Cabinet
6 June 2011
Overview and Scrutiny
22 June 2011
Full Council
28 June 2011
Agenda Item No______10_______
2010/11 OUTTURN REPORT
Summary:
This report presents the outturn position for 2010/11 for both the
general fund revenue account and capital programme. The report
includes details of where contributions have been made to earmarked
reserves for future spending commitments.
Conclusions:
The outturn at 31 March 2011 shows a surplus for the year of
£328,111. This is after allowing for a number of underspends to be
rolled forward within earmarked reserves where commitments have
already been made for 2011/12. Commentary on these, along with the
more significant year end variances is included within the detail of the
report. The general fund reserve balance at the year end still remains
within the current recommended level. The capital programme for
2010/11 has been fully financed in the year and the current capital
programme has been updated to reflect this.
Recommendations:
Members are asked to consider the report and recommend to Full
Council the following:
a) The final accounts position for the general fund revenue account
for 2010/11;
b) The transfers to and from reserves as detailed in the report;
c) The transfer of the surplus of £328,111 for the year to the general
reserve;
d) The financing of the 2010/11 capital programme as detailed within
the report;
e) The balance on the general reserve of £1,328,018 at 31 March
2011;
f) The updated capital programme for 2011/12 to 2012/13 and the
associated financing of the schemes as outlined within the report and
detailed at Appendix I.
Cabinet member(s):
Ward(s) affected:
All
All
Karen Sly, Financial Services Manager, 01263 516243,
Karen.sly@north-norfolk.gov.uk
Contact Officer, telephone number,
and e-mail:
1.
Introduction
1.1
This report presents the draft year end position for the financial year 2010/11. The detail
of the report includes comments on the more significant variances of actual income and
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6 June 2011
Overview and Scrutiny
22 June 2011
Full Council
28 June 2011
expenditure compared to the revised budget for 2010/11 as approved by Full Council on
15 December 2010. The report also includes the outturn position for the 2010/11 capital
programme along with an update for the capital programme for the period 2011/12 to
2012/13.
1.2
The contents of this report will be considered by the Overview and Scrutiny Committee
on 22 June. The outturn position as now reported will be used to produce the statutory
Statement of Accounts for 2010/11. The Accounts and Audit Regulations 2011 which
came into force on 31 March 2011 made a change to the reporting requirements for the
annual Statement of Accounts for Local Authorities. Previously the draft Accounts for the
year ending 31 March had to be approved by Members by 30 June and the final audited
version published by 30 September. Now the draft accounts must be approved by the
Chief Finance Officer by 30 June and by Members by 30 September. Part of the reason
for the change is that Members can be made aware of the findings of the audit and make
a better informed decision. The draft accounts can still be published by 30 June as long
as the accounts are clearly signposted ‘unaudited’.
1.3
At the time of preparing this report there are a number of final figures for 2010/11 which
have not yet been confirmed and therefore estimates have had to be made. This is not
unusual due to the timing of producing the outturn report and the lead in time for
publication of committee papers.
1.4
Any material adjustments to the figures used within this report will either be reported at
the meeting or reflected in the draft Statement of Accounts when they are produced.
2
Background
2.1
Regular budget monitoring reports have been presented to Cabinet and Overview and
Scrutiny Committee throughout the year highlighting budget variances and those
projected to have a full year effect on the revenue budget. The budget for 2010/11 was
also amended during the year and the revised budget approved by Full Council in
December 2010.
2.2
The last budget monitoring position was reported to Members in March for the period to
the end of January 2011 and anticipated a full year underspend of £118,855 at that time
after allowing for the earmarking of a number of underspends for ongoing committments.
This report now shows the final budget monitoring position for the 2010/11 financial year.
2.3
The deadline for the production of the draft Statement of Accounts is 30 June with
publication of the final audited approved version by 30 September. As mentioned at 1.3
the timing of the year end process requires a number of estimates to be used within the
figures now presented, the most significant of which is the housing benefit subsidy. The
subsidy claim for the 2010/11 financial year must be submitted by 31 May 2011 but will
not be audited until later in the year and therefore a review of the level of the benefits
earmarked reserve has been carried out to ensure adequate provision pending any
repayment of subsidy following completion of the final grant claim.
2.4
Following the finalisation of the outturn position the statutory accounts are then
produced. At the time of reporting the outturn position there are still some entries that are
required within the Statement of Accounts for example impairment costs that will be
charged to service accounts but will be reversed out therefore having no impact on the
overall general fund position. These will be entered in the published accounts and will be
fully reconciled to the position now reported.
