Revenue and Capital Budget Monitoring Overview Report
Renfrewshire Council · 13 February 2025
Back to Finance, Resources and Customer Services Policy Board — 13 February 2025 and its agenda
Text extracted from the council's PDF. Layout and reading order may differ from the original.
Page 1
___________________________________________________________________ To: Finance, Resources and Customer Services Policy Board On: 13 February 2025 ___________________________________________________________________ Report by: Director of Finance and Resources ___________________________________________________________________ Heading: Revenue and Capital Budget Monitoring – Council Overview as at 8 November 2024 ___________________________________________________________________ 1. Summary of Financial Position 1.1 At the close of reporting Period 8 on 8 November 2024, the projected revenue outturn position at 31 March 2025 for Council services is a small underspend position of £0.119m (0.0%) against the revised budget for the year. Adult Services (HSCP) is projecting an overspend of £4.643m (4.4%), resulting in a combined projected overspend of £4.524m (0.9%). 1.2 The projected capital outturn at 31 March 2025 all services is a break-even position. 1.3 This is split between General Fund Services and the Housing Revenue Account (HRA) in the table below, with further analysis provided in the Appendices. Table 1 Revised Annual Budget £000 Projected Outturn £000 Budget Variance (Adv)/Fav £000 Budget Variance % Revenue General Fund Services (Council) 423,476 423,357 119 (0.0%) Adult Services (HSCP) 106,460 111,103 (4,643) (4.4%) Housing Revenue Account (HRA) 0 0 0 0.0% Total 529,936 534,460 (4,524) (0.9%) Capital General Fund Services 103,575 103,575 0 0.0% Housing Revenue Account (HRA) 30,862 30,862 0 0.0%
Page 2
2. Recommendations 2.1 Members are requested to: a) Note the projected Revenue outturn overspend position of £4.524m; b) Note the projected Capital outturn break-even position; and c) Note the prudential indicators detailed in section 7 of the report. _________________________________________________________ 3. Revenue Budget Projection – overspend of £4.524m by 31 March 2025 3.1 The projected overspend of £4.524m across all services includes £4.643m for Adult Services (HSCP), leaving a forecast underspend of £0.119m for Council services. 3.2 The tables in Appendix 1 present the projected year-end position for all services, 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. 3.3 The projected outturn is based on information currently available, and assumptions made by service budget holders. Any changes to these projections will be detailed in future reports to this board. 4. Significant Variances 4.1 Education & Children’s Services £0.901m overspend This projected forecast includes overspends in Supplies & Services (£0.762m) mainly due to payments to care leavers and increased demand for Care at Home services for children with additional support needs. Overspends in Transfer Payments (£0.803m) relates mainly to Children & Families, in particular Direct Payments and Section 22 payments. The projected overspend in Third Party payments (£0.606m) relates to Fostering and Adoption fees, following the implementation of the national rate for fostering allowances, and services related to Children with Disability, related to projected placement costs. These overspends are partly offset by Employee Costs currently projecting a £1.197m underspend. 4.2 Infrastructure, Land & Environment £1.160m overspend The projected overspend predominantly sits within Waste Services, where trade waste income is significantly under-recovered owing to a reduction in demand.
