Cabinet
21 March 2011
Overview and Scrutiny
5 April 2011
Agenda Item No______7_______
BUDGET MONITORING 2010/11 – PERIOD 10
Summary:
This report presents the budget monitoring position for the revenue
account and capital programme to the end of January 2011.
Conclusions:
The overall position at the end of January 2011 is showing an
underspend for the current financial year of £118,855.
Recommendations:
It is recommended that:
1) Cabinet note the contents of the report and the revenue account
forecast for the current financial year;
2) That Cabinet note the current position on the 2010/11 capital
programme;
3) Delegated authority is given to the Deputy Chief Executive and
Strategic Director Community in consultation with the relevant Cabinet
Portfolio members for setting the land charges fees for 2011/12.
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 compares the actual income and expenditure for period 10 which ended on
31 January 2011 to the 2010/11 revised budget as reported to Cabinet on 29 November
and approved by Full Council on 14 December 2010.
1.2
The budget monitoring position at the end of period 9 was presented to Cabinet and
Overview and Scrutiny in February. That report included a detailed commentary on the
variances to the end of December 2010 and also the Treasury Management Quarterly
Report. The reason for taking two consecutive period budget monitoring reports so close
to the year end is to allow sufficient time for any actions to be taken where necessary
and appropriate to ensure that the revised budget for the current year remains
achievable. This report for period 10 aims to provide an overview of the more significant
variances and appraise Members of the forecast year end position.
1.3
The latest position on the current years capital programme is also included within this
report.
1.4
The outturn position for 2010/11 will be reported to Cabinet and Overview and Scrutiny
Committee in June 2011.
Cabinet
21 March 2011
Overview and Scrutiny
5 April 2011
2.
Background
2.1
Budget monitoring is carried out monthly with service managers and officers with budget
responsibility. The detail within this report highlights the more significant variances
against the profiled budget to date along with those which are expected to have a year
end variance and also where applicable to recommend action to be taken to ensure that
the overall budget remains achievable.
2.2
Within both the last budget monitoring report and this report Budget Managers have
started to highlight some full year underspends where they would like to carry the budget
forward to the new financial year. Unlike capital budgets, revenue budgets are set for the
year and underspends for the year are not automatically rolled forward. Where a
revenue budget does remain unspent at the year end for which there is an annual
budget provision, this is not automatically carried forward. If the underspend relates to
expenditure being funded from earmarked reserves and the underspend has occurred
due to timing, for example a delay in carrying out the planned work then these funds will
normally be carried forward. For all other underspends or additional income received in
the year any requests to carry these forward at the year end will be considered as part of
the outturn process and will take into account the overall financial position compared to
budget at 31 March 2011.
2.3
In contrast, capital budgets are allocated to a capital scheme when it is approved, where
the scheme has either progressed ahead of schedule or has not progressed as
previously anticipated the capital budget can be reprofiled to a different year, i.e. the
budget is slipped to a later year or brought forward and no separate request is made to
carry the capital budget forward.
3.
Budget Monitoring Position – Revenue Services
3.1
The General Fund summary (Appendix A) shows the overall position at the end of period
10 and is currently showing a year to date variance of £832,884. There are however
commitments which represent orders placed but not delivered of £652,219 still to be
taken into account leaving a net position of £180,665. Further details on each of the
service areas are included within Appendix B.
3.2
The following tables provide details of the more significant variances, along with those
which are anticipated to have a full year effect for each of the five main service areas.
Community
Development Control – Of the variance to date
£21,586 relates to additional income from
planning and other fees above the profiled
budget, this is currently expected to result in a
full year effect of £21,000. This has been offset
by a couple of small overspends on overtime
due to additional planning applications and
external professional fees.
Planning Policy – The main reason for the
variance to date is that the Planning
Over/(Under)
spending to
date
£
(16,356)
(62,135)
Estimated
full year
effect
Performance
Indicator at
Period 10
where
applicable
£
(15,000) 1,218
applications
have been
received to
P10 in the
current year
compared with
1,028 for the
same period in
2009/10
(20,000)
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21 March 2011
Overview and Scrutiny
Inspectorate has not yet billed the Council for
the LDF examination fees. These are being
funded from the Housing and Planning Delivery
Grant (HPDG) earmarked reserve. Although the
actual costs are expected to be less than
originally budgeted and will result in an
underspend of £20,000. Adoption costs of the
LDF of £20,000 were budgeted in the current
year, again to be funded from the earmarked
reserve. These will now be incurred in the new
financial year and therefore will require the
budget to be rolled forward at the year end.