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Overview and Scrutiny
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Full Council
28 June 2011
3
Revenue Account Position
Overall Position
3.1
The General Fund Revenue Account Summary is attached at Appendix E and shows an
underspend for the year of £328,111. This is after allowing for a number of contributions
to earmarked reserves and earmarking in year underspends for current commitments.
Transfers to earmarked reserves are necessary where underspends have occurred
mainly due to the timing of work not being completed as planned by 31 March 2011 and
where no budget exists in 2011/12. Transfers to earmarked reserves have also been
made where service grants have been received in the year but have been allocated
against future projects, for example Coastal Pathfinder Grant or where grant allocations
were made towards the end of the financial year which were either unbudgeted or above
the level budgeted. Further details on the reserve movements made in 2010/11 are
included at section 4 of the report.
Service Variances
3.2
This section of the report aims to highlight the more significant movements compared to
the revised budget for the year.
3.3
As required by accounting standards the General Fund summary shown at Appendix E
includes certain notional charges within the totals for net cost of services. In particular
this relates to transactions covering pension costs and capital charges.
3.4
The International Accounting Standard 19 (IAS19), (formerly Financial Reporting
Standard 17 (FRS17)) requires that charges are made to service areas in respect of
pensions that reflect the pension benefit actually earned in the year, even though the
receipt of the pension may be many years into the future, rather than just the cash
contributions that are made to the Pension Fund. IAS19 therefore ensures that the full
financial consequences of service based decisions are reflected on a consistent basis.
3.5
Capital charges represent the value of an asset that has been used within individual
service areas during the year.
3.6
Also within capital charges is Revenue Expenditure Funded from Capital Under Statute
(REFFCUS). This represents expenditure that may be classified under legislation as
capital, but that does not result in the creation of a fixed asset on the Balance Sheet.
This expenditure generally relates to grants and expenditure on property not owned by
the Authority, such as the provision of capital housing grants for example. The purpose
of this is to enable the costs to be funded from capital resources rather than be charged
to the General Fund and impact on that year’s Council Tax.
3.7
Neither IAS19 or capital charges impact on the expenditure that is met by Government
support or the Council Tax payer and are reversed out in the non service expenditure
part of the income and expenditure account.
3.8
Appendix E summarises the whole income and expenditure account (including notional
charges). Table 1 identifies the main variances with the notional charges excluded.
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6 June 2011
Overview and Scrutiny
22 June 2011
Full Council
28 June 2011
Table 1 – General Fund Variances (Excluding Notional Charges)
2010/11
Revised
Budget £
2010/11
Actual £
Variance
(Under)/Over
spend £
Service Area:
Community
3,302,523
2,330,197
(972,326)
Environment
6,334,740
6,180,071
(154,669)
Information
3,152,051
2,964,988
(187,063)
Resources
3,153,511
2,779,715
(373,796)
526,972
474,344
(52,628)
0
10,000
10,000
16,469,797
14,739,315
(1,730,482)
Parish Precepts
1,427,268
1,427,268
0
Non service expenditure
(436,955)
(434,886)
2,069
(1,202,820)
178,467
1,381,287
(76,368)
(57,353)
19,015
16,180,922
15,852,811
(328,111)
(16,180,922)
(16,180,922)
0
0
(328,111)
(328,111)
Supporting Communities
(Surplus)/Deficit from Norse
Net cost of services (excluding
notional charges)
Contributions to/ (from) earmarked
reserves
Contributions to/ (from) general reserve
Net expenditure to be met from grants
and taxes
Income
(Surplus)/ Deficit
3.9
The reasons for the variances shown in table 1 for the contributions to and from reserves
are explained in section 4. Appendix F provides details of the variances for each of the
services areas. The following commentary seeks to highlight the more significant
variances and concentrates only on the direct costs and income movements compared
to the revised budget. Figures in brackets represent an underspend or additional income.
3.10
Community
a) Planning Policy (£102,697) – The main reason for the year end variance is due to the
timing of the expenditure in relation to the Local Development Framework adoption and
publicity. These costs are being funded from the Housing and Planning Delivery Grant
(HPDG) that is being held in an earmarked reserve and therefore will be required in the
2011/12 financial year. In addition examination costs were £39,500 less than required.
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6 June 2011
Overview and Scrutiny
22 June 2011
Full Council
28 June 2011
b) Landscape (£22,724) – A Habitats Regulations grant of £16,835 was received at the end
of March 2011 and due to the late notification it was not able to be utilised in the year.
