ECSPB 22.08.2024 - Revenue and Capital Budget Monitoring as at 21 June 2024
Renfrewshire Council · 22 August 2024
Back to Education and Children's Services Policy Board — 22 August 2024 and its agenda
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To: Education and Children’s Services Policy Board On: 22 August 2024 Report by: Director of Finance and Resources, Director of Children’s Services Heading: Revenue and Capital Budget Monitoring as at 21 June 2024 1. Summary of Financial Position 1.1. The projected Revenue outturn at 31 March 2025 for Children’s Services is an overspend of £2.287m (0.9%) against the revised budget for the year. 1.2. The projected Capital outturn at 31 March 2025 for Children’s Services is a break-even position. 1.3. This is summarised in the table below and further analysis is provided in the Appendices. Table 1: Revenue Division Revised Annual Budget £m Projected Outturn £m Budget Variance £m Budget Variance % Children’s Services 255.802 258.089 (2.287) (0.9%) Table 2: Capital Division Revised Annual Budget £m Projected Outturn £m Budget Variance £m Budget Variance % Children’s Services 71.450 71.450 0 0% 2. Recommendations Members are requested to: 2.1. Note the projected Revenue outturn position for Children’s Services detailed in Table 1 above; 2.2. Note the projected Capital outturn position for Children’s Services detailed in Table 2 above; and
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2.3. Note the budget adjustments detailed in sections 6 and 7. 3. Children’s Services Revenue Budget Projection – overspend of £2.287m by 31 March 2025 3.1. The Revenue Budget Monitoring report at Appendix 1 identifies a projected annual overspend of £2.287m (0.9% of total budget). 3.2. It should be noted that the projected outturn position reported here is based on the latest information available, which is subject to change during the financial year. The impact of any change on this projection will be updated at each board cycle until the close of reporting (Period 10). Budget holders are obliged to seek mitigating action to minimise significant budget variances. 4. Objective Analysis – Significant Variances 4.1. Early Learning & Childcare - £1.293m underspend The underspend here is largely driven by vacancies within Employee Costs, offset by an overspend in Transfer Payments. The vacancy position is under review with management. The overspend in Transfer Payments is due to the introduction of a national rate for childcare providers. An over-recovery of Income is also projected, in relation to cross-boundary charges and wraparound care. 4.2. Primary Schools - £0.014m overspend Premises Costs and Transport Costs are currently projected to overspend and are partly offset by a projected underspend in Employee Costs, mainly within teachers’ salaries. The Premises costs overspend is largely due to increased refuse collection costs and demand for janitorial supplies, and the Transport costs overspend is due to the SPT school transport contract being greater than available budget. 4.3. Secondary Schools - £1.691m overspend Employee Costs and Transport Costs are currently projected to overspend. The overspend in Employee Costs mainly arises within teachers' salaries, and the Transport Costs overspend is due to the SPT school transport contract being greater than available budget. 4.4. ASN schools - £0.543m overspend Employee Costs are currently projected to overspend, mainly arising within teachers' salaries. 4.5. Additional Support for Learning - £0.900m overspend Employee Costs and Transport Costs are currently projected to overspend. The overspend in Employee Costs mainly arises due to an increase in demand for Additional Support Needs Assistants (ASNAs) within mainstream schools. The Transport Costs overspend is due to the cost of ASN transport contracts being higher than available budget.
