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: Pieter-Paul Barker Tel: 01844 212438 Date: 9 November 2023 |
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Budget monitoring April 2023 – June 2023
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 2023 to June 2023 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 nine months of the financial year.
Background
3. This report reviews the council’s revenue and capital expenditure performance to the end of month three (June). Year-end outturn forecasts were worked on during January and are based on heads of service’s best knowledge at that time.
Revenue budget monitoring
4. On 16 February 2023, Council agreed a net revenue budget for 2023/24 of £18.548 million. This has subsequently increased to £22.746 million. This reflects the carry forward of unspent one-off project budgets from 2022/23 and grant funded budgets.
5. Table 1 below shows, summarised at service level, both the revenue position as at the end of June 2023 and the forecast position at year end.
Table 1: Revenue budget monitoring position as at June 2023
6. The forecast underspend of £2.1 million includes £2.7 million of projected carry-forward in one-off budgets. Once these have been removed, an overspend of £0.6 million is anticipated at the end of the year. Analysis of the forecast variance is shown in table 2 below.
Table 2: summary of forecast major variances against revenue budget
7. Although a projected overspend of £0.6 million is forecast, due to the prevailing economic conditions, income from the council’s treasury investments in 2023/24 is forecast to be in nearly £1.0 million higher than estimated when the budget was set. This additional income is over and above that allocated in the council’s five-year Medium Term Financial Plan, agreed by Council in February 2023, to be used in 2024/25 under the council’s policy of using interest income in the year after it is earned.
Budgets forecast to be carried forward to 2024/25
8. As detailed above there is forecast to be slippage of £2.7 million 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 at this early stage of the year are forecast to be sufficiently underbudget to cover the managed vacancy factor set at the beginning of the year and no outturn variance is being reported. Key employee cost variances are as follows:
· Strategic management had a number of vacancies during quarter one, which have now been filled.
· Customer Service vacancies in Corporate Services make up the majority of this variance.
· The underspend in Planning is made up of various vacancies across the service. A review of service structure has been completed with a reduction in costs.
Service department variances over £25,000
Excluding carry forwards to 2024/25, grant income to be transferred to reserves and employee cost variances, net revenue expenditure is forecast to be £662,000 overspent against budget. The significant forecast variations from budget are shown in table 2 above and are explained below.
Development & corporate landlord
10. Show bookings are below expectations at Cornerstone and income is expected to be down against budget by £320,000.
11. Housing benefit is forecasting an over recovery for the year. There are a number of small variances across the service, the recovery of backdated housing benefit payments (delayed due to the Covid pandemic) is the largest at £57,000 favourable.
Planning
12. Development income, which is £163,000 below budget for the June quarter, is forecast to be £450,000 below budget by Year End. Some of this variance is recovered by the favourable salary variance mentioned above.
Capital budget monitoring
13. On 16 February 2023, Council agreed a capital programme for 2023/24 as follows:
· Approved programme - £13.339 million
· Provisional programme (including Cabinet growth proposals) - £13.938 million.
14. At the end of June 2023, the approved programme totalled £24.334 million, against which £3.65 million had been spent. Details of the changes to the capital programme during the first nine months are summarised in table 3 below:
Table 3: movement on capital programme
15. The capital budgets have not been reviewed for this report. A full review of the current capital programme is underway and the outcome of this will be reflected in future budget monitoring reports.
Financial, legal and other implications
16. The financial implications are as set out in the body of the report. There are no other implications of this report.
Conclusion
17. At this stage of the financial year, for revenue an overspend is forecast which is anticipated to be offset by additional investment income.
Appendices
1) Revenue budget monitoring – budget carry forwards
2) Capital budget monitoring - summary
Background Papers
· Budget papers for 2022/23