Meeting documents

Cabinet
Tuesday, 20 September 2005

CA200905-05

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Division(s): N/A

ITEM CA5

CABINET – 20 SEPTEMBER 2005

FINANCIAL MONITORING

Report by Head of Finance & Procurement

Summary

  1. This report covers the period up to the end of July 2005 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 2005.
  2. The consolidated forecast position at the end of July shows a balance of £10.160m. This is an increase of £0.309m from the position reported to the Cabinet on 19 July and is the result of the return of £0.724m of Directorate carry forward from 2004/05 to general balances and an increase of £0.700m in projected level of interest receivable on cash balances, which offset a significant increase in the forecast Directorate overspend. However, while there are genuine pressures on a number of services which Directorates are working hard to contain within budgets, in many cases there is still a reluctance to quantify potential offsetting areas of underspending at this stage in the financial year and it is likely that the forecast Directorate overspends will reduce as the year goes on. The movement in the projected Directorate outturn position is summarised below (a minus sign represents a balance to carry forward and a positive figure represents an overspend):
  3.  

    May 05 £m

    July 05 £m

    Change £m

     

     

     

     

    Learning & Culture

    4.722

    4.685

    -0.037

    Less City Schools’ Reorganisation

    3.125

    3.125

    -

     

    1.597

    1.560

    -0.037

     

     

     

     

    Social & Health Care

    0.990

    1.493

    0.503

    Environment & Economy

    -0.344

    0.154

    0.498

    Community Safety

    -0.050

    -0.050

    -

    Resources & Chief Executive’s Office

    -0.086

    -0.019

    0.067

     

    2.107

    3.138

    1.031

    Introduction

  4. This report covers the period up to the end of July 2005 for both revenue ed capital. The detail for each Directorate is summarised within this report and individual reports for each Directorate are in the Members’ Resource Centre. The report also includes an update to the Council’s capital programme for 2005/06 until 2008/09 and staffing figures for the quarter ended 30 June 2005.
  5. Annexes

  6. The following annexes are attached:
  7. Revenue

    Annex 1 Estimated Year End Position Directorate Summary (download as .xls file)

    Annex 1a-1e " " " by Directorate (download as .xls file)

    Annex 2a Summary of Virements (download as .xls file)

    Annex 2b Summary of Supplementary Estimates (download as .xls file)

    Annex 3 Latest Grants Position (download as .xls file)

    Annex 4 Forecast Revenue Balances at Year End (download as .xls file)

    Annex 5 Environment & Economy Potential Calls against Surrendered 2004/05 Carry Forwards (download as .xls file)

    Capital

    Annex 6 Monitoring – Summary of Changes (Annexes 6-7 - download as .xls file)

    Annex 7 Detailed Variations Since Previous Report (Annexes 6-7 - download as .xls file)

    Annex 8 Capital Programme Booklet (circulated with the agenda) (download as .doc file)

    Staffing

    Annex 9 Quarterly Staffing Report (download as .doc file)

    Grant Income

  8. Additional grant income of £0.339m has been notified to the Learning & Culture Directorate. The majority of this (£0.329m) relates to the Standards Fund with the balance being additional Excellence in Cities (Early Years) grant.
  9. PART 1 – REVENUE

  10. The main issues on the revenue budget for each Directorate are set out below:
  11. Learning & Culture (£0.856m)

  12. The Learning & Culture Directorate is currently predicting an in-year overspend of £0.856m. However, projections at this stage are based largely on an analysis of anticipated areas of pressure and do not take account of either the effects of actions to be taken over the remainder of the year to control overspending or any offsetting underspends which may emerge during the year. It is probable that the actual year-end position will show an improvement from that reported here. The Cabinet is recommended to request the Director for Learning & Culture to bring forward details of the Directorate’s action plan to recover the position as part of the next monitoring report.
  13. In addition to the in-year overspend there are amounts recoverable in future years totalling £3.829m, of which £3.125m is the planned overspend on the City Schools’ Reorganisation and the remaining £0.704m relates to the 2003/04 overspends on Statementing and Fees to Independent Schools which are repayable over three years until 2006/07 (£0.390m) and the variation in transport days on the Home to School Transport service (£0.314m). The movement on the non-delegated budgets since the last report is as follows:
  14.  

