Purpose of
Report
1.
To
report the final year end position for revenue and capital
expenditure against budget for the financial year
2021/22.
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 2021/22; 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 some change following the conclusion of the audit of
the Statement of Accounts.
Revenue outturn
2021/22
4. In
February 2021 the council approved a net expenditure budget of
£18.5 million. The budget was set during the third
lockdown period caused by the Covid-19 pandemic, a period when
there was considerable uncertainty regarding how the pandemic would
evolve. This meant that, within the budget, a considerable
contingency was included to mitigate against potential negative
financial impacts of the pandemic. The budget was
further amended to include one-off budgets that had been carried
forward from the previous financial year. With the inclusion
of budget carry forwards and other in-year changes, the working
budget for 2021/22 was increased to £24.3 million.
5.
Against
the working budget of £24.3 million, net expenditure at year
end was £18.1 million. This equates to a favourable
variation of £6.2 million, which has been transferred to the
council’s reserves. A detailed summary by service is
shown in table 1 below.
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Table
1: summary of revenue budgets and variance
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Summary
of revenue budgets and variance
|
Budget
£000
|
Actual
£000
|
Variance
£000
|
Notes
|
|
|
Strategic
Management Team
|
1,343
|
879
|
(464)
|
|
|
|
Corporate
Services
|
2,634
|
2,532
|
(103)
|
|
|
|
Development
& Corporate Landlord
|
2,244
|
1,774
|
(470)
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|
|
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Finance
|
454
|
395
|
(59)
|
(a)
|
|
|
Housing
& Environment
|
6,306
|
5,726
|
(579)
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|
|
|
Legal
& Democratic
|
1,246
|
1,236
|
(10)
|
|
|
|
Partnership
& Insight
|
2,674
|
2,398
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(276)
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|
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Planning
|
411
|
957
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546
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|
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Policy
& Programmes
|
5,867
|
2,558
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(3,308)
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Contingency
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1,085
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(341)
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(1,426)
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Service
expenditure
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24,263
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18,115
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(6,149)
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Investment
income
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(1,847)
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(1,999)
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(152)
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(b)
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Net
expenditure
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22,416
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16,116
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(6,301)
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Notes:
a.
Finance line
contains housing benefits and rent allowances funded by government
grant as shown in table 2 below.
b.
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
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Budget
£000
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Actual
£000
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Variance
£000
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Rent
allowance payments
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20,342
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19,131
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(1,211)
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Government
subsidy income
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(19,800)
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(18,240)
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1,560
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Rent
allowance overpayments
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(620)
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(717)
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(97)
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Net
Position
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(78)
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174
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252
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6.
Appendix 1 analyses income and expenditure across service
areas. This appendix shows that the expenditure budget was
£65.2 million compared to an actual spend of £59.7
million. The income budget was £40.9 million compared to
actual income of £41.5 million. The year end variance of
£6.2million is therefore primarily found in the expenditure
budget.
7.
Table 3 below provides a further analysis of the revenue outturn
position.
Table 3:
variations between budgeted and actual revenue income and
expenditure
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TRANSFERS
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VARIANCES
BREAKDOWN
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Service
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Total
Variance
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Under-spend c/fwd. to
2022/23
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Grant
Income transferred to reserves
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Net Variances after
Transfers
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Employee
Costs
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Other
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£000
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£000
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£000
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£000
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£000
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£000
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Strategic
Management
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(464)
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428
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0
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(36)
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(116)
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80
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Corporate
Services
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(103)
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0
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0
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(103)
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(192)
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89
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Development
& Corporate Landlord
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(470)
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554
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0
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84
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(125)
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209
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Finance
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(59)
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0
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0
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(59)
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(43)
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(17)
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Housing
& Environment
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(579)
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76
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0
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(503)
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(132)
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(372)
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Legal
& Democratic
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(10)
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0
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34
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24
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134
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(110)
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Partnerships
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(276)
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0
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0
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(276)
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(24)
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(252)
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Planning
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546
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0
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0
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546
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(198)
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744
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Policy
& Programmes
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(3,308)
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2,357
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58
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(893)
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(114)
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(779)
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Contingency
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(1,426)
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0
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0
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(1,426)
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535
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(1,961)
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Direct
service expenditure
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(6,149)
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3,415
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92
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(2,642)
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(273)
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(2,369)
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Investment
income
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(152)
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0
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0
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(152)
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0
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(152)
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Net
expenditure
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(6,301)
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3,415
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92
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(2,794)
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(273)
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(2,521)
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Budgets carried
forward to 2022/23
8.
