PART 1 - (OPEN TO THE PUBLIC)
ITEM NO.4
REPORT OF THE DIRECTOR OF CORPORATE SERVICES
TO THE BUDGET COMMITTEE ON WEDNESDAY, 1st OCTOBER 2003
TITLE: REVENUE BUDGET 2003/04 : BUDGET MONITORING
RECOMMENDATIONS: Members are asked to note the contents of this report and
those of the Directors of Education and Leisure and Community and Social Services.
EXECUTIVE SUMMARY :
The report provides details of the current position relating to budget monitoring for
the revenue budget and of the implementation of the agreed revenue budget savings
for 2003-2004.
BACKGROUND DOCUMENTS : Various working papers and reports. (Available for
public inspection)
CONTACT OFFICERS:
Chris Hesketh 793 2668 chris.hesketh@salford.gov.uk
Colin Kay Tel. 793 3245 colin.kay@salford.gov.uk
ASSESSMENT OF RISK: Key budgetary control risks were identified in reports to
this committee in June and September 2003.
SOURCE OF FUNDING : Revenue Resources
LEGAL ADVICE OBTAINED : Not applicable
FINANCIAL ADVICE OBTAINED : This report concerns key aspects of the Council’s
revenue finances and has been produced by the Finance Division of Corporate
Services.
WARD(S) TO WHICH REPORT RELATE(S) :
KEY COUNCIL POLICIES :
None specifically
2003/04 Revenue Budget
REPORT DETAIL
1
INTRODUCTION
1.1
This report advises members of the current position relating to revenue budget
monitoring.
1.2
At the last meeting of this committee members requested that reports to this meeting
be prepared by:a) The Director of Education and Leisure;
b) The Director of Community and Social Services;
on how the budget pressures on the Education and Social Services budgets
respectively will be managed. These reports are being presented elsewhere at today’s
meeting.
1.3
This report is based on directorates latest budgetary control reports and the trading
statements for the DLO/DSOs.
2
BUDGETARY CONTROL REPORTS
2.1
Development Services
There is forecast to be a shortfall on the Markets income budget of £20,000 with no
corresponding scope within the expenditure budget to accommodate this sum. As a
consequence a separate report is being prepared on the options available. There have
been no significant changes to the items previously reported.
2.2
Education
A number of issues within the Resources budget, some of which have been previously
reported, are still a cause for concern and this will be subject to a special report to
today’s meeting.
2.3
Community and Social Services
The budget difficulties previously reported in September are continuing and the
directorate is still managing to contain expenditure within its overall budget resource.
However, full year projections particularly around Home Care will require significant
management activity to control and this is highlighted in the additional report included
on today’s agenda.
2.4
Housing General Fund
The Housing General Fund is currently reporting an adverse variation of £153,000
mainly caused by the late receipt of fees anticipated on capital schemes. This position
is under further review and the Head of Housing is confident that the fee income will
recover later in the year.
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2.5
General
The City Council is anticipating a windfall rates refund relating to rateable value
reductions on leisure centres in the region of £1m, together with a dividend from
Manchester Airport of £500,000. Both these items have not been budgeted for and all
things being equal should help bolster reserves and help achieve the 3% target earlier
than planned.
Other directorates are not indicating that there are any significant problems and at
present it is anticipated that net expenditure should be contained within budget
allocations.
3
DIRECT LABOUR and DIRECT SERVICE ORGANISATIONS
3.1
The DLOs/DSOs under control of the Education Directorate are currently trading
satisfactorily. However, there could be additional costs incurred within the Building
Cleaning DSO as a consequence of the change of hours from 37 to 36 that came into
effect on the 1st September 2003 as part of the Single Status agreement. This area of
the budget will therefore continue to be scrutinised.
3.2
The Street Cleansing and Refuse Collection DSOs are continuing to trade satisfactorily
and are both favourable to the plan. The Grounds Maintenance DSO is currently
showing a small loss but this in line with the seasonal profile. VMM is trading profitably
but adverse to plan. The situation is being closely monitored.