    May 05 £m

    July 05 £m

    Change £m

     

     

     

     

    School Development

    -0.068

    0.101

    0.169

    Children’s Services

    0.747

    0.641

    -0.106

    Community Learning

    0.015

    0.157

    0.142

    Cultural Services

    -

    -

    -

    Resources

    0.199

    -0.043

    -0.242

    Systems & Performance Management

    -

    -

    -

     

    0.893

    0.856

    -0.037

    Plus: Recoverable in Future Years

     

     

     

    Children’s Services – Statementing and Fees to Independent Schools

    0.390

    0.390

    -

    Children’s Services – Transport Days

    0.314

    0.314

    -

    City Schools Reorganisation

    3.125

    3.125

    -

     

    4.722

    4.685

    -0.037

    School Development (£0.101m)

  15. The School Development Service is forecast to overspend by £0.101m, an increase of £0.169m since the previous report. This is mainly the result of brought forward overspends from 2004/05 on the Oxfordshire Schools Improvement Team (£0.102m) and Governor Services (£0.045m) which will need to be recovered during 2005/06. Action plans are being drawn up to bring these budgets back into balance and it is anticipated that the forecast overspend will reduce once these are put in place. The 2004/05 carry forward for the service also included an underspend of £0.681m of the non-delegated Standards Fund allocation. Under the terms of the grant this funding must be spent by 31 August 2005 but it is likely that a corresponding slippage will arise on the 2005/06 allocation. The position is being closely monitored and will be updated in future reports.
  16. Children’s Services (£0.641m)

  17. The forecast overspend for Children’s Services has reduced by £0.106m since the previous report. There have been significant reductions in the forecast overspends for Communication, Language, Autism and Sensory Services (CLASS), which is now forecast to break even, and Social Inclusion, where the forecast overspend has reduced by £0.172m to £0.117m. These reductions are the result of management action in the two services, including the use of underspends brought forward from 2004/05 and staffing savings. Whilst management action is currently controlling the forecast overspends on the Statementing and Out of County Fees budgets, pressures exist in both of these areas and they continue to be closely monitored.
  18. The projected overspend on Home to School Transport has increased by £0.255m and now stands at £0.381m. This has arisen as a result of increased contract costs due to a shortfall in the budgeted level of contract inflation and changes to routes, including the provision of some additional routes and the use of larger vehicles to accommodate additional pupils. The budget included provision of 4.5% for inflation on existing contracts and 14.84% for renewals. Actual inflation for existing contracts is 4.93%. The first contract renewal took place during July and further information on the effect of this will be included in the next financial monitoring report. Concessionary fares are to be increased from September 2005 and it is possible that this will lead to a drop in take-up. The service is being closely monitored and an updated position which provides an analysis of the increases and the implications for next year’s budget will be available in the next report. A Best Value Review is being carried out across the Council’s Transport services and is due to report to the Corporate Governance Scrutiny Committee in January 2006.
  19. Community Learning (£0.157m)

  20. The main area of overspending for Community Learning is the Youth Service, which is forecast to overspend by £0.103m. This forecast takes account of planned vacancies in four posts and reductions of hours in three others. Further staffing reductions are planned in the medium term in order to enable the service to balance its budget in 2005/06 and 2006/07. Significant budget reductions have also been notified by the Learning & Skills Council to both the Further Education and Adult & Community Learning services which, along with lower fee income, will reduce income to the services by between £0.500m and £0.700m. Objectives for the 2005/06 academic year have been adjusted, fees to learners increased and staffing reductions are planned with the aim of living within the reduced budget.
  21. Data from the Summer term count of pupil numbers in relation to the budget for Early Education Funding for 3 & 4 year olds is still being analysed. Following the introduction of the single point of admission to primary schools from September 2004 it is anticipated that this will show little change from the Spring term count, which indicated that half-time equivalent places had been taken up by 80.5% of the three-year-old population, in comparison to budget provision for 85%. The Autumn term count will take place during September. Once this data has been analysed a clearer indication of the likely outturn position for the service will be available. There was a shortfall in spending of £0.808m in 2004/05, and it is likely that the service will underspend again this year.
  22. Resources (-£0.043m)

