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ITEM CA5
CABINET
– 19 SEPTEMBER 2006
FINANCIAL
MONITORING
Report by
Head of Finance & Procurement
Summary
- This report covers
the period to the end of July 2006 for revenue and capital. As the Cabinet
did not meet in August there was no opportunity for the position at
the end of June to be considered separately and changes to the forecast
outturn are reported against the position at the end of May 2006. The
consolidated revenue forecast for the year-end shows a balance of £13.421m,
(paragraph 98). This is made up of £15.902m general balances and a forecast
Directorate overspend of £2.481m (net of City Schools and after allowing
for the proposed additional contribution to the Older People’s Pooled
Budget).
Revenue
Directorate:
Children, Young People & Families
- The current forecast
outturn position for Children, Young People & Families is an in
year overspend of £2.052m, an increase of £1.736m from the last report
in May (paragraph 26). The majority of the increase relates to Early
Years & Family Support (£0.918m).
- The Children &
Young People service now predicts an overspend of £0.338m, of which
Transport is £0.200m and Disabled Children Agency Placements is £0.138m.
- Early Years and
Family Support forecast an overspend of £1.369m, of which £1.399m relates
to the budget for Agency Placements (paragraph 31). There is a great
amount of uncertainty regarding the outturn for Asylum Seekers, but
it is not possible to quantify the position at this stage (paragraph
36). It is proposed to vire the £0.500m contingency retained centrally
within the service to partially offset the overspend on Agency Placements
(paragraph 39).
- An overspend of
£0.345m is forecast for Strategy & Performance, which relates in
the main to the Premature Retirement Compensation budget (paragraph
41).
Directorate:
Social & Community Services
- Pending the Council’s
decision on an increased contribution of £1.2m to the Older People’s
Pooled Budget (paragraph 47), the forecast outturn for Social &
Community Services is an underspend of £1.166m (excluding Supporting
People). After adjusting for the increased contribution the forecast
outturn would show a £0.034m overspend.
- Social Care for
Adults predicts a £0.075m underspend, pending a decision on the increased
contribution to the Pool. Within this, the budget for Older People currently
forecasts an underspend of £0.095m. Savings of over £0.300m for the
equipment contract and £0.125m reductions in staffing costs for Internal
Home Support have been offset by a £0.200m pressure due to underachievement
of rental income from the Order of St John. A significant (£0.777m)
overachievement of residential and nursing income has been forecast
due to increased client number projections. It is proposed that this
is passed on to the Pooled Budget, together with a further £0.423m additional
contribution to meet the extra costs of these clients falling on the
Pool. After the proposed contribution, Social Care for Adults would
show an overspend of £1.125m the proposal to vire part of the Directorate
contingency of £1.076m would largely offset this.
- The Partnerships
& Planning forecast overspend has reduced from £0.428m to £0.021m
overspend (paragraph 54), due to improved income projections based on
actual performance to date.
- Within the Directorate
Management Team, there is a forecast underspend of £1.198m (paragraph
56). This primarily relates to the contingency (not yet allocated) and
Council approval is sought to vire this budget to service areas to meet
identified pressures (paragraph 56).
- The forecast for
Supporting People has changed from a £0.358m underspend to a breakeven
position following a review of contractual commitments (paragraph 57).
This forecast assumes savings will be found in year.
- The Pooled Budget
for Older People, Physical Disabilities and Equipment is forecasting
an overspend of £1.308m, before the proposed additional contribution
(paragraph 58). A pressure of £0.972m would still remain within the
County Council’s elements of the Older People’s Pool even after taking
into account the additional contribution. The Learning Disabilities
Pooled Budget is now projecting an overspend of £0.300m (paragraph 60).
Directorate:
Environment & Economy
- The current forecast
outturn is an underspend for Environment & Economy of £0.190m (paragraph
61).
- The majority of
the underspend relates to Sustainable Development (£0.123m). Waste Management
remains the highest risk area in terms of a variation to budget. Current
forecasts indicate an overspend of £0.760m for hazardous waste, offset
by underspends for Recycling Centres and Landfill Sites, giving an overall
year-end forecast of £0.023m underspend. An underspend of £0.100m is
now forecast for Planning Implementation due to project slippage.
Directorate:
Community Safety
- There is no change
to the Directorate forecast underspend of £0.050m (paragraph 66).
Directorate:
Resources & Chief Executive’s Office
- The forecast Directorate
overspend is £0.400m, an increase £0.090m since the last report which
all relates to Property Services (paragraphs 76 and 77). £0.300m of
this overspend relates to the budget for SAP Revitalisation and will
be managed by a corresponding underspend next year.
- The forecast spend
for the Shared Services Project is £0.645m below the initial forecast
included in the Business Plan approved by the Cabinet on 21 February
2006. This is largely due to timing issues arising from delays in acquiring
a building and the consequential impact on operating costs and revisions
to the calculation of staff savings as project details are firmed up.
The Shared Services Project is being temporarily funded from an earmarked
reserve (Annex 4) created using temporary cash surpluses in the Capital
Programme and therefore the reduced spend does not form part of the
£0.400m Directorate variation.
Council Balances
- The forecast year-end
position for general balances has increased by a net £0.212m from the
previously reported position to £15.902m (paragraph 94).
Capital
- There is a reduction
in estimated payments of £0.858m in 2006/07. Over the period of the
Programme there is an increase in payments of £4.374m.
- Within Children
Young People & Families there is estimated slippage of £2.0m on
devolved formula capital into 2007/08, and by an allocation of £0.242m
in 2006/07 for School Travel Plans funded by a capital grant received
through the Standards Fund. Schemes at Gosford Hill School and Headington
Quarry have been brought into the main Programme from the forward plan
as has a scheme at Faringdon School.
- The variation
in the Community Safety Programme is due to an increase in payments
of £0.480m representing a scheme for refurbishment of traveller sites.
Introduction
- This report covers
the period up to the end of July 2006 for revenue and capital. The detail
for each Directorate is summarised within the report and individual
reports for each Directorate have been placed in the Members’ Resource
Centre.
