Meeting documents

Cabinet
Tuesday, 19 December 2006

CA191206-05

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ITEM CA5

CABINET – 19 DECEMBER 2006

FINANCIAL MONITORING

Report by Head of Finance & Procurement

EXECUTIVE SUMMARY

This report is based on the period up to the end of October 2006 for revenue and capital. Changes to the forecast outturn are reported against the position at the end of September 2006. The consolidated revenue forecast for the year-end shows a balance of £14.028m, (paragraph 91). This is made up of £15.324m general balances (paragraph 87) and a forecast Directorate overspend of £1.296m (excluding the £2.533m City Schools overspend and after allowing for the agreed additional contribution of £1.2m to the Older People’s Pooled Budget and the £0.800m supplementary estimate to Children, Young People & Families). The Directorate variance includes a £0.300m underspend relating to services funded by the Dedicated Schools Grant (DSG).

Revenue

Directorate: Children, Young People & Families

The current forecast outturn position for Children, Young People & Families Directorate is an in-year overspend of £1.890m, a decrease of £0.009m from the last report (paragraph 18). This is before taking into account the £0.800m supplementary estimate for Early Years and Family Support agreed last month.

There is a £0.050m decrease in the Children and Young People service predicted overspend to £0.100m. This relates to a reduction in the revised forecast overspend for Transport to £0.150m. The report includes a recommendation to Council to approve the use of the £0.250m underspend on the Out of County Placements budget to offset the overspend on social care placements for disabled children agency placements (£0.250m).

Early Years and Family Support forecast an overspend of £1.826m. The £0.390m increase in the overspend this month relates to uncertainties around the compensation which may be received in respect of the Asylum Seekers court case. £1.399m of the overspend relates to the budget for agency placements. On 9 November Council approved the virement of £0.500m to this budget from the service’s own contingency to help reduce the overspend, and on 21 November the Cabinet agreed a £0.800m supplementary estimate. These November decisions will be reflected in next month’s report. As the contingency is held centrally within the service the virement does not affect the net service overspend. However, the £0.800m supplementary estimate will reduce the service overspend to £1.026m.

Within Educational Effectiveness an underspend of £0.299m is reported this month. The main change in the forecast position relates to an anticipated underspend on the matched funding for Standards Fund grant for 2006/07 of £0.320m. Initial projections indicate underspends of £0.160m for both Primary Strategy and Key Stage 3 which will need to be carried forward to 2007/08.

Directorate: Social & Community Services

The Council approved the increased contribution of £1.2m to the Older People’s Pooled Budget (paragraph 37) on 9 November, which will be reflected in next month’s report. The current forecast outturn for Social & Community Services is an underspend of £0.918m (excluding Supporting People). After adjusting for the increased contribution to the Pooled Budget the forecast outturn would show a £0.282m overspend. The forecast outturn for Supporting People is an underspend of £0.030m.

Of the £0.282m projected overspend that would remain, £0.229m relates to Cultural Services and is primarily due to the write down of audio visual stock. Further work in this area suggests that the total write-down may need to be of the order of £0.7m and an update will be provided in next month’s report.

The remainder of the projected overspend is attributed to variances in several areas. The main elements are a £0.125m overspend on Home Support and, within Older People, the fairer charging income target is now showing a projected shortfall of £0.250m. However, a £0.300m increase in the forecast client income for residential and nursing placements is largely offsetting these variances.

The Pooled Budget for Older People, Physical Disabilities and Equipment is forecasting a £1.177m overspend pending November’s adjustment for the additional £1.2m contribution. An in-year pressure of £0.455m would still remain within the County Council’s elements of the Pool after taking into account the additional contribution. The Learning Disabilities pool is now forecasting an £0.250m overspend as a result of a decision by the Directorate’s management team to allocate additional Supporting People income to internal services/budgets (paragraph 55).