  23. The forecast for Resources has moved by £0.242m from the position reported to the Cabinet on 19 July, changing from an overspend of £0.199m to an underspend of £0.043m. However, this is the result of the 2004/05 carry forwards for Premises Health & Safety and Joint Sports Agreements, totalling £0.517m, which the Cabinet agreed could be carried forward and used to offset pressures elsewhere within the Directorate. This amount is offset by the 2004/05 procurement savings allocation of £0.078m which was not achieved during the year, leaving £0.439m held within the Directorate’s general expenses, which has yet to be allocated to services.
  24. Excluding this, the service is projected to overspend by £0.396m, an increase of £0.197m since the previous report. The forecast overspend on the budget for Premature Retirement Compensation (PRC) has increased by £0.406m to £0.520m following notification of an additional 23 early retirements. It is anticipated that the majority of early retirements will have been agreed for the start of the academic year, but it likely that there will be more in the New Year, which would further increase the pressure on the budget. In addition, if redundancies are required as part of actions to control spending elsewhere in the Directorate this will also create pressure on the PRC budget. The Cabinet is due to consider new rules to tighten up the criteria under which teachers can retire early in October, but it is unclear at present how much impact this will have on the position in 2005/06.
  25. The overspend on the PRC budget is partially offset by an underspend of £0.196m forecast on the budget for Joint Sports Agreements. This budget habitually slips from year to year, and as reported above the carry forward from 2004/05 is to be offset against pressures elsewhere in the Directorate. However, the budget funds works undertaken jointly with the District Councils and there are a number of potential projects for 2005/06 which could create considerable pressure in this area if they are all implemented.
  26. As previously reported, the reserves for County Facilities Management (CFM) were run down in meeting the deficit for 2004/05 and the service was expected to be one of the areas of greatest financial pressure in 2005/06. Based on the first quarter’s performance, the forecast for the year is that there will be a small surplus (£0.009m) for Cleaning and overspends of £0.300m for Primary Catering and £0.272m for Secondary Catering. Under the terms of the service level agreement the deficit on Secondary Catering is recoverable from the schools and it is anticipated that the majority of this money will be repaid. The Government announced details of additional funding for school meals on 8 August 2005. Oxfordshire’s share of the new Targeted School Meals Grant in 2005/06 will be £0.316m. This will be paid via the Standards Fund and it is assumed that the funding will be used to meet the deficit on the Primary Catering budget. In addition, the Primary Catering budget assumes that savings of £0.150m will be found through management action, of which £0.098m has been identified to date. The additional funding is for three years only and is conditional on authorities developing strategies for the improvement of schools meals provision, including the reintroduction of universal hot meals provision where it does not exist already. The Council will need to determine how it will use the grant, taking into account the ongoing work on the review of CFM.
  27. Other Service Areas

  28. Cultural Services’ income to the end of June has not matched the predicted profile, and this is being monitored closely with possible corrective action planned. New scales of charges introduced in June may help to alleviate any problems. Meanwhile work is ongoing to produce robust outturn projections for the Music Service, and these are expected to be available early in the Autumn.
  29. There are potential overspends across the Directorate in relation to telephone costs, where anticipated savings have not materialised, and energy costs, which have risen significantly in the last year. In the light of delays in agreeing new telephone contracts it is recommended that the 2005/06 savings allocation should be returned to Directorates. This would represent an addition to the Learning & Culture budget of £0.058m. However, this still leaves the Directorate with a target of £0.184m for procurement savings on recruitment advertising and stationery and it is not yet known whether these savings will be achieved.
  30. Delegated Schools’ Budgets

