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ITEM EX5
EXECUTIVE
- 8 JULY 2003
PROVISIONAL
OUTTURN 2002/03
Report by
the Head of Finance
Introduction
- This report sets
out the provisional revenue and capital outturn positions for 2002/03.
It is the third "badged report" in the series on the Budget and Oxfordshire
Plan 2004/05. Please ensure you place this copy in your green ring binder
in the section ‘Executive Papers’.
- The budget strategy
‘Maximising Our Resources’ by the Leader and Deputy Leader of the Council
highlighted ‘the need to review our budget monitoring and accounts
closedown processes. Monitoring and reporting should be in financial
and output terms and enable officers and members to understand the base
budget better and to inform the ongoing budget setting process. Accounts
closedown should include a more informed review of variations and outputs,
again informing the budget setting cycle’.
- It was also recognised
that it will ‘require a significant amount of work and implementation
may have to be incremental, focussed on critical areas’. I have
provided an analysis of the outturn position at Annex 1, based on the
information that directorates have supplied at this point in time. A
full explanation is available in the individual reports prepared by
the directorates, which are in the Members’ Resource Centre.
- Members are reminded
that there is a series of seminars between July 14 and 24 when they
will be able to ‘get inside the budget’ of each directorate. Where you
are unable to attend but have specific unanswered questions on the performance
of the budget – then these should be directed to individual directors
or the respective business managers (listed at the end of this report).
- The final figures
will be given to the District Auditor in July and submitted to the Best
Value Committee in September as part of the Council’s formal Statement
of Accounts 2002/03.
Presentation
- Details of the
Council’s overall financial position for 2002/03 are contained in the
following annexes:
Annex
1 Detailed Analysis of Individual Programme Area Carryforward position
(download as .xls file)
Annex
2 Provisional Revenue Outturn – Summary position (download
as .xls file)
Annex
3 Provisional Reserves and Balances at 31 March 2003 compared with 1
April 2002
Annex
4 Provisional Capital Outturn
Provisional
Revenue Outturn
- The budget added
£3m to balances in 2002/03. This means that General County Fund Balances
started the year at £6.3m. The City Schools Re-organisation planned
revenue overspend in 2002/03 was expected to reach £3.5m, leaving £2.8m
in balances for the remainder of the year to deal with all unexpected
calls on funds and any major overspendings which might arise. Therefore,
I took the decision – mandated by the Executive – to institute an internal
administrative holdback. As both an internal and external benchmark
1% of net budget is deemed the minimum requirement to be held in balances.
For the County Council this would have meant balances of at least £4.5m,
after allowing for the City Schools planned overspend. The amount agreed
with the programme areas for holdback was £1.4m. This rebuilt balances
temporarily to £4.2m, which I considered to be prudent, given the problems
experienced in 2001/02 around overspending on Social & Health Care,
combined with planned revenue overspending on City Schools Re-organisation.
- The major draw
on balances in year came from: overspending on OCN/Broadband - £0.867m
in 2002/03 (a further £0.362m has slipped into 2003/04); £0.700m for
interest on balances caused by the unusually high rise in the construction
indices used for inflating developer contributions (this ensures that
the purchasing power of the contributions is maintained); £0.264m for
firefighters’ pensions; and latterly a £1m temporary draw on balances
required to support the revenue budget 2002/03. A full explanation of
why this was required is set out later in the report. The outturn position
for the County Fund after these adjustments is forecast £3.529m at the
end of the year.
- The programme
area carryforward reserve in total came to around -£0.400m last year,
when the Social & Health Care overspending of £6.3m was mostly offset
by £5.9m of underspending on the other programme areas. This year the
forecast overspend on Social & Health Care is substantially lower
at £2.5m and underspending on all other programme areas is £4.4m, giving
a positive balance of £1.9m. Finally the planned overspend on City Schools
was actually £3.3m. When the City Schools position is taken account
of, this gives a net position of -£1.4m. This compares with -£2.2m for
the previous year.