Page 3
There are further cost pressures related to increased software and work by contractor costs within Infrastructure and Assets, and Fleet Services are projecting an overspend which is mainly reflective of the inflationary impact on replacement parts for vehicles and specialist contractors. 4.3 Finance, Resources & Customer Services £2.053m underspend The anticipated underspend is mainly driven by an expected £3.000m increase in investment interest income, owing to the level of interest rates prevailing. This is offset by a forecast overspend in Public Building Repairs of £0.739m due to the continued inflationary and cost pressures that have been experienced by the service over the last few financial years. The position continues to be closely monitored, and mitigating actions will be taken by management where appropriate. There is also an expected £0.128m overspend within Soft FM, principally due to inflation on food and provisions. 4.4 Adult Services £4.643m overspend The overspend is mainly due to external care at home packages for both Older People and those with Physical or Sensory Difficulties. This results from increased acuity of patients with more complex needs discharged from hospital, meaning more intensive Care at Home packages are required to support people to remain in their own homes. Note that these projections do not take into account the cost associated with the back pay in relation to care at home staff regrade, which is still to be fully agreed. This overspend is further impacted by inflationary increases as a result of the adult supported living framework renewal in November 2024. 5. Capital Budget Projection – Housing Services Programme 5.1 The HRA Capital Investment Programme 2024/25 to 2028/29 was approved by the Council on 29 February 2024. For 2024/25, the revised programme totals £30.862m, an increase of £0.093m since Period 6, as a result of a net acceleration from 2025/26 into 2024/25. Decelerations for Regeneration have been offset by accelerations within Improvements to Existing Assets and Other Assets. 5.2 Capital expenditure to 8 November 2024 amounted to £14.298m, representing 46% of available resources, compared to 53% for the same period in 2023/24.
Page 4
5.3 22% of expected capital income has been received to date, compared to 74% for the equivalent period in 2023/24. This difference relates to grant received in 2023/24 for energy efficiency improvements which came in at the start of the year; this has not been awarded for 2024/25. The remainder of expected capital income is expected to come in towards the end of the financial year. 5.4 The projected outturn position, after budget changes, is for the Housing Services Programme to break even (see Appendix 2). However, inflationary impacts of delays to work and related cost estimates are still ongoing and therefore this forecast will be kept under review. 6. Capital Monitoring: Non-Housing Services Programme 6.1 The General Services Capital Investment Programme 2024/25 to 2028/29 was approved by Council on 29 February 2024. For 2024/25, the current revised programme totals £103.575m, a decrease of £3.135m since Period 6, resulting mainly from the net effect of: projects reprofiled from 2024/25 into 2025/26 of £4.859m, mainly as a result of updated cashflow profiles for Thorn New Build, Dargavel Primary School 2, Community Halls Refurbishment & Lagoon Internal Play Centre; and budget increases in 2024/25 of £1.724m largely reflecting grant awards for Recycle Improvement Fund and Shared Prosperity Fund. 6.2 Capital expenditure to 8 November 2024 totals £44.395m, representing 43% of the available resources, compared to 45% for the equivalent period in 2023/24. 6.3 Capital income totalling £12.963m has been received to 8 November 2024. This represents 41% of the total anticipated income, compared to 44% for the equivalent period in 2023/24. 6.4 The projected outturn position after these budget changes is to break even (see Appendix 2). However, the full impact of inflation on capital costs on each project is not yet determined, with increased costs through inflation and compliance expected to increase the risk of overspends across the capital programme. 7. Capital Overview: Prudential Indicators 7.1 The Council is required to set prudential indicators to ensure that its capital investment plans are affordable, proportionate, prudent and sustainable. The current prudential indicators were approved by Council on 12 December 2024.
Page 5
7.2 The CIPFA Prudential Code 2021 recommends that from 2024/25 a regular update is provided to members noting the current forecasts for prudential indicators compared to those approved at the start of the financial year. These are outlined in 7.4 to 7.8 below. 7.3 The Council will be asked to approve new Prudential Indicators in late February 2025 as part of the non-housing capital investment programme report. 7.4 Capital Expenditure: The limit on capital expenditure that the Council has set for 2024/25 is shown in the table below. The limit is based on the resources available to fund the capital programmes, split between Housing and Non- Housing Services, but excludes the Public Sector Housing Grant, as this is not considered to be capital spend for the Council. The forecast expenditure is lower owing to the changes outlined at 6.1 above. Approved Plan £m Forecast Expenditure £m Non-Housing 107 104 Housing 31 31 Total 138 135 7.5 Capital Finance Requirement (CFR): The CFR originally planned by the Council for 2024/25 is shown in the table below and is split between Housing and Non-Housing Services. The projected outturn at 31 March 2025 is also shown. Any significant increase in the capital expenditure without planned funding at the point of spend will result in an increase to the CFR. Planned CFR to 31 March 2025 £m Projected CFR to 31 March 2025 £m Non-Housing 462 458 Housing 130 129 Total 592 587 7.6 Operational Boundary: This is the focus of day-to-day treasury management activity within the Council and is an estimate of the most likely, but not worst case, scenario in terms of cashflow. Risk analysis and risk management strategies are taken into account, as are plans for capital expenditure, estimates of the CFR and estimates of cashflow requirements for all purposes.
