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ITEM EX5

EXECUTIVE – 23 DECEMBER 2003

FINANCIAL MONITORING

Report by Head of Finance

Introduction

  1. The report sets out the budget monitoring position to the end of October 2003. Individual reports from each of the Service Directorates are in the Members’ Resource Centre. This report is set out on a Directorate basis, which is the same format as the Medium Term Financial Plan – Services Analysis. The main advantage is that Directorate accountability is much clearer. This is a change in presentation to previous reports, which were shown by Programme Area. Comparative figures for earlier periods have been amended to Directorate format.

  2. The position for each Directorate is considered below:

    3. Learning & Culture

  3. The forecast outturn for Learning & Culture now shows a forecast deficit of £2.640m compared to £2.251m in the last report. This is a worsening of £0.389m. The main increases in costs since the last report are on fees to Independent Schools (£0.067m), Statementing (£0.114m) and Premature Retirement Compensation (£0.190m). The latter is due to voluntary redundancies in schools taking action to balance their budgets this year. The Director is producing an action plan on how to contain and where possible reduce these pressures.

    4. Social & Health Care

  4. The forecast outturn position for Social & Health Care now shows a forecast carry forward of £1.017m compared to £1.669 in the last report (£0.869m after deducting the £0.500m additional payment to the pooled budget and allowing for £0.300m for regrading of Home Support Workers). This represents a further drawing down of the carry forward of £0.652m. The main changes are as follows.

    		5.

     

    October

    £m

     

    September

    £m

    Movement since last month

    £m

    Children & Families

    Older People

    Learning Disabilities

    Across client Groups

    -231

    -383

    -41

    -144

    -799

    88

    -675

    199

    -911

    -1299

    -319

    292

    -240

    767

    500

  5. Children & Families is forecasting a carry forward of £0.231m. This is mainly due to increased carry forward on Community Support budgets;

  6. Older People is forecasting a reduced carry forward of £0.383m. This is a reduction of £0.292m, mainly accounted for by the additional payment to the pooled budget of £0.500m agreed by Executive on 11 November, offset by a reduction in the overspend on the Care Managers Purchasing Budgets of £0.227m.

  7. Learning Disabilities have recovered their overspend position and are now forecasting a carry forward of £0.041m.

  8. The Across Client Group area is forecasting a reduction in carry forward of £0.767m. Of this, £0.400m is on Internal Home Support Service due mainly to the costs of revised gradings for Home Support Workers of £0.300m. The other main area of increased spending is on Rapid Response Service, which has used £0.222m on workforce issues, since last month.

  9. The Pooled Budget now shows a forecast carryforward of £0.712m compared to £1.154m in the last report. This reflects a provision of around £0.400m to fund "Winter Pressure" bids. In addition it assumes that £0.500m to prevent bed blocking will be fully utilised. We also have a delayed discharge grant of £0.511m which has not yet been committed. Bed blocking fines become effective from January 2004. Whilst the carry forward on the pooled budget does not affect Council revenue balances directly, it should be remembered that the Council’s contribution to the pooled budget was around £37m gross in 2003/04, therefore the carry forward position should be fully understood before making decisions about the level of contribution to be made in next year’s budget.

    10. Environment & Economy

  10. The Environment & Economy Directorate is now forecasting a carry forward of £0.590m at 31 March 2004. This compares to £0.468m in the last report, a variation of £0.122m. The main changes are an increased carry forward of £0.175m on Waste Management due to a reduction in waste tonnages in the hot dry summer, offset by further spending on Public Transport of £0.068m because of commitments on the Premium Routes Network agreed by the Transport Implementation Committee.

    11. Community Safety

  11. The Community Safety Directorate is now forecasting a carry forward of £0.099m compared to £0.082m in the last report. The change of £0.017m relates to a carry forward of part of the additional Emergency Planning Grant to fund a project manager for business continuity. The additional Emergency Planning Grant of £0.057m was originally returned to balances, but has now been utilised for expenditure pressures such as, the production of the OCC Flood Booklet, a flood warning project and the business continuity manager. This will mean a reduction in balances. We are looking in to the sequence of events around this. In addition, we will now need to provide for the transfer values of two officers transferring to other brigades. The estimated cost is £0.300m and is also a charge against balances.

    12. Corporate Governance

  12. The Director for Resources has confirmed that he will have a carry forward of at least £0.250m. The two major areas of carry forward will be the Modernisation Fund and the IEG budget which is fully committed, but unlikely to be fully spent by the end of year.

  13. There are two additional calls on balances, one for the Coroner’s Service of a further £0.020m (total £0.030m) due to increased workload, and on the Magistrates Courts of £0.012m due to transitional arrangements at Banbury Magistrates Courts, which will eventually be offset against a capital receipt anticipated in 2004/05.

