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  1. 1. Agenda Item 9 21st February, 2007 To the Chair and Members of the CABINET FINANCIAL MANAGEMENT REPORT: REVENUE BUDGET PROJECTIONS 2006/07 Decision Taker Relevant Overview Wards Affected Key Decision & Scrutiny Panel Overview and Cabinet Scrutiny All K0688 Management Committee Purpose 1. This is the 3rd Financial Management report and presents the latest projections of income and expenditure compared to budget for the 2006/07 financial year. It contains projections of the year end position for:- • the General Fund Revenue Account (paragraphs 8 to 18); • General Fund Reserves (paragraphs 21 to 24); • the Housing Revenue Account (paragraphs 25 to 28); • Trading Accounts (paragraphs 29 to 30) the • Income Collection (paragraphs 31 to 34). Recommendations 2. It is recommended that Cabinet:- • note the contents of this report, including the potential significant overspend of £4m (See Appendix A); • endorse the actions proposed by C.M.T. to reduce the potential overspending on the budget at the year end (see para 19). It is anticipated that this action could result in reducing the projected £4m overspend to between £3m and £4m; • approve the credit of any additional income in relation to Business Growth Incentive Scheme which is over and above the £2m predicted in the 2nd Financial Management report, to General useable reserves, to provide greater scope for dealing with any future financial issues (para 18);
  2. 2. • approve the transfer of Budgets between N.C.C.S. and O.D.C. in respect of the Library Service (para 35). Summary 3. The report sets out the following key issues:- • there is the potential for a significant overspend in the order of £4.2m by the end of the 2006/07 Financial year; • projections indicate that N.C.C.S. are estimating to underspend by £0.4m, which represents 0.3% of their budget target. There is, however, a great deal of volatility in key service areas, making financial projections more difficult. The issues are set out in more detail in paragraphs 8-11; • there are significant financial issues for Corporate Services and Council- wide budgets, which total an additional £4.6m. These include:- - 2006/07 Efficiency savings that have not been delivered; - Equal Pay compensation payments; The report covers these issues in some detail in paragraphs 16 to 18 and the management actions that are being taken to ensure that any overspends are minimised; • there is potential for additional income on Local Authority Business Growth Incentive (L.A.B.G.I.) of £2m of income, the treatment of which is identified in paragraph 22; • the projection of the balance available on General Fund revenue reserves at the end of this financial year is £4.94m (see paragraphs 21 - 24). A significant overspend will reduce the balance of General Reserves available. This includes a provision for an overspend of £4.18m; • the Council’s trading accounts are projecting a total deficit of £670k, compared to a budgeted surplus of £425k, which is an overspend of £1.1m. The main issues are on Catering, Schools Catering and Steadfast Windows. The significant problems with the Catering trading account are as a result of the loss of the contract for the Racecourse (see paragraphs 29 - 30). These have been taken into account in the overspend projection; • the Housing Revenue Account (H.R.A.) is projected to overspend by £650k, resulting in an in year deficit of £2.6m. This is largely as a result of increased general management and recovery of A.M.R.A. grant repaid from H.R.A. balances. The in year deficit will need to be charged to the £6.6m of H.R.A. balances.
