Item 1 - Revenue and Capital Budget Monitoring report
Renfrewshire Council · 12 September 2024
Back to Finance, Resources and Customer Services Policy Board — 12 September 2024 and its agenda
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___________________________________________________________________ To: Finance, Resources and Customer Services Policy Board On: 12 September 2024 ___________________________________________________________________ Report by: Director of Finance and Resources ___________________________________________________________________ Heading: Revenue and Capital Budget Monitoring 2024/25 at 21 June 2024 ___________________________________________________________________ 1. Summary 1.1 At the close of reporting Period 3 on 21 June 2024, the projected revenue outturn at 31 March 2025 for those services reporting to the Finance, Resources and Customer Services Policy Board was an overspend position of £0.375m (0.4%) against the revised budget for the year. 1.2 The projected capital outturn at 31 March 2025 for projects reporting to the Finance, Resources and Customer Services Policy Board is a break-even position. 1.3 This is summarised over the relevant services in the table below and further analysis is provided in the report and appendices. Revised Annual Budget £000 Projected Outturn £000 Budget Variance (Adv)/Fav £000 Budget Variance % Revenue Finance and Resources 43,750 43,693 57 0.1% Environment, Housing and Infrastructure 23,094 23,471 (377) (1.6%) Chief Executive's Service (Estates) (168) (113) (55) (32.7%) Miscellaneous 27,852 27,852 0 0.0% Total 94,528 94,903 (375) (0.4%) Capital Finance, Resources and Customer Services Policy Board 14,294 14,294 0 0.0%
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2. Recommendations 2.1 Members are requested to: a) Note the projected Revenue outturn overspend position of £0.375m; b) Note the projected Capital outturn break-even position; and c) Agree to homologate the budget adjustments detailed at sections 5 and 6. 3. Revenue Budget Projection – overspend of £0.375m by 31 March 2025 3.1 The tables in Appendix 1 present the projected year-end position for all services reporting to this Board, by both subjective analysis (what the budget is spent on) and objective analysis (which division is spending the budget). Significant variances affecting the projected position are analysed further below. 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 Finance, Resources and Customer Services - £0.057m underspend This forecast position mainly reflects the underspend in Internal Audit. The post of Chief Auditor remains vacant pending the result of informal discussions between Chief Finance Officers of Renfrewshire Council, Inverclyde Council and West Dunbartonshire Council with regards improving resilience within their respective internal audit and counter fraud services. 4.2 Environment, Housing and Infrastructure - £0.377m overspend There is an anticipated overspend of £389k being forecast within Public Building Repairs. This is due to the continued inflationary and cost pressures that have been experienced by the service over the last few financial years. The position has improved since last year and continues to be closely monitored. Mitigating actions will be taken by management where appropriate. Soft Facilities Management is forecasting an underspend of £12k. There are under and overspends across the budget headings but the main overspend is within premises related costs (cleaning £0.190m) and transport costs (£0.114m).
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In addition, there is a projected over-recovery of income which largely relates to recharge income that is recovered from HSCP (£0.560m) for staff costs. This is offset by an under-recovery of HQ car parking income, along with a lower than expected school meal income expected in the final quarter. This reduced income relates to the provision of school meals to P6 and P7 pupils who receive the Scottish Child Payment. The position will be closely monitored throughout the year and any updates provided to Board. 4.3 Chief Executive’s Service (Estates) - £0.055m overspend This forecast position mainly reflects an anticipated under-recovery in rental income as a result of a property at Houston Square held vacant as part of the delivery of the Johnstone Vision regeneration programme. 4.4 Miscellaneous Services – break even While the service is currently projected to break even by year-end, there is an anticipated over-recovery of investment interest income owing to interest rates increasing after the budget was established. This will be closely monitored with a view to the additional income covering expected overspends in loan charges (borrowing interest), as outlined to Council during its revenue budget setting for 2024/25. Further information will be reported to the Board as it emerges throughout the year. 5. Subjective Analysis – Significant Variances 5.1 Employee Costs - £0.021m overspend Finance and Resources is projecting a £0.389m overspend mainly due to lower than expected levels of staff turnover at this stage in the financial year. The position will be closely monitoring with the overspends expected to ease in the coming periods as a result of some staff movements across the service. This is partly offset by a projected underspend within Soft Facilities Management (£0.462m) which reflects the high staff turnover and the difficulty filling posts. 5.2 Premises Related - £0.739m overspend This projected overspend predominantly sits within repairs and maintenance in Public Building Repairs due the continued inflationary and cost pressures that have been experienced by the service over the last few financial years. It is partly offset by underspends and income elsewhere in the service at present. The position has improved since last year and continues to be closely monitored.
