Budget Monitoring January 2006 : Executive on 07/03/2006

Waverley Borough Council Committee System - Committee Document

Meeting of the Executive held on 07/03/2006
Budget Monitoring January 2006

APPENDIX B

Waverley Borough Council

EXECUTIVE – 7TH MARCH 2006

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Title:

BUDGET MONITORING JANUARY 2006

[Wards Affected: N/A]

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Summary and purpose:

This report provides details of the expenditure and income position to the end of January 2006 compared with the budget for the General Fund and the Housing Revenue Account.
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Environmental implications:

There are no direct environmental implications relating to this report.

Social / community implications:

There are no direct social/community implications relating to this report.

E-Government implications:

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

Resource and legal implications:

This report shows the budget monitoring position to the end January 2006 for the General Fund and the Housing Revenue Account. It monitors the progress of revenue expenditure and income and projects the likely year-end position.
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General Fund

1. Budget Monitoring for the period 1st April 2005 to 31st January 2006 identifies an underspend of Ł367,300. This includes a saving of Ł165,000 arising from the new contracts commencing on 1st November 2005 and a saving on inflation costs compared to the original estimate of some Ł100,000, also resulting from the tendering process.

2. This underspend is in excess of the projected underspend identified from the outturn position for 2004-05, which indicated an underspend in the region of Ł100,000 for 2005-06 to be likely.

3. At the Executive meeting on 8th November, Members suggested that an underspend target of Ł125,000 would be appropriate to align with savings on the waste contract. The underspend target has been exceeded as a result of increased waste recycling volumes, additional income from Car Parks including the charge increase from 1st February and an over achievement of the Officer Manpower savings target.

4. Previous monitoring to the end of November identified a number of areas which were likely to contribute to a higher underspend at the year-end. These, which include the items identified at paragraph 3, have now materialised and are included in the overall underspend identified above.

5. The main variations from the Budget are shown in the table at Annexe 1.

6. The table at Annexe 1 also shows the likely impact of the 2005-06 variations on the 2006-07 Budget. The overall effect is broadly neutral, with additional income of Ł80,000 and additional expenditure of Ł86,000, the reasons for this are provided in the table.

Supplementary Estimates

7. The approved Supplementary Estimates are shown below:-

Service	Amount
Waste Collection Service Ł170,000, to be offset by savings in the contract cost	Ł170,000	Executive 11th October 2005
District Councils’ Special Interest Group	Ł2,000	Executive 11th October 2005
Godalming Leisure Centre – revenue loan to JSJ Trust	Ł44,000	Executive 8th November 2005
Civil Contingencies Act 2004	Ł30,000	Executive 8th November 2005
The Edge Leisure Centre – increased Management Fee	Ł3,750	Executive 10th January 2006
	Ł249,750

Inflation Provision

8. The Budget includes an Inflation Provision of Ł500,000, of which some Ł297,000 has been allocated. This mainly covers the inflation on the Arkeco contract costs to the end of November 2005. The remainder of the Inflation Provision includes provision for the 2005-06 element of the pay award, leaving an unallocated balance of Ł100,000, which has been incorporated into the underspend.

Use of Balances

9. The original Budget for 2005-06 did not include a contribution from the General Fund working balance. The underspend, together with the Supplementary Estimates in the year totalling Ł249,750, as shown at paragraph 7, and the revenue carry forward from 2004-05 of Ł95,250, will provide a net overall contribution to balances at year-end of some Ł22,000. This is in addition to the prior-year adjustment relating to Housing Benefits, as reported to the Executive during the recent 2006-07 Budget setting process.

The use of the Revenue Reserve Fund is budgeted at Ł320,000, with a further Ł330,000 by way of abatement of capital repayments made from the General Fund.

Housing Revenue Account

10. Budget Monitoring for the period 1st April 2005 to 31st January 2006 has identified a net underspend of Ł188,500.

The estimated variations from the budget are shown below:

Major estimated variations to Budget

ServiceŁReason

Additional Expenditure

Sheltered Accommodation9,000Council Tax

Loss in Income

Sheltered Accommodation40,000Central Heating income – loss of Dorlcote and reduced numbers in Rowland House

Overspends49,000

Savings

Responsive Repairs-65,000Community Safety programme not completed in year and uncommitted.

Tenancy & Estates Management-15,000Underspend on Transfer Grants

Sale of Council Houses-8,000Valuers fees

Sheltered Accommodation-10,000Communal cleaning contract less than budget

Additional Income

Shadow Board/New Organisation-30,000Minimum contribution from General Fund

Rent income-70,000Estimated additional rent income

Water Rate Commission-9,500Increase in commission received

Interest on Balances-30,000Improved opening balance and cash-flow

Underspends-237,500

Anticipated Underspend-Ł188,500

Inflation Provision

11. The budget includes an Inflation Provision of Ł40,260, of which Ł5,560 has been allocated.

Use of Balances

12. The use of balances is budgeted at Ł40,840 from the Housing Revenue Account Working Balances. It is proposed that the Ł65,000 saving in responsive repairs shown above is transferred to the HRA repairs fund at the year-end rather than the HRA working balance to be used to meet repairs requirements in 2006-07. The remaining underspends identified above less the revenue carry forward from 2004-05 of Ł8,130 will contribute to balances by some Ł115,000.