Building Control – The position to date does
not show a significant variance although income
is slightly below budget and is currently
anticipated to have a small full year shortfall of
£5,000.
General Economic Development – The
variance to date is due to a number of delays in
scheduled work due to the restructuring of public
sector partnership providers. There is not
currently anticipated to be a full year
underspend.
Coast Protection – The underspend to date is
mainly due to a delay in carrying out some of the
sea defence schemes due to the adverse
weather conditions. Any underspend at 31
March will be requested to be carried forward to
fund the current programme of works.
Coastal Pathfinder – This represents an
underspend on the project to date, any year end
underspend will be carried forward to fund the
projects as per the plan.
Strategic Housing – This service includes the
VAT shelter receipt which is transferred to the
capital projects reserve at the year end to fund
the housing capital programme. The revised
budget assumed £604,000 would be received in
the year, the latest projections from the housing
trust suggest that the actual will be £60,250 less,
this will be adjusted for by movements to and
from the capital projects reserve. There is
anticipated to be an underspend of £45,000 on
expenditure being funded from the
homelessness prevention grant, and a request
will be made to carry this forward at the year
end. The full year effect of £15,000 reflects the
recovery of homelessness accommodation
charges through benefits and individual
contributions. Whilst the report is only showing
the actuals to the end of period 10 a grant of
£85,000 for youth homelessness has been
received in period 11 which will show as a
variance at the end of the year. This will
5 April 2011
(3,296)
5,000
(68,595)
0
(36,923)
0
(357,567)
0
102,693
(15,000)
Cabinet
21 March 2011
Overview and Scrutiny
however need to be carried forward to the new
financial year for ongoing commitments.
Local Land Charges – Of the variance to date
£10,000 relates to turnover savings due to a
vacant post not yet filled. This will result in a full
year underspend but has been reduced slightly
by additional County Council Search fees. There
will be additional income in the year from search
fees chargeable, however due to the land
charge service being run on a cost recovery
basis it will prudent to earmark this for future
deficits. The fees for 2011/12 were approved by
Full Council in December 2010, however further
work on the level of fees has been carried out by
the service and therefore this report asks for
delegated authority to be given to the Deputy
Chief Executive and Strategic Director
Community in consultation with the relevant
Cabinet Portfolio Members for amending the
land charges fees.
Transport – The variance to date is made up of
a number of smaller underspends including
reimbursement to bus operators and costs for
the card management system. The full year
underspend relates to a creditor that was
entered for 2009/10 that is no longer required.
Sub Total Community
Environment
5 April 2011
(11,902)
(8,000)
(8,042)
(5,000)
(462,123)
(58,000)
Over/(Under)
spending to
date
£
Travellers – The full year variance reflects a
lower level of contributions being received that
do not fully cover the costs of the sites.
Parks and Open Spaces – Within the variance
to date there is an underspend on grounds
maintenance for which £10,000 will be used to
fund the emergency remedial tree works
referred to in Woodlands Management below.
Leisure Complexes – Of the underspend to
date £4,068 reflects repairs and maintenance
work that has not yet been invoiced. The
remaining balance reflects an underspend on
repairs and maintenance which is anticipated to
result in a full year variance.
Other Sports – The variance to date consists of
a number of small variances including income
for the walking project and free swimming
initiative grant still to be offset by expenditure.
The full year effect reflects additional
contributions made in the year, these have been
Estimated
full year
effect
3,543
£
10,000
(4,519)
(10,000)
(12,556)
(5,000)
(5,926)
7,500
Performance
Indicator at
Period 10
where
applicable
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21 March 2011
Overview and Scrutiny
5 April 2011
partly offset by additional income from the
mobile gym.
Pier Pavillion – No further repairs planned at
the Pier Theatre in this financial year and
therefore an underspend is projected.
Woodlands Management – The variance to
date and full year effect reflects emergency oneoff tree repairs required as a result of Health and
Safety inspections.