Page 6
It is possible that this boundary could be breached occasionally, and this should not be regarded as significant. However, a sustained or regular trend of such would be significant and require investigation and action. Planned Operational Boundary to 31 March 2025 £m Projected Operational Boundary to 31 March 2025 £m Borrowing 498 493 Other Long-Term Liabilities 94 94 Total 592 587 7.7 Authorised Limit: This is based on the same assumptions as the Operational Boundary, with additional headroom to ensure sufficient capacity to allow for both planned and exceptional cashflow requirements, without breaching the limit. Planned Authorised Limit to 31 March 2025 £m Projected Authorised Limit to 31 March 2025 £m Borrowing 523 518 Other Long-Term Liabilities 94 94 Total 617 612 7.8 Ratio of Financing Costs to Net Revenue: A key measure of affordability is the incremental impact of investment decisions on Council Tax or housing rents. Estimates of the ratio of financing costs to net revenue stream provide an indication of how much of the Council’s revenue budget is committed to the repayment of debt. Approved Ratio of Financing Costs to Net Revenue 2024/25 % Projected Ratio of Financing Costs to Net Revenue 2024/25 % Non-Housing 3.47 3.22 Housing 28.59 28.49 Financing costs include the interest payable with respect to forecast borrowing levels, interest payable on finance leases, interest and investment income, loans fund and finance lease principal repayments and gains/losses on the repurchase or early settlement of borrowing.
Page 7
There is a decrease in the projected ratios due to the updated capital spend profile and interest rate outlook. Revenue streams relate either to the amounts received in terms of government grant and local taxpayers for Non-Housing, or to the amounts received from tenants in respect of housing rents for Housing. 8. Private Sector Housing Grant Programme 8.1. The overall budget provision for this programme is included within the revenue budget. However, in order to monitor the performance of the individual programmes, it is included within capital budget monitoring procedures. 8.2. The Council approved expenditure up to £0.526m for 2024/25. The current revised budget totals £1.186m, an increase of £0.660m, reflecting a contribution from revenue for Disabled Adaptations and Care & Support. 8.3. The programme is expected to fully spend by 31 March 2025 and will be contained within the overall resources. Implications of the Report 1. Financial The projected budget outturn position for General Fund Services Revenue budget is an overspend of £4.524m (0.9%) and break-even for the HRA Revenue budget. Income and expenditure will continue to be monitored closely for the rest of the financial year and, where necessary, steps will be taken to mitigate overspends. The projected outturn position for General Fund Services and HRA Capital budgets is a break-even position. The Capital programme will continue to be monitored closely for the rest of the financial year. Any changes to current projections in either Revenue or Capital budgets will be detailed in future reports to this board. 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.
Page 8
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. 5. Property/Assets The capital expenditure noted in this report will result in lifecycle maintenance improvements to existing properties and replacement of ICT, infrastructure, and plant and equipment. 6. Information Technology 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 There are no direct implications arising from the recommendations in this report.