Directorate: Environment & Economy

The Directorate currently forecasts an underspend of £0.591m (paragraph 57), an increase of £0.086m from last month. The main element of the increase relates to transport and arises as a result of reviewing the funding set aside and expected calls on funding to support services where there are commercial withdrawals.

Directorate: Community Safety

There is no change to the Directorate forecast underspend of £0.050m (paragraph 61).

Directorate: Resources & Chief Executive’s Office

There are a number of small changes across the service resulting in a £0.003m decrease in the projected overspend to £0.360m (paragraph 63). There is no change reported this month in the prediction of estimated expenditure on the Shared Services project for this year of £2.5m to be drawn down against the reserve in 2006/07.

Capital

The Capital programme monitoring for October 2006 shows a reduction in payments of £0.432m in 2006/07 and an increase in total payments of £1.638m compared to the capital programme booklet circulated in September.

INTRODUCTION

This report covers the forecast of the year-end outturn position for 2006/07 based on the position up to the end of October 2006 for revenue and capital. The detail for each Directorate is summarised within the report and individual reports for each Directorate are 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

(Annexes 1- 5 - download as .xls file)

Capital

Annex 6 Capital Monitoring Summary

Annex 6a-f Capital Monitoring by Directorate

(Annexes 6 - 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 October. The overall projected Directorate variance, (excluding the City Schools overspend) is set out in the table below (positive variances represent overspends and negative variances represent underspends):

September 2006

October 2006

Change

£m

£m

£m

Children, Young People & Families

4.667

4.658

-0.009

Less City Schools Reorganisation

2.533

2.533

0

2.134

2.125

-0.009

Social & Community Services (excl. Supporting People)

-0.788

-0.918

-0.130

Supporting People

0

-0.030

-0.030

Environment & Economy

-0.505

-0.591

-0.086

Community Safety

-0.050

-0.050

0

Resources & Chief Executive’s Office

0.363

0.360

-0.003

Total Variation per Annex 1

1.154

0.896

-0.258

Agreed additional contribution to the Older People’s Pooled Budget

1.200

1.200

0

Agreed supplementary estimate to CYPF

0

-0.800

-0.800

Total Variation after adjustments

2.354

1.296

-1.058

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

Directorate: Children, Young People & Families (£1.890m in-year overspend)

The current forecast outturn position shows a projected overspend of £4.658m. Of this, £1.890m 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 is ring-fenced to the Schools Budget. The Educational Effectiveness variation includes £0.320m matched funding for the standards fund grant, which it is predicted, will not be spent by the year-end. This committed budget will need to be carried forward into 2007/08. The table below includes a column to show the position as at the end of October 2006 restated to show the effect of the supplementary estimate agreed in November.

	September 2006	October 2006	Change	October 2006 restated	Committed
	£m	£m	£m	£m	£m
Children & Young People	0.150	0.100	-0.050	0.100	0
Early Years & Family Support	1.436	1.826	0.390	1.026	0
Educational Effectiveness	0.041	-0.299	-0.340	-0.299	0.320
Strategy & Performance	0.272	0.263	-0.009	0.263	0
Total in year variation	1.899	1.890	-0.009	1.090	0.320

Variation in Transport Days	0.235	0.235	0	0.235	0
City Schools Reorganisation	2.533	2.533	0	2.533	0
Total Variation	4.667	4.658	-0.009	3.858	0.320

Service Area: Children & Young People (£0.100m overspend, £0.335m including the variation in transport days)

There is no change in the projected underspend of £0.250m for Out County Placements reported last month, although further fluctuations may occur before the year-end. It is proposed to use this Dedicated Schools Grant underspend to facilitate a permanent virement to balance the overspend on social care placements for disabled children. This can be achieved by funding other spend that could be met from DSG and viring the base budget this releases to the disabled children’s budget. 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. This service is also funded from DSG.

There is no change in the service for Disabled Children forecast overspend of £0.250m in respect of agency placements. Cabinet are asked to recommend Council approve the virement of £0.250m from the Out of County budget (paragraph 19).

