Revenue and Capital Budget Monitoring as at 23 June 2023 ILE 30 08 23
Renfrewshire Council · 30 August 2023
Back to Infrastructure, Land and Environment Policy Board — 30 August 2023 and its agenda
Text extracted from the council's PDF. Layout and reading order may differ from the original.
Page 1
To: Infrastructure, Land and Environment Policy Board On: 30 August 2023 Report by: Director of Finance & Resources, Director of Environment and Infrastructure & Director of Communities and Housing Heading: Revenue and Capital Budget Monitoring as at 23 June 2023 1. Summary of Financial Position 1.1. The projected Revenue outturn as at 31 March 2024 for Infrastructure, Land and Environment is an overspend position of £2.348m (7.6%) against the revised budget for the year. 1.2. The projected Capital outturn as at 31 March 2024 for Infrastructure, Land and Environment 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 attached appendices. Table 1: Revenue Division Revised Annual Budget Total Projected Outturn Budget Variance (Adv)/Fav Budget Variance £000 £000 £000 % Environment and Infrastructure 30,806 33,154 (2,348) (7.6%) Table 2: Capital Division Revised Annual Budget £000 Total Projected Outturn £000 Budget Variance (Adv)/Fav £000 Budget Variance % Environment and Infrastructure 16,676 16,676 0 0% ___________________________________________________________________
Page 2
2. Recommendations It is recommended that the Infrastructure, Land and Environment Policy Board: 2.1 Note the projected Revenue outturn position as detailed in Table 1 above; 2.2 Note the projected Capital outturn position as detailed in Table 2 above; and 2.3 Note the Revenue and Capital budget adjustments detailed in sections 4 and 6. ___________________________________________________________________ 3 Revenue 3.1 The Revenue Budget Monitoring report at Appendix 1 identifies a projected annual overspend of £2.348m (7.6% of total budget) for Infrastructure, Land and Environment. Narrative is provided in the Appendices below to provide context and explanation to the budget position for service areas. 3.2 The projected costs for this financial year are based on the financial information available at the time of writing this report, and future projections and outturns may vary depending on the operational and current market conditions. 3.3 The forecast financial overview for the Council being reported to Finance, Resources and Customer Services Board incorporates the overspend position reflected in this report. 3.4 The main reasons for the projected outturn position are indicated below, with the tables showing both the subjective analysis (what the budget is spent on) and the objective analysis (which division is spending the budget). The main drivers are the loss of parking income, as has been the case since the beginning of the pandemic, refuse collection costs that are largely driven by inflationary pressures, absence cover as a result of annual leave and sick leave, and the impact of other inflationary pressures across the services. 3.5 It should also be noted that additional expenditure has been incurred as a result of ongoing tree management work that the Streetscene team is legally obligated to carry out. However, further analysis is required to be undertaken and the detailed report also being presented to this board provides further background information, including the estimated financial costs. 4 Revenue Budget Adjustments 4.1 Since the last report there have been net budget adjustments of £317k, reflecting a number of savings targets for 2023/24 incorporated into the reported position, as well as a drawdown from reserves.
Page 3
5 Capital 5.1 The Capital Investment Programme 2023/24 to 2027/28 was approved by the Council on 2 March 2023. The approved spend for 2023/24 at that time was £11.868m. 5.2 The Capital Monitoring report at Appendix 2 indicates adjustments in the approved capital programme of £4.808m. This mainly arises from new grant funding for projects including Cycling, Walking & Safer Routes and Strathclyde Passenger Transport and budget carried into 2023/24. 5.3 The projected outturn at 31 March 2024 is to break-even. 5.4 Further detail, including reasons for significant variances, can be found at Appendix 2. 6 Capital Budget Adjustments 6.1 Since the last report, budget adjustments of £4.808m have arisen, which reflect the following changes: o Net budget reprofiled from 2022/23 to 2023/24 £0.721m to reflect updated cash flows for the following projects; Roads Footways £0.374m; Vehicle Replacement Programme £0.124m; Bridge Assessment/Strengthening (£0.133m); Light Columns Replacement £0.053m; Traffic Management £0.061m; Core Pathways & Cycle Network £0.051m; Improvement to Outdoor Access £0.160m; Nature Restoration Fund £0.031m. o Budget increases in 2023/24 £4.087m: Cycle, Walking & Safer Routes - £0.363m for grant awarded from Active Travel Roads and Footways - £0.500m funding from Investment Capital Fund to meet committed costs for 2023/24; Traffic Management £0.300m for capital element of funding approved by Council on 2 March 2023 to support delivery of roads improvements and traffic reduction measures; Public Litter Bin Replacement - £0.090m to reflect funding approved by Council on 2 March 2023 to support first year of public litter bin replacement programme; Renewal of Play Parks - £0.350m for capital element of play park renewals approved by Council on 2 March 2023;
Page 4
Nature Restoration Fund - £0.199m for Scottish Government Grant award for 2023/24; Strathclyde Passenger Transport - £1.485m for grant funding awarded by Strathclyde Passenger Transport. Roads and Footways - £0.800m brought forward from 2024/2025 to support commitment costs. ___________________________________________________________________ Implications of this report 1. Financial – The projected outturn position for the Infrastructure, Land and Environment Revenue budget is an overspend of £2.348m. The projected outturn position for the Infrastructure, Land and Environment Capital budget is a break-even position. 2. HR and Organisational Development None directly arising from this report. 3. Community/Council Planning None directly arising from this report. 4. Legal None directly arising from this report. 5. Property/Assets Capital projects result in lifecycle improvements and replacements to Roads & footways network and vehicles. 6. Information Technology None directly arising from this report. 7. Equality and Human Rights The recommendations contained within this report have been assessed in relation to their impact on equalities and human rights. No negative impacts on equality groups or potential for infringement of individuals’ human rights have been identified arising from the recommendations contained in the report because for example it is for noting only. If required following implementation, the actual impact of the recommendations and the mitigating actions will be reviewed and monitored, and the results of the assessment will be published on the Council’s website. 8. Health and Safety None directly arising from this report. 9. Procurement None directly arising from this report.