3.3
Since the last report there has been an in-depth scrutiny of City Highways expenditure
and income and there is a separate report on today’s agenda. Indications are that the
DSO could break even at year-end. However, at this stage in the financial year this
position must be treated with caution and close examination continued throughout the
remainder of the year.
4
HOUSING REVENUE ACCOUNT
4.1
The net budget position as at August 2003 is still showing an adverse variation of
£127,000 caused mainly by a shortfall in income from rents and fees and charges.
Additional money is being spent on void dwellings to improve re-let times and the level
of fees and charges is being reviewed. However, it is still anticipated that the account
balance will meet its budgeted level by the end of the year. Additional monitoring will
continue in specific areas to ensure that this will still be the case.
5
BUDGET RISKS
5.1
A full budget monitoring exercise is undertaken each month by all directorates to
ensure that any issues are identified at an early stage so that corrective action may be
taken.
5.2
The key budget risks identified by the various directorates were outlined in the reports
to this committee in June and September 2003
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6
PROGRESS ON AGREED SAVINGS
6.1
The attached Appendix 1 provides details of the approved savings included in the
2003-2004 revenue budget.
6.2
Once again there has not been a significant change to the savings achieved mainly
because a large proportion have already been implemented. However, close scrutiny
of the remaining savings will need to continue to ensure they are achieved.
6.3
The appendix will continue to be updated during the year and it will be included as part
of the regular monthly monitoring report until all the savings have been implemented
and achieved.
7
SUMMARY
7.1
The budgetary control exercise is still indicating that some potential problem areas are
continuing and close scrutiny will still be needed to determine if overspends are likely
to occur and remedial action identified.
7.2
The respective reports of the Directors of Education and Leisure and Community and
Social Services presented at today’s meeting will outline their plans of action on how
the budget pressures for the current year will be managed.
7.3
Some further progress has been made since last month in respect of the agreed
savings for the year although it must be remembered that the majority have already
been achieved or are on target to be implemented. Some of the proposals will need to
be the subject of close scrutiny to ensure that the full amount of the savings will be
achieved.
8
RECOMMENDATIONS
8.1
Members are asked to note the contents of this report and those of the Directors of
Education and Leisure and Community and Social Services.
Alan Westwood
Director of Corporate Services
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Appendix 1
SAVINGS (SUMMARY)
Achieved
Not Yet
Achieved
£
£
Total
£
ARTS AND LEISURE
173
220
393
EDUCATION
220
0
220
ENVIRONMENTAL SERVICES
176
23
199
CORPORATE SERVICES
328
0
328
6
0
6
PERSONNEL
103
58
161
DEVELOPMENT SERVICES
149
88
237
COMMUNITY AND SOCIAL
SERVICES
201
25
226
CHIEF EXECUTIVE
131
0
131
1,487
414
1,901
HOUSING
TOTAL
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Ref.
Description
Achieved
£000
Not
Achieved
Comments
0
175
56
0
0
19
19
25
0
0
25 Savings expected to be achieved
19 Budget reduced accordingly
19 Budget reduced accordingly
8
45
5
0
0
15
8
45 Budget reduced accordingly and post deleted
20 Still under construction
3
18
5
0
173
220
Reduction to the Salford Consortium budget and increase
in LSC funding
Discretionary Student Awards - delete remainder of
contingency budget
Deletion of two support posts wef 30/9/03
Share of top sliced savings
150
0
150 Budget reduced accordingly
20
0
20 Budget reduced accordingly
30
20
0
0
30
20 Budget reduced accordingly
Total
220
0
Total
ARTS & LEISURE
Rates saving by transferring to Leisure Trust or PPP
AL2
Reduction to events budget, deletion of post, reduction of
grants budget, reduced sponsorship for events
Review Library Service provision
Removal of remaining budget for Clifton House Farm
Reduction of Arts grants budget and delete one part time
post – develop links with Lowry Centre
Increased revenue from Fitness Suites
Delete Town Twinning post and grants
Reduction of subsidy to Working Class Movement
Library
General housekeeping savings and increased income
Share of top sliced savings
AL3
AL4
AL5
AL6
AL7
AL8
AL9
AL10
Total
175 Will be achieved if transfer to Trust is completed by
01/10/03
56 Achieved
8 Alternative savings now being considered
18
393
SAVINGS (ANALYSIS)
AL1
EDUCATION
ED2
ED3
ED4
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220
Appendix 1 Contd.