Annexes
- The following
annexes are attached:
Revenue
Annex
1 Estimated Year End Position Directorate Summary
Annex 1a-1e " " "
by DirectorateAnnex
2a Summary of Virements
Annex 2b Summary of Supplementary Estimates
Annex 3 Latest Grants Position
Annex 4 Earmarked Reserves
Annex 5 Forecast Revenue Balances at Year End
(Annexes 1 - 5 - download as .xls
file)
Capital
Annex
6 Capital Monitoring
Annex 6a-g Capital
Monitoring by Directorate
(Annex 6 - download as .xls file)
PART 1 - REVENUE
- Annex 1 shows
the forecast revenue outturn position at the end of July and the movement
from the position as at the end of May. The overall projected variance
for the Council, (net of City schools) is set out in the table below
(positive variances represent overspends and negative variances represent
underspends):
|
May
2006
|
July
2006
|
Change
|
|
£m
|
£m
|
£m
|
Children,
Young People & Families
|
3.084
|
4.820
|
1.736
|
Less City
Schools Reorganisation
|
2.533
|
2.533
|
0
|
|
0.551
|
2.287
|
1.736
|
Social &
Community Services (excl. Supporting People)
|
0.266
|
-1.166
|
-1.432
|
Supporting
People
|
-0.358
|
0
|
0.358
|
Environment
& Economy
|
0
|
-0.190
|
-0.190
|
Community
Safety
|
-0.050
|
-0.050
|
0
|
Resources
& Chief Executive’s Office
|
0.310
|
0.400
|
0.090
|
|
|
|
|
Total
Variation per Annex 1
|
0.719
|
1.281
|
0.562
|
Proposed
additional contribution to the Older People’s Pooled Budget
|
|
1.200
|
1.200
|
Total
Variation after additional contribution
|
0.719
|
2.481
|
1.762
|
- The main issues
on the revenue budget for each Directorate are set out below.
Directorate:
Children, Young People & Families (£2.052m in-year overspend)
- The current forecast
outturn position shows a projected overspend of £4.820m. Of this £2.052m
relates to the current financial year and £2.768m to be recovered in
future years.
- The Cabinet on
18 July 2006 agreed that for the purpose of dealing with any overspends
on central Schools Block items, they would adopt the option to carry
forward the overspend to the next financial year and fund from the non-schools
element of the Dedicated Schools Grant (DSG) for that year. Of the current
year variation, £0.023m relates to the DSG and would need to be carried
forward.
|
May
2006
|
July
2006
|
Change
|
|
£m
|
£m
|
£m
|
Children
& Young People
|
0.071
|
0.338
|
0.267
|
Early
Years & Family Support
|
0.451
|
1.369
|
0.918
|
Educational
Effectiveness
|
0
|
0
|
0
|
Strategy
& Performance
|
0.029
|
0.345
|
0.316
|
Total
in year variation
|
0.551
|
2.052
|
1.501
|
Variation
in Transport Days
|
0
|
0.235
|
0.235
|
City
Schools Reorganisation
|
2.533
|
2.533
|
0
|
Total
Variation
|
3.084
|
4.820
|
1.736
|
Service
Area: Children & Young People (£0.338m overspend, £0.573m including
the variation in transport days)
- Within the Schools
Block, temporary virements of £0.100m from Statementing and £0.296m
from Out of County placements to the Special Educational Needs Support
Service (SENSS) budget are requested, to replace ad-hoc recharges to
provide SENSS with a greater level of security. Although this is a change
affecting the configuration of services, as it is not a permanent virement,
Council approval is not required.
- The service for
disabled children is currently forecasting an overspend of £0.138m.
This is as a result of disaggregation of the agency placements budget,
which led to a small reduction in the overall budget (£0.033m) and three
young people being charged to the budget whose costs had previously
been charged to Leaving Care. Whilst there are uncertainties about Health
Service contributions to the Resource Centre redesign project this budget
is currently projected to balance.
- The transport
budget provided for 3% inflation on the 2005/06 base budget together
with additional resources of £0.833m. However, this represents only
a 2% increase above the actual 2005/06 expenditure level. Expenditure
rose by 6.5% in 2004/05 and 14.8% in 2005/06, so there is a high risk
that actions being taken following new management arrangements may not
achieve a balanced budget by year-end. Every 1% increase in the level
of cost above inflation represents a potential pressure of £0.160m.
Current projections indicate a £0.200m overspend. This is as a result
of two sets of re-tendering routes since the forecast that was made
during the 2006/07 budget process, with costs being higher than originally
anticipated together with cautious assumptions made in relation to the
third due in December 2006. This is subject to further review following
route changes in September. The following permanent virements are requested
to allocate the additional funds provided in the 2006/07 budget to the
most appropriate headings:
Budget
Book Reference
|
Narration
|
Change
£m
|
CYPF1-11A
|
Mainstream
Transport
|
0.462
|
CYPF1-11B
|
SEN Transport
|
0.065
|
CYPF1-11C
|
Home to College
Transport
|
0.232
|
CYPF1-11D
|
Other Transport
Costs
|
-0.759
|
- The Youth Service
is forecasting a balanced budget following a thorough review of the
forecasts for geographical teams. However, the budget is dependant on
a high level of external income, and continues to be identified as a
risk area. The following permanent virements are requested to restructure
the budget in line with the new management structure:
Budget
Book Reference
|
Narration
|
Change
£m
|
CYPF1-31
|
Central Staff
Costs (Youth Support)
|
0.279
|
CYPF1-32
|
Geographic
Teams
|
-0.045
|
CYPF1-33
|
Support Services
|
-0.287
|
CYPF1-34
|
Projects
|
0.066
|
CYPF1-35
|
Staff Development
& Training
|
-0.013
|
Service
Area: Early Years & Family Support (£1.369m overspend)
- The budget for
Agency Placements is forecast to overspend by £1.399m, an increase of
£0.758m since the previous report. The main elements of the increase
are new long-term residential placements coupled with the inclusion
of a provision for future additional placements. The average cost of
a residential placement is £0.200m per year and an Independent Fostering
Agency placement is around £0.045m per year (but these frequently involve
families of 2 or more). This means that at this stage in the year small
changes in numbers can lead to large changes in cost. New arrangements
for accessing and gate-keeping entry into the Looked After System and
entry into Agency Placements are being established. The expected outcome
of the changes is to reduce further the rates of entry to care and to
reduce reliance on the high-cost independent sector. In order to reduce
the overspend, the Cabinet is asked to recommend Council approve the
permanent virement of £0.500m held in contingency within this service
area to this budget head (paragraph 39).
