Meeting documents

Cabinet
Tuesday, 21 November 2006

CA211106-05

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ITEM CA5

CABINET – 21 NOVEMBER 2006

FINANCIAL MONITORING

Report by Head of Finance & Procurement

Summary

This report is based on the period up to the end of September 2006 for revenue and capital. Changes to the forecast outturn are reported against the position at the end of August 2006. The consolidated revenue forecast for the year-end shows a balance of £12.931m, (paragraph 88). This is made up of £15.285m general balances (paragraph 84) and a forecast Directorate overspend of £2.354m (net of £2.533m City Schools overspend and after allowing for the proposed additional contribution of £1.2m to the Older People’s Pooled Budget). The Directorate variance includes a £0.300m underspend relating to services funded by the Dedicated Schools Grant (DSG) which would need to be carried forward.

Revenue

Directorate: Children, Young People & Families

The current forecast outturn position for Children, Young People & Families Directorate is an in-year overspend of £1.899m, a decrease of £0.473m from the last report (paragraph 18).

There is a decrease in the Children and Young People service predicted overspend to £0.150m. However, £0.300m of the variance relates to an underspend on DSG funded services (of which Out of County Placements is £0.250m) and is ring-fenced to the Schools Budget. This is offset by an increased overspend on disabled children agency placements (£0.250m) and a continued forecast overspend of £0.200m for Transport.

Early Years and Family Support forecast an overspend of £1.436m, of which £1.399m relates to the budget for Agency Placements (paragraphs 22 and 23). On 19 September the Cabinet recommended Council approve the virement of £0.500m to this budget from the service’s own contingency to help reduce the overspend. As the contingency is held centrally within the service the net effect of the virement on the service overspend of £1.436m is nil. A supplementary estimate of £0.800m is requested this month to help address the pressures identified.

Action is being taken within Educational Effectiveness to meet the potential income shortfall for the Oxfordshire Quality Schools Association (OQSA), reducing the overspend for this service area to £0.041m.

Directorate: Social & Community Services

Pending the Council’s decision on an increased contribution of £1.2m to the Older People’s Pooled Budget (paragraph 36), the forecast outturn for Social & Community Services is an underspend of £0.788m (excluding Supporting People). After adjusting for the increased contribution the forecast outturn would show a £0.412m overspend, an increase of £0.263m from last month.

The main reason for the increase is a £0.233m write-off to the revenue budget as a result of a reduction in the value of the Cultural Services audio visual stock.

As previously reported, income shortfalls continue to create pressures. Management action will address the shortfall previously highlighted in Cultural Services (£0.178m), and a virement from contingency (subject to Council approval) will address the shortfall of fairer charging income in Physical Disabilities. The income pressure within Older People (£0.220m) remains an issue, although this month it has been possible to offset the shortfall by a release of £0.100m from the bad debt provision.

The Pooled Budget for Older People, Physical Disabilities and Equipment is forecasting a £1.338m overspend pending Council approval of the additional £1.2m contribution. An in-year pressure of £0.654m would still remain within the County Council’s elements of the Pool after taking into account the additional contribution. An action plan has been requested by the Joint Management Group to address this. The Learning Disabilities pool is now projecting to break-even.

Directorate: Environment & Economy

The current forecast outturn is an underspend for Environment & Economy of £0.505m (paragraph 55), an increase of £0.338m from last month. The main elements of the increase relate to slippage on Planning Implementation service projects, together with additional planning application fee income.

There is no change to the Directorate forecast underspend of £0.050m (paragraph 60).

Directorate: Resources & Chief Executive’s Office

There are a number of small changes across the service resulting in a decrease in the projected overspend to £0.363m (paragraph 62). An update on the shared services project and associated costings is anticipated in next month’s report as implementation progresses.

Capital

The Capital Programme monitoring for September 2006 shows a reduction in payments of £3.863m in 2006/07 and an increase in total payments of £5.669m compared to the Capital Programme booklet circulated last month.

Introduction

This report covers the forecast of the year-end outturn position for 2006/07 based on the position up to the end of September 2006 for revenue and capital. The detail for each Directorate is summarised within the report and individual reports for each Directorate have been made available in the Members’ Resource Centre.

