PART 1
(OPEN TO THE PUBLIC)
ITEM NO.6
REPORT OF THE STRATEGIC DIRECTOR OF CUSTOMER AND SUPPORT SERVICES
TO THE BUDGET AND AUDIT SCRUTINY COMMITTEE ON WEDNESDAY, 7TH SEPTEMBER 2005
TITLE: REVENUE BUDGET 2005/06: BUDGET MONITORING
RECOMMENDATION: Members are asked to consider the contents of the report and i) request a
detailed report from the Director of Community and Social Services on the areas of overspending within
the budget and the actions being taken to contain overall net expenditure within the budget allocation
and ii) request a detailed report from the Director of Children’s Services concerning the Inclusion and
Transport Services should investigations confirm projected overspendings.
EXECUTIVE SUMMARY:
The report provides details of the current position relating to budget monitoring for the revenue budget,
the key budget risks identified by directorates and the implementation of the agreed revenue budget
savings for 2005-2006.
BACKGROUND DOCUMENTS:
Various working papers and reports. (Available for public inspection)
CONTACT OFFICER:
Chris Hesketh Tel. 793 2668 chris.hesketh@salford.gov.uk
Colin Kay Tel. No. 793 3245 colin.kay@salford.gov.uk
ASSESSMENT OF RISK: Key budgetary control risks were identified in a report to this committee in
July 2005.
SOURCE OF FUNDING: Revenue Resources
LEGAL ADVICE OBTAINED: Not applicable
FINANCIAL ADVICE OBTAINED: This report concerns key aspects of the City Council’s revenue
finances and has been produced by the Finance Division of Customer and Support Services.
WARD(S) TO WHICH REPORT RELATE (S) :
KEY COUNCIL POLICIES: Budget Strategy
None specifically
Report Detail
1.
Introduction
1.1
At this time of year, following completion of the final accounts, the work of the accountancy
division is increasingly focused on budget monitoring. With expenditure data available for a
greater proportion of the year, predictions of full-year effects are becoming more reliable.
1.2
To make maximum use of the resources available, budget monitoring concentrates on an
examination of the large, high risk and volatile budgets.
1.3
The City Council's overall financial position imposes a need for agreed savings targets to be met
and this report also includes an update on the progress being made on the savings proposals.
1.4
Individual directorates prepare regular monthly monitoring reports to their Lead Members. This
report is a consolidation of the significant items from those directorate reports.
2
General Fund Services
2.1
Arts and Leisure
The directorate is still anticipating that net expenditure will be within budget at year-end.
2.2
Chief Executive's
Approval has now been given by the Leader and Lead Member for Customer and Support
Services to the additional cost of projects for 2005/06 of £60,000 within the Marketing and
Communications Division to be met from next year’s budget allocation.
It is anticipated that the mainstream Chief Executive’s budget will remain within target.
2.3
Community and Social Services
Salaries to the end of July 2005 are currently showing a small underspend of £128,000 (0.9% of
the total salaries budget) to date.
Unfortunately, the very volatile Children’s Outside Placements budget continues to come under
additional pressure and the latest monitoring report is projecting a year-end overspend of
£760,000. Close monitoring will need to continue throughout the year.
The Learning Difficulty Service budget is also coming under additional strain as a consequence of
new placements and a reduction in the Supporting People Grant and consequently is anticipating
a year end overspend of £790,000.
In addition other budget pressure areas have been identified as follows :

Next Steps - projected year end overspend £65,000
Additional accommodation costs - anticipated year end overspend £270,000
It is anticipated that the additional cost of the latter three items can be met from elsewhere within
the current budget, but close monitoring will need to continue for the remainder of the year.
ckbudmonsept05
2
2.4
Customer and Support Services
There is currently a very small underspend on the staffing budget to the end of July 2005 and it is
still anticipated that net costs will be within budget at year-end.
At the last meeting of this committee members asked for details of the 2004/05 Community
Committees outturn and this included at appendix 2.
2.5
Planning
As previously reported the Planning budget is now split into three areas i) Joint Venture
Management fee, ii) Managed budgets and iii) Council budgets.
Unfortunately, due to problems associated with the Urban Vision management reporting system
no monitoring information is currently available in respect of the Joint Management fee and
Managed budgets. It is anticipated that the problem will be resolved in the very near future.
Council Budgets:- A shortfall in income on car parking of £41,000 is being more than offset by
additional income of £81,000 in respect of building control fees and £193,000 in respect of
development control fees, but close monitoring will still need to continue for the remainder of the
year.
2.6
Children’s Services
Overspendings are occurring within the Inclusion Service but further investigations are taking
place to assess the situation and evaluate the possibility of potential funding from elsewhere.
The Transport Service is anticipating a year-end overspend in the region of £100,000 and the
position is being investigated further.
Other budget heads are still indicating that net expenditure will be as budget at year-end but
close monitoring will need to continue throughout the year particularly in volatile areas like
Special Education Needs.
2.7
Environmental Services
The overall position is that net expenditure is on target as at the end of July 2005.
2.8
Housing General Fund
There are no areas of the budget that are currently causing concern, however, expenditure on the
homelessness provision and the staff budget (including agency staff) will continue to be closely
monitored.
A separate monitoring report is now produced for the Supporting People programme and this has
confirmed that service reviews to date have been successful in identifying savings across the
Supporting People programme. However, significant risks remain that costs could increase in
other areas within the programme. The contingency fund is still required to meet these risks whilst
the administration budget will continue to be monitored on a monthly basis.
2.9
Corporate Issues