- The Children’s
Homes budget is forecast to overspend by £0.150m as a consequence of
a savings target resulting in insufficient budget to provide adequate
cover for leave and sickness absence. It was originally assumed it would
be possible to provide this cover with the existing staff, but this
has not proved the case. This is a provisional position pending further
refinement of budgets following reorganisation of the service.
- Within the Schools
Block, the budget for Nursery Education Funding to Private, Voluntary
and Independent settings predicts a £0.023m overspend based on the outturn
for the Summer Term. The current forecast also includes the recovery
of £0.085m overpayments to providers in 2005/06 giving an ongoing pressure
of £0.108m.
- An overspend of
£0.050m on Social Work Staffing Budgets reflects the continued use of
agency staff in the City Assessment team following the recommendations
of the Commission for Social Care Inspection (CSCI) inspection. These
will be replaced by permanent staff for the second half of the year.
The overspend will be reduced by managing vacancies across the service
where appropriate.
- Forecast expenditure
for the element of the Leaving Care budget covering the cost of placements
has changed as the number of children in agency placements has reduced,
partly as a result of transferring to the disabilities budget and others
leaving. This reduction has been largely offset by an increase in foster
care expenditure and a reduction in income from the Department for Education
& Skills (DfES) Safeguarding Children Grant outlined in paragraph
36 below. The budget is currently forecast to be in balance, although
may come under pressure later in the year due to the numbers of young
people likely to leave care and the level of support required.
- Asylum Seekers
– no variation is forecast at present, although there are significant
uncertainties highlighted below.
- Over the past
year there has been a significant reduction in the numbers of asylum
seekers supported following the transfer of responsibility for new
families and adults to the National Asylum Seekers Service (NASS).
The County Council service now supports only Unaccompanied Asylum
Seeking Children (UASCs). The service is grant funded and the
grant is paid per asylum seeker supported per week. A reduction in
grant funding has led to a situation where the current structure is
no longer financially viable. Staffing costs have already been reduced
and longer term restructuring is being undertaken to address this
problem. Managers continue to work to ensure staffing and support
activity reflects the claimable grant for under 18 UASCs.
- There is a potential
additional pressure as a result of changes in DfES grant funding for
UASCs who are over 18 and to whom the Council has a responsibility
to provide support under the Children (Leaving Care) Act. All of the
local authorities that are supporting UASCs are facing a similar pressure,
and are working together to address this with the Government. For
2005/06 the estimated DfES Safeguarding Children Grant in respect
of UASCs leaving care was £0.619m. The final amount of the grant,
notified at the beginning of July 2006, was only £0.229m, as a result
of changes to numbers being eligible. The net reduction of £0.390m
falls to be met in this financial year. The position for the 2006/07
grant has yet to be determined, but initial estimates suggest a reduction
of £0.337m compared to the amount included in the budget. The 2006/07
reduction (£0.337m) can be accommodated within the Leaving Care budget
as indicated at paragraph 35. However, the reduction of grant relating
to 2005/06 is likely to remain a pressure to the extent it is not
offset by any compensation due (see final bullet point below).
- The Home Office
grant funding the majority of the service (approx £2m in 2006/07)
has not been subject to a full audit since 2001/02 due to problems
with Home Office data matching systems. Any disputes over eligibility
for support may impact on the amount of grant receivable. Ten or more
cases not being deemed eligible for support could potentially result
in our grant entitlement being reduced to a point where it was less
than our actual expenditure.
- The hearing
in respect of compensation arising from the recent court case is due
in September. It is currently assumed that any additional income due
to the County Council over and above what has been accrued for in
the 2005/06 accounts would be used to offset the reduction in the
2005/06 Safeguarding Children Grant.
- An overspend of
£0.079m is forecast for Assessment and Family Support. The cost of residence
orders currently committed exceeds the budget by £0.029m and an overspend
of £0.050m for Legal Charges is likely if spending remains in line with
the first quarter.
- The Homelessness
budget now predicts a £0.069m overspend based on a review of existing
and likely commitments. The current budget of £0.236m is sufficient
to support on average seven families whilst actual expenditure indicates
an average of nine.
- A £0.400m underspend
is forecast for the centrally held budgets for this service area. This
is the net position inclusive of a £0.100m overspend due to the anticipated
difficulty in realising a target saving through greater health contributions
to placement costs for children with mental health problems. It also
includes £0.500m allocated in the 2006/07 budget round for "increased
numbers of children looked after" held in contingency. It is proposed
to vire the latter to Agency Placements (Paragraph 31).
Service
Area: Educational Effectiveness (no variation forecast)
- There is currently
a potential shortfall of £0.219m against the income target for the Oxfordshire
Quality Schools Association which is not included in the forecast at
present. This is being investigated and possible actions to redress
this are being identified. County Facilities Management (CFM) are forecasting
to achieve a break-even position for the financial year.
Service
Area: Strategy & Performance (£0.345m overspend)
- The variation
for this service area relates primarily to the Premature Retirement
Compensation budget. The forecast overspend is £0.367m, representing
current commitments (including contributions received from schools).
In 2006/07 81 new cases have been agreed at a net cost of £0.829m. The
ongoing annual commitment of existing and new cases is £3.391m compared
to a budget of £4.041m. Following the recent age discrimination legislation
it is expected that the Council’s existing PRC policies will be revised
this autumn. This will also provide an opportunity to review the cost
implications of the policies with a view to establishing effective budgetary
control.
