Agenda Item No_____12_______
BUDGET MONITORING REPORT 2012/13 – PERIOD 6
Summary:
This report summarises the budget monitoring position
for the revenue account and capital programme to the
end of September 2012.
Options considered:
Not applicable
Conclusions:
The overall position at the end of period 6 shows a
forecast underspend of £23,552 for the current financial
year on the revenue account. The revised budget for
2012/13 will be presented for approval in December.
Recommendations:
It is recommended that:
1) Cabinet note the contents of the report and the
current budget monitoring position.
2) New homes bonus of £40,000 be used to fund a
CIL Planning Policy Officer as outlined at 2.3.
Reasons for
Recommendations:
To update Members on the current budget monitoring
position for the Council and approve additional capital
budget as outlined in the report.
LIST OF BACKGROUND PAPERS AS REQUIRED BY LAW
(Papers relied on the write the report and which do not contain exempt information)
System budget monitoring reports
Cabinet Member(s)
Ward(s) affected
Cllr Wyndham Northam
Contact Officer, telephone number and email: Karen Sly, 01263 516243,
Karen.sly@north-norfolk.gov.uk
1.
Introduction
1.1.
This report compares the actual expenditure and income position at the end
of September 2012 to the current budget for 2012/13 as set by Full Council in
February 2012.
1.2.
The budget process for 2012/13 is ongoing and as part of that the budget for
the current financial year will be revised and reported to Cabinet and Scrutiny
in December and then for approval by Full Council on 19 December 2012.
The information contained within this report will be used to inform the revised
budget along with the latest financial projections for future years.
1.3.
The base budget for 2012/13 includes savings and additional income of
£897,096. This report includes the latest position on both of these areas.
1.4
The budget monitoring position at the end of July was reported to Members in
September, this report now provides the latest updated position on both
revenue and capital.
2.
Budget Monitoring Position – Revenue Services
2.1
The general fund summary at Appendix F shows the high level budget
monitoring position at 30 September 2012. This shows a year to date
variance of £74,978 underspend. Appendix F provides further details of the
individual service variances. The services are grouped by Heads of Service,
whilst all appointments have been made to the Management Team there are
still some reallocations of services between the Heads Service to be
confirmed. Where this requires the reallocation of budgets below the level
reported this will be updated for the revised budget.
2.2
The following tables seek to provide reasons for the more significant
variances along with those which are anticipated to have a full year effect.
Table 1 – Service Variances
Assets and Leisure
Car Parking – The current underspend reflects a number of
variances on both income and expenditure compared to the
profiled budget. These include additional repairs and
maintenance totalling £23,883 of which £20,000 relate to
ticket machines. There is also an additional management fee
relating to the previous financial year of £12,746 and further
contract costs linked to the additional penalty notice income.
The total full year effect of the expenditure variances is
£64,200, although these will be more than offset by additional
income. Additional car park fee and excess charge income
totalling £113,115 has been received for first half of the year
above the profiled budget. The current forecast for additional
income for the year estimates an additional £45,000 from pay
and display fees and a net £30,000 from penalty notices (this
is after allowing for the contract costs for the additional
income as per the Service Level Agreement). Further work on
these budgets will be carried out over the coming weeks to
inform the revised budget. The overall implication of the
variances now reported is a net additional income of £10,800
for the year.
Administration Buildings – The variance to date and the full
year impact is mainly due to a reduction in the National Non
Domestic Rate (NNDR) costs following a revaluation of
Cromer and Fakenham Connect offices. This has been offset
by professional fees which were incurred in order to achieve
the NNDR reduction. The net effect is an underspend of
£14,000 although this has been reduced by additional costs
incurred in relation to the disaster recovery facility at
Over/
(Under)
Spend to
Date
£
Estimated
Full Year
Impact
£
(78,108)
(10,800)
(24,900)
(7,000)
Table 1 – Service Variances
Over/
(Under)
Spend to
Date
£
Estimated
Full Year
Impact
£
Fakenham due to the relocation from the annex building.
Parks and Open Spaces – The variance to date and full year
impact reflect business rates now payable by the lessee.
(6,282)
(3,500)
Foreshore – The variance to date is mainly due to repairs and
maintenance not yet completed.
(29,844)
0
Sports Centres – The full year effect includes a number of
budget movements including, professional fees relating to the
business case at North Walsham Sports Centre which is
being funded from an earmarked reserve, North Walsham
sports hall repairs and a saving due to a vacant post. The
overall impact is a forecast overspend of £12,342.
