PAPER B

Committee: ENVIRONMENT AND TRANSPORT SELECT COMMITTEE

Date: 27 NOVEMBER 2002

Title BUDGET MONITORING REPORT AS AT END OF OCTOBER 2002

REPORT OF THE STRATEGIC DIRECTOR FOR FINANCE AND INFORMATION AND COUNTY TREASURER

SUMMARY / PURPOSE

This report sets out the budget and spending position on both revenue and capital for the services within this Committee’s remit, as at the end of October. The figures do not include budgets that are controlled elsewhere than the service concerned. These are monitored by the Committee which bears responsibility for such costs. (For example, Resources Select Committee monitors the building maintenance budget centrally, and building maintenance costs are not therefore shown against individual services in the attached appendix).

REVENUE EXPENDITURE

The report details gross expenditure, income and net expenditure to date against budget as shown at appendix 1. The expenditure and income has been classified over thirteen distinct categories, each of which may have different spending or income generation characteristics. For example, the waste management budget has expenditure which accrues fairly evenly through the year, with increased contract payments from November, the anniversary of commencement of the contract. By contrast, the county transport and management and supervision budgets also have expenditure which accrues fairly evenly through the year, but in addition have a considerable requirement for recharges to service budgets and capital budgets which tend to take place in arrears of the expenditure; whereas the car parking service generates a considerable amount of income, an element of which is seasonal.

At this stage of the financial year there are still few significant variances to report. The comments contained in the revenue expenditure table (Appendix 1) are intended to provide a basic summary of the services provided within each heading and reasons for the level of budget activity to date. As can be seen from the totals on Appendix 1, expenditure is beneath target using an assumption of its accruing evenly throughout the financial year, particularly if the county transport figures, which tend to distort the totals, are excluded. However, given the comments on the appendix expenditure to date is broadly in line with that which would reasonably be expected seven months through the financial year. By contrast, income generation is ahead of target and seems certain to exceed the budget by the year end, particularly in a number of specific instances.

CAPITAL EXPENDITURE

Expenditure against each scheme is shown at appendix 2.

The budgets shown are those approved for the current financial year, described as 2002-2003 schemes, and those slipped from the previous year, described as 2001-2002 slippage. The current years budget forms a part of the single capital pot, for which expenditure must be completed by 31 March 2003. Last year’s capital settlement was in the form of 2 year supplementary credit approval for which expenditure also has to be completed by 31 March 2003. The total approved budget for the year is in excess of £11.5 million, of which £4.5 million has been spent by the end of October, with a further £1.6 million committed. Within the total approved budget figure there is some £1.9 million for the Military Road project, on which negotiations have taken place with prospective contractors. The budget for the project has been in place for some years now, and the net underspend has been carried forward year on year to ensure the maximum amount is available when tenders are received. Consequently, there is flexibility to carry forward any underspend once again, should that prove to be necessary. A report on progress on the Military Road scheme was considered by the Executive in September, and subsequently by the Council on 16 October. The Portfolio Holder for Transport explained the reasons for the high cost of tenders received, linked to high risk elements of the project, and that in order to reduce the risks that stabilisation works should be undertaken as soon as possible. The budget shortfall was identified as £1,225,000 and the Council resolved to approve an additional allocation of that amount as a first call from the 2003-2004 Highways capital budget.

On the basis of an assumed capital settlement of some £5,000,000 for next year, the allocation of resources to both the Military Road project and the deferred Newport to Cowes Strategic Corridor will mean that a significant proportion of the likely resources will be effectively ‘committed’ prior to commencement of the financial year.

POLICIES AND STRATEGIES

The services included within this report are linked to a number of the Council’s key strategic objectives, specifically Improving health, housing and the quality of life for all; Creating safe and crime-free communities; Improving public transport and the highways infrastructure; and Protecting the Island’s physical environment.

CONSULTATION

No specific consultation has been undertaken in the production of this report. However, a number of the capital projects and services included within the report will have been the subject of consultation with a range of external agencies and members of the public.

CRIME AND DISORDER

There are no direct crime and disorder issues arising from the production of this report.

