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Waverley Borough Council Committee System - Committee Document

Meeting of the Executive held on 06/03/2007
APPENDIX B - BUDGET MONITORING - JANUARY 2007



Summary & Purpose
This report provides details of the expenditure and income position to the end of January 2007 compared with budget for the General Fund and the Housing Revenue Account. It also gives an update on the Capital Programme for the General Fund and Housing Revenue Account.

APPENDIX B
Waverley Borough Council

EXECUTIVE - 6TH MARCH 2007

Title:

BUDGET MONITORING - JANUARY 2007
[Wards Affected: All]

Summary and purpose:

This report provides details of the expenditure and income position to the end of January 2007 compared with budget for the General Fund and the Housing Revenue Account. It also gives an update on the Capital Programme for the General Fund and Housing Revenue Account.

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 of January 2007 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. The position on capital expenditure is also given.

General Fund

1. Budget Monitoring for the period 1st April 2006 to 31st January 2007 forecasts an underspend for the year of 724,680 compared to the original budget. This compares with the underspend of some 525,000 projected at the previous Budget Monitoring report to the end of November.

2. The increase of some 200,000 can be attributed mainly to higher interest rates, combined with larger cash balances resulting from anticipated slippage on the capital programme; a probable saving from reduced calls on the inflation provision; and from significantly improved performance for the first six months operation of Godalming Leisure Centre since it was taken over by Waverley.

3. Potential further factors that may impact on the underspend include the actual implementation costs of alternate weekly refuse collection and the full effect of alternate weekly collection on income from Waste Recycling; possible further changes to interest rates; and the final expenditure in the year against the Recreational Open Space grounds maintenance budget. Significant expenditure is planned in the remaining few weeks of the year and if work cannot be completed by the end of March there will be a request for revenue carry forward to 2007-08 to be approved.

4. The main projected variations from Budget are shown in the table at Annexe 1. This table also shows the estimated effect on the approved Budget for 2007/08.

Housing Benefits 5. The 2006-07 Budget already allows for the new subsidy arrangements for Housing Benefits with additional income built in of 190,000 and therefore no further improvement should be anticipated.

Recreational Open Space

6. The underspend identified above includes a previously-reported projected saving at the year-end of 80,000 on Grounds Maintenance. This includes some 30,000 relating to tree works, arising from the establishment of a dedicated tree gang within the Borough. The carry forward from 2005-06 of 15,000 remains unspent and the Security Patrol budget of 5,400 has not been required this year. Staff shortages, contractor work standards and the winter season have had an impact on expenditure levels. All routine works are being undertaken in accordance with the contract, but few additional works requisitions have been made so far this year. The figure of 80,000 does, however, allow for substantial additional works, now planned, being undertaken by the end of March.

Inflation Provision

7. The Budget includes an Inflation Provision of 308,000; for the period to the end of January 2007 some 265,000 of this has been allocated. This covers all of the known major cost increases. The remaining balance has been included in Annexe 1 as a probable saving resulting from a reduced call on the provision.

Target Reductions

8. The table below lists the target reductions included in the budget for 2006-07 together with the level of achievement to date.

Target
Status
Officer Manpower
300,000
The current identified savings are 296,360
Planning Staff budget reduction
45,000
Will not be achieved - met by virement from additional income
Procurement savings
10,000
Work being undertaken - should be achieved

Supplementary Estimates

9. The approved Supplementary Estimates are shown below:-



ServiceAmount
Balance of Pay Increase
43,000
Executive 4th April 2006
Chief Executive Redundancy
-20,000
Council 26th April 2006
Godalming Leisure Centre
136,500
Executive 4th April 2006
Restructure
87,000
Council 26th April 2006
Cranleigh Arts Centre
20,000
Executive 10th October 2006
Local Government White Paper
20,000
Executive 9th November 2006
Leisure Procurement Strategy Implementation
51,000
Executive 5th December 2006
337,500
Use of Balances

10. The Budget for 2006-07 includes a contribution of 100,000 from the General Fund working balance. 11. The underspend, together with the Supplementary Estimates identified at paragraph 9 and the revenue carry forward from 2005-06 to 2006-07 of 43,310, gives a forecast contribution to balances at the year end of 330,870. 12. The use of the Revenue Reserve Fund is budgeted at 250,000, with a further 330,000 by way of abatement of capital repayments made from the General Fund. The one-off costs of 87,000 for the Restructure will be met from the Revenue Reserve Fund.
13. For 2006-07, each monitoring report will focus on a Target Area with the aim of giving more of an in-depth analysis and understanding of the featured area. For this report the Target Area revisits Planning Income.

Planning Income

14. Attached at Annexe 2 is an updated table showing planning income for the current and previous years. Income received to date has been projected forward to give a forecast income position for 2006-07. As at the end of January forecast income is 744,600 compared to the budget of 680,000. Therefore, additional income of 60,000 is reported, this remains unchanged since the November monitoring.

15. As shown by the annexe, planning income is difficult to predict and any large schemes could significantly increase the income received for the year. The additional income has been spent on extra staffing to deal with these applications in accordance with the approval.

