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ITEM CA5
CABINET
– 20 SEPTEMBER 2005
FINANCIAL
MONITORING
Report by
Head of Finance & Procurement
Summary
- 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.
- 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):
|
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
- 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.
Annexes
- The following
annexes are attached:
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
- 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.
PART 1
– REVENUE
- The main issues
on the revenue budget for each Directorate are set out below:
Learning
& Culture (£0.856m)
- 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.
- 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:
|
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)
- 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.
Children’s
Services (£0.641m)
- 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.
- 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.
Community
Learning (£0.157m)
- 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.
- 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.
Resources
(-£0.043m)
- 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.
- 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.
- 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.
- 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.
Other
Service Areas
- 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.
- 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.
Delegated
Schools’ Budgets
- 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.
Social
& Health Care (£1.492m)
- 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:
|
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
|
- 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.
Children
& Families (£0.459m)
- 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.
Older
People (-£0.547m)
- 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.
- 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.
- 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.
Learning
Disabilities (£0.978m)
- 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.
Other
Service Areas
- 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.
Supporting
People
- 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.
- 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.
Environment
& Economy (£0.154m)
- 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.
- 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.
- 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.
Community
Safety (-£0.050m)
- 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.
Resources
& Chief Executive’s Office (-£0.019m)
- 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.
- 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.
- 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.
Strategic
Measures
- 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.
- 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.
External
Investment Manager
- 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.
- 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.
Efficiency
Savings
- 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:
|
£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
- 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:
|
£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
|
- 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.
- 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.
Conclusion
- 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.
- 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.
PART 2
– CAPITAL
Capital
Monitoring
- 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).
|
£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
- The additional
schemes for June are all within Learning & Culture and are funded
by grants or within the overall capital resources available for schools.
- 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.
Revisions
to Scheme Costs
- 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.
- 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.
Slippage
on Existing Schemes
- 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
- 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.
- 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.
PART 3
– QUARTERLY STAFFING REPORT
- 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.
RECOMMENDATIONS
- The Cabinet
is RECOMMENDED to:
- note
the report;
- 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;
- 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;
- approve
an increase of 6% in the full cost rate for Fairer Charging
income;
- 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;
- authorise
the Head of Finance & Procurement to appoint at least one
external manager to manage a proportion of the Council’s surplus
cash balances;
- agree
a supplementary estimate of £0.250m to reinstate the 2005/06
telecommunications procurement savings allocation to Directorate
budgets;
- agree
the adjustments to the capital programme as shown at paragraph
48 and incorporated in the updated Capital Programme booklet;
- 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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