The main purpose of the grant is to offset the costs of implementing statutory duties
under the Wildlife and Habitat Regulations. This has been carried to 2011/12 within an
earmarked reserve. The remainder of the underspend relates to expenditure being
funded from the HPDG earmarked reserve for tree preservation works that have not yet
been carried out.
c) General Economic Development (£63,688) – Of the underspend £36,882 relates to
planned recession works being funded from an earmarked reserve which have not yet
been carried out. Of the remaining underspend £20,918 represents a grant that has
been drawn down from the Marine Management Organisation to support North Norfolk
fisheries local action group which will be spent in 2011/12. These two items have
therefore been carried forward within an earmarked reserve at 31 March 2011.
d) Coast Protection (£53,417) – The majority of the underspend is in relation to repairs not
carried out in the year as planned due to the inclement weather in the last quarter of the
year restricting the amount of work which could be completed. This has been carried
forward at the year end in the coast protection reserve and will be utilised in 2011/12.
e) Coastal Pathfinder Project (£406,066) – The year end variance reflects the currently
unspent grant received for the pathfinder project. The grant has been fully allocated
against a number of projects and has therefore been carried forward to fund these
commitments.
f)
Strategic Housing (£172,565) – The majority of the year end underspend reflects a
£70,000 underspend on homelessness grant funded expenditure and £85,000 grant
received to support the County wide youth homelessness project.
g) Local Land Charges (£49,759) – The year end variance includes turnover savings
generated from a vacant post of £13,868 and the Land Charges New Burdens Grant
received at the end of March. A grant has been paid to Local Authorities responsible for
administering personal searches to fund potential future claims for reimbursements. This
has been transferred to an earmarked reserve to offset future claims as applicable.
These will be closely monitored during the year as part of the budget monitoring reports.
h) Transport (£68,508) – The year end variance is made up of a number of items, the most
significant being an underspend of £50,851 for reimbursements to bus operators for the
concessionary fares scheme. From 1 April 2011 responsibility for the administration of
the concessionary fares scheme transferred from Districts to Counties. Any claims from
the bus operators in relation to reimbursements for the period up to the transfer date
would fall to the districts. The revised budget did assume an element of costs (£39,334)
to be funded from the concessionary fares earmarked reserve. Due to the year end
underspend this has not been required, however it is recommended that this balance
remains in the earmarked reserve pending any notification of claims. The balance of the
underspend for the year relates to a number of smaller underspends and also additional
income above the level budgeted for railcards and replacement bus passes.
3.11
Environment
a) Licensing £14,589 – The overall overspend within this service is made up of a number of
smaller variances including less income than anticipated.
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Full Council
28 June 2011
b) Environmental Protection (£20,419) – The year end underspend is made up of a number
of variances and includes the following. Staff turnover not achieved resulting in an
overspend of £5,766; an underspend of £6,835 on equipment and materials not required
in the year, an underspend of £7,370 on professional fees for contaminated land and
land drainage not required in the year; additional income of £13,822 from various
rechargeable works and the sale of air quality monitoring equipment and Local Authority
Pollution Prevention and Control Fees.
c) Foreshore £14,830 – Of the overspend £6,895 reflects additional costs for emergency
telephone services where mobile reception is not available, £4,799 in relation to the Blue
Flag application and £2,531 for beach cleansing costs.
d) Woodlands Management £34,974 – The main reason for the overspend is due to
additional one-off costs of £23,091 for emergency remedial tree works identified as part
of Health and Safety inspections. Smaller underspends within the service include vehicle
lease and repair costs of £3,284 above budget.
e) Cromer Pier (£18,620) – Underspend on minor repairs and maintenance costs for the
Pier, this has been carried forward within an earmarked reserve to fund future repair
costs.
f)
Waste Collection and Disposal (£77,421) – The overall underspend on the waste
collection and disposal service is made up of a number of variances within these budget
headings. The most significant variances include the following:
• additional profit share income of £114,173 due to an increase in the price of recycling
materials sold;
• £26,459 for recycling initiatives not required in the year;
• £10,530 for processing of street sweepings, this was mainly due to the adverse
weather;
• £17,172 for professional fees not required (these were budgeted to be funded from an
earmarked reserve and will no longer be utilized);
• £8,860 for tipping away costs;
• Additional fee income from prescribed and commercial customers of £7,168;
These have been offset by the following:
• Additional contractor charges for prescribed, commercial and other collection
processing and disposal costs of £68,177, which includes additional costs for recycling
contamination;
• Additional processing costs for material recycling of £23,294;
• £14,735 loss of income from tipping away income no longer collectable.
g) Environmental Strategy (£55,664) – Of the outturn variance £35,880 relates to an
underspend of expenditure identified as part of the carbon reduction plan. These are
one-off costs being funded from an earmarked reserve and have therefore been carried
forward to 2011/12. Expenditure totaling £20,090 funded from area based grant has
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28 June 2011
been committed but not yet incurred and has therefore been carried forward to the new
financial year.
h) Civil Contingencies (£29,475) - Of the underspend £21,692 reflects a saving on
employee costs as a result of a vacant post not appointed during the year. The
remainder of the underspend reflects a number of demand led supplies and services
budgets not required in the year.