Service
Area: Delegated Schools’ Budgets
- Three-year budget
plans for 2006/07 to 2008/09 have been received from all 293 schools,
of which 278 (95%) have been approved. Taking the approved and unapproved
budgets together indicates year-end balances for 2006/07 of £1.945m.
Directorate:
Social & Community Services (£1.166m underspend before proposed
additional £1.2m contribution to the Older People’s Pooled Budget and
excluding Supporting People)
- The forecast outturn
for Social and Community Services is an underspend of £1.166m before
the proposed additional £1.2m contribution to the Older People’s Pooled
Budget. A significant element of this is the forecast of £0.777m additional
residential and nursing income relating to Older People, together with
a more optimistic forecast of £0.281m increased income within Partnerships
and Planning reported this month. The proposed £1.2m additional contribution
to the Pooled Budget is made up of the £0.777m income outlined above
and the balance (£0.423m) is part of the proposed allocation of the
Directorate contingency. After adjusting for the proposed contribution
the forecast outturn shows a £0.034m overspend.
|
May
2006
|
July
2006
|
Change
|
|
£m
|
£m
|
£m
|
Cultural
Services & Adult Learning
|
0.000
|
0.016
|
0.016
|
Social Care
for Adults
|
0.954
|
-0.075
|
-1.029
|
Partnerships
& Planning (excl. Supporting People)
|
0.428
|
0.021
|
-0.407
|
Business
Support & Performance Management
|
0.047
|
0.070
|
0.023
|
Directorate
Management Team (incl. contingency)
|
-1.163
|
-1.198
|
-0.035
|
Social
& Community Services Subtotal
|
0.266
|
-1.166
|
-1.432
|
Supporting
People
|
-0.358
|
0.00
|
0.358
|
Total
per Annex 1
|
-0.092
|
-1.166
|
-1.074
|
Adjustment
for additional contribution to the Pool
|
|
1.200
|
1.200
|
Adjusted
Total
|
-0.092
|
0.034
|
0.126
|
|
|
|
|
Memorandum
Accounts
|
|
|
|
Older People,
Physical Disabilities & Eqpt Pooled Budget
|
0.317
|
1.308
|
1.066
|
Learning
Disabilities Pooled Budget
|
0
|
0.300
|
0.300
|
Service
Area: Cultural Services & Adult Learning (£0.016 overspend)
- Within Cultural
Services energy costs and audio-visual income targets remain areas of
concern. The latest projections indicate an overspend of £0.040m on
energy in 2006/07, offset by a planned underspend of £0.026m relating
to additional income from negotiated VAT exemption on audio visual loans.
- So far there is
no indication that the cost containment in Adult Learning is off target.
Service
Area: Social Care for Adults (£0.075m underspend before the proposed
additional £1.2m contribution to the Older People’s Pool)
- The budget for
all client groups is forecasting an underspend of £0.354m. This is mainly
due to projected savings in the equipment budget as a result of recent
re-tendering of the contract to supply equipment for clients’ homes.
The Cabinet is asked to recommend Council approve a permanent virement
of £0.250m from this budget to Internal Home Support. The virement requested
would offset the pressure in paragraph 48 and would enable the service
to expand provision slightly, helping to keep delayed transfers of care
from acute hospitals at acceptable levels.
- The budget for
Older People is currently forecast to underspend by £0.095m. Of this
a significant (£0.777m) overachievement of residential and nursing income
is forecast due to increased client number projections within the Older
People’s Pooled Budget. The Cabinet is asked to recommend that Council
approve the transfer of this additional income to the Pool through an
increased contribution from the County Council, together with a further
contribution of £0.423m funded from the Directorate’s contingency (paragraph
56) to help meet the additional costs falling on the Pool as a result
of the increased client numbers.
- The year-end forecast
for Internal Home Support has moved from a £0.478m overspend to a £0.110m
overspend after taking in to account staff savings as a result of detailed
analysis of budgets in June. The virement requested in paragraph 46
would offset this pressure.
- The year-end projection
for External Home Support shows a £0.014m underspend, compared to £0.177m
previously reported. This movement is caused by increased client numbers,
together with an increased use of higher cost providers to ensure capacity.
- The care management
team budget continues to show a significant pressure and is now forecasting
an overspend of £0.232m. This is due to difficulties in achieving the
vacancy factor together with the recruitment of extra staff to deal
with the changeover of clients to new external home support providers.
It is proposed to vire £0.154m from the contingency fund to offset the
transitional costs of the new home care contracts and £0.161m for vacancy
targets for Older People as a whole (paragraph 56).
- A pressure of
£0.200m has been identified in relation to underachievement of rental
income from the Order of St John as a result of phasing between buildings
ceasing to be operational and new premises brought into use. The forecast
for the underachievement of Fairer Charging income for Older People
remains at £0.200m.
- The Physical Disabilities
budget is predicted to overspend by £0.301m the underlying reason being
the projected shortfall in Fairer Charging income. It is proposed to
address most of this (£0.289m) using part of the Directorate contingency.
- No significant
variances are forecast for the Integrated Mental Health Service (£0.003m
underspend) and Learning Disabilities (£0.081m overspend).
Service
Area: Partnerships & Planning (£0.021m overspend)
- An improved position
this month is mainly as a result of improvements in fairer charging
income projections by £0.267m and residential income by £0.046m.
Service
Area: Business Support & Performance Management (£0.070m overspend)
- Budget pressures
within Facilities Management and Finance continue as vacancy targets
are proving difficult to meet. Funding in contingency has been earmarked
for pressures related to vacancy factors (see paragraph 56), and a budget
virement is requested.