Page 5
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 None directly arising from this report. 12. 13. Cosla Policy Position N/a. Climate Risk None directly arising from this report. __________________________________________________________________ List of Background Papers Revenue Budget and Council 2023/24. Council, 2 March 2023 Non Housing Capital Investment Programme, Prudential Framework and Treasury Management Strategy, and Capital Strategy 2023/24 – 2027/28. Council, 2 March 2023. ___________________________________________________________________ Authors: Alastair MacArthur, Director of Finance & Resources and Gordon McNeil, Director of Environment, Housing & Infrastructure
Page 6
Appendix 1 Objective Summary Approved Annual Budget Budget Adjustments Revised Annual Budget at Period 3 Projected Outturn £000 £000 £000 £000 £000 % Directorate and Service Co‐ordination 1,293 (22) 1,271 1,101 170 13.4% Refuse Collection 5,727 (961) 4,766 5,811 (1,045) (21.9%) Household Waste Recycling Centres 806 130 936 1,019 (83) (8.9%) Refuse Disposal 7,052 (6) 7,046 7,120 (74) (1.1%) Streetscene 6,104 711 6,815 7,137 (322) (4.7%) Sustainability and Place 653 (210) 443 465 (22) (5.0%) Fleet Services (84) 0 (84) 12 (96) (114.3%) Social Transport 1,597 0 1,597 1,565 32 2.0% Roads Operations 3,075 (10) 3,065 3,019 46 1.5% Infrastructure and Assets 1,832 12 1,844 1,876 (32) (1.7%) Transportation & Development 1,028 22 1,050 1,050 0 0.0% Parking of Vehicles (1,128) (53) (1,181) (259) (922) (78.1%) Strathclyde Partnership for Transport Requisition 3,168 70 3,238 3,238 0 0.0% NET EXPENDITURE 31,123 (317) 30,806 33,154 (2,348) (7.6%) RENFREWSHIRE COUNCIL REVENUE BUDGET MONITORING STATEMENT 2023/24 1 April 2023 to 23 June 2023 Budget Variance (Adverse) or Favourable POLICY BOARD : INFRASTRUCTURE, LAND AND ENVIRONMENT
Page 7
Appendix 1 Objective Heading Key Reasons for Projected Variance Waste Services This reflects the financial position for Refuse Collection, Refuse Disposal and Household Waste Recycling Centres. In the main the overspend relates to increased costs relating to bins, caddies and bin liner supplies. Both Streetscene and Waste Services are currently experiencing high levels of overtime that is likely to continue throughout this financial year. This is due to two additional annual leave days within the pay award, additional public holidays and 2024 being a leap year, (6 extra days). In addition, the LGV driver training referred to in the Operational Performance Report will result in a further 4 days to be covered for drivers. In addition, there has been a reduction in demand for special uplifts, as well as increased tonnage costs despite reduced levels of waste being disposed of, resulting in an overspend on the Clyde Valley Waste contract. However, the market is highly volatile and as a result this will be closely monitored through the remainder of the year. The finance team is working closely with the service to review the current methods of projecting the tonnages for each of the waste streams. Streetscene The current projected overspend within Streetscene largely relates to additional tree management and associated health and safety issues, such as tree inspections and tree health monitoring, including Ash Dieback and Larch infection activities. It should be noted that the level of work with regards to the tree management activities being undertaken has increased significantly and this has been reflected into the revised outturn position. Like other areas within the service, the projected outturn is showing inflationary pressures in other supplies and services. This will be closely monitored through the remainder of the financial year. A report will be present to ILE on 30 August 2023 with regards to Tree Management. Social Transport The service is reflecting a projected underspend mainly as a result of vacancies. However, it should be noted that this will be monitored throughout the remainder of the financial year and any changes will be reported to future boards. Infrastructure and Assets The current forecast reflects a projected overspend as a result reduced construction consent income being offset by a projected over‐recovery in sales, fees and charges. Due to the income generated in sales, fees and charges being of a reactive nature, this is an area that is difficult to predict, however this position will be closely monitored for the remainder of the financial year.