3.12
Information
a) IT Support Services (£57,002) – Of the underspend £40,210 relates to software costs
that were budgeted for within the revenue accounts but are actually eligible as capital
expenditure and have been transferred to capital. A revenue contribution to capital has
been made in the year to fund these. Of the remaining underspend £10,135 relates to
telephone call costs and rental being lower than anticipated and £4,346 reflects an
underspend on staff training due to a number of free courses being utilised and use of
coaching within the team.
b) Registration Services (£13,864) - This service includes the costs for running elections
and producing the register of electors, the underspend is due to printing costs being
lower than budgeted.
c) Member Services (£29,533) – Of the underspend £5,589 relates to an area based grant
for e-petitions that has not yet been spent so has been rolled forward to 2011/12. The
remaining year end variance includes; £8,390 less expenditure being incurred on the
review of the constitution (this was a one-off item budgeted to be funded from an
earmarked reserve); £12,736 underspend on Member travelling expenses, subsistence
and telephone reimbursements and £4,858 underspend on Member basic allowances.
d) Legal Services (£53,938) – The most significant variance within this service in the year
relates to an underspend of £27,868 against one-off costs budgeted to be funded from
an earmarked reserve for a review of standards arrangements and work in relation to a
compulsory purchase order. Of the remaining underspend there was a saving of £13,316
due to less demand for the use of external legal fees.
e) Media and Communications (£13,758) – Within the reprographics budget there is a full
year underspend of £15,266 due to a credit being received in relation to the lease cost of
the printers and also paper costs being less than budget. The balance of the position at
31 March includes one off costs related to a officer restructuring that was funded from
the restructuring reserve.
3.13
Resources
a) Car Parking £73,374 – The main reason for the variance is due to a shortfall in the
income received from car parking as previously highlighted within the budget monitoring
reports towards the end of the year. The largest variance was on pay and display
income which was £58,868 less than budgeted, in addition income from season tickets
and excess charges was less than budget.
b) Benefits (£212,174) – This service includes the total benefit payment made for the year
that are recovered by subsidy. The actual amount of benefits paid are in the region of
£32 million. The year end variance represents an estimated position in respect of the
benefits subsidy claim for 2010/11. Work is ongoing with the system software provider to
reconcile the system reports. The deadline for completion and submission of the claim to
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Overview and Scrutiny
22 June 2011
Full Council
28 June 2011
the Department for Work and Pensions is 31 May which will then be audited later in the
year. Due to the significant movements against the budget and the current issue with the
system reporting, it is recommended that £200,000 of the underspend within the service
be transferred to the earmarked reserve to allow for any adjustments to subsidy payable
to the DWP following the external audit.
c) Non Distributed Costs (£6,712,000) – As mentioned at 3.4 under IAS19 charges are
required to be made to service areas in respect of pensions that reflect the pension
benefit earned in the year, even though the receipt of the pension may not be until many
years in the future. These entries to the accounts are charged to ‘Non Distributed Costs’
and then reversed out under the net cost of services to negate any impact and leave
only the ‘real’ costs (i.e. the employer pension contributions, actuarial strain costs and
added years costs) chargeable against the general fund. Of the variance £21,000
reflects the charge for Settlements and Curtailments which represents the cost of the
early payment of pension benefits as a result of redundancies. Also included is a
movement of (£6,733,000) for Past Service Costs. This represents the effect of future
pension increases being linked to the Consumer Prices Index (CPI) and not the Retail
Prices Index (RPI). This change arose from the Chancellor’s budget statement in June
2010 and will reduced the deficit on the pension fund as reported in the statement of
accounts . The individual services will have been charged with the real cost of employer
pension contributions and any variances on these actual costs will be reported at the
service level.
d) Personnel and Payroll Support Services (£64,584) – The most significant underspend
within this service for the year is an underspend of £48,703 on the common training
budget of which £12,000 relates to Member training, £5,000 for the Learning Pool and
£10,000 for Health and Safety training which have all been carried forward within an
earmarked reserve. There is also an underspend for the year of £10,854 on relocation
and interview expenses not incurred.
e) Administrative Buildings £18,198 – Costs of £29,369 had previously been incurred as
part of a capital scheme at a Council depot. These are no longer eligible to be
capitalised and therefore must be funded from revenue in the year. There are a number
of smaller variances within this service heading including an underspend on structural
surveys of £8,125, although this was planned to be funded from the asset management
reserve in the year and therefore has been carried forward to 2011/12.