Service
Area: Directorate Management Team, Central Recharges and Contingency
(£1.198m underspend)
- As previously
reported this relates in the main to the £1.313m contingency ring-fenced
to meet identified pressures. The Cabinet is asked to recommend Council
approve the permanent virement of the contingency to the relevant service
areas as the pressures have now been confirmed as set out below:
|
Year
End Variation
£m
|
Contingency
budget
|
1.313
|
|
|
Proposed
Virement:
|
|
All
Client Groups – Vacancy targets
|
0.025
|
Older
People:
|
|
–
Increased contribution to the Pool
|
0.423
|
–
Transitional cost of new home care contracts
|
0.154
|
–
Vacancy Targets
|
0.161
|
Physical
Disabilities:
|
|
–
Vacancy Targets
|
0.008
|
–
Fairer Charging income
|
0.289
|
Mental
Health – Vacancy Targets
|
0.016
|
Commissioning
Planning & Partnership – Vacancy Targets
|
0.111
|
Business
Support – Vacancy Targets
|
0.120
|
Directorate
Management Team- Vacancy Targets
|
0.006
|
Balance
of contingency
|
0.000
|
Service
Area: Supporting People (no variation forecast)
- The forecast for
Supporting People has changed from a £0.358m underspend to a breakeven
position following a review of contractual commitments for 2006/07 and
slippage on renegotiation of contracts for this year. This forecast
continues to require savings to be found in year. Indications are that
grant reductions for future years will be lower than originally anticipated.
Pooled Budgets Memorandum
Accounts
- The forecast overspend
of the County Council element of the Pooled Budget for Older People,
Physical Disabilities and Equipment is £2.172m. If Council approves
the additional contribution of £1.2m as set out in paragraph 47 to this
pool, a pressure would still remain of £0.972m in relation to the Council’s
element of the pool. When both PCT and County Council elements are taken
together, the pool is broadly projected to be in balance at the year-end.
In order to address these pressures the number of placements could be
reduced. The Oxfordshire Commissioning Partnership will be asked in
September to consider the implication for the whole health and social
care system of taking this course of action. Pending the outcome of
this review a further contribution to the pooled budget may need to
be considered.
- The purchase of
beds in the Older People’s Pool is the most sensitive area to changes
in outturn forecast for the Directorate due to the size of the budget.
A 1% increase in the number of beds purchased throughout the year (15
beds) or a 1% increase in the price (£5/bed per week), would each lead
to a year-end overspend of around £0.450m. These risks are mitigated
by good procedures for monitoring the purchase and prices of beds.
- The Learning Disabilities
Pooled Budget is forecast to overspend by £0.300m (the County Council’s
element is £0.234m overspend). This variance is due to the need to make
five emergency residential placements this month for clients and the
need to offer care to a further twenty-one clients who met the criteria.
A management review is scheduled to consider how to re-balance the budget
whilst considering the risks to clients and the County Council. The
main pressure on the Learning Disabilities Pooled Budget remains the
achievement of £1.2m efficiency savings. These savings continue to be
carefully monitored.
Directorate:
Environment & Economy (underspend £0.190m)
- The current forecast
position shows a projected underspend of £0.190m, the main movement
being for Sustainable Development.
|
May
2006
|
July
2006
|
Change
|
|
£m
|
£m
|
£m
|
Transport
|
0
|
0.012
|
0.012
|
Sustainable
Development
|
0
|
-0.123
|
-0.123
|
Trading
Standards & Registration
|
0
|
-0.025
|
-0.025
|
Business
Support
|
0
|
-0.054
|
-0.054
|
Total
Variation
|
0
|
-0.190
|
-0.190
|
Service
Area: Transport (overspend £0.012m)
- The forecast overspend
of £0.012m is identified as a low risk area. However, due to extraordinarily
high temperatures this summer damage has occurred to some of the County’s
roads. The cost for the repair is not included in the forecast position
for transport, and it is likely that the Directorate will bring forward
a request for additional funding to support this work in a future report.
Service
Area: Sustainable Development (underspend £0.123m)
- The year-end forecast
for Planning Implementation is an underspend of £0.100m, this movement
is mainly due to slippage in the West End Strategic Sites Project and
will need to be carried forward.
- Waste management
represents the highest risk area in terms of a variation to budget.
Progress on the procurement of a technology neutral treatment facility
to mitigate the risk of Landfill Allowance Trading Scheme (LATS) fines
in the future is going to plan. The procurement budget for the current
year will not be spent as the bulk of the estimated costs are expected
to fall in the next two years. An estimated underspend of £0.218m would
need to be carried forward.
- The underspends
forecast for Recycling Centres (£0.090m) and Landfill Sites (£0.483m)
are offset in the main by the continuing higher costs of hazardous waste,
predicted to overspend by £0.760m. Virements to better reflect the allocation
of budget will be requested once assumptions underlying the forecast
become more certain. Within Waste Management the current prediction
for Landfill Sites is that tonnage will be down by 8% in comparison
to budget but actual unit costs up by 2% on budgeted costs. However,
a movement of 4% on activity levels (or 6,900 tonnes) would generate
a variance of £0.264m, producing a significant impact on the forecast
year-end outturn.
Directorate:
Community Safety (£0.050m underspend)
|
May
2006
|
July
2006
|
Change
|
|
£m
|
£m
|
£m
|
Fire
& Rescue Service
|
-0.050
|
-0.050
|
0
|
Emergency
Planning Service
|
0
|
0
|
0
|
Community
Safety Team
|
0
|
0
|
0
|
Travellers’
sites
|
0
|
0
|
0
|
Total
Variation
|
-0.050
|
-0.050
|
0
|
Service
Area: Fire & Rescue Services (£0.050m underspend)
- The £0.050m relates
to a planned carry-forward of funding for the Radio Replacement Project
Manager post as reported in May.
- As a result of
the Fire fighters’ pay award being settled at 2.7% against a budgeted
settlement of 3% there will be a saving of £0.022m in 2006/07. This
will be returned to Council Balances.
- The principle
change to the variation reported last month relates to a projected overspend
of £0.220m on the retained fire fighters budget, which will be a call
on Council Balances. The nature of the retained fire service means that
it is sensitive to staff turnover and activity levels. In order to determine
the cost of its provision it is being recommended for inclusion in the
Programme of fundamental reviews. The retention of retained fire fighters
in service is also subject to a separate report to the Cabinet later
this year.