Savings are anticipated as part of the home to school transport route re-tendering process, reducing the projected overspend from £0.200m to £0.150m.

Service Area: Early Years & Family Support (£1.826m overspend)

The budget for Agency Placements shows a forecast overspend of £1.399m. This will reduce to £0.099m once the virement approved by Council of £0.500m and supplementary estimate approved by the Cabinet are processed. The current assessment of risk indicates that the remaining pressure will continue to grow beyond the £0.099m identified and a further supplementary estimate request will be brought later in the financial year if necessary.

The forecast overspend on the Children’s Homes budget remains at £0.150m, this position is provisional dependent on the outcome of the reorganisation taking place in November. There is also no change to the predicted overspend of £0.050m on Social Work Staffing budgets reported previously.

The Leaving Care budget is forecast to overspend by £0.390m. There is a pressure as a result of changes in DfES grant funding for Unaccompanied Asylum Seeking Children (UASC) who are over 18, and to whom the Council has a responsibility to provide support under the Children (Leaving Care) Act. All of the local authorities that are supporting UASCs are facing a similar pressure, and are working to address this pressure with Government. This is currently subject to a judicial review. It was previously assumed that the shortfall in grant income relating to 2005/06 would be offset by compensation as a result of the recent court case. It now appears unlikely that this will be resolved in this financial year. 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 and this remains a high-risk area.

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, to be vired to Agency Placements (Paragraph 22) in November.

The predicted overspend for legal charges remains at £0.141m as reported previously.

Service Area: Educational Effectiveness (£0.299m underspend forecast)

This represents a reduction of £0.340m since last month. Of this £0.020m relates to a reduction in the forecast overspend relating to residential centres.

Initial projections indicate that £0.320m (£0.160m for Primary Strategy and £0.160m for Key Stage 3) matched funding for the standards fund grant will not be spent by the year-end. Standards fund may be spent up to 31 August in the following financial year and this committed budget will need to be carried forward into 2007/08.

The service restructuring agreed in September has resulted in a number of staff transfers which, although not changing the nature of the service, do change a number of budget headings. The Cabinet is requested to approve a virement of £0.308m within staffing budgets in the Learning and Achievement service to reflect this. Although this is a permanent change it does not affect the configuration of services and is not a change in policy.

Reference

Service

From

£m

To

£m

CYPF3-24A

Staffing (Partnerships)

0.064

CYPF3-22A

Staffing (Achievement)

0.244

CYPF3-23A

Staffing (Curriculum)

0.041

CYPF3-32A

Staffing (Secondary)

0.267

Total

0.308

0.308

County Facilities Management (CFM) continue to forecast a break-even position for the financial year. Quest Cleaning will continue providing a service after 31 March 2007, until any decision on the re-tendering process for the non-school sites is concluded.

Service Area: Strategy & Performance (£0.263m overspend)

There is a small reduction of £0.009m in the overspend for this service area reported this month. The Premature Retirement Compensation (PRC) budget forecast overspend is £0.409m representing all current commitments, including school contributions. As reported previously, a thorough review of the budget and the policies on which it is based is underway and the outcome of this will be reported to Cabinet in January 2007.

There are currently underspends of £0.033m for Human Resources (HR) Health & Safety and £0.080m for HR Staffing. These are offset by an overspend of £0.040m on the budget for Trade Union Representation. The Legal Services budget is forecast to overspend by £0.060m, the reduction (£0.005m) reported this month arises following the identification of costs chargeable to the capital programme.

The Joint Use budget is still 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.

Service Area: Delegated Schools’ Budgets

Three-year budget plans for 2006/07 to 2008/09 have been received from all 293 schools, of which all but one has been formally approved. The forecast balances for the approved plans are included in Annex 4. Of the budget monitoring returns due from schools for the period ended September 2006 responses from 90% of the schools have been received. Reports from the remaining schools are being followed up and there is an opportunity to submit revised budget plans up to late November. Any changes in forecast balances arising from this will be reported in a subsequent report.