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5.3 Transport Related - £0.126m overspend This projected overspend predominantly sits within Environment, Housing & Infrastructure and in the main relates to external vehicle hire required to support the Universal Free School Meals project. 5.4 Supplies and Services - £1.244m overspend This projected overspend predominantly sits within Environment, Housing & Infrastructure (£1.318m) on work by contractors within Property Services, the costs of which are recovered through the fees process. 5.5 Income - £1.625m over-recovery This projected over-recovery of income predominantly sits within Environment, Housing & Infrastructure (£1.480m), and mainly relates to the recovery of Property Services costs and HSCP costs, currently showing as overspends within expenditure lines. A budget realignment exercise will be completed in Period 6. There is a further over-recovery within Finance and Resources (£0.194m) the majority of which relates to income generated from ICT support for a digital programme. 6. Revenue Budget Virements 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. Since the budget was approved in February 2024, the Director now seeks homologation from the Board for the following affected virements: Revenue Budget Adjustments for homologation Objective Heading Subjective Heading Amount (£m) Reason Finance and Resources Employee Costs (0.443) Transfer of Clark Street Depot Staffing from Business Services to Building Services in EH&I Finance and Resources Employee Costs (0.137) Transfer of Customer Services Homeless Team Staffing to Housing in EH&I
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Objective Heading Subjective Heading Amount (£m) Reason Finance and Resources Employee Costs 0.086 Transfer of 2 Licensing Officer posts from EH&I to Corporate Governance Environment, Housing & Infrastructure Premises Costs 0.115 Transfer from various other services to cover commissioned repairs Environment, Housing & Infrastructure Employee Costs 0.443 Transfer of Clark Street Depot Staffing from Business Services to Building Services in EH&I Environment, Housing & Infrastructure Income (0.298) Transfer of lets income budget from Community Learning and Development Environment, Housing & Infrastructure Employee Costs Premises Transport Supplies & Services Transfer Payments Income 1.363 0.124 0.015 0.262 0.020 (1.784) Realignment of budgets within the service to reflect revised establishment and forecast workload for 2024/25. 6.3. The following budget adjustments reflect allocations of agreed pay settlements, approved savings, and changes to superannuation rates for employers, and are therefore for noting only: Revenue Budget Adjustments for noting Objective Heading Subjective Heading Amount (£m) Reason Finance and Resources Employee Costs (0.307) Right for Renfrewshire savings realised Finance and Resources Employee Costs (3.619) Contribution to reserves re reduction in employers’ superannuation Finance and Resources Employee Costs 2.817 Pay award 2023/24 Environment, Housing & Infrastructure Employee Costs (1.708) Contribution to reserves re reduction in employers’ superannuation Environment, Housing & Infrastructure Employee Costs 1.613 Pay award 2023/24 Miscellaneous Transfer Payments 3.771 Council wide Right for Renfrewshire savings Miscellaneous Employee Costs (14.448) Allocation of pay award 2023/24 to services and contribution to reserves re reduction in employers’ superannuation
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6.4. Budget holders are obliged to seek mitigating action to minimise significant budget variances. The Board is therefore asked to approve the following virements, which are not currently applied to the budget: Revenue Budget Adjustments for approval Objective Heading Subjective Heading Amount (£m) Reason Soft FM Employee costs 0.560 Realignment of budget to reflect recharge of staff costs to HSCP Income (0.560) Property Services Supplies and Services 0.718 Realignment of budgets to reflect increased work by contractor costs being recharged to capital and other services Income (0.718) 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. Finance, Resources and Customer Services approved capital spend for 2024/25 is £9.707m. 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 Budget adjustments totalling £4.587m have been carried forward into 2024/25 to reflect updated timing on the programming of some capital projects. The revised capital spend for 2024/25 is £14.294m, and details of the adjustments are as follows: Capital Budget Adjustments Project Amount (£m) ICT Infrastructure Maintenance & Renewal Programme 0.969 Lifecycle Capital Maintenance (LCM) Fund 2.360 Artificial Pitch Upgrades 0.524 Digital Infrastructure Provision 0.032 Community Empowerment Fund 0.552 Villages Improvement Fund 0.076 Retail Improvement Fund 0.074 Total 4.587
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Implications of the Report 1. Financial The projected budget outturn position for Finance, Resources and Customer Services’ Revenue budget is an overspend of £0.375m (0.4%) at 31 March 2025. Income and expenditure will continue to be monitored closely for the rest of the financial year and as far as possible, steps will be taken to mitigate any overspend. The projected outturn position for Finance, Resources and Customer Services’ Capital budget is break-even, after the adjustments outlined at section 7. 2. HR & 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 mainly in lifecycle maintenance improvements to existing properties, replacement of ICT assets and infrastructure and replacement of artificial pitches. 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 & 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 & 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 financial risk that the Council will overspend its approved revenue budgets for the year is 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. Climate Change 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.