- The consolidated
position is:
|
|
31
March 2002
£m
|
31
March 2003
£m
|
|
County Fund
Balance
|
|
3,317
|
|
3,529
|
|
Programme
Area Carry Forward Reserve
|
-384
|
|
1,901
|
|
|
City Schools
Overspend
|
-1,787
|
|
-3,280
|
|
|
Sub–total:
Programme Area Carryforward
|
|
-2,171
|
|
-1,379
|
|
Outturn
|
|
-1,146
|
|
2,150
|
- In effect the
position at year would have been £1.4m less had it not been for the
administrative holdback, leaving £0.8m in balances. I have indicated
above that overspending on the OCN/Broadband project was £0.867m in
2002/03, with £0.362m slipping into 2003/04. This means that balances
could easily have been further eroded by another £0.4m. I am content
therefore that the administrative holdback was prudent and justified.
The holdback has been released back to the directorates in 2003/04.
Programme
Areas Carryforward Reserve
- In summary, the
position is as follows:
|
|
31
March 2002
£m
|
|
31
March 2003
£m
|
|
Learning
& Culture
|
2,330
|
|
1,135
|
|
Social
& Health Care
|
-6,318
|
|
-2,542
|
|
Environment,
Roads & Transport
|
1,724
|
|
1,574
|
|
Community
Safety
|
145
|
|
-81
|
|
Corporate
Governance
|
1,735
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|
1,815
|
|
Subtotal
|
-384
|
|
1,901
|
|
City Schools
Re-organisation
|
-1,787
|
|
-3,280
|
|
Total
|
-2,171
|
|
-1,379
|
Detailed
Analysis of Outturn position for Programme Areas
- The following
paragraphs highlight the key factors to note from each of the Programme
Areas. Included at Annex 1 is the detailed position. This analyses the
carryforward position into how under and over spends are planned to
be carried forward or written off, and also outlines some of the key
policy and budget plans agreed in the 2003/04 budget. Clearly, this
information is most useful where analysis of outturn position and additional
funding for 2003/04 is at cost centre level. The position is shown according
to the level of the analysis available.
Learning
& Culture
- For Learning,
the net underspend is £0.782m on the non-delegated budget. This compares
with an underspending of £0.573m reported to May Executive, a movement
of -£0.209m. The forecast position includes £1.867m underspending brought
forward from 2001/02.
- The major areas
of overspend above the £0.250m virement limit are: statementing
£0.395m; and ICT £0.287m. Major areas of underspending also over the
£0.250m limit are: Standards Fund -£0.762m ( to be carried forward);
transport -£0.279m; health & safety £-0.350m. The latter contributed
£0.100m to the administrative holdback.
- Culture has a
provisional outturn position of £0.657m. This position has changed only
minimally since the position reported in May. This total includes £0.463m
brought forward from 2001/02.
- The directorate
contributed £0.550m to the administrative holdback from a number of
budget headings in year (Learning £0.500m and Culture £0.050m). Where
there was a deliberate policy to underspend, it has been highlighted
in the supporting table at Annex 1.
Social
& Health Care
- The Social Services
part of Social & Health Care is forecast to over spend by £2.602m.
This position includes the overspending brought forward of £6.344m from
2001/02.
- The major areas
of overspending relate to Children and Families £1.5m, Learning Disabilities
£2.5m, and services across client groups £0.388m. Business support underspent
by £2.6m.
- The overall position
for Social & Health Care is an overspend of £2.542m. This includes
an overspend of £0.102m on the Youth Offending Team and an underspend
of £0.161m on early years.
Environment,
Roads & Transport
- Environment, Roads
& Transport Programme Area has a forecast underspending of £1.574m;
this includes the underspending of £1.7m brought forward from 2001/02.
- The main areas
of underspending are: £0.265m on Public Transport Revenue Support, £0.559m
on Land Use Planning and £0.576m against Waste management.
- This Programme
Area held back £0.850m in response to the requirement in year for an
administrative holdback. This is included in the forecast outturn and
highlighted at Annex 1.
Community
Safety
- The forecast outturn
for Community Safety is an overspend of £0.081m. This includes the underspending
brought forward of £0.145m from 2001/02.
Corporate
Governance
- The provisional
outturn position for Corporate Governance is an underspending of £1.815m.
This includes underspending brought forward from 2001/02 of £1.735m.
This is an increase of £0.714m since the report in May.
- The main areas
of underspending are as follows Strategy £0.853m, Business Support £0.262m,
and property other services £0.395m.