  31. Three-year budget plans for 2005/06 to 2007/08 have been received from all 293 schools. This is unprecedented and reflects considerable co-operation from schools. As at 17 August 2005 211 plans have been formally approved, of which 15 are deficit budgets. The forecast year end balance for the schools whose budgets have been agreed is £3.693m although previous experience suggests that the actual year-end reserves may be considerably higher than this. A tool designed to assist schools with budget monitoring has been developed and is available on the Intranet, with training courses planned for the Autumn. The acceleration of budget submissions and approvals should allow budget monitoring to be conducted more robustly throughout the year than has previously been possible.
  32. Social & Health Care (£1.492m)

  33. The current forecast position for Social & Health Care is an overspend of £1.492m, which is made up of £0.892m for the Directorate itself and £0.650m for the Supporting People programme, which is administered by Social & Health Care but is the responsibility of the Council as a Social Services Authority. This is an increase of £0.502m since the last report, of which £0.150m relates to Supporting People. The movement on the individual service areas is shown below:
  34.  

    May 05 £m

    July 05 £m

    Change £m

     

     

     

     

    Children & Families

    0.471

    0.459

    -0.012

    Older People

    -0.971

    -0.547

    0.424

    Mental Health

    0.026

    -0.025

    -0.051

    Learning Disabilities

    0.920

    0.978

    0.058

    Physical Disabilities

    -0.118

    -0.150

    -0.032

    Directorate Management Team

    0.188

    0.133

    -0.055

    Business Support & Performance Management

    0.146

    0.150

    0.004

    Commissioning, Planning & Partnership

    -0.172

    -0.155

    0.017

     

    0.490

    0.852

    0.362

     

     

     

     

    Supporting People

    0.500

    0.650

    0.150

     

    0.990

    1.492

    0.502

  35. In the light of the increasing overspend forecast by the Directorate it is recommended that the Cabinet require the Director for Social & Health Care to produce an action plan for all of the Directorate’s areas of overspending, showing how the position is to be recovered, which will be included in the next financial monitoring report.
  36. Children & Families (£0.459m)

  37. There has been little change in the forecast position for this service, although there have been offsetting movements within the service. In particular the forecast overspend for internal residential services has reduced from £0.355m to £0.200m, but this is offset by reductions in underspends forecast on a number of staffing budgets, in particular those relating to Children Looked After Teams where there has been recruitment to a number of new posts.
  38. Older People (-£0.547m)

  39. The forecast underspend on the Older People service has reduced by £0.424m to £0.547m. It had previously been assumed that the underspend on this service would be managed in order to offset overspending elsewhere in the Directorate and the change in the forecast is the main reason for the increase in the overall overspend projection. The greatest movement is on external home support placements, where the forecast underspend has reduced from £1.691m to £1.227m as a result of a net increase of 95 clients. In addition, a successful recruitment campaign has reduced the forecast underspend on Care Management Teams by £0.195m from £0.290m to £0.095m. These movements are partially offset by a reduction of £0.249m in the forecast overspend on the internal home support service, mainly due to underspent Access & Systems Capacity Grant, and the emergence of a forecast underspend of £0.200m in relation to S117 reassessment claims, which are expected to fall short of the available provision in 2005/06.
  40. There has been a reduction of £0.030m in the forecast deficit for Fairer Charging income, which now stands at £0.320m. It was reported to the Executive on 19 April 2005 that a stepped increase in charges would be put in place for 2005/06, with a 6% increase from 1 April 2005 and a further review of the position during the year. This review has now been completed and the Cabinet is recommended to approve an increase of 6% in the full cost charging rate from 1 October 2005. The forecast position includes an estimate of the likely impact of this increase. Work is being undertaken to determine to what extent the deficit is related to the shortfall in external home support placements and to what extent it is due to an incorrect historical budget which has been rolled forward.
  41. The Older People and Physical Disabilities Pooled Budget is forecast to overspend by £1.170m, including the brought forward overspend of £0.136m from 2004/05. The in-year overspend for Older People is £0.950m, which relates predominantly to health related spending on Continuing Care. The overspend in relation to Physical Disabilities is £0.083m but includes an overspend of £0.362m on the Social & Health Care element which is offset by underspending on the health elements. An additional contribution of £0.350m has been made from the Older People service and is included in the forecast position. Further clarification is needed of the extent to which Social & Health Care may be required to fund this overspend and potential actions to bring the position back into line, and this should be included as part of the Directorate’s Action Plan referred to at paragraph 22.
  42. Learning Disabilities (£0.978m)