Annexes

The following Annexes are attached:

Revenue

Annex 1 Estimated Year End Position Directorate Summary

Annex 1a-1e " " " by Directorate

Annex 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

Annex 6a-6e Unit costs and activity monitoring (Annexes 1 - 6 - download as .xls file)

Capital

Annex 7 Capital Monitoring Summary

Annex 7a-f Capital Monitoring by Directorate (Annex 7 - download as .xls file)

PART 1 - REVENUE

Annex 1 shows the forecast revenue outturn position for the year-end based on the position to the end of September. The overall projected variance for the Council, (net of City Schools overspend) is set out in the table below (positive variances represent overspends and negative variances represent underspends):

August 2006

September 2006

Change

£m

£m

£m

Children, Young People & Families

5.140

4.667

-0.473

Less City Schools Reorganisation

2.533

2.533

0

2.607

2.134

-0.473

Social & Community Services (excl. Supporting People)

-1.051

-0.788

0.263

Supporting People

0

0

0

Environment & Economy

-0.167

-0.505

-0.338

Community Safety

-0.050

-0.050

0

Resources & Chief Executive’s Office

0.399

0.363

-0.036

Total Variation per Annex 1

1.738

1.154

-0.584

Proposed additional contribution to the Older People’s Pooled Budget

1.200

1.200

0

Total Variation after additional contribution

2.938

2.354

-0.584

The main issues on the revenue budget for each Directorate are set out below.

Directorate: Children, Young People & Families (£1.899m in-year overspend)

The current forecast outturn position shows a projected overspend of £4.667m. Of this, £1.899m relates to the current financial year and £2.768m to be recovered in future years. Of the current year variation a £0.300m predicted underspend relates to services funded by the Dedicated Schools Grant (DSG) and would need to be carried forward

August 2006

September 2006

Change

£m

£m

£m

Children & Young People

0.338

0.150

-0.188

Early Years & Family Support

1.459

1.436

-0.023

Educational Effectiveness

0.260

0.041

-0.219

Strategy & Performance

0.315

0.272

-0.043

Total in year variation

2.372

1.899

-0.473

Variation in Transport Days

0.235

0.235

0

City Schools Reorganisation

2.533

2.533

0

Total Variation

5.140

4.667

-0.473

Service Area: Children & Young People (£0.150m overspend, £0.385m including the variation in transport days)

Within the Out of County Placements budget expenditure is notably volatile, for example four new cases have been agreed this year at an average cost of £0.125m per annum. Despite these additional cases the budget is currently projected to underspend by £0.250m, although further fluctuations may occur before the year-end. The Special Educational Needs Support Services budget is predicting a £0.050m underspend by the year-end as a result of the DfES’s new arrangements for remunerating teachers coming into effect later than planned. Both of these services are funded from DSG.

The service for Disabled Children shows a forecast overspend of £0.250m in respect of agency placements, an increase of £0.112m from that reported last month. The Cabinet is asked to approve a virement of £0.317m to transfer disabilities services agreements to this budget as part of the adjustments following realignment. Although this is a permanent change it does not affect the configuration of services and is not a change in policy.

Projections continue to indicate a £0.200m overspend for the transport budget. This forecast may change in light of the route re-tendering taking place in December.

Service Area: Early Years & Family Support (£1.436m overspend)

The budget for Agency Placements continues to show a forecast overspend of £1.399m. This would reduce to £0.899m if Council approve the virement of £0.500m from the contingency held centrally within the service. This budget has been closely managed and monitored during the year, the effect of which has been to avoid an increase in the number of placements in high-cost care and to control spend to within 3.5% of the 2005/06 outturn. The reasons for the expenditure pressures are as follows:

The underlying pressure on the budget carried forward from 2005/06 was around £0.500m greater that the proposed budget agreed by Council for 2006/07.

Towards the end of 2005/06 the expenditure pressure increased due to the need to place 5 children into high-cost external care arising from the closure of Maltfield House in the absence of local foster placements. This risk was identified late in the budget setting process not enabling corrective action to be taken both for 2005/06 and also in relation to the 2006/07 budget.

The £0.899m pressure remaining after the proposed virement reflects a combination of actual committed expenditure (£0.800m) and a risk element in respect of potential additional placements (£0.099m). A supplementary estimate of £0.800m is sought this month to address some of the remaining pressure based on existing commitments. The current assessment of risk indicates that the remaining pressure will continue to grow beyond the £0.099m identified and a further request will be brought later in the financial year if necessary.