Directorate: Social & Community Services (£0.918m underspend (before the £1.2m contribution to the Pooled Budget), Supporting People £0.030m underspend)

The forecast outturn for Social and Community Services Directorate is an underspend of £0.918m before the approved additional £1.2m contribution to the Older People’s Pooled Budget. This represents an increase in the predicted underspend of £0.130m from the previous month. The forecast variation for Supporting People is now a £0.030m underspend. The table below includes a column to show the position as at the end of October restated to show the effect of the virements agreed in November, including the increased contribution to the Pooled Budget.

September 2006

October 2006

Change

October 2006

restated

£m

£m

£m

£m

Cultural Services & Adult Learning

0.229

0.229

0

0.229

Social Care for Adults

0.008

-0.106

-0.114

-0.049

Partnerships & Planning (excl. Supporting People)

0.126

0.109

-0.017

0.062

Business Support & Performance Management

0.078

0.077

-0.001

-0.043

Directorate Management Team (incl. contingency)

-1.229

-1.227

0.002

0.083

Social & Community Services Subtotal

-0.788

-0.918

-0.130

0.282

Supporting People

0

-0.030

-0.030

-0.030

Total per Annex 1

-0.788

-0.948

-0.160

0.252

Adjustment for additional contribution to the Older People’s, Physical Disabilities & Equipment Pooled Budget

1.200

1.200

0

0

Adjusted Total

0.412

0.252

-0.160

0.252

Memorandum Accounts

Older People, Physical Disabilities & Eqpt Pooled Budget

1.338

1.177

0.368

-0.023

Learning Disabilities Pooled Budget

0

0.250

0.250

0.250

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

There is no change in the predicted year-end shortfall of £0.178m in audio visual (AV) 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. In light of the reducing income stream from the AV service, the opportunity has been taken to review the value of AV stock held on the Council’s balance sheet. Last month’s report indicated a write down in the stock value of £0.233m. Further work in this area suggests that the total write-down may need to be of the order of £0.7m. The difference (£0.467m) is not included in the current forecast outturn as the figure needs to be firmed up. An update will be provided in next month’s report. Options for managing this budget pressure are still being considered.

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 have both been reported previously.

Adult Learning enrolment figures have been above target. If the resulting additional income leads to savings in excess of the recovery plan target for 2006/07, then there will be a reduction in the anticipated amount to be drawn from the Adult Learning earmarked reserve.

Service Area: Social Care for Adults (£0.106m overspend)

The most significant change from last month is the expectation of a further £0.300m residential and nursing client income over and above the additional £0.777m income reported previously as a result of increased placements and more accurate projections. This is largely offset by underachievement in fairer charging income targets (£0.150m) and increased overspends in home support (£0.105m when taking both internal and external services together).

The more precise recording of visit times using the new Electronic Time Management System (ETMS) has shown that visit lengths to clients are shorter than recorded on the old system and hence has given rise to a reduction in charges to clients. Further analysis of the potential impact on the budget is being carried out.

The main reason for the increase in the home support overspend this month relates to new spot contract prices for the on-going use of the ‘old’ home support providers due to an initial lack of capacity with the new providers.

The projected underspend on the non-pool elements of the equipment budget is £0.343m, which will reduce to £0.093m once the virement agreed by Council is processed. The change from last month is due to further clarification on the elements of the variance that belong outside of the equipment pool. The equipment pool overspend is £0.188m (paragraph 54). It is not proposed to increase the Council’s contribution to the pool as action continues to make savings by ensuring that delivery charges on equipment are minimised.

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

Within Learning Disabilities, further work on the projections for internal day services and internal supported living have shown that vacancy factors are now unlikely to be achieved, leading to a £0.133m increase in gross spend for the two services. However, additional supporting people income (£0.160m) more than offsets the increase (see paragraph 55).

