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: Leigh Rawlins Tel: 01189 722565 E-mail: leigh.rawlins@southoxon.gov.uk Date: 29 September 2022 |
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Budget monitoring April 2022 – June 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 June 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 three 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 December and are based on heads of service’s best knowledge at this time.
Revenue budget monitoring
4. On 17 February 2022, Council agreed a net revenue budget for 2022/23 of £16.779 million. This has subsequently increased to £20.974 million. This reflects the carry forward of unspent one-off project budgets from 2021/22.
5. Table 1 below shows, summarised at service level, both the revenue position as at the end of June 2022 and the forecast position at year end.
Table 1: Revenue budget monitoring position as at June 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
7. As shown in table 2, of the £0.7 million forecast variance to budget, £1.6 million represents slippage in one-off budgets. These will be requested as carry forwards at the end of the financial year. £0.1 million is forecast grant income to be received. These carry forwards and grants are shown in appendix 1.
8. Employee costs are forecast to be overspent at the end of the year by £434,000, which is net of the managed vacancy factor set at the beginning of the year.
9. The variance in strategic management is due to a vacancy, which is being covered by a consultant. Spend on consultants does not form part of employee costs.
10. Corporate services is predicting an underspend mainly as a result of vacancies that are not anticipated to be filled by the end of the year.
11. The overspend in development and corporate landlord is primarily a result of costs that had been budgeted in capital but on review were decided should be revenue.
12. The £207,000 underspend in policy is made up of various vacancies across the service. A review is to be carried out on service structure for the 2023/24 budget.
Service department variances over £50,000
13. Excluding carry forwards to 2023/24, grant income to be transferred to reserves and employee cost variances, net revenue expenditure is forecast to be £623,000 overspent against budget.
14. The significant forecast variations from budget are shown in table 2 above and are explained below.
Development and Corporate Landlord
15. Utilities budgets are expected to be inadequate due to the soaring cost of fuel. It is expected that there will be a £213,000 overspend on these budgets.
17. The waste service is predicting an overspend of £371,600. 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.
Finance
Planning
19. Anticipated income from major developments has been delayed and therefore a £267,000 overspend is expected.
20. The building control service has seen an increase in income due to some larger developments using the service. Income is predicted to be £134,800 over budget.
Capital budget monitoring
21. On 17 February 2022, Council agreed a capital programme for 2022/23 as follows:
· Approved programme - £16.528 million
· Provisional programme (including Cabinet growth proposals) - £16.871 million.
At the end of June 2022, the approved programme totalled £23.356 million, against which £0.765 million had been spent. Details of the changes to the capital programme during the first three months are summarised in table 3 below:
Table 3: movement on capital programme
Financial, legal and other implications
22. The financial implications are as set out in the body of the report. There are no other implications of this report.
Conclusion
23. At this stage of the financial year, for revenue an overspend is forecast. The spending position is monitored closely each month and any overspends will be managed during the year. There is likely to be slippage in the capital programme. A full review of projects will be undertaken in the coming months.
Appendices
1) Revenue budget monitoring – budget carry forwards
2) Capital budget monitoring - summary
Background Papers
· Budget papers for 2022/23