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ITEM EX6

EXECUTIVE - 8 JULY 2003

FINANCIAL MONITORING

Report by the Head of Finance

Introduction

  1. This is the first Monthly Monitoring Report for 2003/04. At this stage of the year there are only a few identified variations to the agreed budget and these are discussed below. As we progress further into the financial year other variations will emerge and be reported accordingly.

  2. Members are reminded that shortly there will be a series of budget seminars run by individual directorates to enable members to ‘get inside the budget’. The ‘Medium Term Financial Plan 2003/04 to 2007/08 - Summary’ is now available. The more detailed book ’ Medium Term Financial Plan – Service Analysis, Revenue and Capital’ is due to be available shortly.

    3. Learning & Culture

  3. No budget variations have been identified at this stage. There is a potential issue in relation to the impact of Job Evaluation on casual staff in libraries and this will be reported to a future meeting of the Executive if necessary.

    4. Social & Health Care

  4. The impact of tight control of budgets in 2002/03 within Social Services is still being felt in the early part of 2003/04. This together with a contingency held back to deal with any budgetary problems arising in year leaves a current projected underspending of around £2m. This underspending will reduce over the financial year in response to the demand for services. It is anticipated that Social Services will be in balance at 31 March 2004. The Social Services provisional outturn position at 31 March 2003 is an overspend of £2.6m. There is a one off provision of £3m in the 2003/04 budget to offset this. Part of the contingency relates to the additional £0.400m available to allocate in year, subject to member approval.

  5. It is expected that the overspend carried forward at 31 March 2003 of £0.102m on the Youth Offending Team will be accommodated within the spending for 2003/04.

    6. Environment, Roads & Transport

  6. There is an anticipated underspend of £0.4m due to the Structure Plan Examination in Public now being likely to take place in Spring 2004. This underspend will be carried forward to fund the work in 2004/05.

  7. At this stage it is anticipated that all other budgets will be fully spent including the variations brought forward from 2002/03. In 2002/03 the Capital Programme was expected to provide £1m for the budget reserve through a revenue/capital switch. This did not prove possible due to an overspending on the Transport capital programme leaving balances £1m less than anticipated. This switch will now take place in 2003/04 and the £1m will be reinstated to balances.

    8. Community Safety

  8. There is a projected overspend on the Registration Service of £0.262m. This reflects a brought forward overspend of £0.157m from 2002/03 and at this stage a projected overspend of £0.105m in 2003/04. Work is being undertaken currently to meet part of the overspend from 2002/03 by other means. Significant changes are being made in 2003/04 which will bring down substantially the overspend position during the year, and this will become clearer in future reports to the Executive. The overall forecast position for Community Safety is an overspend of £0.240m.

    9. Corporate Governance

  9. There are two changes identified so far. The first change is a technical change to the way in which we have to account for the external audit fee. This results in an estimated charge of £0.292m in the 2003/04 accounts, as we must now accrue for the fee. It is recommended that the Executive approve a supplementary estimate in 2003/04 to meet this cost.

  10. The Oxfordshire Community Network Project had been projected to overspend by £1.4m in 2002/03, to be met from balances. The actual figure is £1.376m. Of this £0.867m was incurred in 2002/03 and due to an additional grant allocation of £0.147m from the New Opportunities Fund, only £0.362m remains outstanding. This has slipped into 2003/04 and is a call on balances this financial year.

    11. Fire Service Pay Award

  11. The Fire Service Pay Award from November 2002 has now been agreed. The budget for 2003/04 included a provision based on the offer from the employers side. We will report any variance to the budget figure once a full costing exercise has been completed. It is not anticipated that there will be any additional costs above the budget provision.

    12. Job Evaluation

  12. The task of costing Job Evaluation has been enormous and complicated. Further detailed analysis has shown that the costs are expected to be some £0.110m more than the budget provision. This sum will be a call on balances.

    13. Temporary Mortuary

  13. A temporary mortuary was set up at Brize Norton at the request of the Ministry of Defence to receive the bodies of British soldiers killed in the Iraq conflict . The Council has incurred costs of £0.346m to date. These costs are being reimbursed by the Ministry.

