Cabinet Report |
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Report of Head of Finance Author: Emma Creed E-mail: emma.creed@southandvale.gov.uk Wards affected: All |
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Cabinet member responsible: Andrew Crawford Tel: Tel: 01235 772134 E-mail: Andy.crawford@whitehorsedc.gov.uk Date: 20 December 2022 |
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Budget monitoring April 2022 – August 2022
RecommendationCabinet is recommended to note the contents of the report |
Purpose of Report
1. To report the revenue and capital expenditure against budget for the period April 2022 to August 2022 and the latest year end outturns forecast by heads of service.
Corporate Objectives
2. The allocation of financial resources within the revenue and capital budgets needs to match the objectives agreed by the council. The budget monitoring report shows how these resources have been allocated during the first five months of the financial year.
Background
3. This report reviews the council’s revenue and capital expenditure performance to the end of month five (August). Year-end outturn forecasts were worked on during September and are based on heads of service’s best knowledge at that time.
Revenue budget monitoring
4. On 16 February 2022, Council agreed a net revenue budget for 2022/23 of £15.380 million. This has subsequently increased to £17.017 million. This reflects the carry forward of unspent one-off project budgets from 2021/22 and additional grant funded budgets.
5. Table 1 below shows, summarised at service level, both the revenue position as at the end of August 2022 and the forecast position at year end.
Table 1: Revenue budget monitoring position as at August 2022
6. The forecast variance is further broken down in table 2 below.
Table 2: summary of forecast major variances against revenue budget
Budgets forecast to be carried forward to 2023/24
8. As shown in table 2, of the £0.93 million forecast variance to budget, £0.28 million represents slippage in one-off budgets. These will be requested as carry forwards at the end of the financial year. These carry forwards are shown in appendix 1.
9. Employee costs are forecast to be underspent by £101,000, not yet enough to cover the £625,000 managed vacancy factor set at the beginning of the year, giving a net overspend of £626,000. Key employee cost variances are as follows:
· Strategic management had a number of vacancies during quarter one, which have mostly now been filled.
· Development and Corporate Landlord is showing a year end overspend as a result of salary costs that were expected to be funded from capital receipts, but it is now expected that they cannot be capitalised.
· Legal and Democratic are using locum solicitors to cover vacancies. These costs are much higher than the salary budget, generating an overspend.
Service department variances over £50,000
10. Excluding carry forwards to 2023/24, grant income to be transferred to reserves and employee cost variances, net revenue expenditure is forecast to be £933,000 overspent against budget.
11. The significant forecast variations from budget are shown in table 2 above and are explained below.
Development and Corporate Landlord
12. Utilities budgets including those recharged from South Oxfordshire are expected to be inadequate due to the rising cost of fuel. It is expected that there will be a £269,985 overspend on these budgets broken down as follows:
· Facilities £87,880,
· Property £86,415,
· Beacon £55,570,
· Car Parks and toilets £40,120.
13. Use of council car parks has increased since the ending of pandemic restrictions, however we are still not seeing usage back to pre-pandemic levels. It is predicted that there will be a £52,000 adverse variance on car parking income.
14. The grounds team are currently leasing vehicles until vehicles can be purchased. There is no budget for this, and we expect to spend £131,000 during the year on these vehicles and their associated fuel.
15. Costs for the Concerto upgrade are currently forecast to be £91,851 underspent.
Finance
16. Housing benefit costs have increased significantly due to the number of claimants in temporary accommodation. The current forecast is a £242,294 overspend.
17. Bank charges are forecast to be over budget by £100,000. A new contract is in place as of 31 August 2022 which will mitigate further overspends on this budget.
Housing and Environment
18. Homelessness costs are expected to be £164,390 over budget. Higher hotel placements and lower rental income as a result of one hostel being closed for refurbishment have contributed to this overspend.
19. Waste contract costs are expected to be over budget by £193,941. Indexation on the waste contract was underestimated when the budget was set and will be inadequate to cover actual costs this year. Contractual indexation is based on a number of factors, some of which, such as fuel, have been subject to significant price increases in recent months.
Partnerships
20. The costs associated with the Five Councils contract have been reprofiled and therefore an underspend of £275,000 is expected by the end of the year.
Capital budget monitoring
21. On 16 February 2022, Council agreed a capital programme for 2022/23 of £6.749 million.
22. At the end of August 2022, the capital programme had increased to £19.8 million. Details of the changed to the capital programme during the first five months are summarised in table 3 below:
Table 3: movement on capital programme
23. Capital budgets will be reviewed in the coming months to ensure that project spend is more accurately profiled.
Financial, legal and other implications
24. The financial implications are as set out in the body of the report. There are no other implications of this report.
Conclusion
25. At this stage of the financial year, for revenue an overspend is forecast. On capital, expenditure was under budget as at the end of August and an underspend is anticipated for the year.
Appendices
1) Revenue budget monitoring – carry forwards
2) Capital budget monitoring - summary
Background Papers
· Budget papers for 2022/23