Cromer Pier - No further minor repairs and
maintenance are planned for the pier this
financial year, however it is expected that any
underspend on repairs and maintence in the
year will be requested to be rolled forward at the
year end to fund repairs in 2011/12.
Public Conveniences – The main reason for
the variance to date is due to invoices from the
contractor not yet received and therefore paid.
Waste Collection and Disposal – See
comment at 3.3.
* Actual at end of December 2010, the snow
disruption did have an impact on performance
and therefore the average rate for the first 9
months is likely to be around 44.7%.
Cleansing – The variance to date reflects
contractor invoices outstanding at the end of
period 10.
Environmental Strategy – This service
includes costs to be funded from an earmarked
reserve for the green travel plan and carbon
reduction revenue initiatives totaling £43,000.
The service also includes costs for a number of
projects totaling £22,500 being funded from an
area based grant received in 2009/10. These
projects include a Global Action Plan to support
individuals in their homes for energy saving
initiatives. A number of the carbon reduction
projects are planned to be delivered within the
next four years and therefore will require slipping
to future financial years. This will be covered as
part of the outturn report.
Civil Contingencies – Of the variance to date
£12,054 relates to an underspend on employee
related costs due to a vacant post and training
not yet undertaken. This is expected to result in
a full year underspend of £18,000. The
remaining underspend relates to a number of
smaller underspends in the year to date.
Sub Total Environment
(4,772)
(5,500)
21,089
16,655
(16,159)
0
(17,982)
0
(45,055)
(95,000)
(64,685)
0
2,916
0
(19,112)
(18,000)
(163,218)
(99,345)
Recycling rate
for all
recyclables
44.7%*, target
47.5%.
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21 March 2011
Overview and Scrutiny
Information
IT – Support Services – There are a number of
variances within the service including £6,597 for
staff training not yet undertaken and £5,321 for
telephone rental and call costs. Overall there is
anticipated to be a full year saving of £8,000.
TICs – Salaries and oncosts for holiday pay
entitlement.
Registration Services – The full year effect
relates to additional employee costs for byelections and parish polls which are not
rechargeable.
Members Services – The underspend to date is
made up of a number of variances including an
underspend on computer hardware purchases of
£5,214, Members traveling allowances of £5,517
and basic allowances of £6,588. Overall these
are anticipated to result in a year end
underspend of £10,000
Legal Services – The variance to date and the
full year effect reflects less demand for the use
of external legal fees.
Graphical Information System – GIS
development work was budgeted for within the
revenue account in the year, this is now being
funded as a one-off from the BPR capital
project.
Media and Communications – Within the
position to date there are a number of
compensating variances. Following a restructure
within the team there is a net overspend in the
year, this will be funded from the Restructuring
Reserve.
Sub Total - Information
Resources
Car Parking – The variance to date largely
reflects car parking income not received as
budgeted as follows:
- £56,678 less from pay and display
- £7,074 less from excess charges
- £3,596 less from season tickets.
Based on the actuals to date and trends shown
in previous years it is anticipated that there will
5 April 2011
Over/(Under)
spending to
date
Estimated
full year
effect
£
(12,846)
£
(8,000)
11,952
10,000
(3,730)
2,160
(20,755)
(10,000)
(17,129)
(4,000)
320
(10,000)
5,081
6,000
(37,107)
(13,840)
Over/(Under)
spending to
date
£
60,335
Estimated
full year
effect
£
64,000
Performance
Indicator at
Period 10
where
applicable
Performance
Indicator at
Period 10
where
applicable
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21 March 2011
Overview and Scrutiny
5 April 2011
be a full year shortfall on income in the region of
£64,000.
Industrial Estates – The variance to date and
full year effect reflects the impact of the
collection of previous years arrears in excess of
debtor provisions made.
Parklands – Some analysis of the actuals to
date for electricity for the site has been carried
out and from the work completed so far a
potential year end underspend has been
highlighted. Further work is still required on
actual meter readings and therefore no full year
variance has been included in the report at this
stage.
Benefits – The variance to date reflects bad
debts charged to the service, it is not currently
envisaged that this will result in a full year effect.
(5,010)
(5,000)
(4,959)
0
18,346
0
(48,770)
(33,500)
(962)
9,530
A post audit adjustment of £45,730 has now
been confirmed for the 2008/09 subsidy claim.