The forecast overspend on the Children’s Homes budget remains at £0.150m. There is also no change to the predicted overspend of £0.050m on Social Work Staffing budgets reported last month.

The Leaving Care budget is currently forecast to be in balance. However, it is still possible that the element of this budget dealing with support to care leavers will come under pressure later in the year due to the numbers of young people likely to leave care and the level of support they could require.

No variation is projected for the Asylum Seekers budget, although there are significant uncertainties as highlighted in previous reports which are, as yet, unresolved.

There is no change to the predicted overspends for residence orders (£0.028m) or in the Homelessness budget (£0.068m).

A £0.400m underspend is still 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 achieving greater health contributions to placement costs for children with mental health problems. It also includes £0.500m, which will be vired to Agency Placements (Paragraph 22) if approved by Council.

The predicted overspend for legal charges remains at £0.141m as reported last month. Significant efforts have been made to bring this budget under control. Despite fewer proceedings launched this year compared with last, the increased costs and complexity of cases have led to the projected overspend.

Service Area: Educational Effectiveness (£0.041m overspend forecast)

This represents a reduction of £0.219m since last month as the OQSA income shortfall previously reported will be met from staffing vacancies arising through the year. The £0.041m forecast overspend relates to residential centres and has not changed from last month.

County Facilities Management (CFM) continue to forecast a break-even position for the financial year. Food for Thought is providing a service to 178 (of 244) primary schools and 10 (of 13) special schools. The service ceased for all secondary schools at the end of the July 2006 term. The total forecast income for the year is £4.2m. The average number of meals provided per day in September was 8,574 a fall of 0.2% year on year. In the first two weeks of October numbers increased to 9,317 per day an increase of 2.5%. Although this is less than the 5% originally set out in the business plan the service is forecast to breakeven as the shortfall in income has been offset by reductions in employee costs and other overheads. Quest Cleaning will continue to operate until 31 March 2007 and is forecast to break-even with a turnover of £3.1m.

Service Area: Strategy & Performance (£0.272m overspend)

The variation for this service area relates primarily to the Premature Retirement Compensation (PRC) budget. The forecast overspend reported this month is £0.410m representing all current commitments, including school contributions. The increase of £0.051m from last month includes recent cases brought forward by CFM/Food for Thought. A thorough review of the budget is underway. Following the recent age discrimination legislation, the Council is in the process of reviewing existing PRC policies for teachers and Green Book staff. This will also provide an opportunity to review the cost implications of existing policies with a view to establishing effective budgetary control.

There are currently underspends of £0.033m for Human Resources (HR) Health & Safety and £0.080m for HR Staffing as a result of posts created following realignment being filled part way through the year. These are offset by an overspend of £0.040m on the budget for Trade Union Representation.

The Joint Use budget is currently forecast to underspend by £0.130m based on estimated costs for the year. However, there are a number of projects that the District Councils may initiate in 2006/07, which in turn may put this budget under pressure again before the end of the year. In December 2005 a project report for the redevelopment of the Cherwell centres was approved by the Cabinet. The report concluded that although the majority of costs would be met from the Capital Programme, any uncommitted revenue available from the Joint Use budget at the end of 2005/06 would be used to offset the contribution to this cost. The Cabinet is asked to clarify whether this arrangement was in respect of 2005/06 only.

Service Area: Delegated Schools’ Budgets

Three-year budget plans for 2006/07 to 2008/09 have been received from all 293 schools, of which 289 (99%) have been formally approved. Schools are required to submit budget-monitoring returns on a termly basis and 65% had returned budget-monitoring projections for the period to the end of September in early October. Any projected overall change in balances from that predicted in the agreed school budget plans will be reported in a subsequent report.

Directorate: Social & Community Services (£0.788m underspend, £0.412m overspend after adjusting for proposed contribution to the Pool)

The forecast outturn for Social and Community Services Directorate is an underspend of £0.788m before the proposed additional £1.2m contribution to the Older People’s Pooled Budget, a reduction in the predicted underspend of £0.263m from the previous month.