ED1
Ref.
Description
Achieved
£000
Not
Achieved
Comments
Total
ENVIRONMENTAL SERVICES
75
23
ES2
Increase in fees and charges
80
0
ES3
Increase in casual vacancy target (share of top sliced
savings)
21
0
176
23
Energy savings initiative
Reduction in Internal Audit
Reduction in staffing costs arising from the termination
of the recruitment & retention scheme
Savings on the purchase of goods and services through
corporate contract arrangements (share of top sliced
savings)
67
33
200
0
0
0
67 Budget reduced accordingly
33 Budget reduced accordingly
200 Budget reduced accordingly
28
0
28 Budget reduced accordingly
Total
328
0
Reduction in supplies and services budget (share of top
sliced savings)
6
0
6 Budget reduced accordingly
Total
6
0
6
Total
98 Savings ongoing following service changes arising
from current review
80 Fees and charges have been reviewed. Income is
being closely monitored
21 Budget reduced accordingly
199
CORPORATE SERVICES
CS1
CS2
CS3
CS4
328
HOUSING
HO1
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Appendix 1 Contd.
Grounds Maintenance efficiency review
SAVINGS (ANALYSIS)
ES1
Ref.
Description
Achieved
£000
Not
Achieved
Comments
48
27
0
0
28
28
56 Vacancies being received. On target to achieve.
0
15
0
15
15 To be top sliced across all directorates based on
advertising spend over the last three years
15
103
58
161
0
0
38
50
38 Ongoing work to achieve full saving
50 Marketing strategy in progress. To be put out to
tender with other security schemes: successful
applicant to ensure self-financing
130 Budget reduced accordingly
19 Budget reduced accordingly
Total
PERSONNEL
PE1
PE2
PE3
PE4
Deletion of two posts from the Job Evaluation team
Deletion of one post following the VER of existing
Assistant Director
Efficiency and casual vacancy savings (including share of
top sliced savings)
Reduction in advertising costs
Total
DEVELOPMENT SERVICES
Cease providing Eccles Town Centre Management
To make the Quay Watch self financing
DS3
DS4
Non filling of vacant posts
Reduction in the supplies and services budget (share of
top sliced savings)
130
19
0
0
Total
149
88
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237
Appendix 1 Contd.
DS1
DS2
SAVINGS (ANALYSIS)
Proposals yet to be determined
48 Budget reduced accordingly and posts deleted
27 Budget reduced accordingly and post to be deleted
Ref.
Description
Achieved
£000
Not
Achieved
Comments
Closure of Moorside and Calderwood Community
Centres
Reduction in planned painting programme
Deletion of refurnishing scheme for Orchard Mount DC
Reduction in equipment budget
Reduction in the purchase of day care from an
independent provider
(SS2 to SS5 are share of top sliced savings)
100
0
67
7
27
0
0
0
0
25
67
7
27
25
Total
201
25
226
27
0
27 Budget reduced accordingly and post deleted
55
10
27
12
0
0
0
0
55
10
27
12
131
0
131
1,487
414
1,901
Total
COMMUNITY & SOCIAL SERVICES
SS1
SS2
SS3
SS4
SS5
100 Achieved
Budget reduced accordingly
Budget reduced accordingly
Budget reduced accordingly
On target
CE1
CE2
CE3
CE4
CE5
Total
GRAND TOTAL
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Budget reduced accordingly
Budget reduced accordingly
Budget reduced accordingly
Budget reduced accordingly
Appendix 1 Contd.
Deletion of ICT Co-ordinators post and associated IT
budget
Reduction in lottery budget
Reduction in annual subscription to Midas
Freeze vacant Economic Development Officer post
Casual vacancies and efficiency measures including share
of top sliced savings)
SAVINGS (ANALYSIS)
CHIEF EXECUTIVE