This will show as a favourable variance at the
year end and will be reviewed as part of the
overall subsidy position within the final accouts
process.
*below target due to the continued increase in
work load and the continued implementation of
fixes on the civica system.
Personnel and Payroll Support Services – Of
the underspend to date £8,958 relates to
relocation and interview expenses not incurred.
Taking into account minimal external advertising
and appointments being made, it is expected
that this will result in a full year saving of
£10,500. Of the remaining variance for the
current year £41,931 relates to the common
training budget which has not been fully utilized
in the year. This does include £12,000 for
Members induction and subsequent training,
and will be requested to be carried forward at 31
March for the training to be delivered following
the May 2011 elections. Taking all of this into
account an underspend of £23,000 is still
predicted for the current year from the training
budget.
Administration Buildings – Overall the service
is not showing a significant variance to date,
although there are a number of compensating
variances contained within the service. There
will be an overspend of £9,530 for electricity at
Fakenham Connect, this is due to previous
estimated readings being too low, mainly in
relation to the CCTV control room. Actual
Average
processing
days for new
claims and
change events
– 15 Days
(end of
January).
Target – 12
days. *
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21 March 2011
Overview and Scrutiny
5 April 2011
readings are now being taken on a regular
basis.
Property Services – The variance to date
reflects the Leadership of Place income received
in the current year. Any remaining balance at the
year end will need to be carried forward as part
of the final accounts process. The full year
overspend relates to necessary work identified
from the legionella survey.
(32,130)
6,300
Central Costs – Whilst it is not currently
showing as a variance, this service includes
provision for the costs of the implementation of
the Pay and Grading review including £90,000
being funded from an earmarked reserve. The
proposed model is yet to be agreed and
therefore the budget will not be utilised in the
year but will need to be carried forward to fund
costs in 2011/12.
Corporate Leadership Team – The turnover
savings have not been achieved however this is
currently offset by a number of minor savings
within supplies and services.
Sub Total Resources
(1,965)
0
392
0
(14,723)
41,330
Supporting Communities
Active Communities – Expenditure not yet
incurred on the North Norfolk Youth Voice, there
are plans for this to be fully utilised before the
end of the financial year.
Community Safety – External grants received
for which the expenditure is yet to be incurred in
the current year.
CCTV – There are outstanding commitments of
£22,037 for replacement cameras and screens
for the control room. This work is currently
ongoing.
Sub Total Supporting Communities
3.3
Over/(Under)
spending to
date
£
(15,798)
Estimated
full year
effect
Performance
Indicator at
Period 10
where
applicable
£
0
(16,032)
0
(21,255)
0
(53,085)
0
Waste Collection and Disposal – Within the service there are a number of variances to
date, the most significant relates to outstanding invoices not received from the contractor
for contract fees and Norfolk County Council for waste disposal and therefore not
processed by the end of period 10 (these have since been received and are now being
processed in period 11). The full year effect is made up of a number of favourable
variances on income and expenditure including the following:
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21 March 2011
Overview and Scrutiny
5 April 2011
• additional profit share income of £112,000 due to an increase in the price of recycling
materials sold;
• £13,000 saving for processing of street sweepings, this was mainly due to the adverse
weather;
• £35,000 for recycling initiatives not required in the year;
• £15,000 for large sized bin purchases not required;
• £12,500 for professional fees not required (these were budgeted to be funded from an
earmarked reserve and will no longer be utilized);
• £9,000 for tipping away costs;
• £13,500 for a number of smaller savings;
These have been offset by the following:
• Commercial and garden collection and disposal costs of £52,500;
• Reduced income from recycling credits mainly due to a lower tonnage of glass
recyclable material of £20,000;
• A reduction in the fee income from trade waste and recycling of £15,000;
• £15,000 loss of income from tipping away income no longer collectable.
Overall these variances are anticipated to result in a full year underspend of £95,000
(excluding the underspend relating to costs being funded from a reserve).
4.
Budget Monitoring Position – Savings 2010/11
4.1
The following table provides details of the savings included in the 2010/11 revised
budget along with an updated forecast for the current year. Where a variance is shown,
comments on these was provided within section 3 of the report.