August 2006

September 2006

Change

£m

£m

£m

Cultural Services & Adult Learning

-0.004

0.229

0.233

Social Care for Adults

0.019

0.008

-0.011

Partnerships & Planning (excl. Supporting People)

0.099

0.126

0.027

Business Support & Performance Management

0.072

0.078

0.006

Directorate Management Team (incl. contingency)

-1.237

-1.229

0.008

Social & Community Services Subtotal

-1.051

-0.788

0.263

Supporting People

0

0

0

Total per Annex 1

-1.051

-0.788

0.263

Adjustment for additional contribution to the Pool

1.200

1.200

0

Adjusted Total

0.149

0.412

0.263

Memorandum Accounts

Older People, Physical Disabilities & Eqpt Pooled Budget

1.286

1.338

0.052

Learning Disabilities Pooled Budget

0.300

0

-0.300

Service Area: Cultural Services & Adult Learning (£0.229m overspend)

The £0.233m change this month arises from a thorough review of the audio visual stock. The charge to revenue each year is the cost of stock purchased adjusted for the difference between the opening and closing stock values. This adjustment between opening and closing stock values is to reflect any loss of value due to wear and tear, obsolescence and change in realisable value. The review of the stock valuation has resulted in a reduction in the value and therefore the difference has to be written off as a charge to expenditure this year. Options are being considered as to how the charge to the revenue budget could be funded and the implications will be reported for consideration in a future month’s report.

There is no change in the predicted income pressure of £0.178m in respect of audio visual hire income. This is not included in the forecast year-end variance, as this will be managed within the service, by reducing expenditure so that no year-end overspend results from this issue. The forecast position includes a predicted overspend in respect of energy costs (£0.042m) and a planned underspend of £0.046m (relating to VAT exemptions and a provision) which were both reported last month.

Service Area: Social Care for Adults (£0.008m overspend)

Council has been asked to approve an additional £1.2m contribution to the Older People’s Pooled Budget. £0.777m of this is funded from additional residential and nursing income, which has arisen due to an increased placement rate in the pool, the remainder to be met from the proposed virement from contingency (also subject to Council approval).

Additional pressures have been identified within External Home Support of £0.389m. Part of the pressure relates to the non-achievement of efficiency savings (£0.212m) due to the slow start of the Telecare project. However, an action plan has been put together which will save £0.136m by transferring packages of care from more expensive providers to cheaper block providers; coupled with action for more effective usage of the block providers, thereby saving a further £0.100m. The measures to be taken would result in a net forecast overspend of £0.153m. This position is being monitored.

As previously reported, income shortfalls continue to create pressures for the Directorate. A virement from contingency (pending Council’s approval) will address the £0.257m shortfall of fairer charging income in Physical Disabilities. The pressure within Older People of £0.220m as a result of a shortfall in fairer charging income remains an issue. This forecast assumes an extra £0.030m is collected each month by shortening the gap between the start of the care package and the financial assessment as well as through joint working with the Department of Work & Pensions. In addition this month it has been possible to offset the income shortfall by a release of £0.100m from the 2006/07 bad debt provision due to the collection of debts previously provided for, bringing the net overspend to £0.120m.

Care Management teams actively continue to manage their vacancy factors and are now forecasting a reduction in year-end overspend to £0.121m, but this will be wholly offset by the proposed virement from contingency.

The projected underspend on the equipment service continues to be monitored closely in order to achieve the underspend of £0.250m to offset the proposed virement to the home support budget. There are higher delivery charges under the new contract and management action is being taken to ensure that deliveries are managed effectively.

The pressure of £0.200m in relation to underachievement of rental income from the Order of St John remains.

The forecast Integrated Mental Health Service underspend of £0.039m for residential services and an overspend predicted for home support of £0.034m are largely offsetting one another.

There are no major changes to Learning Disabilities (£0.086m overspend) although this continues to assume that savings are made in supported living and internal day services before the year-end.

Service Area: Partnerships & Planning (£0.126m overspend)

The main elements of the overspend relate to External Day Services (£0.050m) and an income shortfall relating to the contribution to the Learning Disabilities pool (£0.076m).

Service Area: Business Support & Performance Management (£0.078m overspend)

There are no significant changes from last month.

Service Area: Directorate Management Team, Central Recharges and Contingency (£1.229m underspend

£1.313m of this variance relates to the contingency budget. Council has been asked to approve the virement of this funding to offset pressures across the Directorate.