Manchester Airport – favourable trading results for 2004/05 should provide an increase in
dividend payment of £170,000.
Modesole Limited – an unbudgeted dividend of £278,000 has been received.
ckbudmonsept05
3
3

Capital Financing – pre borrowing in 2004/05 and the completion of borrowing requirements
for 2005/06 at preferential interest rates will provide cost reductions in the region of
£500,000.

Property Insurance Renewal – has been renewed within the budget at a modest saving of
£50,000.

District Audit Fees – have been renewed within the budget at a modest saving of around
£30,000.
Housing Revenue Account (HRA)
Although the HRA is currently showing a large underspend which is occurring mainly within
housing repairs (due to fluctuations in the timing of expenditure) latest indications are that there
could be a potential overspend although NPHL are still confident that these cost will be contained
within the available budget.
Other smaller adverse and favourable variations are being shown on the remainder of the budget
and close monitoring will continue to be undertaken throughout the remainder of the year.
4
Direct Labour and Direct Service Organisations
4.1
Details of the trading positions of the various DLOs/DSOs are indicated in the table below :DLO / DSO
School and Welfare
Catering
Building Cleaning
Commercial Catering
VMM
Grounds Maintenance
Street Cleansing
Refuse Collection
As at
22/07/05
Surplus /
(Deficit)
£
127,372
Surplus /
(Deficit)
£
162,802
Surplus /
(Deficit)
£
35,430
Variance
31/07/04
Surplus /
(Deficit)
£
28,922
31/07/05
31/07/05
31/07/05
31/07/05
31/07/05
31/07/05
4,189
4,746
5,150
0
8,950
26,827
22,549
23,286
48,537
9,563
51,602
26,827
18,360
18,540
43,387
9,563
42,652
0
3,272
13,331
(53)
(17,867)
26,976
116
177,234
345,166
167,932
54,697
Total
Budget
Actual
Variance
No DSO is trading adversely. Only the Refuse Collection service is showing other than surplus,
and this is currently break-even.
The overall position shows more favourably all round than the corresponding period last year.
5
Progress on agreed savings
5.1
The attached Appendix 1 provides details of the approved savings included in the 2005-2006
revenue budget.
ckbudmonsept05
4
5.2
Although the actual savings achieved remain the same as previously reported directorates have
confirmed that where budgets have been adjusted these savings are still on target to be
achieved.
5.3
The appendix will be updated each month and will be included as part of the regular monthly
monitoring report until all the savings have been implemented and achieved or alternative
savings found.
6
Budget Risks
6.1
A full budget monitoring exercise is undertaken each month by all directorates to ensure that any
issues are identified at an early stage to enable corrective action to be taken.
6.2
It is useful to identify areas that could represent risks in budgetary control in order that the budget
monitoring exercise can subject them to greater scrutiny. The key budget risks identified by the
various directorates were reported to this committee in July and will be updated and reported
again next month.
7
Summary
7.1
Potential problem areas within the Community and Social Services directorate continue to be
highlighted and are a cause for concern that will need to be subject to close monitoring for the
remainder of the year.
7.2
The non-availability of monitoring information in respect of Urban Vision is a matter that should be
resolved as a matter of urgency.
7.3
The anticipated overspends within the Inclusion and Transport Services of the Children’s
Services directorate are to be investigated further, and subject to findings, a detailed report will
be brought to this meeting next month should an overspend continue to be projected.
7.4
The agreed savings for the year are still on target to be achieved.
8
Recommendations
8.1