  3. 3. Background 4. The 2006/07 General Fund net revenue budget was set at £201.116m by Full Council on 27th February, 2006. Since then, the following funds have been transferred from approved earmarked reserves to the revenue account to fund key items. £000 Original Budget 201,116 Add: Standards Fund carry forward 539 Add: One-off reorganisation pension costs 950 Add: O.F.S.T.E.D. Action Plan 69 Add: Pupil Retention Fund 182 Add: One Off Investment in 2006/07 750 Less: L.A.B.G.I. income from Year 1 Appeal -521 Less: L.A.B.G.I. income credit to Useable Reserves (estimate) -1,700 Revised Budget Total 201,385 5. The approved budget for 2006/07 included the following key elements:- • a 2.7% increase in Council Tax for 2006/07; • an additional £25.5m expenditure to fund inflation, shift resources and investment in a number of schemes outlined in the corporate plan for future years; • a target for the Council to reduce its cost base by £15.3m. 6. Under the Council's Financial Procedure Rules, the forecast budget position and any changes to approved budgets will be put forward for consideration by management as part of a financial management report to Cabinet on a quarterly basis. 7. The projections shown in this report are the result of reviewing expenditure and income to-date and also the action plans of the service areas to produce estimates to full year end. All managers will continue to receive monthly budget statements, which form the basis for revenue budget monitoring and management of the financial position. General Fund Revenue Budget Projections 8. Neighbourhoods, Communities and Childrens Services (N.C.C.S.) A detailed forecasting exercise has been performed on these budgets, which total £153.4m. This has included:- • an examination of actual expenditure and income as at 31st December, 2006;
  4. 4. • forecasting full year expenditure and income for 2006/07, using the best estimates available. This has been completed by the Services Financial Management Team, working closely with budget managers. 9. The best estimate available concludes that this crucial area of service delivery will underspend by approximately £419k. Appendix A provides a more detailed breakdown of this position. 10. There are many areas of volatile budgets, which are experiencing severe spending pressure due to unprecedented increases in demand for service. They include:- • Children's Out of Authority Placements, is currently projecting a year end overspend of £913k. Action has been ongoing to limit placements but this is not always possible due to individual circumstances; • Out of Authority – Fostering Fees, currently projecting a £733k overspend by the year end; • Adults and Older People – Independent Sector Placement, currently projecting to overspend by £579k. This area is difficult to project due to changes in mortality rates and number of placements made. These service areas will all receive additional budget resource in 2007/08 to minimise the risk of further large overspends. 11. The main areas of underspend within N.C.C.S. are as follows:- • Staffing vacancies amount to £758k. This is after allowing for any additional costs for agency or temporary cover; • Resource Recovery has generated an underspend £1,199k, which is partly in respect of reduced disposal to landfill sites and also by other efficiencies in recycling. • Maximisation of underspends on grants of £1,073k. Corporate Services Budgets 12. These budgets include those support areas of the Council that are delivered centrally from within Organisation Development and Culture (O.D.C.), Education Standards, Development and Policy Partnerships and Governance (P.P.G.), but also include some large service delivery teams, for example the Planning and Revenues and Benefits services. These budgets total £61.6m. 13. The best estimates of income and expenditure available at this time highlight two significant budget problem areas, totalling £963k (1.6%), that need to be managed in year. They are:- • Projected shortfalls of income in the Building Design and Asset Maintenance Team, totalling approximately £486k. This is partly due to
  5. 5. changing work patterns that are reducing the scope for these internal services to charge to the Council’s capital programme and also to schools. There are also a number of issues associated with the way in which financial targets for these services have continued at the same level over the medium term, when work patterns are changing. This service is being reorganised and additional budget provision of £281k is being created for 2007/08; • Human Resources & Organisational Development – budgets have been analysed and are projected to overspend by £504k, this is due to several items including - pay protection costs; retaining staff in ‘Get that Job’ and ‘Jobs Doncaster’ which were not budgeted for; pressures in the Pay and Employment Service which have led to an increase in the temporary staffing requirements; an increase in the number of Trade Union Convenors due to an increase in membership; reduced income from the Neutral Vendor contract has occurred due to delayed commencement and lower than anticipated turnover; a shortfall in recruitment advertising commission as the service has moved towards on line recruitment (‘Jobs Doncaster’) resulting in less media advertising. 