Monitoring of Efficiency Gains
2006-07 Efficiency Gain Monitor
2006/07 Actual to 31 Jan 2007



000’s
2006/07
Projected Actual for year



000’s
Projected Cumulative to date
2004/05 to 2006/07


000’s
Projected cumulative over Govt. measurement period 2004/05 to 2007/08
000’s
Gershon Target
430
516
1,033
1,550
WBC Target (reported Feb 06)
840
1,004
1,983
3,020
Latest estimate
880
1,060
2,095
3,090

16. This table shows that Waverley is exceeding its own target and significantly exceeding the Government’s target. Housing Revenue Account

17. The major variations identified are attached at Annexe 3, an underspend of 380,000 has been identified. Of this, 150,000 relates to Responsive Repairs (see below) and 146,500 forms part of the savings target built into the original budget.

Responsive Repairs 18. A very disciplined approach throughout the year has resulted in the potential for an underspend of some 150,000 against a total budget of 2.2million. If this is the outcome and the savings target is achieved, then it is proposed that the amount of the underspend should be carried forward in the Repairs Fund Balance. Grounds Maintenance 19. In addition to the underspend identified above, there is the potential for a significant underspend on the Grounds Maintenance Budget. Staff absences for both Waverley and the contractor have resulted in commissioning difficulties and it may not be possible to retrieve the situation by the year-end. If there is likely to be a significant backlog of work, budget carry forward will be sought. Rent Income/Rebates

20. Early indications are that rent rebate payments will be higher than the original estimate. The effect of this, in conjunction with a slightly higher than estimated average rent, is to increase the penalty that the Housing Revenue Account incurs due to the average rent being higher than the Government’s limit rent. An increased amount in respect of rent rebate subsidy must be paid to the General Fund. Target Reductions

21. The table below shows the target reduction included in the Housing Revenue Account budget for 2006-07 together with the level of achievement to date.


Target
Status
Savings Target
212,000
Staff savings achieved to date
-116,500
Option Re-Appraisal costs
-30,000
Re-appraisal managed internally
Balance of Savings Target
65,500

Use of Balances

22. At the end of January, the position on the Housing Revenue Account shows a net underspend of 380,000, of this 150,000 is proposed to be carried forward to the Repairs Fund Balance, 146,500 forms part of the savings target built into the budget and the remainder will contribute to balances at year-end.

Capital Programme

23. The Management Team has received reports from the cross-departmental groups responsible for monitoring the Capital Programme. The detailed monitoring report for the General Fund Capital Programme is attached at Annexe 4.

24. The annexe shows the original Programme, slippage to be added from 2005-06 and payments to 31st January 2007. Where appropriate, comments are shown against individual schemes. Expenditure to 31st January 2007 is only 1,759,000, representing around 30% of the approved Programme. However, slippage of some 1.8 million has been reported previously. Unfortunately, it is now highly likely that this figure will increase, with total slippage approaching 2.5 million. The increase in slippage arises mainly from the delay in works at Farnham Sports Centre further 120,000; associated DDA works at Farnham Sports Centre and other leisure buildings 110,000; various works to the Central Offices further 115,000; House Renovation Grants 100,000; Partnership Funding further 60,000; Upgrade Recycling Bring-Sites 40,000; House Condition Survey 30,000, as a result of contract issues; and further slippage of some 100,000 on IT schemes, in particular Document and Record Management.

Capital Programme Summary
’000
Approved Capital Programme5,697
Forecast Spend3,097
Forecast Slippage2,480
Estimated Savings 120
5,697

Housing Revenue Account

25. It appears likely that there will be an underspend of 100,000 on the total programme of 5.3million. Some of the major work programmes are running behind due to a variety of issues (resource difficulties, changed ways of working) but the programmes of work will ultimately be completed and slippage will be sought in these areas.
Revenues Cash Collection

National Non-Domestic Rates

26. The net cash collected in the financial year to 31st January 2007 was 29,349,991. When compared with a net collectable debit at 31st January 2007 of 30,814,426, this represents a collection rate of 95.25%. The comparable collection rate in the previous financial year was 94.26%.

Council Tax

27. The net cash collected in the financial year to 31st January 2007 was 64,966,304. When compared with a net collectable debit at 31st January 2007 of 67,772,140, this represents a collection rate of 95.86%. The comparable collection rate in the previous financial year was 94.84%.

Conclusion

28. As at the end of January, an overall underspend of 724,680 from the approved Budget is forecast: the main elements of this are additional interest; extra income from Waste Recycling; savings on Homelessness, due to planned reductions in the use of private properties, following the success of Waverley’s strategy to reduce homelessness; and reduced expenditure on Recreational Open Space Grounds Maintenance.

29. Potential further factors that may still impact on the underspend include the actual implementation costs of alternate weekly refuse collection and the full effect of alternate weekly collection on income from Waste Recycling; possible further changes to interest rates; and the final expenditure in the year against the Recreational Open Space grounds maintenance budget. Significant expenditure is planned in the remaining few weeks of the year and if work cannot be completed by the end of March there will be a request for revenue carry forward to 2007-08 to be approved.

30. At the end of January, the position on the Housing Revenue Account shows a net underspend of 380,000, of this 150,000 is proposed to be carried forward to the Repairs Fund Balance, 146,500 forms part of the savings target built into the budget and the remainder will contribute to balances at year-end.

31. Management Team 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 for the General Fund Revenue Account, Housing Revenue Account and Capital Programme to 31st January 2007 be noted.

Background Papers (DoF)

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

CONTACT OFFICER:

Name: Brian Long Telephone: 01483 523253
E-mail: blong@waverley.gov.uk
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