Service
Area: Community Safety Team (no variance forecast)
- The previous budgetary
problems affecting the Community Safety Team have been brought under
control and it is forecast that the current years budget will come in
on target.
Directorate:
Resources and Chief Executive’s Office (£0.400m overspend)
- Resources and
the Chief Executive’s Office are forecasting a combined overspend of
£0.400m for the areas set out below:
|
May
2006
|
July
2006
|
Change
|
|
£m
|
£m
|
£m
|
Financial
Services & Procurement
|
0
|
0
|
0
|
Human Resources
|
0
|
0
|
0
|
Legal Services
|
0
|
0
|
0
|
Information
Communications & Technology
|
0
|
0
|
0
|
Business
Support
|
0
|
0
|
0
|
Property
Services
|
0.030
|
0.120
|
0.090
|
Coroner’s
Service
|
0
|
0
|
0
|
Shared Services
|
0.300
|
0.300
|
0
|
Chief Executive’s
Office
|
-0.020
|
-0.020
|
0
|
Total
Variation
|
0.310
|
0.400
|
0.090
|
Service
Area: Financial Services & Procurement (no variation forecast)
- The volume of
debts being raised through SAP has more than doubled in 2005/06 and
will continue to increase following SAP Revitalisation and on-going
improvements to internal financial control. Taken with the commitment
to enhancing debtor information to service managers to ensure debt collection
is maximised the current level of resource is insufficient. Permission
is therefore sought for an additional full-time employee, at an ongoing
cost of £0.026m per annum. This increased resource will allow proactive
debt management reducing debtor days outstanding and the improvement
in cash flow will be sufficient to fully finance this new post. The
Cabinet is asked to approve a permanent virement of £0.026m from interest
on balances (paragraph 81). The new post will be filled on a temporary
basis initially, until the function is moved to Shared Services.
Service
Area: Human Resources (no variation forecast)
- Now that the Occupational
Health Unit is operating as a trading account, the loss of the Probation
Service contract of approximately £0.010m puts a pressure on the Unit
that will require careful management, including seeking new customers
and tight control of expenditure.
Service
Area: Legal Services (no variation forecast)
- The final payment
of legal fees arising from the Trap Grounds case totalling £0.026m has
now been made. If this cost cannot be met by Legal Services it may be
necessary to request that it is met from balances.
Service
Area: Information Communications & Technology (no variation forecast)
- ICT continues
to forecast that it will spend to budget this year although the position
remains very tight.
- The Cabinet is
recommended to approve the allocation of the additional £0.060m of Local
Authority Business Growth Incentive (LABGI) funding received (see paragraph
94) to ICT to fund corporate ICT projects. If approved, this gives ICT
one-off funding this year of £0.772m for the list of projects agreed
by Council in February.
Service
Area: Property Services (£0.120m overspend)
- The price of energy
is currently very volatile impacting on the accuracy of forecasting
spend to the year-end. However, based on known price changes, an overspend
of £0.060m on central buildings is currently forecast. This extra cost
will be difficult for Property Services to absorb.
- The overspend
forecast for the Castle Project has been increased to £0.060m as it
now seems likely that the Oxford Preservation Trust will be unable to
pay an insurance premium of £0.030m. There will also be some additional
legal costs but these cannot yet be quantified. As previously reported,
any overspend on completion can be met by using part of the £0.150m
included in the Capital Programme for the Castle Education Centre, which
is no longer required.
Service
Area: Shared Services (£0.300m overspend)
- As previously
reported, the budget for the SAP Revitalisation Project forecasts an
overspend of £0.300m, to be managed by a corresponding underspend next
year. The position may improve following a recent decision on the continued
use of consultants.
- The table below
compares the current forecast spend this year against the business plan
for the Shared Services Project. Variances to the original plan are
to be expected given the complexity and size of the project and are
largely due to timing issues, for instance delays in acquiring a building,
revisions to project costings and to revisions to the calculation of
staff savings as project implementation documents are developed and
improved.
|
Business
Plan
(£m)
|
Forecast
(£m)
|
Variance
(£m)
|
Set
up and transition costs
|
4.325
|
3.498
|
-0.827
|
Operating
Costs
|
0.783
|
0.309
|
-0.474
|
Staff
savings
|
-0.724
|
-0.068
|
0.656
|
|
4.384
|
3.739
|
-0.645
|
Note:
the variance will have no effect on the Resources Directorate revenue
budgets this year and does not show as part of the Directorate’s outturn
position as the project is being temporarily funded by an earmarked
reserve created using temporary cash surpluses in the Capital Programme.
The estimated cash flows for subsequent years indicate that net savings
may be delayed until 2011/12, which means the effect on the Capital
Programme, will need to be carefully monitored and assessed.
Service
Area: Chief Executive’s Office (£0.020m underspend)
- There continues
to be a planned underspend this year in the Scrutiny budget of £0.020m
to cover pay costs in 2007/08. The estimated cost of by-elections this
year is £0.012m. The balance of the £0.120m elections budget will be
transferred into a reserve to build up a fund for the main election
in 2009.
Strategic Measures
- The strategic
measures budget has been reviewed, taking account of the increase in
the base rate from 3 August 2006 and the latest forecast for the Baxter
index used to pay interest on certain developer contributions. It is
now estimated that there will be a surplus of £1m in 2006/07. This compares
to £0.650m reported to cabinet in July. The extra £0.350m will be added
to balances.
- The Council has
a potential borrowing requirement of around £40m in 2006/07 to fund
part of the Capital Programme. In the Treasury Management Strategy for
2006/07 approved by Council in February 2006 our policy for 2006/07
was to take our borrowing using Lender’s Options Borrower’s Option Loans
(LOBO’s).