3.14
Supporting Communities
a) Active Communities (£26,519) – The variance includes an underspend of £12,321 on
Youth Inclusion Strategy and North Norfolk Youth Voice projects and £15,191 due to
expenditure not being incurred by North Norfolk Community Partnership as a result of
delaying the Community Strategy refresh until after the elections.
b) CCTV (£16,204) – The service is showing an underspend of £22,037 for the purchase of
CCTV cameras and screens for the control room that were budgeted for within the
revenue account but have been transferred to capital. A revenue contribution to capital
has been made in the year to fund these in the year. The overall position has been
reduced by backdated electricity costs of £7,556 for the CCTV control room due to
invoices previously being paid on estimates. Regular meter readings are now being
recorded.
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28 June 2011
Non Service Expenditure and Income
3.15
The non service expenditure and income predominantly relates to investment income.
The 2010/11 outturn position achieved from the Council’s treasury management activity
was £15,000 lower than the amount anticipated in the revised budget. Investment
income for the year was £547,241 at an average rate of 2.07% from an average balance
available for investment of £26.5m. The revised budget anticipated a total of £562,000
would be earned at an average rate of 2.19% from an average balance of £25.7m. The
Treasury Management Annual Report is included as a separate item on this Agenda and
provides more details on the performance of the Treasury Management activity for the
year.
4
Reserves
4.1
The Council holds a number of earmarked reserves, ie those that are held to meet
known or predicted liabilities, and which are separate from the general fund reserve. The
purpose of the earmarked reserve is generally determined by the name/description of it.
Earmarked reserves are used at the year end for carrying funds forward to the new
financial year to fund ongoing commitments.
4.2
The general reserve is held for the purpose of providing a working balance to
help cushion the impact of uneven cashflows to avoid temporary borrowing and
also as a contingency to help cushion the impact of unexpected events or emergencies.
4.3
Section 3 of the report highlighted some areas where an underspend had occurred in the
year and a request had been received for it to be carried forward to meet future spending
commitments. Unlike capital budgets underspends on revenue budgets in the year are
not automatically rolled forward at the year end where there is an annual budget
provision. Where the underspend represents a grant received which has not yet been
fully utilised (for example the Coast Protection Pathfinder project) or there has been a
delay in the planned use, (for example the Housing and Planning Delivery Grant
(HPDG), the unspent grant has been rolled forward within an earmarked reserve. Other
requests to roll forward underspends have been considered by Corporate Management
Team and the recommended treatment is reflected in the position now reported.
4.4
The revised budget assumed a net transfer of £1,874,317 in the year from earmarked
reserves. Table 2 shows the budgeted and actual net movement to and from earmarked
reserves in the year. Movements out of reserves are shown in brackets.
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28 June 2011
Table 2 – Earmarked Reserves Movement
Name/Description
Organisational Development
Coast Protection
Coastal Pathfinder
Asset Management
Sports Hall Equipment
Common Training
Local Strategic Partnership
Environmental Health
Environmental Policy
Election Reserve
Land Charges
Local Development Framework
Regeneration Projects
Housing and Planning Delivery Grant
(Revenue)
Housing and Planning Delivery Grant
(Capital)
Housing
Concessionary Fares
Benefits
Restructuring
Carbon Management
Legal and Democratic Services
Cromer Pier
Net Movement to/(from) Earmarked
Reserves
Capital Projects Reserve
Net Movement to/(from) Earmarked
Reserves
4.5
Budgeted
Movement
2010/11
£
(90,000)
(106,828)
(457,966)
(47,907)
(4,000)
(21,000)
(12,168)
(79,500)
(29,000)
40,000
0
(44,000)
(80,105)
(254,583)
Actual
Movement
2010/11
£
90,000
(65,402)
148,100
(26,084)
3,160
6,000
(12,168)
(79,500)
(8,910)
40,000
50,356
(44,000)
(22,305)
(183,748)
(19,390)
(22,899)
(3,509)
0
(39,334)
(295,881)
(155,400)
(40,000)
(49,000)
0
(1,786,062)
155,000
0
(95,881)
(139,211)
(4,120)
(2,401)
15,000
(199,013)
155,000
39,334
200,000
16,189
35,880
46,599
15,000
1,587,049
(88,255)
377,480
465,735
(1,874,317)
178,467
2,052,784
Variance
£
180,000
41,426
606,066
21,823
7,160
27,000
0
0
20,090
0
50,356
0
57,800
70,835
The following provides detail on a number of the more significant variances within the
earmarked reserves.