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4.6. Facilities Management - £0.107m underspend Premises Costs and Supplies & Services are projected to underspend and are partly offset by a small projected overspend in Employee Costs. The Premises Costs underspend may reduce during the year, as more of this budget is committed to small property repairs across the school estate. 4.7. Children & Families - £0.546m overspend. Employee Costs, Supplies & Services and Transfer Payments are currently projected to overspend. The Supplies & Services projected overspend mainly relates to demand for both Care at Home for children with additional support needs, and payments to care leavers. The overspend in Transfer Payments relates to Section 22 payments across localities. These areas will be kept under review. 5. Subjective Analysis – Significant Variances 5.1. Employees – £0.903 overspend The projected overspend in Employee Costs mainly relates to Secondary and ASN school teaching staffing, and is partly offset by a projected underspend in Primary school teaching staffing. 5.2. Premises Related - £0.286m overspend The overspend in Premises Costs is mainly due to increased janitorial costs and refuse collection costs across the school estate. 5.3. Transport Related - £0.603m overspend The overspend in Transport Costs is due to SPT contracts for both mainstream school transport and ASN transport being higher than available budget. 5.4. Third Party Payments - £0.165m overspend The projected overspend in Third Party Payments relates to Fostering and Adoption fees, following the implementation of the national rate for fostering allowances. 5.5. Transfer Payments - £0.608m overspend The projected overspend in Transfer Payments relates to Early Years and Children and Families. The projected overspend in Early Years is due to the increase in the sustainable rate to childcare providers. Although the Scottish Government has provided additional funding for this (£0.564m), a net overspend of £0.363m is projected. The projected overspend in Children & Families relates to section 22 payments and will be closely monitored throughout the year. A virement of £0.200m is proposed here to mitigate this variance. 5.6. Income - £0.187m over-recovery A projected over-recovery of income is currently projected in relation to Early Years wraparound care and cross-boundary charges for early years. A virement of £0.200m is proposed to mitigate this variance.
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6. Revenue Budget Adjustments 6.1. Under the Council’s financial regulations, Directors and their nominated officers, in consultation with the Director of Finance and Resources, have certain delegated authority to transfer sums between subjective budget headings within a service division to enable budget management throughout the financial year. This is known as ‘budget virement’. 6.2. Transfers between divisions of the same service / department in excess of £100,000, and transfers between services / departments must be authorised by the respective service Director and the Director of Finance and Resources for submission to the relevant policy board for approval. 6.3. The Director now seeks homologation from the Board for the following affected virements since the budget was approved in February 2024: Revenue Budget Adjustments Objective Heading Subjective Heading Amount (£m) Reason Children’s Services Premises Related (0.064) Corporate Landlord transfers Environment & Infrastructure Premises Related 0.064 Corporate Landlord transfers 6.4. The Director seeks approval for the following proposed virements, which address significant variances in-year, and will be reflected in the next board report: Revenue Budget Adjustments Objective Heading Subjective Heading Amount (£m) Reason Children’s Services Income (0.200) Increase due to revised charges Children’s Services Transfer payments 0.200 Impact of sustainable rate uplift 6.5. The following budget adjustments reflect allocations of agreed pay settlements, and changes to superannuation rates for employers and are therefore for noting only: Revenue Budget Adjustments Objective Heading Subjective Heading Amount (£m) Reason Children’s Services Employee Costs (5.891) Contribution to reserves re reduction in employers’ superannuation - non-teachers Children’s Services Employee Costs 3.891 Pay increase 2023-24 - non- teachers Children’s Services Employee Costs 2.094 Pay increase 2023-24 - teachers Children’s Services Employee Costs 3.382 Increase in employers' superannuation – teachers
