Return to Agenda

ITEM EX5

EXECUTIVE – 26 NOVEMBER 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 September 2002. Anticipated variations are set out, together with potential variations for later in the year. The estimated position on reserves has not changed since the last report. This will be updated for the January Executive.

  2. Individual reports from each of the Executive Programme Areas form the background documents to this report and are in the Members’ Resource Centre and available for public inspection.

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

    4. Learning & Culture

  4. Learning and Culture are reporting a decrease in the level of underspend of £0.193m. This arises principally from; an additional out of county independent placement £0.061m, a projected overspend in the Education Psychology Service £0.079m, and projected decrease of £0.050m in the premature retirement contribution budget under spend resulting from higher numbers of redundancies and early retirements at the end of the academic summer term. Culture has increased its under spend marginally by £0.004m. The latest reported position overall is a forecast under spend of £0.811m after taking account of the planned overspend on City Schools Re- organisation of £3.465m.

    5. Social & Health Care

  5. The latest report to the Social and Health Care Budget Working Group for the forecast position to the end of September 2002 shows a potential overspend of £2.979m compared to £2.849m for the position to the end of August. This is a worsening of £0.130m. There has been deterioration in the forecast year end position of all service areas except Physical Disabilities and Children and Families. The net overspend position assumes unallocated preserved rights grant of £1.005m. It will be necessary to keep under review the legitimacy of assuming the unallocated element of this grant to offset other costs. Social and Health Care staff are continuing to strive to restrict demand in pressure areas, but this continues to be difficult to contain as the figures show.

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

  7. In total the forecast outturn for Social and Health Care is a deficit of £3.054m (£2.979m plus £0.075m).

    8. Environment, Roads and Transport

  8. The latest position on Environment, Roads and Transport is a predicted underspend of £1.132m. This is a decrease in underspend of £0.051m since the September report which arises mainly from the employment of agency staff to cover vacancies and long term sickness.

    9. Community Safety

  9. There is no change to the position reported last month.

    10. Corporate Governance

  10. The latest position for Corporate Governance remains a forecast underspend of £0.423m as reported last month.

    11. Broadband/OCN project

  11. The position on the Broadband/OCN project was reported fully last time. The position is unchanged.

    12. Virements

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

    13. Programme Area Carryforward Reserves

  13. The projected Programme Area Carryforward Reserves at 31 March 2003 as outlined in the report, are shown at Annex 1.(download as .rtf file) The estimated position shows a potential deficit of £4.149m after allowing for City School Reorganisation planned overspend of £3.465m. This is a decrease in the projected underspend reported in the October report to the Executive of £0.374m as detailed above.

    14. Consolidated Position

  14. 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 October. The overall position on balances based on the projections shown in this report shows an estimated £2.22m 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:

    15.  

     

     

    Revenue Balances

    City Schools Planned Overspend

    Projected Programme Area Carry Forward

    Potential Year End Position

    At 31.3.2003

    £m

    6.37

    -3.47

    -0.68

    2.22

     

    Outstanding Pressures

  15. A list of the known and potential pressures is included within Annex 2. These total £1.2m at present. The firefighters pay award will add to this figure. The latest position on the firefighters pay award at the time of writing this report, is a staged pay offer of 11%, that is 4% in 2002/03 and 7% in 2003/04 which has been rejected. The Government have indicated that the cost of the pay award should be met by efficiencies. The offer would have cost additionally £0.039m this year, and £0.250m in 2003/04 had it been accepted.

    16. Schools Revenue Balances

  16. 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 if required.

    17. Overall Position – Strategic Overview

  17. In my report to the October Executive I reported forecast balances at year end of £2.6m to meet outlined pressures of potentially around £1.2m (plus the firefighters pay award). £1.4m of the projected underspend relates to holdback of non urgent expenditure (£0.850m from the Environment, Roads and Transport and £0.550m from Learning and Culture). I advised the Executive that it would not be appropriate to release any of the holdback until there was further sustained evidence that the position on Social and Health Care had stabilised and there were no other pressures arising elsewhere. The overall situation has worsened marginally; there is a decrease in the forecast outturn position of some £0.374m. This indicates that we do need to proceed with caution. Should the unallocated grant on preserved rights be unavailable to ameliorate the position on Social and Health Care, then the situation could worsen potentially by £1.0m. This could lead to balances being overdrawn. Once again, when the Council’s revenue balances are so tightly drawn, I have to adopt a position which is probably more stringent than I would wish. My advice remains much the same as in October; directors should seek to maintain their underspends, based on their latest projections, to ensure that the Council remains in balance at year end. It is unlikely that I will relax this advice further this financial year.

    18. The Capital Programme

  18. The capital programme is currently being updated. The updated position will be reported at the Executive meeting of 21 January.

    19. Conclusion

  19. I have set out the updated position above. I continue to recommend that directors proceed cautiously and endeavour to maintain their levels of underspend since the evidence suggests that the financial position is not sufficiently stable to warrant any change to my previous advice. Whilst I will be closely monitoring the position, I am unlikely to relax my position further this financial year.

    20. RECOMMENDATION

  20. The Executive is RECOMMENDED to receive the report and to strongly reiterate to directors the continued need to proceed cautiously and to maintain their levels of underspend for the rest of the financial year.

CHRIS GRAY
Director for Business Support & County Treasurer

Background Papers: Nil

Contact Officer: Jenny Hydari Tel. 01865 815401

November 2002

Return to TOP