14. There are some emerging underspends in Corporate Services that need to be clearly highlighted to assist in managing the Council’s financial position. The three most significant areas are:- • Planning Delivery Grant: income of £171k above budget. It has been assumed that this will not be ring-fenced for planning; • Additional Rent income as a result of a delay in the property disposals programme, which amounts to £336k. This will occur for 2006/07 only. • Additional Benefits subsidy grant of £214k Efficiency Agenda Targets 15. In setting the Revenue Budget for 2006/07, the Council agreed to a resource shift of £25.5m, which would be met in part from cashable efficiencies of £15.3m. Progress has been made in ensuring these cash savings can be delivered and are reflected in the budget targets that are monitored above. There is, however, a balance of £3m of cashable savings which will not be delivered and, therefore, contribute to the overspend. Provision has been made in 2007/08 budget to ensure this is a one off occurrence in 2006/07. These are:- Grants to Voluntary Organisations: The budget target for 2006/07 amounts to £2m. Cabinet have taken decisions which will deliver only £800k of this target, which leaves a budget shortfall of £1.2m; Homes Closure: Cabinet have taken the decision not to proceed with the re- alignment of care between in house and private provision, which would have resulted in the closure of a Council run care home. This leaves a financial savings target of £108k still to deliver;
  6. 6. Mileage Allowances: The Council currently pays above the Inland Revenue recommended rate for mileage. A plan was in place at the time of setting the budget to reduce the mileage allowance to put Doncaster in line with other Councils. This has not progressed and an efficiency target of £518k remains to be delivered; O.D.C.: Although O.D.C. has reduced costs significantly by centralising support service delivery, there are outstanding cashable savings targets/income which is external to the general fund that will not be delivered of £911k. Council-Wide Budgets 16. These are the budgets that are managed on a Council wide basis, due to either their specialist nature or that they cannot be sensibly allocated to a Strategic Director. These budgets tend to be managed by the Corporate Finance team/H.R. and include:- • any balances owed to or from the Government or Pension Fund; • budgets that are short term in nature and are supported by contributions from Reserves; • Treasury Management; • Job Evaluation/Equal Pay; • Business Growth Incentive Scheme; • Costs of Voluntary Early Retirement, incurred during the Council-wide restructure. 17. The best estimates available at this point in the financial year, highlight budget overspends, amounting to £1.715m:- Equal Pay Compensation: A total budget of £4.5m was set aside (for 2005/06 and 2006/07), during the budget process to meet the costs of backdated compensation to Council employees who would be entitled to take out equal pay claims against the Council. To-date, payments have been made which total £4.3m (£900k in 2005/06). In addition to this, the Council will incur a tax liability (of close to £1m). There are a series of payments due to groups of employees that the Council has agreed for fairness should also be included in the compensation arrangements. These payments, including the tax liability, amount to a further pay-out of nearly £800k.
  7. 7. When these additional payments are made, the resulting overspend will amount to £1.4m (Total Budget of £4.5m, compared to Total Expenditure of £5.9m). Management are reviewing the estimated payments, but it is felt these amounts will be incurred by the end of the financial year. A further provision of £1m has been created in 2007/08. Costs of Voluntary Early Retirement (Council Reorganisation): A budget of £950k was set aside in the Council’s Revenue Budget to meet the 2nd year costs of V.E.R.s from both the Council restructure and the racecourse redundancies. The detail of the projections has been subject to change as individual cases have been finalised. The latest projection points to an overspend against this budget of £315k. This has been increased in the 2007/08 budget. 18. There are three areas which will improve the budget position during 2006/07. They are as follows:- Treasury Management: The Council operates a pro-active Treasury Management strategy, the parameters of which are approved by Council in advance of each financial year. The parameters (prudential indicators) for 2006/07 were set at Full Council on 27th February 2006. The Corporate Director of Finance monitors performance within these parameters on a regular basis and can confirm that the Council is operating within approved limits. Details are shown at Appendix D. There is no need to revise these indicators. The second quarter financial management report projected a break even position for this area. However, as a result of a strategic debt restructuring exercise undertaken in December in order to reduce treasury costs it is now anticipated that Treasury Management will over achieve the income target by £150k. Business Growth Incentive Scheme: The allocations to Doncaster of the Local Authority Business Growth Incentive Scheme (L.A.B.G.I.) totalled £1,347k for the first year of the scheme (2005/06) and were reported as part of the 2005/06 revenue outturn and the first financial management report of 2006/07. For this financial year, there is an income budget of £300k for L.A.B.G.I. income, which recognises that the 2005/06 pay-out was enhanced by the new inclusion of the Airport on the business rates register. Scheme details for the second year of the scheme (2006) were announced by the Government at the end of September 2006. Based on those details and the rating information then available the view of finance officers was that the Council should receive at least £2m in this financial year and this was reported to Cabinet on 29th November, 2006, in the second financial management report. Cabinet recommended that £1.5m of L.A.B.G.I. income (over and above the £300k budget target) should be used to create an Invest to Save reserve with the balance taken to general useable reserves, to provide greater scope for dealing with any future financial issues. The Invest