Within Physical Disabilities, as reported previously, the projected overspend relates to the shortfalls in client income that partly funds the contribution to the Physical Disabilities Pooled Budget, the shortfall of £0.273m currently forecast will be wholly offset by the virement from contingency now agreed.

Service Area: Partnerships & Planning (£0.109m overspend)

The movement is mainly due to additional income being received in the area of the Council’s contribution to the Learning Disabilities Pooled Budget. Of the £0.236m additional income received (paragraph 55), the Directorate’s management team has agreed that £0.150m will transfer to the Pooled Budget. The balance of £0.086m will be held back as provision for possible refund and in recognition of the pressures linked to income targets outside the pooled budget.

Service Area: Business Support & Performance Management (£0.077m overspend)

There are no significant changes from last month.

Service Area: Directorate Management Team, Central Recharges and Contingency (£1.227m underspend)

£1.313m of this variance relates to the contingency budget. On 9 November Council approved the virement of this funding to offset pressures across the Directorate. As this report reflects the financial position forecast at the end of October the pre-virement figures have been reported.

Service Area: Supporting People (£0.030m underspend)

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 for the County Council element of the Pooled Budget for Older People and Physical Disabilities is £1.655m. The adjusted position, once the £1.2m contribution is vired in November, would be an overspend of £0.455m. Following the contribution the whole of the Older People, Physical Disabilities and Equipment Pooled Budget would be broadly in balance.

The main reason for the improved in-year position for the Council elements of this Pooled Budget is due to a reduction in the projected spend for both elements of the Older People (£0.099m) and Physical Disabilities pool (£0.101m).

The Equipment Pooled Budget is showing a net overspend of £0.188m. This arises as savings from the new contract are not yet being realised as reduced product prices have been offset by increased delivery costs. It is anticipated that more efficient use of deliveries will reduce the overspend.

The balanced position reported last month for the Learning Disabilities Pooled Budget was based on the assumption that £0.396m additional supporting people income transferred from the Council to this Pooled Budget. The Directorate Management Team has now agreed a transfer of £0.150m. Of the remaining income, £0.160m has been allocated to internally provided Learning Disabilities services and £0.086m is being held back. The allocation will be reviewed in future as required.

Virement to Children, Young People & Families Directorate

Following the realignment of the Social & Community Services and Children, Young People & Families Directorates, a number of services are continuing to be provided by S&CS and purchased by CYP&F via Service Level Agreements (SLAs) (and vice versa for some services) as set out below. The Cabinet is asked to approve a temporary virement of the budgets which need to be transferred from the providers to the purchasers of the services. Service providers will receive income by way of recharges to offset expenditure incurred i.e. provider budgets will net to nil. A permanent budget transfer will need to be agreed as part of the 2007/08 budget proposals.

Team

Budget being vired to CYP&F from S&CS £m

Budget being vired to S&CS from CYP&F £m

Business Systems

0.061

Customer Service Unit

0.054

Education Management Systems

0.005

Emergency Duty Team

0.245

Facilities & Support

1.155

Health & Safety

0.014

HR + Workforce Planning

0.016

Learning and Development

0.436

Major Incident & Emergency Team

0.010

Occupational Therapy

0.222

Teachers Pensions

0.002

Sensory Impairment

0.188

Staff Care Services

0.036

Transport

0.032

Accounts Payable

0.018

SUB TOTAL

2.455

0.039

NET for both virements

2.416

Directorate: Environment & Economy (£0.591m underspend)

The current forecast position shows a projected underspend of £0.591m.

September 2006

October 2006

Change

£m

£m

£m

Transport

0.098

-0.039

-0.137

Sustainable Development

-0.525

-0.497

0.028

Trading Standards & Registration

-0.031

-0.018

0.013

Business Support

-0.047

-0.037

0.010

Total Variation

-0.505

-0.591

-0.086

Service Area: Transport (£0.039m underspend)

Transport is forecast to underspend by £0.039m, a movement of £0.137m from last month’s report. This is mainly due to Public Transport reviewing the funding set aside to support services where there are commercial withdrawals. This underspend may be needed this financial year if commercial withdrawals happen, if not the service would look to carry this forward to support similar pressures in 2007/08.