(13,608)
12,342
Leisure Complexes – The full year overspend is mainly due to
an inflationary increase on the Management fee.
(3,795)
19,871
Other Sports – The overall full year saving reflects the net
position in relation to the mobile gym as a result of additional
fee income and contributions for the service received in the
year.
(3,459)
(13,913)
Foreshore (Community) – The variance to date and full year
effect reflects additional costs of £5,000 for emergency phone
rentals in relation to beach safety, the balance reflects
additional costs incurred in relation to the Bathing water
directive requirement for provision of public information, the
latter is being funded from an underspend from the previous
year that was carried forward within the general reserve.
10,605
7,524
Investment Properties – An income provision has been
allowed for within the accounts for the past two years for
service charges, these are no longer recoverable and results
in an unfavourable variance of £15,500 in the current year.
The balance of the overspend reflects additional lift repairs at
the Rocket House.
(3,774)
25,500
CCTV – The full year effect is made up of two smaller
variances, £3,902 in respect of voluntary contributions no
longer anticipated and staff turnover savings not achieved.
(2,708)
6,392
(36,057)
0
8,832
10,000
Community and Economic Development
General Economic Development – The variance to date
reflects a matched funding grant provided by Norfolk County
Council to provide business start-up support. This will be
matched by expenditure as it is incurred.
Local Land Charges – The variance to date and full year
Table 1 – Service Variances
Over/
(Under)
Spend to
Date
£
Estimated
Full Year
Impact
£
effect reflects the additional income that was included as part
of the 2012/13 budget process which is not now anticipated.
In addition the revised charging structure is still to be agreed
for street naming and numbering.
Coast & Community Partnership – The variance to date
includes £8,547 Community Right to Challenge New Burdens
Grant received which is yet to be allocated against
expenditure. The balance reflects big society expenditure not
yet incurred in the year.
(38,820)
0
Coastal Management – The variance to date is mainly due to
a vacant post and external consultant costs not yet incurred.
(30,293)
0
904
(27,000)
6,117
(6,000)
(12,386)
(18,000)
Publicity – The full year saving reflects the net position
following the introduction of advertising in Outlook.
(2,066)
(14,250)
Customer Services (Corporate) – The full year impact reflects
a post that has become vacant in the year for which it is not
currently planned to be replaced in the current year.
(6,228)
(24,000)
52,610
12,100
4,176
11,400
Customer Services
IT Support Services – Whilst the variance to date does not
highlight a significant movement compared to the profiled
budget, a saving will be achieved in the current year due to
the Civica system changes.
TIC’s – Whilst the position to date is showing an overspend
there is anticipated to be a full year underspend in relation to
staffing cost in the current year.
Housing Service Management – The variance to date and full
year impact reflect a vacant post .
Development Management
Development Management – The variance to date is due to
actual planning income being less than the profiled budget,
although some larger applications have recently been
received that would offset this. The full year implication
includes a small shortfall in income anticipated as part of the
2012/13 budget for pre application advice which was not
introduced until May and a compensation payment awarded
after an ombudsman enquiry.
Planning Management and Support – A savings proposal was
accepted as part of the 2012/13 budget which covered a
review of the management support. This has not yet
commenced pending the peer review work and therefore the
saving will not be delivered in the current year as budgeted.
Table 1 – Service Variances
Over/
(Under)
Spend to
Date
£
Estimated
Full Year
Impact
£
This variance was highlighted as part of the 2011/12 outturn
report and a service underspend was rolled forward as part of
the year end process to mitigate the impact in 2012/13.
Environmental Health
Environmental Protection – The full year impact is due to the
delay in implementing staffing restructure within the service.
There is estimated to be an impact in the current year only.
(4,956)
10,161
Waste Collection and Disposal – Of the variance to date
£21,560 relates to additional contract costs due to the
stepped price increase for trade waste, whilst it is anticipated
to result in a full year overspend this has been mitigated by a
£5,905 2011/12 year end provision for the contribution to
NEWS for the plastic sorter not required in full. Overall the
Service Manager remains optimistic that expenditure and
income will be contained within the overall budget for the
year.
34,690
0
Cleansing – The variance to date largely reflects an
underspend on employee costs due to a vacant post. The full
year effect relates to additional income anticipated from dog
and litter bins.