  43. The projected overspend for Learning Disabilities has increased by £0.058m since the previous report and now stands at £0.978m. This is largely the result of placement costs outstripping budgets, with an increase of £0.381m in the forecast overspend for external residential placements. Some progress has been made towards achieving the £0.696m savings target allocated to the service in the 2005/06 budget. Savings of £0.232m remain to be found but it is anticipated that the target will be met.
  44. Other Service Areas

  45. There are pressures on the Physical Disabilities Service arising from within the Pooled Budget, with a risk that a further contribution from the Directorate may be required to fund the forecast overspend on the Social & Health Care services relating to services for adults with disabilities.
  46. Supporting People

  47. As previously reported, Oxfordshire’s allocation of the Supporting People grant has been reduced by £1.5m, or 7%, in 2005/06, with further reductions of 5% each year expected in 2006/07 and 2007/08. Due to the contract structure in place for Supporting People services it is highly unlikely that the required scale of cuts can be implemented in 2005/06. The projected overspend has increased to £0.650m since the last report.
  48. Work is underway to draw up a three-year financial strategy with the aim of phasing in the service reduction over that period and achieving a balanced budget for the programme by the end of 2007/08. The Council administers the Supporting People programme on behalf of the Joint Commissioning Body. It was agreed by the Cabinet on 19 July that discussions should take place with partner organisations to ensure that overall reductions are achieved within the planned timescale. If this is achieved then a supplementary estimate to fund any remaining shortfall would be considered in the current year. Further information from the Commissioning Body will be required before that decision can be taken and a further report will be made next month.
  49. Environment & Economy (£0.154m)

  50. The forecast outturn position for the Environment & Economy Directorate has moved by £0.498m since the previous report, from an underspend of £0.344m to an overspend of £0.154m. This is highly unlikely to be the actual outturn position for the Directorate, which underspent by £3.775m in 2004/05. The movement largely reflects the decision of the Cabinet on 19 July to require the Directorate to return 2004/05 underspends on Transport Planning, Strategic Policy and Economic Development and Waste Management to Council balances, where they are to be held against a risk-assessed schedule of potential future commitments (attached at Annex 5) (download as .xls file). The underspends on Transport Planning (£0.071m) and Strategic Policy and Economic Development (£0.371m) related to delayed spending on projects which is not expected to be incurred until after 2005/06, and the previous forecast assumed that the funding would be carried forward by the Directorate into 2006/07. The change in the forecast position reflects the removal of these underspends.
  51. It is currently estimated that £0.097m of the Strategic Policy and Economic Development underspend that was returned to balances may be required in 2005/06. This is shown as a potential overspend for the service in this report. Once the spending requirement is definitely known the position will be reconsidered and if it cannot be funded from within the Directorate’s budget a request will be made to Cabinet for the return of part of the carry forward. No final decisions can be made until a more accurate picture of the spend in year is known.
  52. Significant withdrawals of commercial services have been announced by local bus operators, creating pressures on the Bus Subsidy budget with an estimated budget shortfall of £0.114m. Various options are being considered to remain within budget but this is likely to result in reduced services to the public.
  53. Community Safety (-£0.050m)