- Market conditions
for LOBO’s have been favourable during July and the Council arranged
£20m of LOBO loans with the terms shown below:
Loan Amount
|
Initial
Period
|
Terms
beyond initial period
|
Interest
Rate
|
Commencement
Date
|
£5m
|
5
year
|
Semi-annual
calls
|
3.80%
|
Drawdown
– 31 July 2006
|
£5m
|
5
year
|
Five
year calls
|
3.84%
|
Drawdown
– 31 July 2006
|
£5m
|
6
year
|
Five
year calls
|
3.825%
|
Drawdown
– 2 October 2006
|
£5m
|
13
year
|
Five
year calls
|
4.01%
|
Drawdown
– 2 October 2006
|
- These rates compare
to 4.8% used in the Council’s Medium Term Service and Financial Plan.
This will bring savings of £0.108m in 2006/07 and £0.186m in a full
year. The 2006/07 savings forms part of that added to balances (paragraph
81).
- The Council has
undertaken the following debt restructuring activity in early August
2006:
Loan
Amount
|
Interest
Rate
|
Repaid
at
|
Discount
|
Replacement
Loan
|
Interest
Rate
|
£5m
|
4.75%
|
4.8%
|
£0.030m
|
£5m
|
4.65%
|
£4m
|
4.625%
|
4.65%
|
£0.013m
|
£4m
|
4.50%
|
£4m
|
4.625%
|
4.65%
|
£0.013m
|
£4m
|
4.50%
|
£2m
|
4.625%
|
4.75%
|
£0.030m
|
£2m
|
4.60%
|
£10m
|
4.625%
|
4.75%
|
£0.134m
|
£10m
|
4.60%
|
£5m
|
4.45%
|
4.5%
|
£0.034m
|
£5m
|
4.35%
|
- The savings obtained
by reducing the interest rate on our debt go into the revenue account.
The savings accruing from the discount received have to be credited
to the revenue account pro-rata to the period of the replacement loan.
The savings in 2006/07 will be incorporated in next months update.
Government Grants
- Details of specific
grants are shown in Annex 3 and summarised below:
|
£m
|
Specific
grants received in 2006/07 (as per published Medium Term Service
& Financial Plan)
|
399.113
|
New grants/changes
previously reported
|
-0.138
|
New grant
changes this month
|
3.246
|
Total grants
for 2006/07
|
402.221
|
- The main changes
are an increase of £4.353m in a number of elements of the Standards
Fund, final notification of the Dedicated Schools Grant, and a reduction
in Leaving Care Unaccompanied Asylum Seekers grant (paragraph 36). The
Children’s Fund Grant under Community Safety has been removed as it
is counted elsewhere and final notification has been received for Positive
Action for Young People and U Project grant.
Earmarked Reserves
- Details of Earmarked
Reserves are shown in Annex 4 and summarised below:
|
2006/07
|
|
Balance
at
1
April 2006
|
Forecast
Movement
|
Forecast
Balance
at
31
March 2007
|
|
Contributions
from
Reserve
|
Contributions
To
Reserve
|
|
£m
|
£m
|
£m
|
£m
|
Children
Young People & Families
|
17.063
|
-18.832
|
13.826
|
12.057
|
Social &
Community Services
|
1.550
|
-1.420
|
0.321
|
0.451
|
Environment
& Economy
|
4.397
|
-3.085
|
1.559
|
2.871
|
Community
Safety
|
0.923
|
-1.374
|
0.794
|
0.343
|
Resources
& Chief Executive’s Office
|
1.448
|
-0.795
|
0.618
|
1.271
|
Corporate
|
14.530
|
-11.989
|
0.037
|
2.578
|
Directorate
Total
|
39.911
|
-37.495
|
17.155
|
19.571
|
- Children, Young
People & Families reserves have been amended to reflect the indicative
year-end forecasts of schools’ balances.
- The year-end position
forecast for Environment & Economy has reduced by a net £2.745m
from that reported in May. The key changes are the contribution of £2.6m
being made to support the capital works at Thornhill Park & Ride,
a notional surplus on LATS allowances of £0.420m and a contribution
of £0.350m to the On-Street Car Parking reserve. An update to the Waste
Management fund is expected to be made next month to reflect the agreement
with the district Councils entered into under the Oxford Waste Partnership.
- The movement on
Community Safety reserves relates in the main to the vehicle replacement
Programme. An annual revenue contribution is made to the reserve. The
reserve is drawn down to fund the cost of purchases, which may vary
from year to year. In 2006/07 the revenue contribution is £0.782m and
planned purchases for 8 vehicles is £1.354m.
- The Corporate
figures include an indication of drawdown on the Carry Forward Reserve,
Capital Reserve and the Shared Services Reserve (based on initial spending
forecasts as detailed in paragraph 79).
General Revenue Balances
- The forecast position
for general balances has increased by £0.212m as shown below. This is
as a result of a savings predicted on interest payable in respect of
LOBO loans 0.108m, additional interest on cash balances of £0.242m,
LABGI funding final determination of 0.060m, and actual fire fighters’
pay award being £0.022m less than budgeted and an overspend of £0.220
on the retained fire-fighters budget.
|
£m
|
Forecast
position per last report (net of City Schools)
|
15.690
|
Savings on
interest payable on LOBO loans
|
0.108
|
Additional
interest on cash balances
|
0.242
|
Local Authority
Business Growth Incentive grant determination
|
0.060
|
Fire-fighter’s
pay award saving on budgeted settlement
|
0.022
|
Retained
fire-fighters budget forecast overspend
|
-0.220
|
Net forecast
position (net of City Schools)
|
15.902
|
- Recommendations
set out in this report would reduce the general balances position to
£15.842m.
Efficiency Savings
- Within Resources
it is currently predicted that the saving of £0.028m included in this
year’s budget for cleaning central offices will only partly be met,
this is pending the outcome of new contracts in autumn. A number of
risk areas have been identified, particularly within Social & Community
Services and Children Young People & Families, which will be closely
monitored.
Best Value Performance
Indicator (BVPI) 8
- BVPI8 measures
the percentage of undisputed invoices paid within 30 days of receipt.