Members are asked to consider the contents of the report and also:-
8.2
Request a detailed report from the Director of Community and Social Services on the areas of
overspending within the budget and the actions being taken to contain overall net expenditure
within the budget allocation and
8.3
Request a detailed report from the Director of Children’s Services concerning the Inclusion and
Transport Services should investigations confirm projected overspendings.
Alan Westwood
Strategic Director of Customer and Support Services
ckbudmonsept05
5
SAVINGS (SUMMARY)
Appendix 1
Achieved
Budget
Adjusted
On Target
Total
£000
Budget
Adjusted
Behind
Target
£000
£000
ARTS AND LEISURE
0
13
0
13
EDUCATION
0
22
0
22
ENVIRONMENTAL
SERVICES
0
189
0
189
CUSTOMER & SUPPORT
SERVICES
0
796
0
796
HOUSING
0
16
0
16
DEVELOPMENT SERVICES
0
259
0
259
COMMUNITY & SOCIAL
SERVICES
0
176
0
176
CHIEF EXECUTIVE
0
7
0
7
CAPITAL FINANCING
1,000
0
0
1,000
TOTAL
1,000
1,478
0
2,478
6
£000
Ref.
Description
£000
Comments
Achieved
Budget
Adjusted
On Target
Budget
Adjusted
Behind
Target
Total
Improve attendance management
0
13
0
13 Budget adjusted - being monitored
Total
0
13
0
13
Improve attendance management
0
22
0
22 Budget adjusted - being monitored
Total
0
22
0
22
ARTS & LEISURE
AL1
ED1
ENVIRONMENTAL SERVICES
ENV1
Increase in income
0
130
0
130 Budget adjusted - being monitored
ENV2
Light vehicle fleet tender
0
50
0
50 Budget adjusted - being monitored
ENV3
Improve attendance management
0
9
0
9 Budget adjusted - being monitored
Total
0
189
0
189
SAVINGS (ANALYSIS) Appendix 1 Contd
EDUCATION
CUSTOMER & SUPPORT SERVICES
.
CS1
Support Services Review
0
200
0
200 Budget adjusted - being monitored
CS2
HR – reduce professional & short courses
0
23
0
23 Budget adjusted - being monitored
CS3
Customer Services – supplies & services
0
21
0
21 Budget adjusted - being monitored
ckbudmonjuly04
7
Ref.
Description
£000
Comments
Achieved
Budget
Adjusted
On Target
Budget
Adjusted
Behind
Target
Total
Customer Services – increase court costs
0
25
0
25 Budget adjusted - being monitored
CS5
Finance – increase payroll/pensions schools
SLA’s
0
10
0
10 Budget adjusted - being monitored
CS6
Support Services Review – further savings
0
150
0
150 Budget adjusted - being monitored
CS7
Energy savings
0
150
0
150 Budget adjusted - being monitored
CS8
Procurement – use of purchase cards
0
25
0
25 Budget adjusted - being monitored
CS9
Improve attendance management
0
57
0
57 Budget adjusted - being monitored
CS10
HR – Support Services Review – further
savings
0
100
0
100 Budget adjusted - being monitored
CS11
HR – Procurement of agency staff
0
25
0
25 Budget adjusted - being monitored
CS12
HR – Improve attendance management
0
10
0
10 Budget adjusted - being monitored
Total
0
796
0
SAVINGS (ANALYSIS) Appendix 1 Contd
CS4
796
HOUSING
Use of agency staff
0
14
0
14 Budget adjusted - being monitored
HS2
Improve attendance management
0
2
0
2 Budget adjusted - being monitored
Total
0
16
0
ckbudmonjuly04
8
16
.
HS1
Ref.
Description
£000
Comments
Achieved
Budget
Adjusted
On Target
Budget
Adjusted
Behind
Target
Total
DEVELOPMENT SERVICES
Urban Vision JVC efficiency savings
0
230
0
230 Budget adjusted - being monitored
DS2
Improve attendance management
0
29
0
29 Budget adjusted - being monitored
Total
0
259
0
259
COMMUNITY & SOCIAL SERVICES
SS1
Reorganise transport services
0
25
0
25
Budget adjusted - being monitored
SS2
Reorganise transport services – further
savings
0
50
0
50
Budget adjusted - being monitored
SS3
Improve attendance management
0
101
0
101
Budget adjusted - being monitored
Total
0
176
0
176
Improve attendance management
0
7
0
7 Budget adjusted - being monitored
Total
0
7
0
7
Debt rescheduling
1,000
0
0
1,000 Achieved
Total
GRAND TOTAL
1,000
1,000
0
1,478
0
0
1,000
2,478
CHIEF EXECUTIVE
CE1
SAVINGS (ANALYSIS) Appendix 1 Contd
DS1
CAPITAL FINANCING
ckbudmonjuly04
9
.
C1