  54. There is no change in the projected outturn for the Community Safety Directorate from the position quoted in the last monitoring report. Work continues to address the brought forward overspend on the Community Safety Team. Current projections suggest that planned expenditure for 2005/06 is £0.258m more than funding available. The Director for Community Safety has asked the Head of the Youth Offending Service to prepare an action plan to recover the budget shortfall, and actions to address the situation are currently being risk assessed according to their likely impact on front end service delivery and achievability.
  55. Resources & Chief Executive’s Office (-£0.019m)

  56. The forecast underspend for the Resources Directorate and the Chief Executive’s Office has reduced by £0.067m since the previous report. This is largely due to a forecast overspend of £0.100m on the Property Services budget relating to pressures within the pay budget, following the restructuring of the Corporate Property Group, and the energy budget as a result of increases in gas and electricity prices. Actions are being taken to manage these pressures, including delaying the filling of vacancies and controlling the variable fee element of the Mouchel Parkman contract. Provided this action is successful the forecast should reduce over the next few months, although there are underlying pressures and a review of the Property budget will be undertaken as part of the preparation of next year’s budget.
  57. This is offset by an increase of £0.033m in the planned underspend on the Scrutiny area of the budget for Members’ Services to provide continued funding for two scrutiny research posts in 2006/07 and part of 2007/08. These posts were requested by the Scrutiny Co-ordinating Group prior to the County Council elections and confirmation that they should proceed has now been given by the current members of that Group. Recruitment to the posts is on hold until the review of the Scrutiny carry forward from 2004/05 agreed by the Cabinet on 19 July is completed.
  58. The service agreement with the National Association of Citizens’ Advice Bureaux has been renegotiated and will reduce this year by £0.055m to £0.054m. It is recommended that the Cabinet requests the Council to approve the permanent virement of the budget released by this reduction from Grants to Equalities & Social Inclusion to fund the post of Social Inclusion Manager, which is currently filled on a temporary basis. This post is required to manage the Council’s significant social inclusion agenda and develop a corporate Community and Social Cohesion Strategy, as agreed by the Executive on 7 September 2004.
  59. Strategic Measures

  60. This represents the budget for the Council’s debt and the net interest earned on cash balances. The Council has a borrowing requirement of around £65m for 2005/06, dependent on the amount of spending on schemes to be funded by Prudential Borrowing. To date £35m has been borrowed and details were reported to the Cabinet on 19 July.
  61. The Council’s cash balances continue to be at a high level. It is now estimated that there will be a surplus of £2m compared to the budget. This is £0.7m more than the figure reported to the Cabinet in June, and will be added to balances initially. It may subsequently be necessary to add some or all of this surplus back to the capital programme in order to maintain funding levels in real terms.
  62. External Investment Manager

  63. Three years ago the Council appointed Alliance Capital to manage part of the cash balances. This was done to diversify risk and to seek to enhance the investment return on the County Council’s surplus cash balances. The agreement with Alliance Capital was initially for three years. Following a progress meeting with Alliance Capital it is felt appropriate to review the Council’s strategic direction on external management and we have given notice to terminate the agreement.
  64. We are currently reviewing the likely level of cash balances over the next three years so that the amount available to be managed externally can be identified. It is proposed to seek a manager who will adopt a more proactive role in investing the Council’s cash across the full range of derivatives available to them. This should ensure that the Council can expect enhanced investment returns on its surplus cash balances over the period of the agreement. Cabinet are asked to agree to the appointment of at least one new external manager to manage a proportion of the Council’s surplus cash balances, with authority being given to the Head of Finance & Procurement to decide on the appointment. The amount to be placed externally will be brought to Cabinet for approval in October.
  65. Efficiency Savings

  66. Some concerns remain surrounding the achievement of budgeted savings in areas of the Learning & Culture and Social & Health Care Directorates, although Social & Health Care indicate that the potential shortfall is less than had originally been feared. A more detailed analysis of the savings achieved and not achieved will be presented to a future meeting. There is also a risk that the corporate efficiency savings allocated across Directorates may not be achieved in full. The main area of concern is in relation to the telecommunications procurement savings. As reported to the Cabinet on 19 July, the anticipated new contracts have not yet been put in place and the budgeted savings of £0.250m for 2005/06 appear to be unachievable. The Cabinet is recommended to approve a supplementary estimate for this amount to reinstate the savings that were taken from Directorate budgets. The amounts to be returned to each Directorate are as follows:
  67.  