    14. Contingency

  14. As part of the budget setting process for 2003/04, overprovision for inflation on property rates resulted in an unallocated contingency of £0.118m. This will be returned to balances.

    15. Balances

  15. The effect of the above changes and the budget contribution to balances is as follows:

    16.  

    £m

    Provisional County Fund Balance at 1 April 2003

    3.529

    Unallocated Contingency

    0.118

    Contribution from Revenue Budget

    3.700

    External Audit Fee

    -0.292

    Oxfordshire Community Network Project

    -0.362

    Job Evaluation – Additional Costs

    -0.110

    Repayment from Environmental Capital Programme

    1.000

    Estimated County Fund Balance at 31 March 2004

    7.583

    Programme Area Carry Forward Reserves

  16. At this stage of the year there is no further information available, other than as reported. The minor variations reported relate to the reported underspend to be carried forward of £0.400m for Environment, Roads & Transport and the projected overspend on Community Safety of £0.240m. An analysis of individual Programme Area reserves at 31 March 2003 is shown below:

    17.  

    £000

    £000

    Learning & Culture

    1,135

     

    Environment, Roads & Transport

    1,574

     

    Corporate Governance

    1,815

     

     

     

    4,524

    Social & Health Care

    - 2,542

     

    Community Safety

    -81

     

     

     

    -2,623

    Net position

     

    1,901


    City Schools Re-organisation Cashflow

  17. The City Schools Re-organisation cashflow is expected to reach its peak at the end of 2003/04. The anticipated costs are £1.108m offset by part year savings of £0.400m from formula allocation savings. This leaves a cumulative overdrawn position of £3.984m at 31 March 2004. There is a further potential variation when the Middle Schools close at the end of the summer term 2003, as the LEA will need to meet the costs of any deficit budgets. This position will not be known until September and will be reported to the Executive then.

    18. Consolidated Position

  18. The overall position on balances based on the projections shown in this report shows an estimated £3.751m remains in reserves to meet all other potential and outstanding pressures arising in the year. This assumes, perhaps prematurely, that the Carryforward Reserve for all areas will be net nil (save for reported minor variations). The more likely position is that Social & Health Care will deliver a balanced budget this year (see paragraph 4) and there will continue to be some carryforward in other areas. The position is summarised below:

    19.  

    £m

    Revenue Balances

    City Schools Overspend

    Projected Programme Areas Carryforward
    based on paragraph 15 above

    7.575

    -3.984

    0.160

    3.751


    County Council Staffing

  19. Annex 1 (download as .doc file) analyses the Cdouncil’s workforce at 31 March 2003. The next update will be at 30 June 2003, when information will be presented according to the new directorates.

    20. Conclusion

  20. This is the first monitoring report for 2003/04 and clearly the financial position for all programme areas will emerge more fully as the year progresses. Whilst County Fund Balances remain below the 1% recommended threshold, there is provision within the agreed Medium Term Financial Plan to increase them by £1m annually up to 2007/08. I will be reviewing this policy as part of the budget process. With regard to the overall financial position, I do not have specific cause for concern at this early stage.

    21. RECOMMENDATIONS

  21. The Executive is RECOMMENDED to:

          1. note the report;

          2. approve a supplementary estimate of £292,000 for the external audit fee as set out in paragraph 8;

          3. approve a supplementary estimate of £362,000 for the Oxfordshire Community Network as set out in paragraph 9, in place of the similar amount originally to have been funded from balances in 2002/03;

          4. approve a supplementary estimate of £110,000 to meet the additional cost of Job Evaluation arising in 2003/04 as set out in paragraph 11;

          5. approve the arrangements for dealing with unallocated contingency provision in respect of Social & Health Care and property rates as set out in paragraphs 4 and 14.

CHRIS GRAY
Head of Finance

Background Paper Nil.

Contact Officer Mike Petty Tel 01865 815622

June 2003

* Please note the following: the structure on the old MIS system was outdated and therefore does not match the current structure. This means that it is not possible to give an accurate indication for the annual change in numbers for each group of staff within Directorates. Total changes in numbers are given. There are some employees who have more than one job with the Council, these have been counted separately for each job for the first time.

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