Service Area: Supporting People (no variation forecast)

Negotiations with one service provider are still ongoing and a successful outcome is assumed in this forecast. All other re-negotiations have proved successful.

Pooled Budgets Memorandum Accounts

The latest forecast overspend of the County Council element of the Pooled Budget for Older People and Physical Disabilities is £1.854m. The adjusted position, assuming Council approve the additional £1.2m contribution proposed last month, would be an overspend of £0.654m.

The main reason for the improved in-year position for the Council elements of this pool relates to a reduction in projected spend within the Physical Disabilities pool for both home support and residential placements. This is offset by a £0.045m increase in projected spend in the Older People’s area of the pool.

The Older People, Physical Disabilities and Equipment Joint Management Group have requested that an action plan is produced to address the Council’s element (£0.516m) of the Physical Disabilities forecast overspend. This will be brought to the November meeting of the Joint Management Group and will be reflected in next month’s report.

There is an improved position this month for the Learning Disabilities Pooled Budget, as no variance is forecast in either the pool or the Council’s element of this pool. This is due to a number of measures: "Fair Access to Care" reviews leading to reduced costs; reduced spend on out of County packages; and a more accurate reflection of spend projections.

Directorate: Environment & Economy (£0.505m underspend)

The current forecast position shows a projected underspend of £0.505m.

August 2006

September 2006

Change

£m

£m

£m

Transport

0.034

0.098

0.064

Sustainable Development

-0.123

-0.525

-0.402

Trading Standards & Registration

-0.031

-0.031

0

Business Support

-0.047

-0.047

0

Total Variation

-0.167

-0.505

-0.338

Service Area: Transport (£0.098m overspend)

Transport is forecasted to overspend by £0.098m, made up of several small overspends partially offset by staffing vacancy underspends. Although no action plan is yet in place it is anticipated that by the year-end this service will be within budget.

At its meeting on 17 October 2006 Cabinet agreed a supplementary estimate of £0.500m to support the costs of the roads most urgently requiring treatment due to the affects of the July heat-wave.

Service Area: Sustainable Development (£0.525m underspend)

The year-end forecast for Planning Implementation is an underspend of £0.468m. The movement this month is mainly due to slippage of £0.229m in the E-planning project and £0.143m additional planning application fee income due to three large applications. The projected underspends for the West End Strategic Sites and E-planning projects are committed in 2007/08 and are reflected in the draft business plans as part of the service and resource planning process. The underspends are required to be carried forward from 2006/07 into the next financial year.

The Waste Management service is currently forecast to break-even, as variances within budgets offset one another. An underspend in the Waste Treatment procurement project (£0.243m) will need to be carried forward to support consultancy costs in future years. The Districts’ performance in recycling has increased and as a result the recycling credits budget is overspending by £0.175m. The overspend predicted for Hazardous Waste has reduced by £0.091m to £0.669m, although this position does not reflect the proposed virement (pending Council approval) from Waste Landfill sites. Within Waste Recycling an improvement in performance is noted mainly due to the removal of wood for composting. Waste Landfill sites tonnage has reduced in comparison to the budget, resulting in a forecast underspend of £0.439m.

Directorate: Community Safety (£0.050m underspend)

August 2006

September 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 underspend relates to a planned carry-forward of funding for the Radio Replacement Project Manager post as reported previously.

Service Area: Community Safety Team (no variance forecast)

There is no change in the Community Safety Team forecast that the current years’ budget will come in on target.

Directorate: Resources and Chief Executive’s Office (£0.363m overspend)

The Resources Directorate and the Chief Executive’s Office are forecasting a combined overspend of £0.363m for the areas set out below:

August 2006

September 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

0.028

0.028

Business Support

0

0

0

Property Services

0.169

0.142

-0.027

Coroner’s Service

0

0

0

Shared Services Centre

0

0

0

Shared Services: SAP Revitalisation project

0.250

0.250

0

Chief Executive’s Office

-0.020

-0.057

-0.037

Total Variation

0.399

0.363

-0.036

Service Area: Human Resources (no variation forecast)

Corporate HR is still on target to achieve its efficiency savings including those not met last year by the management of vacancies and savings, although this may put pressure on delivering service objectives. There is continuing pressure on the Occupational Health Unit arising from uncertainty as to whether schools have signed up for this service and there has been some loss of external income.