Provisions,
Reserves and Balances
- The provisional
outturn figures on provisions, reserves and balances are shown at Annex
3. This includes the latest predicted position on schools reserves which
are shown as falling to £5.7m at 31 March 2003. This figure excludes
sums deposited by schools with the Council of £2.1m, giving an overall
level of school reserves totalling £7.8m. This position will be updated
later in the year once all the returns due from schools have been received.
County
Fund Balances
- The estimated
outturn position on the County Fund is analysed below:
|
Balance
at 1 April 2002
Plus
contribution from revenue budget 2002/03
|
£000
3,317
3,000
|
£000
6,317
|
|
Variations
previously reported
VAT
on car allowances – provision not required
Emergency
Planning – additional grant received
Contingency
written off
Asylum
Seekers – additional cost
Rates
Refunds
Interest
on Balances – Baxter Index on Developer Contribution
Additional
Costs of Broadband
Firefighters
Pension Scheme
Retained
firefighters – budget variation
Magistrates
Courts – additional costs
Coroners’
service – additional costs
Rates
– budget variations
|
+120
+45
-23
-115
+67
-700*
-1.400
-264
+50
-29
-6
-7
|
-2,262
4,055
|
|
New
Variations
Magistrates
Courts – Reduced costs
Coroners’
Service – increased costs
Rates
– budget variations
Broadband
- slippage in payments
Retained
Firefighters – reduced costs
Budge
Reserve Shortfall
Balance
on County Fund at 31 March 2003
* Actual
cost incurred in 2002/03 £0.867m (£1.4m less £0.533m)
|
3
-9
-35
533*
-18
-1,000
|
-526
3,529
|
Provisional
Capital Outturn
- The provisional
capital outturn shows an underspending of £3.6m compared to a programme
of £105.3m and is summarised at Annex 4, where the main reasons for
the underspending are shown. Within the overall net underspending there
was an overspend of £3.0m on Environment, Roads & Transport. This
arose due to increased costs on some schemes and some costs being incurred
earlier than anticipated including early settlement of some final accounts.
The overspending was funded from On Street Parking Surplus, where the
expenditure was a legitimate call on that source, or from Developer
Contributions.
- The impact of
this overspending is that the proposed revenue/capital switch of £1m
to add £1m to the Budget Reserve in 2002/03 could not be accommodated.
The Budget Reserve was being used to fund the Revenue Budget in 2002/03.
This shortfall in funding the Revenue Budget has had to be met temporarily
from balances. It is now proposed to make the revenue/capital switch
during 2003/04 which will allow for the £1m shortfall in balances to
be reinstated.
- The City Schools
Reorganisation project was in surplus at 31 March 2003 due to a combination
of slippage in payments of £1.7m and the capital receipt from the sale
of Milham Ford School (£11.9m).
- The Executive
agreed in April 2003 that the City Schools Revenue Reserve should be
redesignated and used to fund the shortfall on the main capital programme
expected at that time to be £6.7m. The overall underspend on the programme
means that only £3.3m of this reserve has been utilised in 2002/03.
With the flow of capital receipts from the City Schools Reorganisation
in 2003/04 the Council will be able to reinstate the Insurance Fund
Reserve which will be needed to fund the Revenue Budget in 2003/04 and
reinstate the interest on Developer Contribution accounts which were
set aside to fund the cashflow on the City Schools project. These amounts
are already included in the Medium Term Financial Plan.
- There was a variation
on Credit Approvals used to fund the programme of £2.793m. This was
mainly due to funding of £2.6m being received through grant rather than
Credit Approval. Unspent Supplementary Credit Approvals will be carried
forward to fund expenditure that has slipped into 2003/04.
RECOMMENDATIONS
- The Executive
is RECOMMENDED to:
- note
the provisional revenue and capital outturn set out in the report;
- note
the programme area carryforwards set out in Annex 1 and approve
those which would involve a change in budget head.
CHRIS
GRAY
Head of Finance
Background
papers: Nil.
Contact
Officers:
Jenny Hydari, Resources, Finance Tel 01865 815401
Mike Petty, Resources, Finance Tel 01865 815622
Business Managers:
Paul Gerrish,
Environment & Economy Tel 01865 815370
Kerry Dearden,
Social & Health Care Tel 01865 815565
Chris Mitchell,
Resources Tel 01865 815430
Robert Capstick/ Louise
Goll, Learning & Culture Tel 01865 815155/ 428116
Mike Smyth,
Community Safety Tel 01865 855206
June 2003
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