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Waverley Borough Council Committee System - Committee Document

Meeting of the Executive held on 02/12/2003
Budget Monitoring - October 2003



Summary & Purpose
This report provides details of the anticipated outturn position at the year end based on the actual expenditure and income position at the end of October 2003. The Executive is requested to support action designed to reduce the projected overspend.

Quality of Life Implications
Natural Resource Use
Pollution Prevention and Control
Biodiversity and Nature
Local Environment
Social Inclusion
Safe Communities
Local Economy
Natural
Resource Use
Pollution
Prevention and Control
Biodiversity
and Nature
Local
Environment
Social
Inclusion
Safe, Healthy
and Active
Communities
Local
Economy
N/A
N/A
N/A
N/A
N/A
N/A
N/A



E-Government implications:

There are no E-Government implications relating to this report.

Resource and legal implications:

This report monitors the progress of income and expenditure to the end of October 2003 for the General Fund and the Housing Revenue Account, showing the latest position regarding the budgeted target reductions and projecting the likely year-end position.

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General Fund

1. The October budget monitoring exercise has identified a potential net overspend before management action of 574,430 at the year-end compared with the approved budget. This compares with a potential net overspend of 443,000 identified in the previous budget monitoring report. However, action has been taken and further action is proposed to reduce the projected overspend at this stage to some 220,000.

2. The previous budget monitoring report identified the following main elements of that overspend as:


Insurance premiums 78,000
Audit Commission Fees 60,000
Land Charges income 55,000
Planning Fee income 30,000
Interest Rates 90,000 3. Further significant variations, not previously reported, and which contribute to the movement since the end of August are:

Waverley Training Services - 100,000 under-achievement of income including prior-year adjustments and business rates revaluation
Miscellaneous Properties - 33,000 shortfall of income on Montrose
Interest Rates – an improvement of 30,000 to the position previously reported (an overall reduction of 60,000 as opposed to 90,000)
Land Charges - 40,000 further deterioration to the position previously reported (a reduction in income of 95,000 as opposed to 55,000) 4. Target reductions of 187,220 in the Officer Manpower budget have been identified to date, compared with the budget target of 240,000. It is expected that the target will be achieved at the year-end.

Inflation Provision

5. 306,830 has been allocated at the end of October from the inflation provision of 320,000.

Supplementary Estimates

6. The approved supplementary estimates are shown below:

Partnership Funding Officer
36,000
Executive 10/12/02
Partnership Funding – Revenue Budget
2,500
Executive 10/12/02
Licensing Admin 400 Hours
12,000
Executive 23/06/03
Emergency Planning – rest centre training
5,000
Executive 01/04/03
Waste Recycling
20,000
Council 15/04/03
WRVS – Meals on Wheels
3,500
Executive 21/07/03
Waste Recycling – Hard-to-Reach properties
19,000
Executive 01/09/03
Total
98,000
Use of balances

7. The use of balances, budgeted at 329,000, will increase to 427,000 as a result of the supplementary estimates above.

8. For the contribution from working balances to remain at 427,000 as approved, savings equal to the potential overspend of 574,430 have to be found.

9. If the outturn is in line with this budget monitoring exercise, the General Fund Working balance would reduce to 674,000 at 1st April 2004, which would be an unacceptably low level.

Housing Revenue Account

10. The budget monitoring process has identified a net deterioration compared with budget of some 295,000. This is principally as a result of reductions in rental income of 250,000 from dwellings and 50,000 from garages. Increased sales of properties under the right to buy scheme and high levels of voids earlier in the year are the main contributory factors.

Conclusion

General Fund

Experience has shown that overspends predicted at mid-year often fail to materialise at year-end. However, the projected overspend on this occasion is significantly higher than at the same stage in previous years and has deteriorated further during the months of September and October.

Last year, Budget Monitoring to the end of October indicated the outturn to be on target to be in line with the approved Budget by the year end; in the event, an underspend of approximately 100,000 was achieved.

Housing Revenue Account

Current indications are that income will fall short of budget as set out in this report.

Remedial Action

General Fund

The action taken to increase car parking charges from 1st December 2003 is expected to generate some 90,000 additional income in this financial year which will reduce the overspend to 484,430.

Officers would also draw attention to increased insurance costs of 78,000 and Audit Fees of 60,000, both of which are considered unavoidable increases arising from factors outside the control of the Council. Accordingly, it is suggested that such increases would normally, and should in this case, be met by supplementary estimates.

Officers have concluded that the process of reviewing every job vacancy before agreeing to the post being replaced should continue, but that process should be more rigorous. Also, where replacement is confirmed as necessary, to restrict recruitment advertising, in the first instance, to the website (www.surreyjobs.info) currently being used by Waverley to advertise posts. There is no cost in doing this as a single fee has been paid for the service regardless of the number of jobs advertised. Through taking this action it is estimated that savings on the salary budget could exceed the target figure by 30,000.

Positive management action is being considered within the Homelessness area which will, if successful, restrain expenditure such that the overall budget saving could be achieved – a saving of 25,000 over the currently reported position.

Action is being taken to bring forward to 1st January 2004 the increase in Land Charge fees of 165 to 175 that was planned from 1st April 2004. This should generate increased income of around 10,000 in this financial year.

Careful examination of Leisure budgets taking account of expenditure and commitments to date has identified than an overall saving of 7,000 is possible in this financial year.

Currently, there are no Land Drainage schemes on Council land being progressed. Consequently, 56,000 in the Capital Programme funded from revenue could be saved.

If the actions recommended above are accepted and the savings achieved, this would reduce the projected overspend on the General Fund to approximately 220,000. Clearly, the remaining budget shortfall will remain the subject of close scrutiny by Officers and measures to reduce such shortfall further may be identified in future monitoring reports.

Housing Revenue Account

Action is being taken to manage this situation by achieving all possible savings in other areas. Additionally it is suggested that the Repairs Fund balance could be used to support current spending on repairs thus reducing the contribution required from the Housing Revenue Account.

Recommendation

It is recommended that the Executive agree that:

1. increased Insurance costs and Audit Commission Fees be covered by recommending the Council to agree a supplementary estimate in the sum of 138,000;

2. the Local Land Charge fee be increased from 165 to 175 with effect from 1st January 2004; and

3. the other action proposed above be endorsed.
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Background Papers (DoF)

There are no background papers (as defined by Section 100D(5) of the Local Government Act 1972) relating to this report.

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CONTACT OFFICER:

Name: Mr B Long Telephone: 01483 523253
E-mail: blong@waverley.gov.uk
COMMS/EXECUTIVE/2003-04/382
39272