  8. 8. to Save scheme will not be created until the final grant income is announced at the end of February 2007, and then only if there is sufficient reserve. Taken at face value the scheme details for this financial year appear more generous than for year 1. However, the Government has pointed out in the details released that ‘given the uncertainties involved in predicting L.A.B.G.I. end of year rateable value caution should be exercised by local authorities in making any L.A.B.G.I. grant predictions’. The experience from the first year of the scheme’s operation is that forecasting of income is particularly difficult. The view of finance officers is that the Council should receive at least £4m this financial year and the likeliest scenario is that the Council will receive between £4m and £6.5m. It is expected that for this financial year grant payments will be announced in February 2007 and no certainty can be provided until then. This report takes the prudent view at this stage that income from this source in 2006/07 will be no more than £4m and this has been assumed in the projection of reserves at Appendix C. Grant Income There are a number of major sources of grant income, which will have significant balances at the end of the Financial Year. A proportion of the these balances can be used to support main-stream council expenditure to a maximum of £1m. Managing Current Budget Pressures 19. The potential of a significant overspend in this financial year and its serious consequences in reducing the Revenue Reserves has been very clearly communicated to the leadership team and to Council staff. Action taken to-date has been successful in reducing the projected overspend by nearly £3m. Everything that can be done, within reason, is being done, to minimize the overspend. This includes:- • holding all vacancies open until April 2007, apart from those posts which are deemed essential to protecting vulnerable customers. These are to be approved by the acting Managing Director or a member of C.M.T.; • freezing all non-pay expenditure except where this is contractual or will lead to a threat to life and limb; • identifying all grant funded expenditure and ceasing spending, disallowing any carry forward of funds into 2007/08 financial year, thereby maximising fee income resource. 20. The overriding priority of managers is now to take action and reduce the overspend, to minimise the impact on the Councils future financial position. It is estimated that this will reduce the overspend of £4m to between £3m and £4m.
  9. 9. General Fund Reserves 21. A full breakdown is shown at Appendix C and details of the movement in earmarked reserves and the projected year end position for 2006/07 and 2007/08 following utilisation of those reserves. A summary of the projections for 2006/07 and 2007/08 is shown below:- £m Total Resources Brought Forward 32.977 Less Earmarked Reserves -26.930 6.047 2006/07 net deduction from Reserves -1.107 4.940 Less 2007/08 Known Commitments -0.265 4.675 22. There was £6.047m of general useable reserves at the outset of this financial year. It is currently anticipated £1.107m will be required in 2006/07, although it should be noted that this includes utilising £3.7m from L.A.B.G.I. This is an estimate based on the projected allocation, which will not be confirmed until the end of February 2007. 23. A balance of just under £4.94m is projected for the end of this financial year and this allows for an overspend of £4.18m. 24. After taking into account the 3rd year of capital V.E.R. costs associated with the Council’s restructure in 2005, the current projection is for reserves to total £4.675m by the end of March 2008. This is after making a reasonable assumption as to the levels of LABGI in 2007/08. Housing Revenue Account 25. Appendix A shows that the Housing Revenue Account is projected to show a deficit at the year end of £2.643m against a budgeted deficit of £1.993m, an overspend of £650k. This is due to a number of factors, which are set out below. 26. An increase in the general management charged direct to the H.R.A. of £817k, due to a number of S.L.A.’s being charged directly to the H.R.A., rather than to the A.L.M.O. In addition there has been a reduction in income of £391k as less administrative costs can be offset against capital receipts. 27. A one off increase in expenditure is expected in 2006/07 of £630k because the Audit Commission have now amended their guidance on the release of grant relating to housing assets in the 2004/05 and 2005/06 accounts from the government grants deferred account to the H.R.A. 28. The current level of H.R.A. balances amounts to £6.607m. This is significantly higher than the level of £3.4m, that was approved by Council on 27th February, 2006. If the current projected deficit of £2.643m does materialise, H.R.A. balances will reduce to £3.2m by the end of March 2007.