Page 9
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. Children’s Rights There are no direct implications arising from the recommendations in this report. 13. 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. 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: Alison Burns, Corporate Finance Manager Geoff Borland, Finance Manager
Page 10
Appendix 1 RENFREWSHIRE COUNCIL REVENUE BUDGET MONITORING STATEMENT 2024/25 1 April 2024 to 8 November 2024 POLICY BOARD: FINANCE, RESOURCES & CUSTOMER SERVICES ‐ OVERVIEW Policy Board ‐ Objective Summary Annual Budget at Period 6 Budget Adjustments Revised Annual Budget at Period 8 Projected Outturn Budget Variance (Adverse) or Favourable Previous Projected Outturn Variance Movement £000 £000 £000 £000 £000 % £000 £000 Communities and Housing Services 14,629 249 14,878 14,878 (0) 0.0% 0 0 Education and Children's Services 256,996 589 257,585 258,486 (901) (0.3%) (659) (242) Infrastructure, Land and Environment 31,072 1,049 32,121 33,281 (1,160) (3.6%) (1,210) 50 Finance, Resources and Customer Services 92,334 3,541 95,875 93,822 2,053 2.1% 1,651 402 Adult Services 106,460 0 106,460 111,103 (4,643) (4.4%) (6,700) 2,057 Planning 584 0 584 584 0 0.0% (5) 5 Economy and Regeneration 2,306 0 2,306 2,214 92 4.0% 76 16 Chief Executive's Service 20,119 8 20,127 20,092 35 0.2% 28 7 GENERAL SERVICES NET EXPENDITURE 524,500 5,436 529,936 534,460 (4,524) (0.9%) (6,819) 2,295 Housing Revenue Account (HRA) 0 0 0 0 0 0.0% 0 0 NET EXPENDITURE 524,500 5,436 529,936 534,460 (4,524) (0.9%) (6,819) 2,295
Page 11
Appendix 1 RENFREWSHIRE COUNCIL REVENUE BUDGET MONITORING STATEMENT 2024/25 1 April 2024 to 8 November 2024 POLICY BOARD: FINANCE, RESOURCES & CUSTOMER SERVICES ‐ OVERVIEW Subjective Summary Annual Budget at Period 6 Budget Adjustments Revised Annual Budget at Period 8 Total Projected Outturn Budget Variance (Adverse) or Favourable Previous Projected Outturn Variance Movement £000 £000 £000 £000 £000 % £000 £000 Employees 359,278 4,406 363,684 359,293 4,391 1.2% 2,977 1,414 Premises Related 52,354 486 52,840 54,539 (1,699) (3.2%) (1,301) (398) Transport Related 15,376 2,126 17,502 18,462 (960) (5.5%) (2,699) 1,739 Supplies and Services 97,099 (85) 97,014 99,935 (2,921) (3.0%) (1,746) (1,175) Third Party Payments 92,630 873 93,503 100,270 (6,767) (7.2%) (7,975) 1,207 Transfer Payments 99,988 39 100,027 101,082 (1,055) (1.1%) (1,051) (4) Support Services 6,248 (1) 6,247 6,307 (60) (1.0%) (5) (55) Depreciation and Impairment Losses 27,068 518 27,586 27,598 (12) 0.0% (12) 0 GROSS EXPENDITURE 750,041 8,362 758,403 767,486 (9,084) (1.2%) (11,811) 2,727 Income (225,541) (2,926) (228,467) (233,026) 4,560 2.0% 4,992 (433) NET EXPENDITURE 524,500 5,436 529,936 534,460 (4,524) (0.9%) (6,819) 2,295
Page 12