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13. Children’s Rights There are no direct implications arising from the recommendations in this report 14. Cosla Policy Position N/a List of Background Papers Revenue Budget and Council Tax 2024/25, Council 29 February 2024 The Capital Investment Programme 2024/25 to 2028/29, Council 29 February 2024 Author: Valerie Howie and Lisa Dickie, Finance Business Partners; Alison Burns, Corporate Finance Manager; and Linsey McGregor, Senior Accountant (Capital)
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Appendix 1 RENFREWSHIRE COUNCIL REVENUE BUDGET MONITORING STATEMENT 2024/25 1 April 2024 to 21 June 2024 POLICY BOARD: FINANCE, RESOURCES & CUSTOMER 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 % Finance and Resources 44,383 (633) 43,750 43,693 57 0.1% Environment, Housing and Infrastructure 23,015 79 23,094 23,471 (377) (1.6%) Chief Executive's Service (Estates) (168) 0 (168) (113) (55) (32.7%) Miscellaneous 38,494 (10,642) 27,852 27,852 0 0.0% NET EXPENDITURE 105,724 (11,196) 94,528 94,903 (375) (0.4%) 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 99,621 (14,486) 85,135 85,156 (21) 0.0% Premises Related 13,700 (306) 13,394 14,133 (739) (5.5%) Transport Related 2,173 16 2,189 2,315 (126) (5.8%) Supplies and Services 26,763 2,202 28,965 30,209 (1,244) (4.3%) Third Party Payments 1,925 0 1,925 1,901 24 1.2% Transfer Payments 40,488 4,847 45,335 45,245 90 0.2% Support Services 171 31 202 186 16 7.9% Depreciation and Impairment Losses 9,182 0 9,182 9,182 0 0.0% GROSS EXPENDITURE 194,023 (7,696) 186,327 188,327 (2,000) (1.1%) Income (88,299) (3,500) (91,799) (93,424) 1,625 1.8% NET EXPENDITURE 105,724 (11,196) 94,528 94,903 (375) (0.4%)
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Appendix 1 RENFREWSHIRE COUNCIL REVENUE BUDGET MONITORING STATEMENT 2024/25 1 April 2024 to 21 June 2024 POLICY BOARD: FINANCE, RESOURCES & CUSTOMER 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 % Finance and Resources Directorate (4,060) 3,253 (807) (898) 91 11.3% Audit Services 677 (65) 612 538 74 12.1% Corporate Governance 3,239 (327) 2,912 2,912 0 0.0% Digital, Transformation & Customer Services 24,625 (1,591) 23,034 23,050 (16) (0.1%) Finance and Procurement 5,932 (401) 5,531 5,525 6 0.1% Business Services 9,154 (1,292) 7,862 7,849 13 0.2% Housing Benefits 1,669 9 1,678 1,694 (16) (1.0%) People & Organisational Development 2,329 (219) 2,110 2,205 (95) (4.5%) Social care (non‐delegated) 818 0 818 818 0 0.0% NET EXPENDITURE 44,383 (633) 43,750 43,693 57 0.1%
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Appendix 1 RENFREWSHIRE COUNCIL REVENUE BUDGET MONITORING STATEMENT 2024/25 1 April 2024 to 21 June 2024 POLICY BOARD: FINANCE, RESOURCES & CUSTOMER SERVICES ‐ FINANCE & RESOURCES 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 35,166 (1,334) 33,832 34,221 (389) (1.1%) Premises Related 2,552 186 2,738 2,660 78 2.8% Transport Related 259 0 259 237 22 8.5% Supplies and Services 8,865 1,025 9,890 9,816 74 0.7% Third Party Payments 1,883 0 1,883 1,859 24 1.3% Transfer Payments 45,300 1,049 46,349 46,300 49 0.1% Support Services 380 0 380 375 5 1.3% GROSS EXPENDITURE 94,405 926 95,331 95,468 (137) 13.6% Income (50,022) (1,559) (51,581) (51,775) 194 0.4% NET EXPENDITURE 44,383 (633) 43,750 43,693 57 0.1%