Service Area: Legal Services (no variation forecast)

No variance is currently forecast but there are growing pressures on this service that will require careful monitoring.

Service Area: Information Communications & Technology (£0.028m overspend)

The Corporate Information Management Unit (CIMU) is forecasting an overspend of £0.028m. Although there is no clear action plan in place at the moment the expectation is that the predicted overspend, which is mitigated by vacancies and an underspend carried forward from last year, can probably be managed from within the total ICT budget.

Construction of the data centre is scheduled to be completed in November within budget. However the procurement of equipment and initial running costs may put some pressure on the ICT budget towards the end of the year.

Service Area: Property Services (£0.142m overspend)

There is no change in the predicted overspend on energy costs for central offices of £0.045m. The forecast now assumes that the efficiency saving on cleaning costs of £0.028m will not be achieved this year. Pressures on pay and related costs identified last month have reduced slightly to £0.034m. The health and safety budget is forecast to underspend this year by around £0.030m. The combined effect of the variances is to leave a net overspend of £0.077m to be managed; of this consideration is being given to ways of managing the energy overspend, and the remaining variances are expected to reduce to a level which should be manageable this year within the service although no action plan is formally in place.

On 17 October Cabinet endorsed the updated strategy for the Review of Property Assets. Mouchel Parkman has been commissioned to undertake preliminary work on this project and this will put pressures on the revenue fees budget. The size of the pressure and proposal for managing it will be included in the next financial monitoring report.

The overspend forecast for the Castle Project is £0.065m as previously reported, although there may be some additional costs not currently allowed for in this prediction. As previously reported, any overspend on completion could be met by using part of the £0.150m included in the Capital Programme for the Castle Education Centre, which is no longer required for that purpose.
Service Area: Coroner’s Service
This budget is under considerable pressure as a result of inquests into military and other deaths in Iraq and Afghanistan. The Government is funding the cost of additional deputy assistant coroners to deal with the current backlog but has not yet promised any assistance towards the cost of military post mortems and inquests this year.

Service Area: Shared Services (no variation forecast)

: SAP Revitalisation Project (£0.250m overspend)

Last month’s report included an estimate that the net costs of the Shared Services project this year would be in the region of £2.5m. As the cost of acquiring the building and fitting it out together with related costs such as transport arrangements become clearer an updated forecast is expected next month. The Shared Services Centre variance will have no effect on the Directorate’s revenue budget this year as the project is being temporarily funded from an earmarked reserve created using temporary cash surpluses in the Capital Programme. Payback is still expected to be achieved by the target year of 2010/11 as contained in the business case.

The SAP project budget is still forecast to overspend by £0.250m and there should be a corresponding underspend next year.

Service Area: Chief Executive’s Office (£0.057m underspend)

The main change since last month is an underspend in the grants budget of £0.033m, following the cessation of the grant to the Citizens’ Advice Bureau.

Modernisation fund

A bid of £0.015m was approved for funds from the Modernisation fund for the Core & Framework Construction Contractors bid, leaving an uncommitted balance of £0.838m (Annex 4).

Half yearly unit cost and activity monitoring

A comparison of unit costs and activity levels between those budgeted for the year and a prediction of the outturn for the year-end based on the activity levels for the first six months of the financial year and a prediction of the next six months is shown in Annex 6a-6e. The figures shown are a best estimate based on the information currently available.

Invest to Save Bid

The Council has submitted an Invest to Save Bid to the Government with the intention to maintain and increase the number of young people in employment, education and training. It is anticipated that we will hear whether or not the bid has been successful in February 2007. If successful the Council will fund a 20% contribution.

Bad Debt Write off
In accordance with procedures, the Cabinet will receive notification of the total value of SAP debts written off each quarter. For the quarter ended 30 September 2006, £0.006m has been written off relating to 15 individual debts. The largest individual debt write-off was for £0.002m, for which the debtor cannot be traced. Most of the other debts have been written off because it is uneconomical to recover through the courts.

Strategic Measures

Further debt restructuring has been undertaken in October 2006 on loans totalling £49m. Overall £107m of loans have been restructured in 2006/07 to date with total full year savings of £0.159m.