Service Area
Workstream 1 – Management Structures
Environmental Health
Planning and Building Control
Sub Total of Workstream 1 Savings
Workstream 2 - 6% Savings:
Environmental Health
Strategic Housing
Leisure and Cultural Services
ICT
Economic and Tourism Development
Finance and Exchequer Services
Organisational Development
Legal and Democratic Services
2010/11
Revised
Budget
£
2010/11 Variance
Forecast
£
£
75,000
121,733
196,733
75,000
121,733
196,733
0
0
0
25,410
32,910
24,682
30,000
30,291
29,400
1,000
15,000
25,410
32,910
24,682
30,000
30,291
29,400
1,000
15,000
0
0
0
0
0
0
0
0
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21 March 2011
Overview and Scrutiny
5 April 2011
Sub Total of Workstream 2 Savings
Additional income from Corporate Asset Management –
Car Parks and Rent Reviews
Total Savings/ Income from Workstream 2
Total Savings/ Income
188,693
22,678
188,693
0
0
22,678
211,371
408,104
188,693
385,426
22,678
22,678
4.2
The majority of the planned savings are still on target for the current year, the revised
budget was updated where applicable, as detailed within section 3 above there is
expected to be a shortfall from car parking income in the year.
5.
Treasury Management
5.1
The revised budget for 2010/11 anticipated that a net total of £559,600 would be earned
in interest. This assumed an average balance of £25.6m at a rate of 2.19%. The period
9 monitoring report suggested that this figure would reduce by £5,500 at the year end
because, although the balance available for investment had been higher than
anticipated, the rate achieved on investments was lower.
5.2
The revised budget assumed that the bonds which matured in December 2010 would be
replaced at a rate of 3.5%. As indicated in the period 9 report, the 4 year bond rate in
December was only 2.06%, which was not considered a good return for the length of
investment. An alternative option available under the 2011/12 Treasury Strategy is to
make a 2 year deposit at more attractive rates. The 2 year rate is currently around
2.0%, although Bank of Scotland has been offering 2.6%.
5.3
In the meantime, these funds are being invested in a call account with National
Westminster Bank plc earning 0.75% which is much lower than the rate assumed in the
revised budget. Consequently, the interest rate for the year is anticipated to reduce to
2.07% which, on an investment balance estimated to be £26.2m, will produce a
reduction in net interest earned against the revised budget of approximately £17,000
6.
Budget Monitoring Position – Summary
6.1
The following table provides a summary of the full year projections for the five main
service areas along with an updated use of reserves figure
Service Area
Community
Environment
(99,345)
Information
(13,840)
Resources
41,330
Supporting Communities
Service Variance Total
Contributions to/ (from) Reserves:
General Fund Reserve
Other Reserves
Non Service Expenditure and Income
Total Impact
6.2
Estimated Full Year
Effect
£
(58,000)
0
(129,855)
0
(6,000)
17,000
(118,855)
Overall the revenue position shows an underspend of £118,855. Any unallocated
underspend would be transferred to the restructuring reserve at the year end, to be used
Cabinet
Overview and Scrutiny
21 March 2011
5 April 2011
to fund one-off restructuring costs from 2011/12. The overall position will continue to be
monitored over the coming weeks before the year end.
7.
Budget Monitoring Position – Capital
7.1
An update of the capital programme was presented to Members in February 2011 as
part of the budget report.
7.2
Appendix C shows the latest position against the current 2010/11 approved programme
and provides details of expenditure up to the end of period 10, along with comments on
the progress of individual schemes.
7.3
Slippage of capital budgets to 2011/12 will be reported as part of the outturn report
which will be reported to Members in June.
8.
Implications to the Council
8.1
The detail within section 3 of the report outlines the significant variances against the
profiled budget to the end of period 10 for each of the five service areas and also those
anticipated to have a variance at 31 March 2011. Overall the total of the projected
service variances at the year end is an underspend of £118,855, this is after allowing for
the updated contributions to and from reserves.
8.2
The overall budget will continue to be monitored by officers and will be used to inform
the final accounts position which will be reported to Members in June 2011.
9.
Recommendations
9.1
It is recommended that:
1) Cabinet note the contents of the report and the revenue account forecast for the
current financial year;
2) That Cabinet note the current position on the 2010/11 capital programme;
3) Delegated authority is given to the Deputy Chief Executive and Strategic Director
Community in consultation with the relevant Cabinet Portfolio members for setting the
land charges fees for 2011/12.