    £000

     

     

    Learning & Culture

    58.1

    Social & Health Care

    53.4

    Environment & Economy

    26.3

    Community Safety

    15.9

    Resources

    96.3

     

     

     

    250.0

    The Council will need to find an alternative source for the required savings and the position is being monitored closely.

    Consolidated Revenue Balances

  68. There have been additions to Council balances of £0.700m relating to additional forecast interest on cash balances and £0.724m following the agreement of the Cabinet on 19 July to require a number of 2004/05 underspends in the Environment & Economy Directorate to be returned to balances rather than being carried forward by the Directorate. It was agreed that this sum would be held against a risk assessed schedule of potential future commitments for the directorate, a copy of which is attached at Annex 5 (download as .xls file). This is offset by calls on balances totalling £0.084m as a result of a number of small overspends on budgets which are deemed to be outside the control of Directorates. The forecast position for consolidated balances is shown below:
  69.  

    £m

     

     

    Revenue balances per last report

    11.958

    Cultural Services - rates overspend

    -0.014

    Retained Firefighters overspend

    -0.030

    Coroner’s Service overspend

    -0.040

    2004/05 carry forwards returned to balances

    0.724

    Additional interest on cash balances

    0.700

     

    13.298

     

     

    Directorate Carry Forward as per Annex 1 (download as .xls file)

    -3.138

     

    10.160

  70. A supplementary estimate of £0.118m was approved by Cabinet on 19 July in relation to increased charges to internal customers of County Facilities Management resulting from the pension fund revaluation. This funding will be allocated across Directorates and the appointed figures will be included in the next financial monitoring report. Cabinet is also requested to approve a supplementary estimate of £0.250m in order to reinstate the telecommunications procurement savings included in the 2005/06 budget, as mentioned in paragraph 42. If the second supplementary estimate is agreed, the net effect will be to reduce the position for general balances to £12.930m and the consolidated position to £9.792m.
  71. A potential call on balances of £0.650m remains in relation to Supporting People although it is hoped that discussions currently being held with partner organisations will secure some or all of the funding shortfall. There is also a possibility that some or all of the £2m surplus on cash balances may have to be returned to the capital programme in order to maintain funding levels in real terms. Even if both of these sums are required in full the position would remain in line with projections.
  72. Conclusion

  73. The projected year-end position on revenue balances (net of the City Schools’ Reorganisation) is £13.298m. This is an increase of £1.340m since the last report and represents 2.28% of net budget. There is a further call on balances of £0.118m relating to the supplementary estimate agreed on 19 July in relation to County Facilities Management. There are also potential calls on balances of £0.250m in relation to the supplementary estimate requested in relation to telecommunications procurement savings and £0.650m in relation to the Supporting People overspend, together with a possibility that the £2m surplus interest on cash balances may be returned to the capital programme, which would reduce the position to £10.280m if required in full. This remains in line with the projections set out in the Service and Financial Planning 2006/07 – 2010/11 report considered elsewhere on the agenda.
  74. The projected Directorate overspend has increased by £1.031m since the previous report. However, a substantial proportion of this change relates to the removal of underspends forecast to be carried forward into 2006/07 following the return of the relevant funds to Council balances. Many Directorates are continuing to focus on areas of pressure without quantifying any offsetting underspends, and the effects of actions taken to contain pressures are yet to be seen. It remains likely that the position will improve as the year goes on.
  75. PART 2 – CAPITAL

    Capital Monitoring

  76. The capital monitoring for June and July is attached at Annexes 6 and 7 (download as .xls file). There is an overall increase in the programme of £2.036m, being -£0.067m for June and £2.103m for July. These changes are analysed below and shown in detail in Annex 7 (download as .xls file).
  77.  