  10. 10. This also includes the £750k approved by Cabinet at its meeting on 20th September, 2006, to provide much needed funding to rectify problems on the Kingsway Estate, Stainforth. Trading Accounts 29. The table below shows the latest projected position on the Council’s Trading Accounts. Budgeted Year End Projected Variance Surplus/(Deficit) Surplus / (Deficit) £k £k £k Catering 13 (300) (313) Cleaning 12 12 0 Schools Catering 0 (336) (336) Inpress 73 75 -2 Steadfast 20 (298) (318) Public Buildings 20 10 (10) Transport 5 30 -25 Markets 282 187 (95) Highways 0 (50) (50) Total 425 (670) (1,095) 30. This shows a sizeable overspend on the trading accounts, in that they are not expected to achieve their budgeted surplus. The keys issues are:- • catering operations are projecting a deficit of £300k. This is mainly due to the loss of the contract for catering with the Racecourse and not being able to recover costs from other functions. A review has been undertaken on this service which will lead to considerable changes for 2007/08; • there is a reduction in income for School dinners, which has caused a deficit of £336k. The main reason for this is the decrease in the number of children in Doncaster Schools and the increased cost of producing higher quality school meals. Proportionately meals take up has remained robust. • the projected deficit for Steadfast Windows of £298k is due to the fall off in Windows being ordered by the A.L.M.O. Steadfast Windows are currently in the progress of tendering for work from the A.L.M.O., a decision on which is expected in March 2007. Without this stream of work, the financial future of this operation is uncertain; • a reduced surplus on Markets due to one off items including, backdated rent at Mexborough, a new ice making machine at the fish market and reduced income at the Wool Market during its refurbishment; • Highways Trading has increased costs due to the implementation of Annualised pay.
  11. 11. There has been a robust challenge of the Trading Accounts for 2007/08 in order to minimise the risk of large trading losses re-occurring in 2007/08. Income Collection 31. During the first 9 months of this financial year 82.5% of Council Tax was collected and it is currently forecast that between 95% and 97% will be received by the end of the year. Actual rates achieved will be published as part of the Council’s outturn process. 32. During the first 9 months of this financial year 85.4% of Business Rates was collected and it is currently forecast that between 96% and 98% will be received by the end of the year. Actual rates achieved will be published as part of the Council’s outturn process. 33. Council Tax arrears are estimated to be £5.1m, which is within the end of December target of £5.2m. The target for the end of the year is to reduce arrears to £4.6m. 34. An analysis of the Sundry Income debt showed a value of £12.5m outstanding as at the 31st December 2006. In terms of the age of this debt, 38% of this refers to debt raised in previous years. It can also be shown that £5.8m (47%) of this debt is owed by 10 of the largest debtors. It should be noted that all the anticipated income has been built into the latest projected overspend. Transfer of Budgets 35. Under Financial Procedure rule B14 Cabinet must approve any virement over £500k. One such virement is the transfer of the Library Service from N.C.C.S., where it is managed by the Town Centre Manager, to O.D.C. where it will come under the Corporate Director for Customer Services. The net transfer of the budgets within the Library Service amounts to £3.2m. Options Considered 36. This report has identified the key budget management issues which need addressing. Corporate Management Team will be working with key directors to reduce the eventual council overspend. Reasons for Recommended Option 37. The measures and actions which are proposed by Management, will be critical to ensure the Council does not overspend. Impact on Transformational Goals 38. Through the Corporate Plan and Budget process and the corporate investment needs and prioritisation methodology, revenue and capital budgets
  12. 12. for 2006/07 were aligned with the Council's strategic planning framework to assist in achieving transformational goals. Risks & Assumptions 39. The table below highlights the most significant risks that could have a negative impact on the deliverability of the proposed budget for 2006/07 and the action taken to mitigate against it. Risks/Assumptions Probability Impact Proposed Action Robustness of Medium High • To work continuously with Estimates in a dynamic budget holders in monitoring Situation of income and expenditure against budget Overspending of High High • Radical action to reduce 2006/07 budgets expenditure in the final months of the financial year to minimise the overspend Council reserves are Medium High • Radical action to reduce not sufficient to cover expenditure in the final unknown commitments. months of the financial year to minimise the overspend Consultation 40. C.M.T. has considered these matters on a corporate basis. Financial Implications 41. These are set out in the body of the report. Legal Implications 42. The authority is required to make arrangements for the proper administration of its financial affairs. This monitoring report assists in discharging that obligation. The actions recommended to manage Council resources in year are in accordance with relevant provisions and guidance as set out in the body of the report. Conclusion 43. The financial projections contained in this report indicate that there is a significant risk of a revenue overspend of approximately £4.18m. Radical Management action is now required to ensure an overspend by the year end is minimised. C.M.T. will be reviewing action and receiving updates on a weekly basis between now and the financial year end. Contact Officer: Julie Wright, Corporate Director of Financial Services, Tel. 737650
  13. 13. Report Author: Steve Mawson, Services Finance Manager, Tel. 862606 Background Papers: Revenue Budget and Council Tax 2006/07 to Council 27th February, 2006.