The Council’s target for 2006/07 is for 95% of invoices to be paid within
30 days of receipt and the performance for the year to the end of July
is as follows:
|
%
|
Children,
Young People & Families
|
95.3
|
Social &
Community Services
|
89.5
|
Environment
& Economy
|
97.4
|
Community
Safety
|
94.2
|
Resources
|
91.4
|
Chief Executive’s
Office
|
95.0
|
Mouchel Parkman
|
79.7
|
|
91.9
|
- July has seen
a considerable improvement by almost all Directorates on the previous
month. Social & Community Services are expecting that a new report,
soon to be operational, will assist in identifying the source of late
payments so corrective action can be taken. Community Safety have identified,
and taken corrective action, where invoices had not been categorised
on SAP as being in dispute. Equally within Children Young People &
Families a number of input errors have been identified which will be
picked up in next month’s figures.
Conclusion
- Directorates have
identified a number of potential budget pressures leading to a total
forecast overspend of £1.281m (net of the City Schools overspend). After
adjusting for the proposed additional £1.2m contribution to the Older
People’s Pooled Budget this gives a forecast overspend of £2.481m. The
forecast for general balances stands at £15.902m, giving a consolidated
balances position of £13.421m. There are a number of emerging pressures
notably within Children Young People and Families where the need for
a review has been identified and a number of uncertainties highlighted
which will, on resolution, affect the forecast year-end position. In
this report some initial consideration has been given to sensitivity
of key risk areas and the potential impact on the resulting predicted
year-end position and it is expected that this will be expanded on in
subsequent reports.
PART 2 – CAPITAL
- The Capital Monitoring
for July is attached in Annexes 6 – 6g. The report shows a reduction
in estimated payments in 2006/07 of £0.858m as compared to the Capital
Programme Booklet. Over the full period of the Programme there is an
increase in payments of £4.374m. Overall there are no funding issues
within the changes to the Programme.
|
Latest
Booklet
|
July
2006
|
Change
|
|
2006/07
|
Total
|
2006/07
|
Total
|
2006/07
|
Total
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
|
|
|
|
|
|
|
Children,
Young People & Families
|
|
|
|
|
|
|
-Main
|
53.034
|
211.954
|
52.086
|
215.790
|
-0.948
|
3.836
|
-City
|
0.802
|
48.500
|
0.802
|
48.500
|
0.000
|
0.000
|
|
|
|
|
|
|
|
Environment
& Economy
|
36.085
|
176.626
|
36.051
|
176.592
|
-0.034
|
-0.034
|
|
|
|
|
|
|
|
Social
& Community Services
|
7.813
|
31.792
|
7.905
|
31.884
|
0.092
|
0.092
|
|
|
|
|
|
|
|
Corporate
Governance
|
8.312
|
37.758
|
7.864
|
37.758
|
-0.448
|
0.000
|
|
|
|
|
|
|
|
Community
Safety
|
0.570
|
1.210
|
1.050
|
1.690
|
0.480
|
0.480
|
|
|
|
|
|
|
|
TOTAL
|
106.616
|
507.840
|
105.758
|
512.214
|
-0.858
|
4.374
|
- The variations
are explained below:
Directorate:
Children Young People & Families
- There has been
a reduction in estimated payments in 2006/07 of £0.948m since the last
Capital Programme booklet was published in July. Over the term of the
Capital Programme estimated payments have increased by £3.836m. The
main changes are as follows:
- There is estimated
slippage of £2.0m on devolved formula capital into 2007/08. Added to
the Capital Programme is an allocation of £0.242m in 2006/07 for School
Travel Plans funded by capital grant received through the standards
fund.
- Schemes at Gosford
Hill School (£1.727m) and Headington Quarry (£0.421m) have been brought
into the main Programme from the forward plan to start in 2006/07. Similarly
a scheme at Faringdon School now comes into the Programme from the forward
plan totalling £1.214m. Fees on these new projects total £0.232m.
- There are financial
pressures emerging on some projects. The main pressure is in relation
to the Orchard Fields scheme. Officers are working with the contractor
and Mouchel Parkman and intend to reduce any overspend to the minimum,
but the current estimate is in the order of £0.250m. An update on this
position and the other emerging pressures will be reported in detail
in next months report.
Directorate:
Environment & Economy
- There is a reduction
in payments of £0.034m on the Capital Programme, which represents a
number of small variations.
Directorate:
Social & Community Services
- There is an increase
in estimated payments of £0.092m on Social & Community Services
Capital Programme. The main change (£0.083m) relates to a provision
necessary for fees on capital projects.
Directorate:
Community Safety
- There is an increase
in payments of £0.480m on the Community Safety Programme. This represents
a scheme for refurbishment of traveller sites. The funding is £0.360m
from grant and £0.120m from revenue.
Capital Programme Update
- The last Capital
Programme booklet update (July 2006) was circulated with the Financial
Monitoring Report on 18 July 2006.
RECOMMENDATIONS
- The Cabinet
is RECOMMENDED to:
- note
the report;
- approve
the permanent virement to allocate funding within Home to School
Transport budget (paragraph 29);
- approve
the permanent virement to restructure the Youth Service budget
in line with the new management structure (paragraph 30);
- approve
a permanent virement of £0.026m to Financial Services and Procurement
from interest on balances to fund an additional post in respect
of income management (paragraph 71);
- approve
the allocation of additional Local Authority Business Growth
Incentive to ICT to fund Corporate projects (paragraph 75);
- approve
the temporary virement to transfer £0.100m from Statementing
and £0.296m from Out of County to Special Educational Needs
Support Service (paragraph 27);
- RECOMMEND
Council approve the following permanent virements:
- the
transfer of £0.500m from the Early Years and Family Support
contingency to Agency Placements (paragraph 31);
- of
£0.250m from the equipment service to Internal Home Support
(paragraph 46);
- an
additional £1.2m permanent contribution to the Older People’s
Pooled budget (paragraph 47);
- of
the Social & Community Services contingency of £1.313m
as detailed in paragraph 56 of the report.
SUE
SCANE
Head of Finance & Procurement
Background papers: Directorate reports
Contact Officers: Stephanie Skivington, Strategic Financial Manager
(Part 1) Tel 01865 815426
Mike Petty, Strategic Financial Manager (Part 2) Tel 01865 815622
September 2006
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