    £m

     

     

    Additional Schemes – June

    0.464

    Additional Schemes – July

    0.278

    Revisions to Scheme Costs – June

    1.006

    Revisions to Scheme Costs – July

    1.825

    Slippage on Existing Schemes – June

    -1.537

     

    2.036

    Additional Schemes

  78. The additional schemes for June are all within Learning & Culture and are funded by grants or within the overall capital resources available for schools.
  79. One additional scheme has come forward for July totalling £0.278m in respect of the refurbishment of a traveller site. The scheme will be funded 75% from grant and 25% from surplus income in the 2005/06 revenue budget for Travellers’ Sites.
  80. Revisions to Scheme Costs

  81. The revisions to scheme costs for June are £0.810m on Environment & Economy and £0.196m on Learning & Culture. There is no impact on the financing position of the capital programme as a result of these changes as all will be financed within existing resources.
  82. The revisions to scheme costs for July total £1.825m. The main changes are for the provision of an additional site for the Homes for Older People project and a grossing up of the costs of the Older People’s Day Centre project. The costs of the Day Centre project will be funded by a capital receipt.
  83. Slippage on Existing Schemes

  84. The slippage on existing schemes totals £1.537m. For the projects on the A40 Headington to Sandhills Structural Maintenance, agreement has been reached to allow funding to be carried forward into 2006/07 to mirror the revised funding of the project.

    Capital Programme Update

  85. An updated Capital Programme booklet is circulated with this report. The booklet contains all amendments that have been reported in the Monthly Monitoring Reports since the 18 May Cabinet meeting.
  86. The programme shows a £1.1m surplus by 2008/09. The capital cashflow shows a surplus of £21.6m for 2005/06 reducing gradually to £1.1m by 2008/09. Further reference to the programme is made in the Service and Financial Planning report elsewhere on the agenda.
  87. PART 3 – QUARTERLY STAFFING REPORT

  88. The quarterly staffing report to 30 June 2005 is attached at Annex 9 (download as .doc file). The analysis is accompanied by an explanation of the main changes in staffing.
  89. RECOMMENDATIONS

  90. The Cabinet is RECOMMENDED to:
          1. note the report;
          2. request the Director for Learning & Culture to bring forward a comprehensive action plan to recover and contain expenditure pressures within the Directorate to accompany the next financial monitoring report;
          3. request the Director for Social & Health Care to bring forward a comprehensive action plan to recover and contain expenditure pressures within the Directorate and the Older People and Physical Disabilities Pooled Budget to accompany the next financial monitoring report;
          4. approve an increase of 6% in the full cost rate for Fairer Charging income;
          5. RECOMMEND the Council to approve a permanent virement within the Chief Executive’s Office of £55,300 from the Grants Budget to the Equalities & Social Inclusion budget;
          6. authorise the Head of Finance & Procurement to appoint at least one external manager to manage a proportion of the Council’s surplus cash balances;
          7. agree a supplementary estimate of £0.250m to reinstate the 2005/06 telecommunications procurement savings allocation to Directorate budgets;
          8. agree the adjustments to the capital programme as shown at paragraph 48 and incorporated in the updated Capital Programme booklet;
          9. note the changes in staffing as at 30 June.

 

SUE SCANE
Head of Finance & Procurement

Background papers: Detailed Directorate reports and annexes deposited in the Members’ Resource Centre.

Contact Officers:
Sadie Slater, Financial Manager (Budget Monitoring) (Part 1) Tel 01865 815989
Mike Petty, Strategic Finance Manager (Capital & Treasury Management) (Part 2) Tel 01865 815622
Steve Munn, Head of Human Resources (Part 3) Tel 01865 815191

September 2005

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