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
Prevention and Control
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.
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.
5. £306,830 has been allocated at the end of October from the inflation provision of £320,000.
6. The approved supplementary estimates are shown below:
Partnership Funding Officer
Partnership Funding – Revenue Budget
Licensing Admin 400 Hours
Emergency Planning – rest centre training
WRVS – Meals on Wheels
Waste Recycling – Hard-to-Reach properties
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.
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.
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 (
) 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.
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.
There are no background papers (as defined by Section 100D(5) of the Local Government Act 1972) relating to this report.
Mr B Long