a) Organisational Development – The 2010/11 budget assumed that one-off costs of
£90,000 being funded from this reserve resulting from the implementation of the pay and
grading review would be incurred during the year. Furthermore the base budget also
allowed for the ongoing impact of the review of £90,000. Due to protracted negotiations
in agreeing the pay and grading model and outcome these costs have not been incurred,
therefore it is recommended that the full £180,000 is carried forward pending the
outcome and financial implications of the pay and grading review.
b) Coastal Pathfinder – As outlined earlier in the report the balance of the unspent
Pathfinder revenue grant has been transferred to the earmarked reserve to fund ongoing
projects.
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6 June 2011
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28 June 2011
c) Housing – A grant of £85,000 to support a County wide youth homelessness project was
received in the year but has not yet been spent. In addition £70,000 of the
homelessness grant received in the year remained unspent at the year end and has
therefore been carried forward to fund related expenditure in 2011/12 and 2012/13.
d) Benefits – As mentioned earlier in the report the outturn position takes account of a draft
subsidy claim for which reconciliations are still to be carried out. Due to the significant
year end variance a contribution has been made to the earmarked reserve pending the
final subsidy claim.
e) Capital Projects Reserve – The VAT shelter receipts have been transferred to this
reserve in the year and £200,000 reallocated from this reserve to the Pathfinder reserve
as previously reported in the 2011/12 budget report to Cabinet in February 2011. The
reason for the variance on the movement on the reserve in the year is due to slippage of
schemes within the capital programme being funded from the capital projects reserve.
4.6
A detailed statement of the position on all reserves including the movements detailed in
table 2 is attached at Appendix G. The overall position gives a total of reserves and
balance of £6,178,971 at 31 March 2011. Appendix G also indicates the planned use of
reserves over the medium term in light of the movements for 2010/11.
4.7
The general reserve balance at 31 March 2011 is £999,907 (before allowing for any of
the 2010/11 surplus). After taking account of the planned spend in 2011/12 the forecast
balance at 31 March 2012 is £1,484,907, although this does include £500,000 within the
reserve which the current financial forecast assumes will be used over the period
2012/13 to 2014/15 therefore giving an unallocated balance of £984,907.
5
Summary – Revenue Account
5.1
During the year the budget has been reviewed and updated resulting in the revised
budget approved in December 2010. The revised budget was amended to reflect the
most up to date position and forecast on service expenditure and income for the year.
5.2
The overall financial position for 2010/11 shows a favourable year end position of a
£328,111 surplus. This is after allowing for a number of underspends to be rolled forward
to fund ongoing commitments or spending pressures in the 2011/12 financial year. This
report recommends that the surplus is transferred to the general reserve which will result
in the balance at 31 March 2011 being £1,328,018.
6
Capital Programme 2010/11
6.1
This section of the report presents the financing of the capital programme for 2010/11
along with an updated programme for 2011/12 to 2012/13. Appendix H provides the
detail of the outturn on the 2010/11 capital programme for non housing, housing and
coast protection along with the financing of each. The updated capital programmes for
the period 2011/12 to 2012/13 are attached at Appendix I.
Cabinet
6 June 2011
Overview and Scrutiny
22 June 2011
Full Council
28 June 2011
6.2
The outturn position for the 2010/11 capital programme highlights where schemes have
slipped between financial years. The reasons for slippage include where schemes have
not progressed as originally planned, and the funding has been carried forward to
2011/12, or where schemes have progressed ahead of schedule, requiring funding to be
brought forward from 2011/12. The following paragraphs provide further details on each
of the capital programmes for non housing, housing and coast protection.
Non Housing
6.3
The non housing capital programme as detailed in Appendix H provides details of the
outturn for the individual schemes. Explanations have been provided where there is a
variance between the actual expenditure and the profiled budget. Expenditure for the
year on non housing schemes totalled £1,010,055 against a current budget of
£2,012,997 giving a variance of (£1,002,942). There has been a requirement to claw
back a total of £30,343 from 2011/12 capital budgets where schemes have commenced
earlier than originally anticipated. The outturn position now reported shows slippage of
(£1,094,518), together with other movements in year of £61,233.
6.4
The following provides further comments on the schemes showing variances at the end
of the year:6.4.1
Playgrounds – The playgrounds scheme is showing a year end overspend of
£3,488. However an additional £4,000 has been received from the Playbuilder
grant fund which is administered by Norfolk County Council (please also see
7.1.1).