Service Area: Sustainable Development (£0.497m underspend)

Planning Implementation is now predicting a year-end underspend of £0.448m, a movement of £0.020m and Strategic Planning & Economic Development (SPED) an underspend of £0.018m, a reduction in underspend of £0.039m. The decrease in the SPED underspend is due to overspends on staffing budgets.

The Waste Management service is currently forecast to underspend by £0.031m (after transferring £0.484m to a reserve earlier this year), as opposed to the break-even position forecast last month. There are no material changes to report from last month, although it is worth noting that the overspend on recycling credits has reduced by £0.054m (1,015 tonnes) due to an updated forecast of the year-end position following receipt of additional invoices from the Districts. The predicted underspend on procurement associated with the Waste Treatment contract has increased by £0.025m; this increases the amount needed to be carried forward to 2007/08 to meet project costs to £0.268m.

Directorate: Community Safety (£0.050m underspend)

September 2006

October 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 year’s budget will come in on target.

Directorate: Resources and Chief Executive’s Office (£0.360m overspend)

The Resources Directorate and the Chief Executive’s Office are forecasting a combined overspend of £0.360m for the areas set out below:

September 2006

October 2006

Change

£m

£m

£m

Financial Services & Procurement

0

-0.010

-0.010

Human Resources

0

0

0

Legal Services

0

0

0

Information Communications & Technology

0.028

0.028

0

Business Support

0

0

0

Property Services

0.142

0.169

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

-0.057

-0.077

-0.020

Total Variation

0.363

0.360

-0.003

Financial Services & Procurement (£0.010m underspend)

An underspend of £0.010m on the budget for bank charges is now forecast. In addition, the budget for the external audit fee is expected to underspend by £0.050m, any variance is to be returned to balances, as the budget is not one the service can control.

Service Area: Human Resources (no variation forecast)

Corporate HR is still on schedule to achieve its efficiency savings including those not met last year. As previously reported, this requires the freezing of some vacancies and delays in recruitment, which may put some pressure on the achievement of service objectives, in particular organisational development strategy. The pressure on the Occupational Health Unit budget is reducing as more schools are now agreeing to subscribe to the service.

Service Area: Legal Services (no variation forecast)

It is still expected that the pressures on the Legal Services budget will be managed and that there will be no variance this year.

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

The core ICT budget is still forecasting to break-even this year in spite of significant pressures and key risk areas are being carefully monitored. There is no change in the Corporate Information Management Unit (CIMU) forecast overspend of £0.028m.

Service Area: Property Services (£0.169m overspend)

Last month an emerging pressure was reported on fees paid to Mouchel Parkman for work on the Review of Property Assets. It is estimated that, if this work continues this year the cost in excess of the existing budget will be £0.040m. A report was presented to the Capital Steering Group in November to seek approval to continue with the preliminary work and with a recommendation that the unbudgeted cost be met from balances this year. An updated position will be given next month.

The estimated overspend on the Castle Project has now increased from £0.065m to £0.083m. 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.

The two increases are offset by expected underspends on rents and other budgets totalling £0.031m, although any underspend on rents will be required in future years to contribute to the cost of rent reviews. Of the variances reported last month – energy/cleaning costs/pay and related costs, and health and safety there is no change to report this month.

Expenditure on planned and reactive maintenance for the year to date indicates that there may be an underspend on the repair and maintenance of county buildings (excluding schools). However, the final spend for the year is dependant on winter temperatures, which will affect the outturn.

Under the new accounting for property arrangements, most budgets for business rates (excluding schools) are now held by property services. An overspend of £0.011m is forecast, and, in accordance with budget management arrangements applied in previous years, any variance will be met by/returned to balances.

