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ITEM EX5

EXECUTIVE – 18 MAY 2004

FINANCIAL MONITORING

Report by Head of Finance

Summary

  1. The Council’s finances are stable overall. The overall forecast position for the consolidated balances at the end of year is £5.763m compared to £5.334m reported last time. There is an increase in the overall Service Directorates’ carry forward position of £ 0.429m. The outturn position on schools’ balances appears to be much better than they had been reporting and will certainly be significantly more than the forecast nil balances. This is the position at end of March. A full provisional outturn report for revenue and capital will be presented to the 16 June Executive.

    2. Introduction

  2. This is the penultimate financial monitoring report for 2003/04. There will be a provisional outturn report, which takes account of all end of year adjustments presented to the Executive on 16 June for revenue and capital.

  3. The first report for 2004/05 will also be presented to the Executive on 16 June. Given that it is reporting the position to end of April 2004, this will be an exceptions report only which highlights known significant variations which may affect the budget for 2004/05. It will not be a full monitoring report.

  4. The Individual Service Directorate reports, which make up the background documents to this report, are in the Members’ Resource Centre. The position for each Directorate is considered below.

    5. Learning & Culture

  5. The forecast position for Learning & Culture is an overspending of £2.746m of which £0.534m is recoverable in future years (of this £0.304m relates to transport days and £0.230m relates to the Music Service). The overspend has increased by £0.150m since the last report.

  6. There are a number of variations which mostly offset each other but the main changes are as follows: in Community Learning the Youth Service has a forecast overspend of £0.188m which is an increase of £0.148m; the Individual Schools Budget Contingency is forecast to overspend by £0.250m which is an increase of £0.100m. There are a number of other areas of over and under spends which reduce the net increase to £0.150m.

  7. It was anticipated that there could be some improvement in the position at year-end. However, the majority of work on the closedown position has been completed and the position reported here is unlikely to significantly change. Learning & Culture have an agreed financial recovery plan to repay the overspending on SEN over three years. Outside of this repayment plan, there remains a residual overspend to be met in 2004/05 of £0.554m. The Directorate Leadership Team is preparing a detailed action plan to address this, which will be outlined in future reports.

    8. Schools’ Budget Closedown

  8. Schools are returning figures for their closing balance at the end of 2003/04 to the Schools Finance Team as required. Some 89 schools have already filed their returns. The position to date indicates that there will be end of year balances overall significantly higher than the forecast nil balances previously reported. The Strategic Finance Manager is analysing the returns against the budget submission from each school and also reviewing the provisional allocation of Targeted Transitional Grant to all schools with deficits at 31 March 2004.

    9. Social & Health Care

  9. The forecast position for Social & Health Care remains as a carry forward of £0.869m which is their target position for the end of year. Work on income and debtors is continuing and due to report back at the end of May which will enable year end figures to be finalised and the required adjustments to the accounts to be made.

  10. The pooled budget has a forecast carry forward of £0.853m and there is an unallocated balance of around £1m on the Residential Allowances Grant in 2003/04 which is un-ringfenced. However, there are still possible outstanding adjustments to be made to the accounts relating to 2002/03 and 2003/04. There are also a number of areas of uncertainty in the budget for 2004/05 which may lead to pressures on the budget. Further work is going on in these areas, and I will report on any potential repercussions for 2004/05 in my next report. The provisional outturn position will also go to the next meeting of the Executive, which means that the impact for 2004/05 will be clearer.

    11. Environment & Economy

  11. Environment & Economy Directorate are reporting a forecast carry forward of £2.217m compared to £1.735m last time. This is an increase of £0.482m. The main change relates to the Waste Management carry forward which increases by £0.200m to £1.2m. The rest of the increase is spread across the main areas of the budget.

  12. The Director is taking steps to establish the reasons for this late increase in carry forward and to strengthen budget management in targeted areas.

    13. Community Safety

  13. The forecast carry forward on Community Safety is £0.084m compared to £0.089m reported last time. There are no significant variations to report.

    14. Resources & Corporate & Democratic Core

  14. The forecast carry forward is £1.669m compared to £1.567m reported last time. This is an increase of £0.102m which is mainly attributable to Financial Services which is reporting an under spend of £0.073m compared to a net nil variance in the previous month. This is fully committed in 2004/05.

    15. Directorate Carry Forward Reserves

  15. The forecast outturn position for the Directorate Carry Forward Reserves as set out in the report is summarised at Annex 1 (download as .doc file). The latest forecast shows a carry forward of £2.093m compared to £1.664m reported last time. This is an overall increase of £0.429m.

    16. Consolidated Position

     

    General Reserves estimated for March

    Add Directorate Carry Forward Reserves

    Less City Schools Planned Transitional Costs

    £m

    7.752

    2.093

    -4.082

     

    5.763

    Conclusions

  16. The position is stable overall. There is an increase in the overall Service Directorates’ carry forward of £0.429m. This is mainly attributable to increases in the carry forward for Environment & Economy and Resources & Corporate & Democratic Core, offset by a slight increase in the overspending for Learning & Culture. The Learning & Culture Leadership Team is considering how it will address the residual overspend in next year’s budget which is not part of their three year repayment plan for SEN. This will be formulated into an action plan to be presented to the Executive at a future meeting as early as possible after the end of year position is finalised.

  17. The provisional outturn report to the 16 June Executive 2004 will set out the commitments against the Service Directorate’s carry forwards and any unallocated balances to be carried forward.

    18. Issues for 2004/05

  18. I have updated the position on forecast balances at the end of 2004/05 at Annex 2 (download as .doc file). This shows an increase of £1.9m between the position forecast at the time of setting the budget and the latest known position. I have earmarked £1.3m of this difference against outstanding adjustments to the accounts for Social & Health Care income and debtors which are due to be finalised at the end of May.

    19. Quarterly Staffing Report

  19. This is attached at Annex 3 (download as .doc file). The analysis is accompanied by an explanation of the changes in staffing.

    20. RECOMMENDATION

  20. The Executive is RECOMMENDED to note the report.

 

CHRIS GRAY
Head of Finance

Background Papers: Individual Programme Area Reports

Contact Officer: Mike Petty, Tel: 01865 815622

May 2004

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