6.4.2
New Schemes – As part of the year end process 3 schemes that had initially
been coded to revenue have been established as being eligible for capitalisation.
The costs for these schemes have therefore been transferred to capital and
financed via a Revenue Contribution to Capital Outlay (RCCO). The schemes are
detailed in table 3.
Table 3 – 2010/11 New Schemes
Capital Scheme
Expenditure
£
Bulk Software Purchases
40,210
Air Quality Equipment
18,000
CCTV Equipment
22,037
Total
80,247
6.4.3 Budget claw backs – There have been a number of schemes that have either
started slightly earlier than anticipated or where the spend level in the year was
higher than anticipated. Where this is the case, and budget is available in
2011/12, this has been clawed back to cover the spend. The updated programme
for 2011/12 onwards (Appendix I) reflects these adjustments. The schemes and
amounts are listed in table 4.
Cabinet
6 June 2011
Overview and Scrutiny
22 June 2011
Full Council
28 June 2011
Table 4 – Capital Schemes Slipped from 2011/12
Capital Scheme
Claw back Amount
£
Playground Improvements
3,488
Waste Management & Environmental Health IT System
2,983
Public Convenience Improvements
7,072
Cliff Top Car Park Fencing
3,250
Asbestos Works
4,159
Car Park Environmental Improvements
2,618
Sheringham East Prom Public Conveniences
6,180
Worstead Church
Total
593
30,343
Housing
6.5
The outturn on the general fund housing programme is also shown in Appendix H along
with the financing of the individual schemes. Expenditure for the year amounted to
£1,348,850 against a current budget of £2,793,451. The outturn position now reported
shows slippage of £1,444,601.
6.6
The original financing of the housing capital programme did not assume the receipt of
any second homes funding for 2010/11 due to uncertainties regarding the funding.
However the County Council has now confirmed a final payment will be made and
therefore £323,135 has been used to finance the Affordable Housing schemes for
2010/11. As per previous years this has been treated as a revenue contribution to capital
(RCCO).
6.7
The underspends on Private Sector Renewal Grants and Disabled Facilities Grants for
the year are £14,246 and £94,105 respectively. The nature of renovation grants means
that grants can be approved and therefore committed, although there may be a delay of
up to 12 months before works are actually completed, therefore the underspends have
been carried forward to 2011/12.
6.8
The Housing Association budget was also subject to slippage of £1,263,200 against a
budget of £1,653,600, following delays being experienced in the implementation of
eligible schemes.
6.9
Approval is also sought for slippage of £73,050 in relation to the Strategic Housing and
Choice Base Lettings Systems for additional works which are due to be completed in
2011/12.
Coast Protection
6.10
The outturn on the Coast Protection capital programme for 2010/11 is also shown in
Appendix H. This shows a total expenditure in the year of £406,100 compared to a
budget of £1,626,430. Slippage of £1,227,384 is requested into 2011/12 in relation to
Cromer Coast Protection Scheme 982 (£173,763), and the Pathfinder Project
(£1,053,621). A claw back of £7,054 is also required in relation to the SMP Preparation
Cabinet
6 June 2011
Overview and Scrutiny
22 June 2011
Full Council
28 June 2011
of Common Version for Approval and Other Additional Studies which is to be financed
from an additional external grant approval for £10,000 which was received on the 18
February 2011, and this has now been built into the 2011/12 programme. The
expenditure incurred on the Coast Protection capital programme is fully funded from the
Environment Agency Grant and DEFRA Pathfinder Grant.
7
Capital Programme 2011/12 Update
7.1
Appendix I shows the updated capital programme for the period 2011/12 to 2013/14.
The programme has been updated to take account of slippage of approved capital
projects between financial years along with the following amendments / additions.
7.2
7.1.1
Playgrounds – During 2010/11 an additional £4,000 was received in relation to
the playground schemes from the Playbuilder grant scheme which is
administered by Norfolk County Council. This additional funding has therefore
increased the overall scheme budget from £270,672 to £274,672, although it
should be noted that the majority of this grant was used to finance spend during
2010/11.
7.1.2
Budget claw backs – As discussed above in 6.4.3, during 2010/11 there were a
number of schemes that either started slightly earlier than anticipated or the
spend level in the year was higher than anticipated. Where this was the case,
and budget was available in 2011/12, this was clawed back to 2010/11 cover the
spend. The updated programme for 2011/12 onwards (Appendix I) reflects these
adjustments.