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Miscellaneous Services Employee Costs (9.367) Allocation of budgets to services for pay and superannuation changes (NB: Scottish Government funding yet to be confirmed for teacher superannuation increase) 7. Capital Budget Projection – break even position by 31 March 2025 7.1. The Capital Investment Programme 2024/25 to 2028/29 was approved by the Council on 29 February 2024. Education and Children’s Services approved Capital spend for 2024/25 is £55.893m. 7.2. The in-year Capital budget is forecast to break-even by 31 March 2025, however, this will be monitored as the projects progress. Further details of the programme can be found in the Capital Monitoring report at Appendix 2. 7.3. A number of budget adjustments have taken place between years to reflect revised programming of some capital projects. Details of these adjustments, which amount to £15.557m, are as follows: Capital Budget Adjustments Project Amount (£m) Reason Primary School Estate Programme (SEMP) 0.202 Budget carried forward into 2024/25 to reflect updated timing Paisley Grammar School Community Campus 10.500 Increase budget approved by Council on 9 May 2024 Paisley Grammar School Community Campus (0.087) Budget accelerated back to 2023/24 Thorn PS New Build 4.184 Budget carried forward into 2024/25 to reflect updated timing Dargavel Extension (Modular Units) 0.117 Transfer of budget from Other Schools Investment and School Estate Programmes Other Schools Investment Programmes (0.106) Transfer of budget to Dargavel Extension (Modular Units) Total Schools Estate (incl. Early Years) Programme (0.011) Transfer of budget to Dargavel Extension (Modular Units) Other Schools Investment Programmes 0.194 Budget carried forward into 2024/25 to reflect updated timing Total Schools Estate (incl. Early Years) Programme 0.313 Budget carried forward into 2024/25 to reflect updated timing Technology Replacement Strategy ICT 0.251 Budget carried forward into 2024/25 to reflect updated timing Total 15.557
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___________________________________________________________________ Implications of this report 1. Financial The projected budget outturn position for Children’s Services’ Revenue budget is an overspend of £2.287m. Income and expenditure will continue to be monitored closely for the rest of the financial year and steps will be taken to mitigate any overspend, including virement, applying flexibility within specific grant funding as permitted by the Scottish Government, and potential use of earmarked reserves. The projected outturn position for Children’s Services’ Capital budget is a break-even position, after the adjustments set out at section 7.3. The Capital programme will continue to be monitored closely for the rest of the financial year. 2. HR and Organisational Development While staffing budgets form a significant proportion of the Council’s revenue budgets, there are no direct implications arising from the recommendations in this report. 3. Community/Council Planning Community Plan Our Renfrewshire is thriving The Council’s revenue and capital spend ensures that its facilities are fit for purpose and safe for the community, to maximise accessibility. Our Renfrewshire is well Our Renfrewshire is fair Our Renfrewshire is safe Council Plan Reshaping our place, our economy and our future The Council’s revenue and capital spend ensures that its facilities are fit for purpose and safe for the community, to maximise accessibility. Building strong, safe and resilient communities Tackling inequality, ensuring opportunities for all Creating a sustainable Renfrewshire for all to enjoy Ongoing revenue and capital budget monitoring is a tool to enable good financial management so that the Council has resources now and in the future for continued service delivery. Working together to improve outcomes 4. Legal There are no direct implications arising from the recommendations in this report.