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. Any potential overspend arising is not taken into account in the breakeven forecast.

Service Area : Shared Services (nil variance)

: SAP Revitalisation Project (£0.250m overspend)

The estimated expenditure on the Shared Services project for this year remains at £2.5m. There remain a number of uncertainties about the level of spend and the timing, but a firmer estimate will be provided next month. This estimate does not include the initial pay costs of those members of staff transferring from the Directorates to the Shared Services Centre in January and February (budgets for these staff are expected to be vired from Directorates as required for the remainder of 2006/07). The cost of the project has no direct effect on the revenue budget for the Directorate as it is being temporarily funded from an earmarked reserve and payback is expected to be achieved by the target year of 2010/11.

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

Service Area: Chief Executive’s Office (£0.077m underspend)

The main change since last month is a forecast underspend of £0.020m on the supplies and services budget for the Local Strategic Partnership, this is expected to be required next year for work arising from the White Paper. It is proposed that the underspend of £0.030m on the grant to the Citizen’s Advice Bureaux reported last month is carried forward to next year for one-off expenditure on equalities implementation work.

Bad Debt Write Off

In accordance with procedures Cabinet approval is now sought for the write off of three debts totalling £0.037m within Social & Community Services as approved for write off by the Directorate’s Management Team. The first debt of £0.014m has arisen due to difficulties in relying on financial assessments used to invoice the client, write off is requested as legal advice is that further resources should not be expended in attempting to recover the debt. The second debt of £0.012m has arisen as another County Council was believed to have been allocated part of the grant to compensate local authorities for the difference in income when moving from a financial assessment based on ‘preserved rights’ benefits to that on income support. As it has not been possible to establish the other Council’s responsibility for the clients care costs the only course of action is to write off the debt. The final debt of £0.011m relates to a residential debt arising in a period before a client was "money managed", as the client is now deceased and it is not proposed to take action against the client’s appointee it is recommended that the debt is also written off.

Strategic Measures

The Strategic Measures budget has been reviewed and it is now anticipated that there will be a surplus of £1.8m in 2006/07. This is an increase of £0.800m on the last reported figure and will be an addition to balances.

The figure reflects continuing improvement in the Council’s cash flow and the impact of the base rate increase on 9 November.

The Council has restructured a further £10m loan with the Public Works Loan Board in November, bringing full year savings of around £0.008m. Total full year savings from debt restructuring undertaken in 2006/07 are £0.169m.

Government Grants

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

	£m
Specific grants received in 2006/07 (as per published Medium Term Service & Financial Plan)	399.113
New grants/changes previously reported	5.105
New grant changes this month	0.677
Total grants for 2006/07	404.895

The changes reported this month relate to a new grant of £0.036m in respect of pump priming for the Youth Offending Service. Social & Community Services are reporting an additional £0.401m increase in grant from the Learning and Skills Council linked to Adult Learning this month, the impact of this on the Adult Learning budget will be addressed in next month’s report.

As reported previously, the Chief Executive’s Office will be responsible for disbursing the funding to the projects managed on behalf of the Milton Keynes, Oxfordshire and Buckinghamshire Improvement Partnership over this and the next financial year. The first instalment of £0.500m has now been received. The Council’s share of this is £0.240m representing half of the funding for two projects totalling £0.400m (Building Capacity through Leadership Development and Building Capacity in Change Management) and £0.040m to cover the cost of a programme coordinator and other overheads. Any balance not spent on the projects this year will be carried forward to next year.

Earmarked Reserves

Various minor changes in the Directorate reserves are reported this month. There is a £0.030m decrease in Community Safety due to the decision to bring forward by 6 months the purchase of 3 vehicles to enable commencement of Fire-fighter Incident Command Training planned for 2007/08. Within Children, Young People & Families changes to balances reflect the forecasts included in school budget plans. It should be noted that school reserves have typically been higher than initial estimates due to slippage on repair and maintenance programmes and the ability to spend Standards Fund allocations up until 31 August.

