, and waste management.
- On 5 February
2002 the Council approved a virement of up to £1.0m for urgent building
maintenance work from within the budgets under the control of Environmental
Services. Part of the £1.087m underspend will be used towards offsetting
an estimated net planned overspend of £0.8m on Repair and Maintenance
of Buildings accounted for under the former Operations Sub-Committee
budget (see paragraphs 15 and 16). The rest of the underspend is being
allocated to work to be carried out in 2002/03. Detailed proposals for
virements will be made when the exact amount of the overspend is known.
Public Protection
- It is currently
anticipated that the Committee Carry Forward Reserve will be £91,000
at the end of 2001/02, comprising £50,000 slippage in expenditure on
the Fire Service and an estimated underspending/overachievement of income
of £61,000 resulting from the Best Value Review of the white fleet,
of which £20,000 will be used towards the overspending on retained firefighter
pay.
Cultural Services
- Cultural Services’
updated financial position shows a projected year end underspend of
£162,000 to be carried forward to the next financial year. This is an
increase in the Committee Carry Forward at 31 March 2002 of £94,000
to the figure previously reported. This reflects slippage in the New
Library Book Issuing System. The phasing of this project is presently
being reassessed in conjunction with an overall review of ICT within
the department and to ensure linkage with any recommendations from the
Best Value Review of the Library Service.
Operations
- The latest estimate
of the outturn position is an underspending of £0.123m. This is an improvement
of £0.676m representing increased underspendings across most headings,
including £0.2m less than forecast on the overall repair and maintenance
budget due to a freeze on planned maintenance works imposed by the Director
of Environmental Services and referred to below.
- The £0.123m underspend
is made up of £0.923m underspendings on Chief Executives, Treasury Services
and Corporate and Democratic Core (Members) offset by £0.8m planned
overspend on repair and maintenance of buildings. The £0.8m overspend
on Repair and Maintenance will be offset by underspends on other Environmental
Services budgets, as already discussed at paragraph 10.
Strategic Measures
- As previously
reported it is currently anticipated that there will be savings of £500,000
this year in respect of improvements in cash flow.
- The Executive
will recall that block appeals have been submitted in respect of the
2000 rate revaluations. It is unlikely that the appeals will be determined
in this financial year and therefore no significant savings on rates
are anticipated.
Capital Reserve
- Current projections
indicate that there will be a surplus of £4.052m on the Capital Reserve
by March 2002 based on the latest capital programme update. These resources
will be used in future years. However it is likely that the City Schools
Capital Reserve will be fully utilised during 2001/02. An update of
the Capital Programme will go to the Executive in April
County fund Balance
- The current position
on the County Fund is shown below:
| |
£’000 |
|
Balance
as at 1 April 2001
|
3,508 |
| Plus contribution
from revenue budget 2001/02 |
400 |
|
|
3,908 |
Variations
previously reported
Less
Supplementary Estimates for:
Operations
– foot & mouth action plan -10
Cultural
Services – foot & mouth tourism strategy -10
Public
Protection – foot and mouth costs -15
Cultural
Services – Cogges -35
Operations
– District Audit Fee -107
Operations
– Job Evaluation -60
50%
of pay awards -405
Operations
– budget for scrutiny committees -40
Operations
– costs of Peer Review -26
Additional
costs of Members Allowances -120
Home
to school transport returned to balances 236
Public
Protection – Firefighters Pay award -35
-627
Variations
to (+)/drawn from (-) Balances (previously reported)
Additional
costs of firefighters pension account -365
Additional
cost of retained firefighters -250
Public
Protection Emergency planning – return of grant 66
Operations
– under spend on election budget 50
Strategic
Measures – improvements in cash flow
Operations
– Better Government for Older People 10
Operation
– further under spend on election budget 10
Broadband
Network Revenue Costs -124
Elms
Day Centre – Loss of Capital Receipt -130
Strategic
Measures improvements in cash flow 500
-233
Projected
Balance as at 31 March 2002 3,048
- There are no new
requests for supplementary estimates.