Appendix 2 Prior Years Approved Budget Revised Projected Expenditure Budget Adjustments Budget Outturn Total Approved Projected to 31/03/2024* 2024‐25 since previous 2024‐25 2024‐25 Budget Outurn Board report to 31‐Mar‐29 to 31‐Mar‐29 £000 £000 £000 £000 £000 £000 £000 EDUCATION & CHILDREN'S SERVICES Education & Children's Services 20,894 31,623 (1,337) 30,286 30,286 0 0% 198,480 198,480 0 0% TOTAL 20,894 31,623 (1,337) 30,286 30,286 0 0% 198,480 198,480 0 0% COMMUNITIES, HOUSING & PLANNING Housing (HRA) 53,408 30,769 93 30,862 30,862 0 0% 219,144 219,144 0 0% Housing (PSHG) 0 526 660 1,186 1,186 0 0% 2,926 2,926 0 0% TOTAL 53,408 31,295 753 32,048 32,048 0 0% 222,070 222,070 0 0% INFRASTRUCTURE, LAND & ENVIRONMENT Environment & Infrastructure 4,137 18,517 167 18,684 18,684 0 0% 54,578 54,578 0 0% TOTAL 4,137 18,517 167 18,684 18,684 0 0% 54,578 54,578 0 0% ECONOMY & REGENERATION Economy and Development 81,445 16,612 690 17,302 17,302 0 0% 109,893 109,893 0 0% TOTAL 81,445 16,612 690 17,302 17,302 0 0% 109,893 109,893 0 0% FINANCE, RESOURCES & CUSTOMER SERVICES Corporate Projects 3,993 9,259 10 9,269 9,269 0 0% 32,997 32,997 0 0% TOTAL 3,993 9,259 10 9,269 9,269 0 0% 32,997 32,997 0 0% LEADERSHIP Leisure Services 24,924 2,982 (1,570) 1,412 1,412 0 0% 28,005 28,005 0 0% Chief Executives 158,319 27,717 (1,095) 26,622 26,622 0 0% 360,395 360,395 0 0% TOTAL 183,243 30,699 (2,665) 28,034 28,034 0 0% 388,400 388,400 0 0% TOTAL ALL BOARDS 347,120 138,005 (2,382) 135,623 135,623 0 0.0% 1,006,418 1,006,418 0 0% MADE UP OF: Non-Housing Programme 293,712 106,710 (3,135) 103,575 103,575 0 0% 784,348 784,348 0 0% Housing Programme (HRA) 53,408 30,769 93 30,862 30,862 0 0% 219,144 219,144 0 0% Housing Programme (PSHG) 0 526 660 1,186 1,186 0 0% 2,926 2,926 0 0% PROGRAMME TOTAL 347,120 138,005 (2,382) 135,623 135,623 0 0.0% 1,006,418 1,006,418 0 0% Budget Variance (Adverse) or Favourable Budget Variance (Adverse) or Favourable RENFREWSHIRE COUNCIL CAPITAL INVESTMENT STRATEGY ‐ NON‐HOUSING SERVICES 1st April to 8th November 2024 POLICY BOARD: FINANCE, RESOURCES & CUSTOMER SERVICES Current Year 2024‐25 Full Programme ‐ All years
Page 13
Appendix 2 2024/25 Housing Non Housing PSHG Total Services Services Programme A. RESOURCES AVAILABLE TO FUND CAPITAL PROGRAMME £'000 £'000 £'000 £'000 1. Prudential Borrowing 22,147 66,996 89,143 2a General Capital Grant 13,627 600 14,227 2b. Specific Capital Grant 2,578 1,469 4,047 3. Usable Capital Receipts 1,350 16,154 17,504 4. Contribution From Current Revenue (CFCR) 4,787 5,329 586 10,702 5 Total Resource Availability 30,862 103,575 1,186 135,623 B. CAPITAL PROGRAMME 6. Resources Available 30,862 103,575 1,186 135,623 7. Current Programme 30,862 100% 103,575 100% 1,186 100% 135,623 100% C. ACTUAL EXPENDITURE VS PROJECTED 8. Resource Availability 30,862 103,575 1,186 135,623 9. Cash Spent at 8 November 2024 14,298 46% 44,395 43% 586 49% 59,279 44% 10. Cash to be Spent by 31 March 2025 16,564 59,180 601 76,344 D. ACTUAL RECEIPTS VS PROJECTED 11. Current Programme (total receipts expected) 3,928 31,250 600 35,778 12. Actual Cash Received at 8 November 2024 857 22% 12,963 41% 340 57% 14,160 40% 13. Receipts to be received by 31 March 2025 3,071 18,287 260 21,618 RENFREWSHIRE COUNCIL 2024/25 CAPITAL BUDGETS MONITORING SUMMARY REPORT TO 8TH NOVEMBER 2024