Government Grants

Details of specific grants are shown in Annex 3 and are summarised below:

	£m
Specific grants received in 2006/07 (as per published Medium Term Service & Financial Plan)	399.113
New grants/changes previously reported	5.041
New grant changes this month	0.064
Total grants for 2006/07	404.218

The changes reported this month by Community Safety relate to a new grant of £0.020m towards employment training from the Learning & Skills Council, £0.035m from the Department for Communities & Local Government for Resilience Training and an increase in the Positive Action for Young People Grant.

Earmarked Reserves

Details of Earmarked Reserves are shown in Annex 4 and are 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

-16.176

11.178

12.065

Social & Community Services

1.550

-1.429

0.331

0.452

Environment & Economy

4.397

-3.085

1.595

2.907

Community Safety

0.923

-1.374

0.794

0.343

Resources & Chief Executive’s Office

1.448

-0.810

0.619

1.257

Corporate

14.530

-11.185

1.787

5.132

Directorate Total

39.911

-34.059

16.304

22.156

Various minor changes in the Directorate reserves reported this month include an update for Children, Young People & Families relating to the schools reserves and the £0.015m bid against the modernisation fund (paragraph 74).

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 71). A Pensions Reserve and a reserve for the Social & Community Services Emergency Fund have been created this month for the budgeted transfer of funds contained in the Medium Term Financial Plan.

General Revenue Balances

The forecast position for general balances has decreased by £0.400m as shown below. This is as a result of the supplementary estimate to Environment & Economy for the roads damaged in July’s heat wave and the repayment of £0.100m supplementary estimate from 2005/06 by Social & Community Services.

£m

Forecast position per last report (net of City Schools)

15.685

Supplementary estimate to Environment & Economy for roads.

-0.500

Repayment of 2005/06 supplementary estimate by Social & Community Services

0.100

Net forecast position (net of City Schools)

15.285

Recommendations set out in this report would reduce the general balances position to £14.485m.

Efficiency Savings

In Children, Young People & Families, difficulties continue to be experienced in achieving the efficiency savings in the 2006/07 budget relating to the proposed reductions in Children’s Homes (£0.150m) and additional Unaccompanied Asylum Seeking Children Grant (£0.150m). Within Social & Community Services, of the £6.1m cash releasing savings originally planned for the year, £5.2m is currently projected to be achieved by the year-end. There is still some uncertainty in the achievement of £0.212m of the home support contract savings and a number of other savings including fairer charging income have been identified as carrying risk. The £5.2m projection takes into account the associated risks. Within Resources it is currently predicted that the saving of £0.028m for cleaning central offices is unlikely to be met this year. The majority of the efficiencies shortfalls are offset by savings elsewhere and the use of contingencies. Directorates are addressing the issues of achieving these efficiencies in future years as part of the budget process for 2007/08-2011/12. A mid-year review is currently underway to assess the achievement of Annual Efficiency Savings (AES) targets and the result of this is expected to be available for next month’s report.

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 September is as follows:

	%
Children, Young People & Families	95.0
Social & Community Services	88.6
Environment & Economy	97.5
Community Safety	95.9
Resources	93.1
Chief Executive’s Office	95.0
Mouchel Parkman – CIS	84.4
Other CIS	95.1
Average	92.0

Whilst Environment & Economy maintain the performance set in August, other Directorates have slipped back slightly. Although the majority are meeting or close to meeting the target some areas of weak performance remain to be addressed. From September the Construction Industry Scheme (CIS) invoices that were previously logged under ‘Mouchel Parkman’ are being specifically analysed by showing CIS invoices from other Directorates separately to assist in highlighting performance.

Conclusion

Directorates have identified a number of potential budget pressures leading to a total forecast overspend of £1.154m (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 £2.354m. The forecast for general balances stands at £15.285m, giving a consolidated balances position of £12.931m. Within the Children, Young People & Families Directorate a request is made in this month’s report for a supplementary estimate to the Early Years and Family Support service to help meet pressures in the agency placements budget. Within Social and Community Services pressures continue on the achievement of income targets.

PART 2 – CAPITAL

The Capital Programme monitoring for September 2006 is attached in Annexes 7-7f and shows a reduction in payments of £3.863m in 2006/07 and an increase in total payments of £5.669m compared to the Capital Programme booklet circulated to cabinet in October. The position is analysed below by Directorate: