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ITEM EX5

EXECUTIVE – 29 OCTOBER 2002

MONTHLY MONITORING REPORT

Report by Director for Business Support & County Treasurer

Introduction

  1. This report sets out the latest budget monitoring position for 2002/03 at the end of August 2002. Anticipated variations are set out, together with potential variations for later in the year. The latest estimated position on reserves is included at Annex 3.

  2. Individual reports from each of the Executive Budget Areas form the background documents to this report and are in the Members’ Resource Centre. Each of the services within the programme areas has absorbed the cost of the Green Book pay award reported last time.

  3. The position for each of the programme areas is considered below.

    4. Learning and Culture

  4. Learning and Culture are reporting an improved position on the underspend to be carried forward of £1.004m compared to £0.814m as reported in September. The increase in underspend of £0.190m relates mainly to the timing of the tendering for the new Library Management System where £0.300m will be carried forward to meet installation costs of the new system, which are now expected to take place at the beginning of 2003/04. Education has reported no change to their previous month’s position.

    5. Social and Health Care

  5. The latest report to the Social Services Budget Working Group for the forecast position to the end of August 2002 shows a potential overspend of £2.849m compared to £3.141m in the September report to the Executive. The directorate is still experiencing pressures and has had to increase spending on residential care for children (potentially £0.316m). In addition it has been asked to fund the additional cost of the local government pay award (£0.250m). The pressures have been more than offset, either by a further limitation on spending or by improved expectations of funding from third parties. In relation to the latter, funding of £0.320m is now expected from the Primary Care Trusts in relation to the pooled budget for people with physical disabilities. In addition the directorate believes it is £0.200m closer to achieving its target of £2.00m income from Transitional Housing Benefit.

  6. However, there remains considerable pressure on the budget, with front line staff continuing to face very difficult decisions over the provision of services. It will undoubtedly be necessary to meet some of the demand and, as such, there can be no guarantee that the downward trend in the expenditure projections can be maintained.

  7. The Youth Offending Team budget forecast overspend at 31 March 2003 remains unchanged at £0.075m.

  8. In total the forecast outturn for Social and Health Care is a deficit of £2.924m (£2.849m plus £0.075m).

    9. Environment, Roads and Transport

  9. The latest position on the Environment, Roads and Transport area is a predicted underspend of £1.183m. This is an increase in underspend of £0.173m since the September report and mainly reflects the decisions made on subsidised bus services at the Executive on 4 September 2002, which anticipated underspend of £0.180m.

    10. Community Safety

  10. There is only one minor change to the position reported in September. A small underspend of £7,000 is now anticipated on Emergency Planning this year.

    11. Corporate Governance

  11. The latest position for Corporate Governance is a predicted underspend of £0.423m compared to £0.519m estimated in the September report. This mainly reflects a transfer of underspend to the MIS project.

  12. There are combined unallocated balances of £0.137m on the Modernisation/Innovation fund. However these are subject to bids from departments during the year and therefore are not assumed to under- spend at this stage. The position will be reviewed.

    13. Broadband/OCN Project

  13. The business manager appointed for the project is now actively pursuing three priorities on the basis of achievability and the need to offset existing costs where possible. These are:

    1. the use of OCN by OCC; the OCN could offer the basic infrastructure on which to develop a secure and speedy wide area network (WAN) for OCC’s own internal use and replace our existing WAN and it is likely that the OCN will be able to carry a large part of our telephone traffic more cheaply;

    2. practical partnership with the Districts; and

    3. a commercial pilot to connect up a small cluster of businesses. However, the project has not yet secured any income from external sources (or internal savings) to offset the reported known shortfall of £0.900m.

    The need for a sustainable business case is very urgent. The Executive expects the highest priority to be given to this.

  14. It is expected that phase 1 schools and libraries will be using OCN fully by 31 March 2003.To achieve this, departmental resources have been severely stretched and it has been necessary to strengthen staffing in Education to support the migration of existing schools’ systems onto the OCN. This has already incurred additional staff costs for phase one of around £0.100m. It is also likely that there will be a shortfall in income from schools this year as a result of the need to extend the connection timetable, estimated at around £0.100m also.

