Scrutiny Committee Report |
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Report of Interim Head of Finance Author: Richard Spraggett E-mail: richard.spraggett@southandvale.gov.uk Wards affected: All |
REPORT NO
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Cabinet member responsible: Andrew Crawford Tel: 01235 772134 E-mail: Andy.crawford@whitehorsedc.gov.uk DATE: 14 October 2020 |
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Financial Outturn 2019/20
Recommendation(s)Scrutiny committee is recommended to note the overall outturn position of the council as well as the outturn of individual service areas.
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Note: If committee members wish to raise specific questions please send these in advance if possible, to either the committee clerk or the senior finance business partner (richard.spraggett@southandvale.gov.uk). Please be aware that if questions are not submitted in advance, it may not be possible to answer these in detail at the meeting. In addition, if committee members wish specific heads of service to attend the meeting this should also be raised in advance.
Purpose of Report
1. To report the final year end position for revenue and capital expenditure against budget for the financial year 2019/20.
Strategic Objectives
2. The allocation of financial resources within the revenue and capital budgets needs to match the objectives agreed by the council. The outturn report shows how these resources have been used in year.
Background
3. The attached papers contain summarised schedules of revenue and capital expenditure for 2019/20; they also present an explanation of the significant variances against budget. This is presented by service. All the figures in this report are pre-audit and may be subject to change following the conclusion of the audit of the statement of accounts.
Revenue Outturn 2019/20
4. In February 2019 the council approved a net expenditure budget of £15.4 million. This increased to £16.9 million as a result of budget carry forwards and supplementary estimates. The net expenditure at year end was £15.3 million – this equates to a favourable variation of £1.6 million, which has been transferred to the council’s reserves. This is shown in table 1 below.
Table 1: summary of revenue budgets and variance
Notes:
a) Finance includes housing benefits and rent allowances funded by government grant as shown in table 2 below.
b) Note that £136,000 of this income represents interest earned on retained business rates held by the council on behalf of Oxfordshire Local Enterprise Partnership (OxLEP). The council’s treasury management outturn report will be considered by Joint Audit and Governance Committee, Cabinet and Council.
Table 2: housing benefits and rent allowances
5. Appendix 1 analyses income and expenditure across the service areas. This appendix shows the expenditure budget was £53.1 million compared to an actual spend of £48.6 million resulting in an underspend of £4.5 million. This underspend is approximately 8.5 per cent of total expenditure. The income budget was £36.2 million compared to actual income of £33.3 million, an adverse variance of £2.9 million or around 8 per cent.
6. Table 3 below provides a further breakdown of the revenue outturn position.
Table 3: summary of major variances against revenue budget
Budgets carried forward to 2020/21
7. As shown in table 3, of the £1.6 million variance to budget, over £0.8 million represents slippage in one-off budgets that have been agreed as budget carry forwards to 2020/21. These carry forwards are shown in Appendix 2. They include £0.6 million of carry forwards in Development and Regeneration relating to Didcot Garden Town and Dalton Barracks Garden Village. The budget carry forwards from 2018/19 totalled £1.5 million.
8. Excluding the carry forwards, net revenue expenditure was £0.7 million underspent against budget. Within that net variance, the outturn position has been analysed to identify explanations for the significant variations from budget. Key reasons for variances are outlined below, categorised between income and expenditure variances and with an indicator showing the service team area as referred to in table 3 above.
Income Variances
9. Significant income variances include:
Increased income against budget
Legal and Democratic
10. Elections income of £74,000 relates to district and parish elections held during the year. Parishes reimburse the council for the cost of these elections and the income was not budgeted.
Planning
11. Neighbourhood planning grant of £120,000 was received in year, which was not budgeted.
Reduced income against budget:
Development and Regeneration
12. General property has £177,000 adverse variance largely due to empty commercial properties income shortfalls of £137,000.
Planning
13. Development Services fee income (planning fees) was £641,000 below target due to market slowdown, particularly on larger developments.
Expenditure Variances
14. Significant expenditure variances include the following. A number of these areas are the subject of the carry forward requests referred to later in this report.
Reduced expenditure against budget:
15. Across all services, employee costs were £0.8 million below budget. This underspend includes £0.2 million that has been carried forward to 2020/21.
Community Services
16. Leisure Centre Operations was under budget by £251,000 due to dual use income relating to prior years.
Development and Regeneration
17. Didcot Garden Town and Science Vale were underspent by £317,000. These are projects funded from ring fenced grants and the budgets have been carried forward into 2020/21.
18. Dalton Barracks Garden Village shows £147,000 favourable variance due to ring fenced grant income received late and has been carried forward to 2020/21.
Housing and Environment
19. Expenditure on Public Realm was £450,000 under against budget. This included budget carried forward from the previous year. With grounds maintenance being brought back in-house there is no requirement to carry this budget forward.
Partnership and Insight
20. Expenditure on supporting the Growth Deal was underspent by £137,000 and this budget has been carried forward into 2020/21.
21. Expenditure on fees and hired services were underspent by £107,000 primarily due to no requirement to spend on preparations for a proposed new reservoir. This budget has not been carried forward.
Planning
Increased expenditure against budget:
Partnership and Insight
23. Spend on the 5 Councils Partnership was £165,000 overspent. This primarily reflects volume-based costs arising from increased workload in the IT service provided in the contract
Comparison to previous year revenue outturn
24. A comparison of the 2018/19 outturn to the 2019/20 revenue outturn is shown in table 4 below:
Table 4: 2018/19 and 2019/20 revenue outturn
25. Similar to 2018/19, expenditure underspends including carry forward requests are the most significant factor in 2019/20.
Capital
26. The: The original capital budget for 2019/20 including growth was agreed in February 2019 at £9.1 million. Details of the changes to the capital programme in year are summarised in table 5 below:
Table 5: movement on capital programme
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Approved |
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Original capital budget 1 April 2019 |
9,096 |
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Roll forward from prior years |
843 |
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Additions in year (externally funded) |
127 |
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Additions in year (other) |
37 |
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Schemes deleted |
0 |
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Slippage into future years |
(3,500) |
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Working budget 31 March 2020 |
6,603 |
27. Capital expenditure for 2019/20 was £2.4 million. Detail of the variance of spend against the capital programme working budget is shown in appendix 3 to this report.
28. During the year, budget holders review their projects and identify those where delays mean that the current working budget will not be spent in year. The budget profile is then moved to reflect the new spend profile and budgets are slipped into future years if applicable. Slipped budgets remain committed for use in future years. During the year £3.5 million was slipped in this way. A list of slipped schemes is shown in appendix 4.
Financial, Legal and any other implications
29. The financial implications are as set out in the body of the report. There are no other implications of this report.
Conclusion
30. Following the trends of recent years, the council has underspent on both revenue and capital, and the nature and reasons for these variances are detailed within this report and the appendices.
Appendices:
1. Revenue outturn – expenditure and income variance
2. Revenue carry forward 2019/20 requests
3. Capital outturn – summary and commentary
4. Capital outturn - slippage
Background Papers
· Budget papers for 2019/20