  14. 14. APPENDIX A Summary Projections: 2006/07 General Fund N.C.C.S. Neighbourhood & Area Budgets Area/Theme Income/ Approved Forecast Forecast Expenditure Budget for Outturn Year End Year £ Variance £ £ Area Budgets Gross Expenditure 4,242,970 4,291,200 (48,230) Area Manager North Gross Income -1,351,760 -1,356,760 -5,000 Net Expenditure 2,891,210 2,934,440 (43,240) Gross Expenditure 3,608,390 3,592,990 -15,400 Area Manager West Gross Income -1,190,300 -1,180,300 (10,000) Net Expenditure 2,418,090 2,412,690 -5,400 Gross Expenditure 3,762,610 3,777,310 (14,700) Area Manager East Gross Income -1,146,030 -1,142,870 (3,160) Net Expenditure 2,616,580 2,634,440 (17,860) Gross Expenditure 3,295,880 3,299,280 (3,400) Area Manager South Gross Income -783,310 -773,310 (10,000) Net Expenditure 2,512,570 2,525,970 (13,400) Gross Expenditure 4,322,710 4,255,240 -67,470 Area Manager Urban Gross Income -878,680 -902,630 -23,950 Net Expenditure 3,444,030 3,352,610 -91,420 Gross Expenditure 1,039,090 1,054,820 (15,730) Town Centre Manager Gross Income -455,810 -455,810 0 Net Expenditure 583,280 599,010 (15,730) Gross Expenditure 20,271,650 20,270,840 -810 Total – all areas Gross Income -5,805,890 -5,811,680 -5,790 Net Expenditure 14,465,760 14,459,160 -6,600
  15. 15. APPENDIX A Area/Theme Income/ Approved Forecast Forecast Expenditure Budget for Outturn Year End Year £ Variance £ £ Borough Wide Gross Expenditure 50,754,220 51,468,220 (714,000) C.Y.P.S. Gross Income -22,181,480 -22,286,480 -105,000 Net Expenditure 28,572,740 29,181,740 (609,000) Gross Expenditure 75,096,450 76,395,350 (1,298,900) H.V.C.P. Gross Income -22,572,940 -22,973,940 -401,000 Net Expenditure 52,523,510 53,421,410 (897,900) Gross Expenditure 75,064,390 74,104,690 -959,700 S.S.S.C. Gross Income -25,635,530 -26,193,230 -557,700 Net Expenditure 49,428,860 47,911,460 -1,517,400 Directorate Gross Expenditure 5,853,620 5,862,120 (8,500) Management Gross Income -3,586,450 -3,606,450 -20,000 Gross Expenditure 445,900 445,900 -0 C.D.C. Costs Gross Income 0 0 -0 Safeguarding & Gross Expenditure 1,490,030 1,563,030 (73,000) Standards Gross Income -518,400 -518,400 -0 Adult Protection & Gross Expenditure 23,179,270 22,655,470 -523,800 Community Manager Gross Income -19,501,520 -19,401,520 (100,000) Youth Offending Gross Expenditure 3,046,940 3,006,940 -40,000 Services Manager Gross Income -1,996,880 -1,996,880 0 Gross Expenditure 234,930,820 235,501,720 (570,900) Total all borough wide Gross Income -95,993,200 -96,976,900 -983,700 services & D.M.T. Net Expenditure 138,937,620 138,524,820 -412,800 Total N.C.C.S. Net Expenditure 153,403,380 152,983,980 -419,400
  16. 16. APPENDIX A Corporate Services Budgets Approved Budget Forecast Forecast Year for the Year Outturn End Variance £ £ £ Development: - Gross Expenditure 20,233,240 19,269,030 -964,210 - Gross Income -8,201,870 -8,053,870 (148,000) - Net Expenditure 12,031,370 11,215,160 -816,210 Education Standards inc. Schools: - Gross Expenditure 243,576,010 243,396,270 -179,740 - Gross Income -214,718,950 -214,744,660 -25,710 - Net Expenditure 28,857,060 28,651,610 -205,450 Organisational Development & Culture: - Gross Expenditure 106,074,290 108,396,430 (2,322,140) - Gross Income -91,160,100 -91,477,680 -317,580 - Net Expenditure 14,914,190 16,918,750 (2,004,560) Policy, Partnerships & Governance: - Gross Expenditure 8,710,020 8,772,860 (62,840) - Gross Income -3,119,640 -3,185,510 -65,870 - Net Expenditure 5,590,380 5,587,350 -3,030 Specialist Change: - Gross Expenditure 598,730 581,540 -17,190 - Gross Income -32,000 -32,000 -0 - Net Expenditure 566,730 549,540 -17,190 Total: - Gross Expenditure 379,192,290 380,416,130 (1,223,840) - Gross Income -317,232,560 317,493,720 -261,160 - Net Expenditure 61,959,730 62,922,410 (962,680)