(15,227)
(3,690)
(87,229)
0
20,587
26,099
(35,942)
(50,000)
Financial Services
Local Taxation – The variance to date reflects a one-off grant
received to assist in funding costs associated with the design
and implementation of the new localised Council Tax
Scheme. This will be fully utilised in the year.
Non Distributed Costs – This service includes the pension
payments in relation to past employees. Inflation chargeable
on these payments is normally contained by reductions in the
payments following the death of members. The full year effect
reflects inflation which has not been offset by reduced
payments of £9,634. The remainder of the full year effect
includes one-off actuarial strain costs as a result of in-year
officer structural changes. This one-off cost is being funded
by a transfer from the Restructuring and Invest to save
proposals reserve.
Corporate and Democratic Core – The variance to date
reflects an outstanding creditor from the previous financial
year in respect of external audit costs. The full year effect
reflects the saving now anticipated to the audit fee following
from the changes to the external auditing arrangements from
2012/13 onwards.
Table 1 – Service Variances
Over/
(Under)
Spend to
Date
£
Organisational Development
Human Resources and Payroll – The variance to date is due
to the corporate training programme not yet being delivered.
All training needs will be assessed following the interim
appraisal process.
Registration Services – The variance to date reflects income
that has not yet been invoiced in relation to elections due to
work still outstanding in agreeing returns and information.
Corporate
Corporate Leadership Team – The variance to date reflects
part of the savings from the management restructure. Further
comments on these corporate savings are included within
section 3.
TOTAL
Estimated
Full Year
Impact
£
(34,374)
0
77,907
0
(29,574)
0
(283,202)
(36,764)
2.3
The Community Infrastructure Levy (CIL) programme will enable more value
from new development to benefit the district and increased staff resources
would allow for a more proactive approach to be taken on allocated housing
and employment sites to encourage inward investment. In order to deliver
this, the planning policy and major developments team needs to be
adequately resourced. This report is recommending that a Planning Policy
Officer post be created who will drive the CIL programme forward. This post is
essentially self-financing as the regulations allow the authority to reclaim the
costs of the preparation of CIL from the scheme when it is implemented.
However initial funding is required until the scheme is introduced and
therefore this report recommends that £40,000 is used from the current years
New Homes Bonus to be replaced once the CIL is in place.
3.
Budget Monitoring Position – Savings and Additional Income
3.1
The base budget for 2012/13 includes savings and additional income totalling
£897,096 within the service areas, the revised figure for the current year is
now £888,065 although it is assumed that all savings will be back on target
for 2013/14. The following table shows a summary of the savings across each
of the service areas. The detail for each of the service savings is included at
Appendix G. Table 2 below summaries the position for each service heading.
Table 2 – Savings and Additional
Income 2012/13
Assets Coastal Defence & Leisure
Customer Services
Community and Economic Development
Development Management
Environmental Health
Financial Services
Organisational Development
2012/13
Base
Budget £
231,778
130,996
39,980
111,500
201,837
93,285
20,160
2012/13
Updated
Budget £
231,778
157,996
39,980
85,600
191,706
93,285
20,160
Variance
£
0
(27,000)
0
28,900
10,131
0
0
Corporate
Total
67,560
897,096
67,560
888,065
0
12,031
3.2
The variances on the service savings are included in the position reported
within section 2 of the report.
3.3
In addition to the service savings, the financial implications of two on-going
work streams for pay and grading and management restructure were included
in the base budget for 2012/13. The original estimate of the implications were
savings of £225,446 (pay and grading) and £150,000 (management
restructure) in 2012/13. Details on these were provided within the previous
budget monitoring report, essentially between the two workstreams there is
an additional cost (shortfall in budgeted saving) of £50,000 in the current
year. These have previously been included in the budget at a corporate level,
i.e. not at the individual services. The revised budget will be updated to reflect
the position at the service level.
4.
Treasury Management Position
4.1
The budget for 2012/13 anticipated that a net total of £269,900 would be
earned in interest. This assumed an average balance of £26m at a rate of
1.03%.
4.2
At the end of period 6, a total of £112,720 had been earned resulting in a
shortfall against the year to date budget of £23,744. The rate of interest
achieved was 0.9% from an average balance available for investment of
£25.0m.
4.3
Based on the actual results to period 6, a total interest receivable figure of
£224,000 is forecast for the year from an average balance £24.6m at an
average rate of 0.90 %. This will result in an estimated shortfall against the
full year budget £47,900, which is unchanged from the position anticipated at
period 4.