Page 8
Appendix 1 Parking of Vehicles Off‐street parking charges have been reintroduced for a significant period of time, however on and off street parking income and fine recovery remain significantly lower than pre‐pandemic levels and this is expected to continue for the rest of the financial year. In 2022/23 an under recovery of £1m was incurred, with a similar amount being forecast for 2023/24. Assuming there is no change, the under‐recovery is expected to continue for 2023/24. It should be noted that the position will be closely monitored throughout the year, with an expected drawdown from ringfenced reserves being actioned if required at the end of the financial year to cover any shortfall that may result during 2023/24.
Page 9
Appendix 1 Subjective Summary Approved Annual Budget Budget Adjustments Revised Annual Budget at Period 3 Projected Outturn £000 £000 £000 £000 £000 % Employees 22,642 319 22,961 23,526 (565) (2.5%) Premises Related 1,023 200 1,223 1,324 (101) (8.3%) Transport Related 5,902 15 5,917 6,147 (230) (3.9%) Supplies and Services 11,965 42 12,007 13,000 (993) (8.3%) Third Party Payments 3,201 70 3,271 3,259 12 0.4% Transfer Payments 108 0 108 148 (40) (37.0%) Support Services 34 0 34 46 (12) (35.3%) Depreciation and Impairment Losses 0 0 0 0 0 0.0% GROSS EXPENDITURE 44,875 646 45,521 47,450 (1,929) (4.2%) Income (13,752) (963) (14,715) (14,296) (419) (2.8%) NET EXPENDITURE 31,123 (317) 30,806 33,154 (2,348) (7.6%) Budget Variance (Adverse) or Favourable RENFREWSHIRE COUNCIL REVENUE BUDGET MONITORING STATEMENT 2023/24 1 April 2023 to 23 June 2023 POLICY BOARD : INFRASTRUCTURE, LAND AND ENVIRONMENT
Page 10
Appendix 2 Prior Years Approved Budget Revised Projected Expenditure Budget Adjustments Budget Outturn Total Approved Projected to 31/03/2023 2023‐24 in 2023‐24 2023‐24 2023‐24 Budget Outurn Project Title to 31‐Mar‐27 to 31‐Mar‐27 £000 £000 £000 £000 £000 £000 £000 ENVIRONMENT & INFRASTRUCTURE Cycling, Walking & Safer Routes 0 786 363 1,149 1,149 0 0% 1,149 1,149 0 0% Roads/Footways Upgrade Programme 73,464 5,848 1,674 7,522 7,522 0 0% 81,785 81,785 0 0% Vehicle Replacement Programme 0 2,235 124 2,359 2,359 0 0% 2,359 2,359 0 0% Bridge Assessment/Strengthening 0 680 (133) 547 547 0 0% 547 547 0 0% Lighting Columns Replacement 0 1,012 53 1,065 1,065 0 0% 1,065 1,065 0 0% Traffic Management 0 0 361 361 361 0 0% 361 361 0 0% Core pathways & cycle network 85 64 51 115 115 0 0% 200 200 0 0% Parks Improvement Programme 2,237 63 2 65 65 0 0% 2,302 2,302 0 0% Improvements to Outdoor Access and Play Area Programm 1,553 161 160 321 321 0 0% 1,873 1,873 0 0% Multi Pupose Bins 60 20 0 20 20 0 0% 80 80 0 0% Public Litter Bin Replacement Programme 0 0 90 90 90 0 0% 90 90 0 0% Improvements to Cemetery Estate 1,238 305 (2) 303 303 0 0% 1,541 1,541 0 0% Renewal of Play Parks 158 307 350 657 657 0 0% 2,044 2,044 0 0% Nature Restoration Fund 191 387 230 617 617 0 0% 808 808 0 0% Strathclyde Partnership Transport 0 0 1,485 1,485 1,485 0 0% 1,485 1,485 0 0% TOTAL INFRASTRUCTURE, LAND & ENVIRONMENT BOARD 78,986 11,868 4,808 16,676 16,676 0 0% 97,689 97,689 0 0% *Rolling programmes have a prior year year expenditure of £0 as the expenditure is not directly linked from one year to the next as a singular project. Budget Variance (Adverse) or Favourable Budget Variance (Adverse) or Favourable RENFREWSHIRE COUNCIL CAPITAL INVESTMENT STRATEGY ‐ NON‐HOUSING SERVICES 1st April to 23rd June 2023 POLICY BOARD: INFRASTRUCURE, LAND & ENVIRONMENT Current Year 2023‐24 Full Programme ‐ All years