  17. 17. APPENDIX A Council Wide Budgets Approved Budget Forecast Forecast Year End for the Year Outturn Variance £ £ £ - Amending Report(Formula Grant) 269,000 269,000 -0 - Contribution from Insurance Fund -750,000 -750,000 -0 - Trading Surplus -425,000 670,000 (1,095,000) - Unsupported Borrowing 2,324,470 2,324,470 -0 - General Financing -35,705,310 -35,855,310 -150,000 - Levying Bodies 22,429,400 22,379,400 -50,000 - P.S.A. Reward Grant -1,015,000 -1,015,000 -0 - Job Evaluation/Equal Pay 2,500,000 3,893,470 (1,393,470) - Business Growth Incentive Scheme 2005 -521,240 -521,240 -0 - Business Growth Incentive Scheme 2006 -300,000 -300,000 -0 - Business Growth Incentive Scheme 2006 – Q2 credit to Useable Reserves -1,700,000 -1,700,000 -0 - Budget Savings not Met -2,034,870 0 (2,034,870) - Reorganisation Costs 950,000 1,265,400 (315,400) - Grant Income which can be used 0 -1,000,000 -1,000,000 to offset services cost Total Council Wide -13,978,550 -10,339,810 (3,638,740) Total General Fund Services 201,384,560 205,566,580 (4,182,020) Housing Revenue Account Housing Revenue Account:- - Gross Expenditure 51,376,500 52,336,860 (960,360) - Gross Income -49,382,970 -49,693,750 -310,780 - Net Expenditure 1,993,530 2,643,110 (649,580)
  18. 18. APPENDIX B Analysis of General Fund Key Variances on budgets (over £100k) Description Total Recurring One-off Overspend/ Overspend/ Underspend Underspend £k £k £k Planning Delivery Grant -171 -171 Staff savings in Strategic Asset Mgt -134 -134 Commission on sales of assets -128 -128 Additional Rental Income (property) -336 -336 St Leger Homes Recharge 174 174 Unspent economic development budget -185 -185 Building Control Inspection Fees -188 -188 Staff savings in Education Standards -113 -113 In House Childrens Residential Homes 110 110 Maximisation of Sure Start Grant -1,073 -1,073 Children's Out of Authority residential placements 913 913 Music Service efficiency target – cannot be implemented until 118 118 new school year – will achieve 50% in 2006/07 Out of Authority fostering placements 733 733 Staffing Vacancies in C.Y.P.S./H.C.V.P./S.S.S.C. -758 -758 Childrens Transport 140 140 Learning and Behaviour Support Services -182 -182 Uncommitted grants on Access & Systems Capacity and -540 -418 -122 Delayed Discharges Independent residential care – greater number of clients in 579 579 first 3 quarters of year than expected. In house Residential Care -341 -341 Learning Disability Supported Living costs 430 430 Additional contract costs for Extra Care beds 215 50 165 Independent Sector Home Care 153 153 Learning Disability Growth Funds -100 -100 Preventative Technology Grant -123 -123 Wardens service – shortfall in income / efficiency saving not 395 395 met Car Parking repairs and maintenance – not all budget required -185 -185 Asylum Seekers Grant – additional backdated grant -263 -263 F.L.A.G. – payments for additional collections 435 435 Resource Recovery – Recycling & Disposal -1,199 -1,199 Public Conveniences – unmet efficiency 137 137 Repairs and Maintenance on social care buildings – demand 300 300 is more than the funding available. Various N.C.C.S. Savings -200 -200 Building Design & Asset Maintenance– income shortfall 486 486 Fruit in Schools 297 297 Efficiency Saving – Car Mileage not yet achieved 518 518 Neutral Vendor – shortfall in Income 111 111 H.R. & O.D. overspend on staffing costs 393 393 Procurement Efficiencies not yet delivered 200 200 Benefits Subsidy Grant -214 -214 N.N.D.R. Refunds re prior years -141 -141 Charge from S.L.H.D. for taking cash income at housing 131 131 offices O.D.C. Savings/Income for support services 911 911 V.E.R./Redundancy for Corporate Assurance 147 147 Monitoring Officer 105 105 Income claimed from funding relating to prior years -101 -101 Efficiency Savings Not delivered (Homes / DSG / Grants) 1,516 1,516