4.4
A report was presented to the Cabinet meeting in October 2012 on investing
in pooled property funds. The Council’s treasury advisor is suggesting the
Council should consider an investment of £5m in the LAMIT fund. Investment
in the fund will take place over the coming months and as a result of this the
expectation is that the overall position on investment income for 2012/13 will
improve. The return on the fund is anticipated to be around 5.0%, and this will
potentially produce an additional £51,250 in interest above the forecast figure
quoted above. At the current time it is expected that the current budget for the
year will be achieved.
5.
Budget Monitoring Position - Summary
5.1
The following table provides a summary of the full year projections for the
service areas along with an updated use of reserves figure where applicable.
Table 3 Summary of Full Year Effects 2012/13
Service Areas (Table 2)
Corporate Savings (Para 3.5)
Non Service Expenditure (Para 4.4)
Estimated Full Year Effect
(£)
(36,764)
50,000
0
Transfers from Reserves
Total Impact
(36,788)
(23,552)
5.2
Overall the revenue position shows a projected underspend of £23,552 for the
current financial year. This position will continue to be monitored and will be
used to inform the revised budget for the current year and the base budget for
2013/14.
6.
Budget Monitoring Position - Capital
6.1
Members were provided with an updated capital programme for both current
and future years as part of the Period 4 Budget Monitoring report which was
approved by Cabinet on the 10 September 2012. Appendix H shows the
latest position for the updated programme, both for the General Fund and
Coast Protection budgets. The appendix also provides details of spend up to
period 6, along with comments on individual schemes where applicable.
6.2
The following commentary provides an update on individual schemes as they
stand at the current time;
a) Car Park Resurfacing and Refurbishment – Of the total budget available for
car park resurfacing and refurbishment, an amount of £10,775 has been
realigned to North Walsham Car Park Environmental Improvements. This
was to reflect the expenditure incurred on car parks in the North Walsham
area, but does not change the overall capital programme budget.
b) Coastal Erosion Assistance – Following the Cabinet meeting on the 10th
September 2012, approval was given to the development of an integrated
approach to coastal management. As a result of this, and following
confirmation of receipt of £60,000 of Coastal Erosion Assistance grant monies
the capital programme has been updated accordingly under the Coast,
Countryside and Built Heritage heading.
c) North Walsham Car Park Environmental Improvements – Following the
realignment of the Car Parks Resurfacing and Refurbishment budget, this
budget has been increased by £10,775, although there is no change to the
overall capital programme total.
6.3
Rocket House – At the current time there is budget available to spend of
£37,916 in relation to capital works at the Rocket House. The Asset
Management Board has identified a series of refurbishment works required to
both the building itself and the lift mechanism. In total the estimated value of
the works is £75,000, including £50,000 for the full renewal and upgrade of
the lift which has been subject to several major breakdowns over the last 6
months. Further details of the work and implications of the work have been
requested prior to additional budget approval.
6.4
Capital Receipts - The updated capital programme for 2012/13 assumes that
new capital receipts of £16,000 will be generated in year from the disposal of
the Mundesley Museum. This disposal is current at the conveyancing stage,
with Legal Services. In addition to this it is also assumed that £390,000 will be
receivable from preserved right to buys. Six preserved right to buys have
been completed in the current year, and the values due to the Authority so
far, amount to £269,769. The position with regards to capital receipts and
financing requirements will continue to be monitored through the year to
ensure that the current capital programme remains affordable.
7.
Conclusion
7.1
The overall revenue budget is showing an estimated full year underspend for
the current financial year of £30,552. The overall financial position for the
current and future years will be considered in detail over the coming months
as part of the budget and financial planning process.
8.
Financial Implications and Risks
8.1
The detail within section 2 of the report highlights the more significant
variances including those that are estimated to result in a full year impact. In
addition the progress made in achieving the two workstream savings targets
from the management restructure and pay and grading will continue to be
monitored and managed to ensure that the overall impact to the Council’s
budget is mitigated.
8.2
The budget for 2012/13 includes service savings and additional income
totalling £897,096. The progress in achieving these is being monitored as part
of the overall budget monitoring process and where applicable corrective
action will be identified and implemented to ensure the overall budget remains
achievable.
9.
Sustainability - None as a direct consequence from this report.
10.
Equality and Diversity - None as a direct consequence from this report.
11.
Section 17 Crime and Disorder considerations - None as a direct
consequence from this report.