Government Grants (Revenue)
- Specific grants
known about at the time of setting the budget are listed in the 20001/02
Budget Book. This information is summarised in Annex 4 and updated for
further grants reported by services this cycle. Annex 4 also indicates
the level of funding required to be input by the Council to access the
grant. Copies of the detailed grant schedules are available in the Members’
Resource Centre.
Other Issues
Pension
Rights for Part Time Workers
- Claims have been
made by 187 part-time and retained firefighters following a decision
of the European Court to extend the pension rights of part-time employees.
If the claims are successful, entry to the Firefighters Pension Scheme
could be backdated to 1976. It is not possible to quantify the total
potential liability at the stage.
Conclusions, 2001/02
Budget
- In summary, the
current projected outturn on the Council’s main reserves and balances
is as follows:
- Schools Reserves
– It is currently anticipated that the year end school revenue balances
will increase by around £1.5m to 12.2m.
- County Fund
Balance – The current projection is that the County Fund Balance will
reduce from £3.508m to £3.048m for the reasons stated in paragraph
18 above.
- Committee Carry
Forward Reserve – Current forecasts indicate a deficit of £4.183m,
including sums repayable in subsequent years of £1.7m (Education)
and £5.3m (Social Services).
- The consolidated
position on Balances and Committee Carry Forward Reserve is analysed
below:
| |
£000 |
|
County
Fund Balance
|
3,048 |
| Less Committee
Carry Forward Reserve |
-4,183 |
| Deficit |
-1,135 |
The
shortfall of £1.135m can be covered in the short term from the balance
on the Capital Reserve of £4.052m.
2002/03 Budget Issues
- The table below
shows the forecast position at the end of the current financial year,
when the capital reserve will be used as a temporary measure to offset
the overall deficit.
|
|
|
|
|
|
|
|
|
Corporate
Reserves/Balances
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31.03.02
|
|
|
31.03.03
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
Balances
|
|
|
3.0
|
|
|
6.0
|
|
|
City Schools
(Revenue)
|
|
-1.7
|
|
|
-3.0
|
|
|
Committee
c/f reserve
|
|
-2.5
|
|
|
0.0
|
|
|
Capital
Reserve
|
|
|
4.0
|
|
|
0.0
|
|
|
|
|
|
|
2.8
|
|
|
3.0
|
|
- For 2002/03 the
Executive in their Budget Strategy 2002/03 –2005/06 on 22 January instructed
the County Council Management Team as follows;‘Given the size of
the creative measures and the risks associated with Oxford City School
cash flows and bringing back Social Services spending under control,
the Executive is minded to institute a holdback on non-essential expenditure
in 2002/03 until there has been a thorough assessment of the risk areas’.
This assessment is currently underway. In particular Social Services
are working on a revised budget for Tuesday 19 March Executive which
will show how it can deliver the service within its budget of £105m
not withstanding the expected overspend of £5.3m in 2001/02.
Rules for Virement and
Supplementary Estimates
- The Constitution
requires the level of virements to be approved by the Council. The Executive
will need to make recommendations to the Council on rules for approving
virements and supplementary estimates which will be dealt with by Council
on 2 April. The detailed proposals are to follow in a supplementary
report.
Social Services Revised
Budget and Environmental Services budget revisions
- Members will recall
that Council on 5 February 2002 accepted the principle that the Social
Services budget would need to be revised for 2002/03. The Budget Strategy
2002/03 – 2005/06 stated ‘The Executive instructs Social Services
officers to report to the Executive with options for allocating a total
of £105.2m across service areas and with an indication of the activity
to be provided in each area at those spending levels’.
- At the same time,
a decision needs to be made on the final allocation of expenditure pressures
on the Environmental Services budget in accordance with the report considered
by the Environment Scrutiny Committee in December.
- Detailed proposals
on both of these service areas are to follow in the supplementary report.
Recommendations
- The Executive
is Recommended to receive the report;
- Recommendations
will be set out in the Supplementary report in respect of
- the
rules for virement limits and supplementary estimates; and
- the
Social Services and Environment budgets.