PERFORMANCE INDICATORS

There are no direct implications for performance indicators arising from the production of this report. However, clearly there will be implications for future performance measures and indicators arising from the information contained within the report, specifically any cost based indicators, but also the outcomes arising from the services and projects to which this report refers.

Contact Point : Stuart Fraser Φ 823657

JOHN PULSFORD

Strategic Director for Finance and Information and County Treasurer

REVENUE EXPENDITURE SUMMARY as at end of October

Service	Expenditure		Income		Net
	Budget	To date	Budget	To date	Budget	To date	Comment
	£000	£000	£000	£000	£000	£000
Management and Supervision including Policy and Strategy	1,278.9	1,097.7	-148.8	-192.8	1,130.1	904.9	Budget includes Transport Planning, Policy and Strategy and Professional and Engineering Services. Expenditure budget is net of design and supervision fees to be recharged to capital projects
Coast protection, harbours and seafronts	874.7	696.2	-212.7	-135.5	662.0	560.7	Budget on target at this stage of the financial year, including cliff stabilisation works
Waste management and recycling	6,139.1	1,897.6	-7.1	-19.3	6,132.0	1,878.3	Budget includes all aspects of the Integrated Waste Management contract, and also includes the landfill tax budget. IWM contract invoices tend to be some weeks in arrears, hence the apparent budget surplus
Public conveniences and first time sewerage	438.5	178.5	-6.2	-0.4	432.3	178.1	Main budgets are for the contractual cleaning of the public conveniences and operational costs such as rates, water and electricity
Building control	428.3	229.1	-394.8	-272.1	33.5	-43.0	Income presently ahead of target due in part to amounts received last year relating to works not yet started, hence accrued into the current year
Street and beach cleaning	1,350.0	637.0	-0.3	-1.1	1,349.7	635.9	As is the case for the waste management and recycling budgets, street cleansing invoices in particular tend to be some weeks in arrears, hence the apparent budget surplus
Highway maintenance	1,874.7	1,407.1	-33.5	-32.6	1,841.2	1,374.5	Budget on target at this stage of the financial year – however possible budget pressure areas are highway drainage and highway clearance/safety sweeping

REVENUE EXPENDITURE SUMMARY as at end of October

Service	Expenditure		Income		Net
	Budget	To date	Budget	To date	Budget	To date	Comment
	£000	£000	£000	£000	£000	£000
Traffic management and road safety	663.6	551.4	-14.0	-13.7	649.6	537.7	Budget on target to date, including cliff stabilisation works linked to highway safety
Street Lighting	627.7	482.0	-10.0	-14.9	617.7	467.1	Budget covers all aspects of the street lighting service, including power, planned maintenance and routine maintenance. On target
County Transport	435.0	1,429.9	-300.2	-164.6	134.8	1,265.3	Budget includes operational costs of Wightbus, Home to School Transport and the Council’s vehicles and plant prior to their reallocation to service areas. The budgets shown are net of recharges to service user budgets, however no recharges have taken place to date, hence the current overspend shown
Public Transport including Cowes Floating Bridge	1,586.9	1,061.5	-597.7	-334.8	989.2	726.7	This budget contains the costs of subsidised local bus services, Rural Bus Grant Services and concessionary fares schemes, as well as the operation of the Cowes Floating Bridge. Income is mainly from the Floating Bridge and the Rural Bus Grant
Car Parking	610.6	463.0	-2,118.3	-1,841.6	-1,507.7	-1,378.6	The main focus of this budget tends to be on income generation because of its relative significance and the impact it can have on the delivery of other service areas e.g. traffic management and public transport. Income is accruing well to date, although a significant proportion is seasonal
Environmental Initiatives including Agenda 21	161.0	91.2	-95.7	-16.1	65.3	75.1	This budget includes the Coastal Visitors Centre and associated projects as well as the Agenda 21 budget. Much of the income relates to project budgets for which recharges have yet to take place
Totals	16,469.0	10,222.2	-3,939.3	-3,039.5	12,529.7	7,182.7	Percentage of year elapsed to date – 58.3% Percentage net budget spent to date – 57.3% Percentage excluding County Transport – 47.7%