As
shown in table 3 of the £6.2 million favourable variance to
budget, £3.4 million represents slippage in one-off budgets
that have been agreed as budget carry forwards to 2022/23. A
further £92,000 of unbudgeted grant income received in year
has been transferred to reserves for future expenditure.
9.
The most significant carry forwards were in Development and
Regeneration and Policy and Programmes, representing £1.2
million for Didcot Garden Town and Gateway projects, and £0.9
million for Berinsfield regeneration. The one-off corporate
transformation budget was underspent by £428,000 due to
changing management priorities during the year. The full underspend
is to be carried forward to 2022/23 and, as agreed in the budget
for 2022/23, will be supplemented by a further £250,000 from
the overall council underspend at year end. Decisions on how
the transformation funding are to be used will be forthcoming in
Autumn 2022.
10.
Details of all
the carried forward budgets are included in Appendix
2. The unbudgeted
grant income received in the financial year was £93,000. This
income will be transferred to reserves and set against expenditure
in 2022/23. The breakdown of this funding is shown in table 4
below.
Table
4: Grant funding transferred to reserves
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Grant
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£
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Berinsfield
regeneration
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50,000
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Domestic violence
support
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33,540
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Diabetes
UK
|
8,721
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Total
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92,261
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Employee
costs
11. Employment costs
shows an overall underspend of £273,000 for the
year, which is net
of the managed vacancy factor set at the beginning of the
year.
12. Corporate
services underspent by £192,000. This was primarily
because staff were seconded to other services and the vacancies
were not filled. The largest employee variance was in Front
of House, which could absorb the vacancies as the offices were not
open to the public for much of the year.
13. The overspend in
Legal Services was primarily the result of vacancies, which were
difficult to fill. The use of more expensive agency staff to
provide the work resulted in the overspend of
£134,000.
14. Planning salary
costs were underspent by £281,000 due
to difficulties experienced in recruiting staff. This was
offset by agency staff costs of £83,000 to cover some of the
vacancies, giving an overall favourable variance of £198,000.
This variance was due to vacancies that could not be recruited that
could not be filled by agency staff for which, notwithstanding
increased workloads, resulted in lower performance on minor and
other applications and delayed responses on
consultations.
Other variances
over £50,000
15. Excluding the
carry forwards to 2022/23, grant income transferred to reserves and
employee cost variances, net revenue expenditure was £2.4
million underspent against
working budget. Of this total, as
identified above, £250,000 has been carried forward to 2022/23
to provide additional funding for the transformation work. In
addition, £337,500 has been carried forward to fund Planning
Policy work in respect of the Joint Local Plan. The
significant
variations from budget are shown in table 3 and are explained
below.
Development &
Corporate Landlord
16. Following the
easing of restrictions in the ongoing pandemic, Cornerstone was
able to reopen during the year. However, as a result of the
closure, income was down and the year ended with a £456,000
overspend.
17. Use of car parks
has not returned to pre-pandemic levels and therefore income was
down by £210,000 at the end of the year.
Housing &
Environment
18. The waste service
was underspent by £54,700.
19. Waste collection
and street cleansing services were underspent by
£300,500. Costs associated with recycling were
£155,000 below budget due to a lower indexation increase than
expected to the contract payments and an increase in recycling
tonnage. On refuse collection there was an underspend of
£84,000, again caused in part by the lower indexation
increase, plus lower delivery costs than expected. Street
cleansing was also underspent by £61,000 primarily due to the
indexation increase, and again costs were lower than
budgeted.
20. The garden waste
service overspent by £245,800. During the year there was
a national problem with sourcing drivers able to operate heavy
goods vehicles, which impacted waste collection. This, along
with sickness due to the Covid 19 pandemic, resulted in the garden
waste service being suspended for several weeks. Customers
were given a three-month extension to their service. There
was also a suspension of taking on new customers for six months
after the service came back in house. The above resulted in a
loss of income for the year.
Partnerships
21.
There
was an underspend of £256,000 on the Five Councils’
Partnership contract. We
have reviewed contract payments made to date in light of services
recently returned in house. We have reprofiled partner
contributions across the life of the contract and made accruals for
adjusted sums now due.