  19. 19. APPENDIX C REVENUE RESERVES £m Total of Reserves 32.977 Less: Earmarked Reserves Schools, Individual School Reserves -11.971 OFSTED Action Plan -0.098 Section 106 -9.984 B.I.F./Capital -2.008 I.T. Fund -0.853 Procurement Budget for Schools P.F.I. -0.263 Pupil Retention fund -0.182 Charities & Donations -0.100 Advance Funding of Community and Voluntary Led Section Led Projects -0.500 Standards Fund -0.539 Employers' Contribution from Pensions Authority -0.432 Leaves: Uncommitted Reserves 6.047 2006/07 known commitments 2nd Year V.E.R. costs incurred in 2005/06 -0.900 Transfer of Advance Funding of Community Projects 0.500 2nd Year Racecourse V.E.R. costs -0.050 One Off Investment in 2006/07 (Cabinet 12/07/06) -0.750 Late Notification of L.A.B.G.I. income – 2005 scheme 0.521 L.A.B.G.I. income – 2006 scheme (Cabinet 29/11/06) 1.700* Additional L.A.B.G.I. income assumption Q3 2.000* South Yorkshire Trading Standards -0.070 S.Y. Laboratory – Rebate to S.Y. Districts 0.122 Projected Overspend 2006/07 -4.180 Balance Projected at 31st March, 2007 4.940 2007/08 known commitments 3rd Year V.E.R. costs incurred in 2005/06 -1.215 3rd Year Racecourse V.E.R. costs -0.050 Additional L.A.B.G.I. income assumption – 2007 scheme (over and above £2m included in 2007/08 budget) 1.000 Balance Projected at 31st March, 2008 4.675 *These are estimated figures to be confirmed with L.A.B.G.I. announcement due at end of February 2007.
  20. 20. APPENDIX C SCHEDULE SUMMARY Movement in Earmarked Reserves Balance Projected Projected as at Balance Balance 31.03.06 as at as at 31.03.07 31.03.08 £'000 £'000 £'000 Individual Schools Budget:- Gross Surplus 12,583 12,583 12,583 Gross Overdrawn (612) (612) (612) Education Standards Fund 539 171 150 Procurement Budget for Schools P.F.I. 263 0 0 O.F.S.T.E.D. Action Plan 98 29 0 Pupil Retention Fund 182 0 0 Council I.T. Fund 854 0 0 Advance Funding of Community & Voluntary Sector Led Regeneration Projects 500 0 0 Capital Reserve 0 0 0 Objective 1 Match Funding 55 30 0 Borough Investment Fund 1,952 1,690 987 Pensions Reserve 432 0 0 Section 106 Income 9,984 9,810 9,619 Charitable Donations 100 100 100 Total 26,930 23,801 22,827 Movement in Provisions Balance Projected Projected as at Balance Balance 31.03.06 as at as at 31.03.07 31.03.08 £'000 £'000 £'000 Insurance 4,874 4,124 4,124 Section 117 Mental Health Act 2,223 600 600 Overstated Income 731 731 500 Equal Pay Claims 1,080 0 0 Total 8,908 5,455 5,224
  21. 21. APPENDIX D TREASURY MANAGEMENT PARAMETERS (Prudential Indicators) Indicator £m Authorised Limit of Debt 505 Operational Boundary of Debt 330 Actual Total Debt as at 31.12.06 321 Maturity Structure of Borrowing Indicator __________________________ Upper Limit Lower Limit Actual % % % Under 12 months 30 0 3 12 months and within 24 months 30 0 0 24 months and within 5 years 50 0 9 5 years and within 10 years 75 0 16 10 years and above 90 10 72 Upper Limit Lower Limit Actual % % % Variable Rate Borrowing 30 0 3 Fixed Rate Borrowing 100 10 97

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