Conclusion

13. An overall underspend of Ł367,300 from the approved General Fund Budget has been identified, this includes Ł165,000 arising from the new contracts commencing on 1st November 2005. The Executive has previously suggested that an underspend target of Ł125,000 would be appropriate.

14. This underspend, together with the Supplementary Estimates in the year totalling Ł249,750, as shown at paragraph 7, and revenue carry forwards of Ł95,250, currently indicate a year-end position which is broadly neutral, reflecting effective management of the budget in 2005-06.

15. The Chief Officer Group will continue to monitor the position to the end of the financial year and take action where appropriate to contain expenditure within budgets.

Recommendation

It is recommended that the current monitoring position on the General Fund and Housing Revenue Account to 31st January 2006 be noted.

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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: Brian Long Telephone: 01483 523253

E-mail: blong@waverley.gov.uk

Comms/exec/2005-06/300

GENERAL FUND - MAJOR VARIATIONS TO BUDGET

2005-06 Major Variations to Budget	*2006-07 Effect*
Service	ŁReasonŁ

Additional Expenditure
Democratic Representation	10,000Printing - Committee reports-2006-07 estimate higher
Corporate Management	10,000Additional Audit Fees - Best Value & Grant claims-2006-07 estimate higher
Other GF Housing Services	11,220Increased activity Printing, Consultancy – insufficient budget for expenditure previously coded to HRA and large one-off items11,000Insufficient budget 2006-07
Community Care	10,000Telemedicine Project 05/06 – no budget provision-2005-06 only
Cost of Collection – Council Tax	7,500Legal Fees and Printing-2006-07 estimate higher
Development Control	15,400Legal Fees – further Inquiries/VAT OS fees less income from recovery of costs-2005-06 only
Waste Recycling	75,000Potential extra cost of mixed glass collection due to change in Surrey Waste Management’s tariffs75,000Subject to market conditions and collection rates
Recreational Open Space	28,000Re-profiling of GM contract for grass cutting payts-12 month period will cover complete profile
Office Accommodation	7,350Continued use of CAB until November 2005-2005-06 only
Office Expenses	10,000Books & Publications approx Ł5,500 Legal Library, Telephones Ł3,000 increased calls-Included in 2006-07 estimate

Loss in income
Land Charges	65,250Unlikely to reach budget income - lower numbers-2006-07 estimate lower
Development Control	120,000Unlikely to reach budget income - drop in applications-2006-07 estimate lower
Animal Control	13,000Unlikely to reach budget income - fewer Wasps-2006-07 estimate lower
Farnham Sports Centre	7,900Loss in income share based on current level-2006-07 estimate lower

Overspends	390,62086,000Projected 2006-07 extra expenditure



Savings
Corporate Plan	-7,450Reduced staffing has resulted in work delayed to next financial year, which can be accommodated within the 2006-07 Budget-2005-06 only
Community Strategy	-10,000Delay in work programme pending consultation & shortage of staff to deliver, not to be carried forward as 2006-07 Budget will be sufficient-2005-06 only
Community Care	-7,750Exercise and Mobility saving from staffing budget-2005-06 only
Environment Contract	-165,000Contract savings-2006-07 estimate based on new contract prices
Officer Manpower	-31,240The projected full-year saving is Ł331,240 compared to the target of Ł300,000-Savings dependent on vacancies in year
Inflation Provision	-100,000Potential saving on Inflation Provision-2006-07 Inflation provision Ł250,000 lower – based on new contracts

Additional Income
Interest & Finance Expenses	-25,000Net additional interest – higher opening cash position & less financed from RRF than budgeted-25,000Should be achieved from latest projected balances
Licensing	-129,000Additional income from 2003 Licensing Act-2006-07 estimate higher
Waverley Training Services	-19,870Extra income-2006-07 estimate includes extra income
Benefits	-42,270Additional Administration Grant and successful sanctions grant which is performance related-2006-07 estimate includes extra income
Building Control	-30,000Additional Fee income-2006-07 estimate includes extra income
Waste Recycling	-131,000Increased Recycling Credit Ł50,000, paper sales Ł40,000, Defra grant Ł41,000-30,0002006-07 estimate includes extra Ł100k, possible improvement of Ł30k
Car Parks	-50,000Additional income including effect of charge increase from 1-2-06 and extra rent income-25,000Projected improvement of Ł25k additional to that already allowed for
The Edge Sports Centre	-11,100NNDR recovery from SCC less reduced income share-2006-07 estimate includes new figures

Underspends	-759,680-80,000Projected 2006-07 extra income
Net Other Variations	1,760
Anticipated Underspend	*-Ł367,300Ł6,000Projected 2006-07 Overspend***