7.1.3
Cromer Red Lion Toilet Refurbishment - In response to inflationary increases
from 2008 when the budget was originally approved and new requirements
imposed upon the scheme following planning approval, the budget for the
redundant Red Lion public conveniences conversion scheme has been updated
and an additional sum of £35,000 allocated to this project. The specification will
be reviewed as part of the tendering process to ensure value for money and keep
costs to a minimum.
As part of the 2011/12 Base Budget Report that was presented to Cabinet on 14
February 2011 and approved by Full Council on 23 February 2011 there were a number
of new capital schemes recommended. These schemes were all approved and these
have now been included in the programme within Appendix I and are summarised in
table 5.
Cabinet
6 June 2011
Overview and Scrutiny
22 June 2011
Full Council
28 June 2011
Table 5 – 2011/12 New Capital Schemes
New Capital Scheme
Scheme Total
£
Provision of Electricity at Holt Country Park
Cromer Pier and West Prom Refurbishment Project
13,000
200,000
Sheringham East Prom Public Conveniences
85,000
North Walsham Regeneration Schemes
70,000
Car Park Improvements
52,000
Provision of Car Park Ticket Machines
103,000
Fakenham Community Centre
45,000
Worstead Churchyard Wall
15,000
Procurement for Upgrading Current Civica System as a
Single Authority
240,000
Total
823,000
7.3
The financing of the updated capital programme is detailed within Appendix I. The
financing at this point in the year assumes capital receipts totalling £3.8 million will be
used to finance schemes in 2011/12. The progress of achieving the capital receipts as
forecast will continue to be monitored throughout the year as part of the budget
monitoring process.
7.4
Housing Capital Programme – The updated Housing capital programme is included
within Appendix I and reflects the slippage from 2010/11.
7.5
The Housing capital programme continues to be financed from capital grants, preserved
right to buy receipts, the Capital Projects Reserve and housing capital receipts and the
receipts position will continue to be monitored to ensure the programme remains
affordable.
7.6
Coast Protection Capital Programme – The 2011/12 coast protection capital
programmed was approved by Full Council on 23 February 2011. There have been no
changes to the programme since the budget report, other than those related to slippage
and additional grant, which have already been detailed in paragraph 6.10 above and
these adjustments are reflected within Appendix I.
8
8.1
2011/12 and Future Years
A balanced budget for 2011/12 was set in February 2011. This included savings and
additional income totaling £1.1 million which had been identified as part of the budget
and financial planning process and in response to the reduction in government grant for
the year of £1,168,000. At the same time as presenting the budget for the forthcoming
year the future financial projections were also reported detailing future projected funding
gaps based upon the Government’s provisional finance settlement. These are currently
estimated to be just under £850,000 for 2012/13, increasing to £886,000 in 2013/14 and
to £1.6million in 2014/15. This position was based on a number of assumptions about
future grant reductions and increases in Council Tax.
Cabinet
6 June 2011
Overview and Scrutiny
22 June 2011
Full Council
28 June 2011
9
Financial Implications
9.1
The financial implications are discussed in detail within the report.
10
Risk Implications
10.1
Future funding levels and forecast gaps – As previously outlined at 8.1 the forecast gap
for 2012/13 is just under £850,000 and this does assume a one-off use of the general
reserve of £200,000. Further work will be carried out over the coming months to inform
the medium term financial strategy taking account of variances in the financial year
2010/11 and where these will have an impact in future years.
10.2
Use of one off funding from reserve – The use of reserves to fund ongoing expenditure
represents a one-off source of funding and whilst it does allow time for financial planning
it should not be relied upon as a long term financial strategy.
10.3
Delivery of planned and further savings – Savings and additional income totaling £1.1
million have been included within the budget for 2011/12. Achievement of these is critical
to delivering a balanced position for the current financial year and also a contribution to
future budget decisions. These are being closely monitored as part of the budget
monitoring process for the current year and corrective actions identified where applicable
to ensure that the current year budget remains achievable.
10.4
Concessionary fares – As mentioned earlier in the report the responsibility for
administering the concessionary fares bus scheme transferred to County from April 2011
There is a still a risk of claims being made against the scheme for the period prior to the
date of transfer for which there could be a financial implication. There is currently an
earmarked reserve of £39,334 to mitigate financial claims.
10.5
Capital funding – The funding of the capital programme assumes a level of capital
receipts to be generated from preserved right to buy receipts and also general fund
asset sales. There is a risk that until the asset has been disposed of the capital receipts
will not come into fruition, which could lead to a shortfall in the available funding for the
capital projects for which expenditure has been committed or incurred. Where it is a
timing issue the capital schemes can be financed by the use of reserved capital receipts
which will then be replaced once the new capital receipt has been received.