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Appendix 1 RENFREWSHIRE COUNCIL REVENUE BUDGET MONITORING STATEMENT 2024/25 1 April 2024 to 21 June 2024 POLICY BOARD: FINANCE, RESOURCES & CUSTOMER SERVICES ‐ ENVIRONMENT, HOUSING AND INFRASTRUCTURE 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 % Building Services (265) 374 109 109 0 0.0% Public Building Repairs 3,591 331 3,922 4,311 (389) (9.9%) Soft Facilities Management Services 19,542 (682) 18,860 18,848 12 0.1% Property Services 147 56 203 203 0 0.0% NET EXPENDITURE 23,015 79 23,094 23,471 (377) (1.6%) 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 30,027 1,296 31,323 30,955 368 1.2% Premises Related 3,114 460 3,574 4,385 (811) (22.7%) Transport Related 1,514 16 1,530 1,678 (148) (9.7%) Supplies and Services 11,086 190 11,276 12,594 (1,318) (11.7%) Transfer Payments 124 27 151 110 41 27.2% Support Services 1,191 31 1,222 1,211 11 0.9% GROSS EXPENDITURE 47,056 2,020 49,076 50,933 (1,857) (3.8%) Income (24,041) (1,941) (25,982) (27,462) 1,480 5.7% NET EXPENDITURE 23,015 79 23,094 23,471 (377) (1.6%)
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Appendix 1 RENFREWSHIRE COUNCIL REVENUE BUDGET MONITORING STATEMENT 2024/25 1 April 2024 to 21 June 2024 POLICY BOARD: FINANCE, RESOURCES & CUSTOMER SERVICES ‐ CHIEF EXECUTIVE'S SERVICE (ESTATES) 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 0 0 0 0 0.0% Premises Related 1,128 0 1,128 1,134 (6) (0.5%) Supplies and Services 4 0 4 4 0 0.0% Transfer Payments 66 0 66 66 0 0.0% GROSS EXPENDITURE 1,198 0 1,198 1,204 (6) (0.5%) Income (1,366) 0 (1,366) (1,317) (49) (3.6%) NET EXPENDITURE (168) 0 (168) (113) (55) (32.7%)
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Appendix 1 RENFREWSHIRE COUNCIL REVENUE BUDGET MONITORING STATEMENT 2024/25 1 April 2024 to 21 June 2024 POLICY BOARD: FINANCE, RESOURCES & CUSTOMER SERVICES ‐ MISCELLANEOUS 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 34,428 (14,448) 19,980 19,980 0 0.0% Premises Related 6,906 (952) 5,954 5,954 0 0.0% Transport Related 400 0 400 400 0 0.0% Supplies and Services 6,808 987 7,795 7,795 0 0.0% Third Party Payments 42 0 42 42 0 0.0% Transfer Payments (5,002) 3,771 (1,231) (1,231) 0 0.0% Support Services (1,400) 0 (1,400) (1,400) 0 0.0% Depreciation and Impairment Losses 9,182 0 9,182 9,182 0 0.0% GROSS EXPENDITURE 51,364 (10,642) 40,722 40,722 0 0.0% Income (12,870) 0 (12,870) (12,870) 0 0.0% NET EXPENDITURE 38,494 (10,642) 27,852 27,852 0 0.0%
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Appendix 2 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 CORPORATE PROJECTS ICT Infrastructure Maintenance & Renewal Programme 600 969 1,569 1,569 0 0% 3,369 3,369 0 0% Strategic Asset Management Fund 0 0 0 0 0 0% 0 0 0 0% Energy Efficiency Programme 0 0 0 0 0 0% 0 0 0 0% Lifecycle Capital Maintenance (LCM) Fund 8,837 2,360 11,197 11,197 0 0% 23,827 23,827 0 0% Artificial Pitch Upgrades 0 524 524 524 0 0% 1,801 1,801 0 0% Digital Infrastructure Provision 0 32 32 32 0 0% 1,936 1,936 0 0% Commnunity Empowerment Fund 0 552 552 552 0 0% 951 951 0 0% Greenspaces and Parks 0 0 0 0 0 0% 1,273 1,273 0 0% Villages Improvement Fund 200 76 276 276 0 0% 550 550 0 0% Retail Improvement Fund 70 74 144 144 0 0% 220 220 0 0% CO2 Monitors 0 0 0 0 0 0% 233 233 0 0% TOTAL FINANCE, RESOURCES & CUSTOMER SERVICES BOARD 9,707 4,587 14,294 14,294 0 0% 34,160 34,160 0 0% Budget Variance (Adverse) or Favourable Budget Variance (Adverse) or Favourable RENFREWSHIRE COUNCIL CAPITAL INVESTMENT STRATEGY ‐ NON‐HOUSING SERVICES 1st April to 21st June 2024 POLICY BOARD: FINANCE, RESOURCES & CUSTOMER SERVICES Current Year 2024‐25 Full Programme ‐ All years