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5. Property/Assets The capital expenditure noted in this report will result in lifecycle maintenance improvements to existing properties and replacement of ICT assets and infrastructure. 6. Information Technology While ICT assets and revenue costs are included within these reported budgets, there are no direct implications arising from the recommendations in this report. 7. Equality and Human Rights While new areas of spend may impact on particular groups, any such impact would be assessed prior to the spend being incurred, therefore there are no direct implications arising from the recommendations in this report. 8. Health and Safety The capital expenditure noted in this report will result in lifecycle maintenance improvements to existing properties and replacement of ICT assets, which may in some cases rectify health and safety issues. 9. Procurement While Procurement is an important consideration prior to the Council incurring any revenue or capital spend, there are no direct implications arising from the recommendations in this report. 10. Risk The potential risk that the Council will overspend its approved budgets for the year will be managed at a Council-wide level by the Chief Executive and Directors. 11. Privacy Impact There are no direct implications arising from the recommendations in this report. 12. CoSLA Policy Position n/a 13. Climate Risk The Council aims to reduce its carbon and other emissions to net zero by 2030, however there are no direct implications arising from the recommendations in this report. 14. Children’s Rights There are no direct implications arising from the recommendations in this report. __________________________________________________________________
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List of Background Papers: • Revenue Budget and Council Tax 2024/25, Council 29 February 2024 • Capital Investment Programme 2023/24 to 2027/28, Council 29 February 2024 Authors: Richard Conway, Finance Business Partner Linsey McGregor, Finance Manager
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Appendix 1 RENFREWSHIRE COUNCIL REVENUE BUDGET MONITORING STATEMENT 2024/25 1 April 2024 to 21 June 2024 POLICY BOARD : EDUCATION & CHILDREN'S SERVICES Subjective Summary Approved Annual Budget Budget Adjustments Revised Annual Budget at Period 3 Projected Outturn Budget Variance (Adverse) or Favourable £000 £000 £000 £000 £000 % Employees 171,937 2,877 174,814 175,717 (903) (0.5%) Premises Related 9,497 (27) 9,470 9,756 (286) (3.0%) Transport Related 5,991 1 5,992 6,595 (603) (10.1%) Supplies and Services 33,419 136 33,555 33,476 79 0.2% Third Party Payments 18,918 0 18,918 19,083 (165) (0.9%) Transfer Payments 14,062 488 14,550 15,158 (608) (4.2%) Support Services 53 0 53 40 13 25.4% GROSS EXPENDITURE 253,877 3,475 257,352 259,826 (2,474) (1.0%) Income (1,550) 0 (1,550) (1,737) 187 12.0% NET EXPENDITURE 252,327 3,475 255,802 258,089 (2,287) (0.9%)
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Appendix 2 RENFREWSHIRE COUNCIL REVENUE BUDGET MONITORING STATEMENT 2024/25 1 April 2024 to 21 June 2024 POLICY BOARD : EDUCATION & CHILDREN'S SERVICES Objective Summary Approved Annual Budget Budget Adjustments Revised Annual Budget at Period 3 Projected Outturn Budget Variance (Adverse) or Favourable £000 £000 £000 £000 £000 % Directorate 415 (12) 403 396 7 1.7% Early learning and childcare 34,952 (1,007) 33,945 32,652 1,293 3.8% Primary 63,342 1,927 65,269 65,283 (14) 0.0% Secondary 87,942 2,047 89,989 91,680 (1,691) (1.9%) ASN (Special) schools 7,071 336 7,407 7,950 (543) (7.3%) Additional support for learning (ASL) 17,268 628 17,896 18,796 (900) (5.0%) Psychological services 836 41 877 877 0 0.0% Education development 2,080 83 2,163 2,163 0 0.0% Attainment Challenge 0 0 0 0 0 0.0% Facilities management 625 (27) 598 491 107 17.9% Children & Families 37,796 (541) 37,255 37,801 (546) (1.5%) NET EXPENDITURE 252,327 3,475 255,802 258,089 (2,287) (0.9%)
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Appendix 3 Approved Budget Revised Projected Budget Adjustments Budget Outturn Total Approved Projected 2024-25 in 2024-25 2024-25 2024-25 Budget Outurn Project Title to 31-Mar-29 to 31-Mar-29 £000 £000 £000 £000 £000 £000 EDUCATION & CHILDREN SERVICES Primary Schools Estate Programme(SEMP) 0 202 202 202 0 0% 10,623 10,623 0 0% Paisley Grammar New Campus 34,631 10,413 45,044 45,044 0 0% 85,600 85,600 0 0% Thorn PS New Build 5,737 4,184 9,921 9,921 0 0% 14,000 14,000 0 0% Dargavel Extension (Modular Units) 0 117 117 117 0 0% 2,250 2,250 0 0% DPS2 New Build 10,000 0 10,000 10,000 0 0% 45,000 45,000 0 0% Other Schools Investment Programmes 125 88 213 213 0 0% 213 213 0 0% Total Schools Estate(inc Early Years) Programme 0 302 302 302 0 0% 302 302 0 0% PMHS Extension 5,000 0 5,000 5,000 0 0% 30,000 30,000 0 0% Technology Replacement Strategy ICT 400 251 651 651 0 0% 1,851 1,851 0 0% TOTAL EDUCATION & CHILDREN'S SERVICES BOARD 55,893 15,557 71,450 71,450 0 0% 189,839 189,839 0 0% RENFREWSHIRE COUNCIL 1st April to 21st June 2024 POLICY BOARD: EDUCATION & CHILDEN'S SERVICES CAPITAL INVESTMENT STRATEGY - NON-HOUSING SERVICES Budget Variance (Adverse) or Favourable Current Year 2024-25 Budget Variance (Adverse) or Favourable Full Programme - All years