  15. A supplementary estimate for £0.124m was approved in 2001/02 for certain revenue costs of the Broadband/OCN project, which slipped into 2002/03. This will need to be drawn from balances this year.

  16. The total unfunded costs of the project are potentially £1.1m plus the supplementary estimate from 2001/02 of £0.124m, so £1.224m in total. This is included at Annex 2.

    17. Virements

  17. There are no new virements to report this month.

    18. Programme Area Carry Forward Reserves

  18. The projected Budget Area Carryforward Reserves at 31 March 2003 as outlined in the report, are shown at Annex 1.(download as .xls file) The estimated position shows a potential deficit of £3.775m after allowing for City School Reorganisation planned overspend of £3.465m.

    19. Balances

  19. There have been no major changes to the position on County Council Balances at 31 March 2003 since the last report to the Executive in September.

  20. We have received some rate refunds this year totalling £25,000 to the end of August. Further refunds are expected later in the year. This sum will add to balances at 31 March 2003.

    21.  

    Estimated County Fund Balance at 31 March 2003 as Reported to Executive in September

    Rate Refunds received

    Revised Estimated County Fund Balance at 31 March 2003

    £m

    6.344

    0.025

    --------

    6.369

    --------

    Consolidated Position

  21. The overall position on balances based on the projections shown in this report, show an estimated £2.594m remaining in reserves to meet all other potential and outstanding pressures arising in the year. This position is analysed in Annex 2 and summarised below:

    22.  

     

     

    Revenue Balances

    City Schools Planned Overspend

    Projected Committee Carry Forward

    Potential Year End Position

    At 31.3.2003

    £m

    6.37

    -3.47

    -0.31

    2.59

  22. This is an improvement since the last report to the Executive in September of around £0.6m and takes account of the effects of the Green Book Pay Award.

    23. Outstanding Pressures

  23. A list of the known and potential pressures outlined above is included within Annex 2. These total £1.2m at present. The firefighters pay award will add to this figure.

    24. Schools Revenue Balances

  24. Schools revenue balances deposited with the Council currently stand at £2.3m of which around £1.1m is required to help finance cashflow in the Education Capital Programme. Of the £1.2m remaining £0.5m is already earmarked for the revenue budget in 2002/03. This leaves a potential £0.7m to provide additional help with problems on the revenue account. However, the latest position does not indicate that it should be necessary to call on this.

    25. Overall Position – Strategic Overview

  25. Overall, we have forecast balances of around £2.6m to meet outlined pressures of potentially around £1.2m (plus the firefighters pay award). Programme areas are currently holding back on non urgent expenditure of £1.4m (this is part of the £2.6m under spend) to help alleviate any problems, which might arise later in the year. It would not be appropriate to release any of this at this stage, until there is further sustained evidence that the position on Social and Health Care has stabilised and there are no other pressures arising elsewhere. I will review the position again in November.

    26. The Capital Programme

  26. Since the September report to the Executive, two potentially significant changes, which may affect the Capital Programme, have emerged. Firstly, there is the possibility of a delay in obtaining the capital receipt from the sale of Wantage School and the diocesan contribution for St Nicholas School, which would impact on the financing of the Capital Programme this year. Secondly, negotiations are continuing with trustees on obtaining a contribution towards the costs of amalgamation work at Wallingford School, which the Council undertook a few years ago. If a contribution can be agreed, it may be secured this financial year. The Executive will be kept informed of progress on these issues.

    27. Conclusion

  27. The overall financial position has improved. I recommend that directors continue to proceed cautiously and at least maintain their levels of underspend until such time as I am able to advise that the financial position overall is stable and change this advice.

    28. RECOMMENDATIONS

  28. The Executive is RECOMMENDED to receive the report and to ask directors to continue to proceed cautiously and at least maintain their levels of underspend until further advice is issued.

CHRIS GRAY
Director for Business Support & County Treasurer

Background Papers: Detailed Reports and Annexes deposited in Members Resource Centre

Contact Officer: Mike Petty Tel. 01865 815622

October 2002

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