Planning
22.
Planning income
was under budget by £496,000. This is primarily a result
of developers delaying major application submissions.
23.
Spend
on consultants for appeals work was overspent by
£121,000. These costs are not budgeted and there is no
expertise in house to deal with appeals.
Policy
24.
Progress on the
new local plan stalled due to the pandemic, confirmation of
corporate objectives and progress of 2035 local plan
examination. As a result, and excluding employee cost savings
identified above, the Policy Team was underspent against budget by
£696,000. Budgeting arrangements for this service has
been amended for 2022/23
and,
as noted above, £337,500 has been earmarked to support future
work on the joint local plan.
NNDR
and council tax
25.
South achieved
over £2 million more NNDR income than anticipated in the
2021/22 budget. The budget
assumed that the council would achieve £2.5 million.
Following review between external advisors and finance staff, the
provisions for business rates appeals, which had been build up over
10 years and were increased in response to the pandemic, were
deemed to have been overly prudent and were significantly
reduced. This, along with a prudent reduction in bad debt
provision, added a one-off credit of £1.2 million to 2021/22
income.
26.
In addition, the
council commissioned external advisors to undertake a review of
business rates premises in the district to identify any premises
that should be paying business rates but were not on the rating
list. This exercise identified an additional £2.6
million business rates, including backdated amounts, owed to the
council by businesses. The council’s share of this is
estimated in 2021/22 to be in excess of £500,000, of which
just under £200,000 is expected to be an ongoing
increase.
27. This additional, primarily one-off income also generated an
additional £0.2 million credit from the Oxfordshire
councils’ business rates pooling distribution group.
Comparison to
previous year revenue outturn
28.
A
comparison of the 2020/21 revenue outturn to 2021/22 is shown in
table 5 below.
Table 5: 2020/21
and 2021/22 revenue outturn
|
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2020/21
Total
£000
|
2021/22
Total
£000
|
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Income
|
(4,280)
|
(593)
|
|
Expenditure
|
(2,114)
|
(5,556)
|
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Net
position before carried forward Budgets
|
(6,394)
|
(6,149)
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Carried
forward budgets
|
3,816
|
3,415
|
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Amounts
earmarked for transformation and joint local plan
|
0
|
588
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Net
position after carried forward Budgets
|
(2,578)
|
(2,146)
|
29. Although clearly
unforeseeable at the time, the level of prudent provision for the
ongoing impact of the Covid-19 pandemic in 2021/22, and the extent
to which that contribution was required, contributed to the
significant underspend in 2021/22.
Capital outturn
2021/22
30.
The
original capital budget for 2021/22, including growth, was agreed
in February 2021 at over £21 million. Details of the changes
to the capital programme in year are summarised in table 6
below:
Table 6:
movement on capital programme
|
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2021/22
£000
|
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Original
capital budget
|
21,866
|
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Roll
forward from prior years
|
12,006
|
|
Additions
in year (externally funded)
|
126
|
|
Additions
in year (other)
|
4,794
|
|
Slippage
to future years
|
(27,655)
|
|
Capital
programme 31 March 2022
|
11,137
|
|
Made
up of:
|
|
|
Approved
programme
|
9,022
|
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Provisional
programme
|
2,115
|
|
Capital
programme 31 March 2022
|
11,137
|
|
|
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31.
Capital
expenditure for 2021/22 was £2.6 million, a variance of
£6.4 million against the approved programme for the year of
£9.0 million. Details of these variances is shown in
appendix 3 to this report. Capital projects span several
years, and any underspends are rolled forward to the following
financial year.
32.
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 £27.7 million was slipped in this
way. A list of these schemes is shown in appendix
4.
Capital
receipts
33.
Capital receipts
in year amounted to £162,000. Repayments of Catalyst
loans make up £130,000 of this total.
Financial, legal
and any other implications
34.
The
financial implications are as set out in the body of the report.
There are no other implications of this report.
Conclusion
35.
The
2021/22 outturn position on revenue and capital was an underspend
against working budget for the year. Details of major
variances are detailed within this report and the
appendices.
Appendices
1.
Revenue outturn
– expenditure and income variance
2.
Revenue carry -
forward 2021/22 requests
3.
Capital outturn
– summary and commentary
4.
Capital outturn
– slippage
Background
Papers
·
Budget Papers for
2021/22