    14. Social & Health Care Income

  14. The work outstanding on the domiciliary care income account and debtors in Social & Health Care has now been completed. The consultant appointed to look at debtors has finalised her work and reported back. The position is that £0.920m income from domiciliary care has not been posted correctly either to the general ledger or reported as part of the cash in bank figure at year end. This means that it is available to be returned to balances. In addition, the work done by the consultant has verified that overall, debtors are understated by £0.250m. It will not be necessary for this amount to be carried forward by Social and Health Care. Therefore, both amounts, the £0.920m and the £0.250m (total £1.170m) can be returned to balances. However, the District Auditor is still finalising his own examination of the adequacy of the bad debt provision. This could impact on the amount shown above.

  15. The errors in accounting for income in Social & Health Care are being addressed. The Trojan system which is used in Social & Health Care to record income is being developed to feed into MIS. Similarly, action has been taken in Corporate Accountancy to ensure that all the Council’s bank accounts sweep to the main account. Management follow up will take place to ensure that corrective action taken is robust and adequate.

    16. City Schools

  16. We have recently received a letter from DfES indicating that they require us to repay 50% of the additional capital receipts which will accrue as part of the City Schools Reorganisation. They will be seeking agreement with us as to how this repayment should be made. Repayment cannot be made until we have obtained all the capital receipts, some of which are scheduled for 2004/05.

  17. It had been hoped to offset the deficit balances on closing City Schools against these additional capital receipts. The latest forecast for these deficits is around £1m. The Council has to meet these deficits in this financial year and the most straightforward way of dealing with this is to charge the shortfall against Council balances. If surplus receipts on City Schools are higher than originally anticipated, then the first call on the surplus (that is the 50% we are allowed to retain) should be to repay the £1m. In addition, it was anticipated that the costs of rolling out SAP to all schools in 2004/05, estimated at around £0.900m, should also be met from surplus receipts on City Schools. This may still be possible, but will be dependent on the final level of surplus receipts which may not be known at the time of setting the budget. The Director will be bringing a report to Executive, explaining the reasons for the deficits on the closed City Schools.

    18. Job Evaluation

  18. The pressure identified on this budget this year, has been £0.980m, of which £0.329m has been met from revenue balances and £0.651m has been absorbed by Social & Health Care. Learning & Culture are continuing to do detailed work in this area, and it is likely that there will be some additional costs. The updated position will be reported next time.

    19. Grants

  19. Annex 2 (download as .xls file) sets out the updated grants position for 2003/04 with explanations, where supplied by Directorates, of how the additional grant received in year has been treated. Any gaps in information will be reported next time. In the future, the position on additional grants received in year, will be reported to Executive as soon as they are announced, to give the Executive the opportunity to agree how the grants are allocated.

    20. Balances

  20. The revised position for revenue balances is shown below:

    		21.

    £m

     

    County Fund Balance as estimated in November

     

    7.107

    Social & Health Care surplus resources

     

    1.170

    City Schools Closing Balances

     

    -1.000

    Emergency Planning – Use of excess grant

     

    -0.057

    Firefighters Transfer Values

     

    -0.300

    Coroner’s Courts increased Costs

     

    -0.020

    Magistrates Courts – Increased Costs

     

    -0.012

    Revised estimated County Fund Balance at 31 March 2004

     

    6.888

    Carry Forward Reserves

  21. The forecast outturn position for the Carry Forward Reserves as set out in this report is summarised at Annex 1 (download as .rtf file). The latest forecast shows a deficit carry forward of £0.684m compared with a deficit carry forward of £0.962m reported last time.

    22. Consolidated Position

  22. The consolidated position on the Council’s key reserves is shown below:

    23.  

     

    £m

     

    Revenue Balances

    6.888

     

    Less Carry Forward Reserves

     

    -0.684

     

    Less City Schools Planned Transitional Costs

    -3.989

     

    Total

    2.215

     

    Overview

  23. In my last report I set out the position agreed with Directors to ensure that balances did not fall below the £2.0m mark, in order that we should have enough left in balances to meet all other unexpected eventualities. We need to continue to monitor and review the position carefully, and that Directors should continue to keep a firm control on their expenditure. There is no doubt that there will be some further pressures this year, but providing the Council adheres to the agreed action plan then we should be in balance at year end.

    24. RECOMMENDATION

  24. The Executive is RECOMMENDED to:

          1. note the report;

          2. ask directors to continue to monitor and keep a firm control on expenditure.

CHRIS GRAY
Head of Finance

Background Papers: Individual Programme Area Reports

Contact Officer: Mike Petty Tel: 01865 815622

December 2003

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