The Corporate figures include an indication of draw-down on the Carry Forward Reserve, Capital Reserve and the Shared Services Reserve (based on initial spending forecasts as detailed in paragraph 74). There has been no call to date against the £1.0m Social & Community Services Emergency Fund Reserve, created as part of the 2006/07 budget to meet potential cost pressures from the health sector. However, there could be a drawn down against this reserve before the year-end if further cost pressures emerge.

Details of Earmarked Reserves are shown in Annex 4 and summarised below:

2006/07

Balance at

1 April 2006

Forecast Movement

Forecast

Balance at

31 March 2007

Contributions

from Reserve

Contributions

To Reserve

£m

£m

£m

£m

Children, Young People & Families

17.063

-16.176

11.415

12.302

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

-1.404

0.794

0.313

Resources & Chief Executive’s Office

1.448

-0.810

0.618

1.256

Corporate

14.530

-10.927

1.787

5.390

Directorate Total

39.911

-33.831

16.540

22.620

General Revenue Balances

The forecast position for general balances has increased by £0.039m as shown below:

£m

Forecast position per last report (net of City Schools)

15.285

Decrease in external audit fee

0.050

Supplementary estimate for Agency Placements

-0.800

Property Services – Business Rates

-0.011

Additional interest forecast on balances

0.800

Net forecast position (net of City Schools)

15.324

Efficiency Savings

There are no significant changes to the position reported in the previous month’s report. 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 service and resource planning process for 2007/08-2011/12. The initial indication from the result of the mid-year update of Annual Efficiency Savings supports this as the underachievement of savings in some areas are balanced by other savings. The Government has reviewed our mid-year update and have raised no issues with the data submitted.

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 October is as follows:

	%
Children, Young People & Families	94.9
Social & Community Services	88.4
Environment & Economy	97.6
Community Safety	96.1
Resources	93.8
Chief Executive’s Office	95.5
Mouchel Parkman – CIS invoices	85.7
Other CIS	91.0
	92.1

It is worth noting that a number of sections within Directorates are achieving 100% performance, and also that a number of Directorates now achieving in excess of 98% performance this month, which translates into a higher overall percentage over the course of the year to date. A minor issue with a small number of Construction Industry Scheme (CIS) invoices that are being delayed is being investigated.

Conclusion

Directorates have identified a number of potential budget pressures leading to a total forecast overspend of £0.896m (excluding the City Schools overspend). After adjusting for the proposed additional £1.2m contribution to the Older People’s Pooled Budget and the £0.800m supplementary estimate to Children, Young People & Families this gives a forecast overspend of £1.296m. The forecast for general balances stands at £15.324m, giving a consolidated balances position of £14.028m. There still remain a number of risk areas, which may result in a further draw-down on balances later in the year.

PART 2 – CAPITAL

The capital monitoring for October is attached in annexes 6-6f. The summary shows a variation of £4.295m (underspend) in 2006/07 compared to £3.863m (underspend) to the end of September, a variation of £0.432m. The total scheme variation shows an increase of £7.307m compared to £5.669m reported to the end of September a variance of £1.638m. Overall there are no funding issues within the changes to the programme.

	September 2006		October 2006		Change
	2006/07	Total	2006/07	Total	2006/07	Total
	£m	£m	£m	£m	£m	£m
Children, Young People & Families
-Main	48.240	223.441	48.760	225.132	0.520	1.691
-City	0.802	48.500	0.802	48.500	0	0

Environment & Economy	36.128	176.741	35.166	176.696	-0.962	-0.045

Social & Community Services	5.394	33.087	5.389	33.082	-0.005	-0.005

Corporate Governance	6.885	35.778	6.900	35.775	0.015	-0.003

Community Safety	0.950	1.690	0.950	1,690	0	0

TOTAL	98.399	519.237	97.967	520.875	-0.432	1.638

The main variations are explained below: