PAPER B
Purpose
: for Decision
REPORT
TO THE EXECUTIVE
Date : 30 JULY 2003
Title : REVENUE AND CAPITAL
PROVISIONAL OUTTURN 2002/03
REPORT OF THE PORTFOLIO HOLDER FOR
RESOURCES
SUMMARY/PURPOSE
1
The purpose of this report is to provide members with
draft outturn results for both revenue and capital expenditure in 2002-03.
2
Members are also asked to determine how overspends on
certain services should be treated.
CONFIDENTIAL/EXEMPT ITEMS
3
This is a public report
which is not exempt under the Local Government Act.
REVENUE BACKGROUND AND KEY POINTS
4
Appendix A shows the revised estimate for each service
area and actual ‘controlled’ expenditure at the year end compared with the
estimate. This shows a net underspend of £9,400 at the year end after allowing
for carry overs of £2,189,200.
5
The revised estimate for 2002-03 envisaged a
withdrawal of £418,000 from the General Reserve which was estimated as a result
to stand at £2,068,000 by the end of last year. The underspend means that a
slightly smaller sum than expected will be taken from the Reserve - £408,000 –
leaving a balance of £2,077,000 at 31st March 2003.
6
The main areas of variance are as follows:
·
Education underspent by £98,000 on LEA functions (0.17%
of budget)
·
Engineering Services overspent by £117,000 due to
under-recovery of
planned capitalisation of eligible
revenue expenditure
·
Fire and Rescue Service underspent by £50,000 due to
the major incident
contingency not being required
·
Corporate accounts overspent by £74,000, largely as a
result of higher housing benefit payments resulting from the ‘supporting
people’ initiative
·
Creation of a ‘spend to save’ reserve of £250,000 to
make repayable advances to generate future savings or income. This was part of
the 2003-04 budget strategy and replaces the annual provision of ‘spend to
save’ monies.
·
Treasury Management and Interest Rate savings of
£376,000
It is
the Council’s normal policy to require overspendings to be charged against
future years’ cash limits. However, in the context of an overall underspending,
and given the circumstances surrounding each instance, it is suggested that on
this occasion service overspends should be written off. The justification in
each case is as follows:
·
Corporate Directorate (£25k): attributable to the
Coroner, whose expenses are largely outside of the Council’s control
·
Legal and Democratic Services (£27k): due to higher
than usual corporate demands associated with the development of the modernising
agenda and improving corporate governance arrangements
·
Property Services (£43k): attributable to lower levels
of market income which have occurred in recent years, plus increased costs of
security and street cleansing.
·
Engineering Services (£118k): Shortfall in capitalised
highways maintenance (target £609k), this has been offset by an equivalent
saving on highways capital.
CAPITAL
BACKGROUND AND KEY POINTS
7
Capital spending and financing details are shown at
Appendix B. Of the total programme of £29.4 millions, some £24.9 millions had
been spent by the end of the year. This will not cause problems on this
occasion as it has been possible to carry forward sufficient resources to
finance the resultant slippage. However, that may not always be the case. The
anticipated new system for local discretion in making capital investment
decisions and setting prudential borrowing indicators may allow a higher degree
of flexibility in future, although paradoxically it could require a closed
degree of control of projects still funded by Central Government support.
8
Main areas of variance are as follows:
·
The principal component of the variance in the
Education programme relates
to devolved budgets held on behalf of
schools
·
Housing slippage relates to delay in the programmed
scheme at Oakfield and the two year Improvement Grant programme
·
Environment and Transport variance includes the
Military Road scheme and Newport Town Centre Traffic Management
·
The major variance on Leisure Services relates to
expenditure to be incurred on the Tone Zone scheme at Westridge
STRATEGIC CONTEXT
9
This report covers the financial performance of each of
the Council’s service areas in the previous financial year for both revenue and
capital expenditure. To that extent it is linked to the delivery of each of the
Council’s strategic objectives, the Corporate Plan and Service Plans.
10 The
appendices to the report show underspends in most service areas, both capital
and revenue. The Council’s Financial Regulations allow automatic carry over of
underspends in the revenue budget year on year, providing the overall budget
situation is under control. This flexibility between years aids delivery of the
Council’s strategic objectives. Similarly, management of the Council’s
available capital resources for the corporate benefit presently allows projects
to be slipped without detriment to the programme overall. Such flexibility in
the capital programme allows value for money to be achieved through project
management, and also facilitates consultation with stakeholders to ensure the
projects delivered are in accordance with community aspirations.
CONSULTATION
11 The
Directors’ Group and Portfolio Holder have been consulted in the preparation of
this report.
FINANCIAL/BUDGET IMPLICATIONS
12 A
decision not to write off revenue overspends would adversely impact on 2003‑04
service budgets but will increase the General Fund balance at 31st
March 2003 by up to £212,000.
LEGAL IMPLICATIONS
13 The
Accounts and Audit Regulations 2003 require approval of the accounts to be by
full council (or a politically proportionate committee established for that
purpose) and this report does not recommend approval of the accounts, which
will come before the September Full Council.
14 The
proposed treatment of overspends is within the discretion of the executive,
under the terms of article 4 of the constitution and the financial procedure
rules.
OPTIONS
15.1
To write off the revenue expenditure overspends shown at
appendix A.
15.2
To require some or all of the revenue overspends to be charged
to the
corresponding service unit cash
limits in 2003-04.
EVALUATION/RISK MANAGEMENT
16 If 2003-04 service cash limits are
required to meet revenue overspends from 2002-03, there will be a possibility
of expenditure pressures in those areas.
BACKGROUND PAPERS
18
Financial
reports, many of which will be exempt under pararaphs 1, 7, 8 or 9 Sch 12 Local
Government Act 1972
Council
publications Budget 2002-03 and Budget 2003-04.
ADDITIONAL INFORMATION
19 Attachments
to the report as follows:
Appendix A – Revenue outturn 2002-03
Appendix
B – Capital outturn 2002-03
Contact
Point : Stuart Fraser. Tel (01983 823657); e-mail: [email protected]
|
P
WILKINSON
Chief Financial Officer
|
R R
BARRY
Portfolio Holder for Resources
|
APPENDIX
A
|
Service area
|
Revised
Estimate
|
Actual
Spend
|
Carry
Over
|
Outturn
|
Over/under
spend
|
|
|
£000
|
£000
|
£000
|
£000
|
£000
|
|
Education
|
58,082.3
|
57,573.0
|
411.0
|
57,984.0
|
-98.3
|
|
Community Development
|
6,837.5
|
6,706.0
|
113.1
|
6,819.1
|
-18.4
|
|
Human Resources and Training
|
747.9
|
748.6
|
0.0
|
748.6
|
0.7
|
|
Policy and Communications
|
1,775.8
|
1,516.4
|
259.4
|
1,775.8
|
0.0
|
|
Economic Development
|
557.1
|
363.0
|
194.1
|
557.1
|
0.0
|
|
|
300.6
|
300.6
|
0.0
|
300.6
|
0.0
|
|
Corporate Directorate
|
438.2
|
462.8
|
0.0
|
462.8
|
24.6
|
|
Legal and Democratic
|
705.3
|
732.7
|
0.0
|
732.7
|
27.4
|
|
Property Services
|
264.8
|
308.0
|
0.0
|
308.0
|
43.2
|
|
Planning Services
|
1,434.7
|
1,356.6
|
78.1
|
1,434.7
|
|
|
Engineering Services
|
11,795.0
|
11,912.5
|
0.0
|
11,912.5
|
117.5
|
|
Finance and
Business Services
|
2,853.8
|
2,733.7
|
120.1
|
2,853.8
|
0.0
|
|
ICT Services
|
1,634.8
|
1,634.8
|
0.0
|
1,634.8
|
0.0
|
|
Consumer Protection
|
1,257.2
|
1,191.8
|
65.4
|
1,257.2
|
0.0
|
|
Tourism Services
|
1,142.6
|
918.3
|
224.3
|
1,142.6
|
0.0
|
|
Fire and Rescue Service
|
4,813.2
|
4,697.2
|
66.0
|
4,763.2
|
- 50.0
|
|
Emergency Planning
|
46.7
|
46.6
|
0.0
|
46.6
|
-0.1
|
|
Social Services
|
26,975.8
|
26,239.5
|
657.7
|
26,897.2
|
-78.6
|
|
Housing Strategy
|
1,064.3
|
1,142.6
|
0.0
|
1,142.6
|
78.3
|
|
Building Maintenance
|
1,156.1
|
1,152.7
|
0.0
|
1,152.7
|
-3.4
|
|
Precepts
|
1,544.9
|
1,545.0
|
0.0
|
1,545.0
|
0.1
|
|
Corporate Accounts
|
3,079.2
|
3,153.7
|
0.0
|
3,153.7
|
74.5
|
|
|
128,507.8
|
126,436.1
|
2,189.2
|
128,625.3
|
117.5
|
|
|
|
|
|
|
|
|
Capital Financing
|
6,825.7
|
6,449.4
|
0.0
|
6,449.4
|
-376.3
|
|
Appropriations to/from reserves
|
-1,922.7
|
-1,673.3
|
0.0
|
-1,673.3
|
249.4
|
|
|
|
|
|
|
|
|
Total Expenditure
|
133,410.8
|
131,212.2
|
2,189.2
|
133,401.4
|
- 9.4
|
|
|
|
|
|
|
|
|
Financed from:
|
|
|
|
|
|
|
Revenue Support Grant
|
-48,408.5
|
|
|
-48,408.5
|
|
|
National Non-domestic Rates
|
-39,822.4
|
|
|
-39,822.4
|
|
|
Council Tax
|
-44,762.1
|
|
|
-44,762.1
|
|
|
|
|
|
|
|
|
|
Withdrawal from/contribution to General
Fund
|
-417.8
|
|
|
-408.4
|
|
|
|
|
|
|
|
|
|
Total Financing
|
-133,410.8
|
|
|
-133,401.4
|
|
|
|
|
|
|
|
|
|
Opening General Fund Balance
|
2,485.4
|
|
|
2,485.4
|
|
|
Change in Year
|
-417.8
|
|
|
-408.4
|
|
|
Closing General Fund Balance
|
2,067.6
|
|
|
2,077.0
|
|
|
|
|
|
|
|
|
APPENDIX
B
|
|
Revised Estimate
|
Actual
|
Over/under spend
|
|
|
£000
|
£000
|
£000
|
|
|
|
|
|
|
Education & Community Development
|
8,989.5
|
7,906.5
|
-1,083.0
|
|
|
|
|
|
|
Housing, Social Services and Benefits
|
3,076.0
|
2,045.0
|
-1,031.0
|
|
|
|
|
|
|
Environment and Transport
|
14,185.1
|
12,334.4
|
-1,850.7
|
|
|
|
|
|
|
|
209.3
|
34.9
|
- 174.4
|
|
|
|
|
|
|
Resources
|
2,189.3
|
2,133.0
|
- 56.3
|
|
|
|
|
|
|
Economic Development, Tourism, Planning
and Leisure
|
734.6
|
439.3
|
- 295.3
|
|
|
|
|
|
Total Expenditure
|
29,383.8
|
24,893.1
|
-4,490.7
|
|
|
|
|
|
|
|
|
|
|
|
Financed by:
|
|
|
|
|
|
|
|
|
|
Basic Credit Approval
|
|
12,154.0
|
|
|
|
|
|
|
|
Supplementary Credit Approval
|
|
4,065.9
|
|
|
|
|
|
|
|
Grants & Contributions
|
|
6,009.1
|
|
|
|
|
|
|
|
Capital Receipts
|
|
1,089.6
|
|
|
|
|
|
|
|
Revenue Contributions
|
|
384.5
|
|
|
|
|
|
|
|
Temporarily Unfunded
|
|
96.8
|
|
|
|
|
|
|
|
Accrued Expenditure (Financed 2003/04)
|
|
1,093.2
|
|
|
|
|
|
|
|
Total Financing
|
|
24,893.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|