Item 2 - Revenue and Capital Budget Monitoring Period 6
Renfrewshire Council · 8 November 2023
Back to Infrastructure, Land and Environment Policy Board — 8 November 2023 and its agenda
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To: Infrastructure, Land and Environment Policy Board On: 8 November 2023 Report by: Director of Finance & Resources and Director of Environment, Housing and Infrastructure Heading: Revenue and Capital Budget Monitoring as at 15 September 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 £2.770m (8.6%) 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 32,290 35,060 (2,770) (8.6%) Table 2: Capital Division Revised Annual Budget £000 Total Projected Outturn £000 Budget Variance (Adv)/Fav £000 Budget Variance % Environment and Infrastructure 18,180 18,180 0 0%
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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 £2.770m (8.6% 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 such as the Clyde Valley Waste contract. 4 Revenue Budget Adjustments 4.1 Since the last report there have been net budget adjustments of £841k reflecting the delivery of agreed savings, and the transfer of funding in relation to contract inflation pressures and proactive tree management works. 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 £16.676m. 5.2 The Capital Monitoring report at Appendix 2 indicates adjustments in the approved capital programme of £1.504m as explained in 6.1. 5.3 The projected outturn at 31 March 2024 is to break-even.
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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 £1.504m have arisen, which reflect the following changes: o Net budget reprofiled to 2023/24 of £1.504m to reflect updated cash flows for the following projects; • Vehicle Replacement Programme - (£0.203m) • Paisley to Renfrew Active Travel Route - £0.500m • Hawkhead Estate to Seedhill Road (Linside) Active Travel Link - £0.200m • North Renfrewshire Active Travel Inchinnan Drive to Glasgow Airport - £0.540m • Parks - Multi Use Games Area- £0.100m • Road Safety - £0.257m • Direct Resource Grant (Feasibility) - £0.030m • Electric Vehicle Infrastructure Fund - £0.080m ___________________________________________________________________ Implications of this report 1. Financial – The projected outturn position for the Infrastructure, Land and Environment Revenue budget is an overspend of £2.770m. 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.
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7. Equality and Human Rights None directly arising from this report. 8. Health and Safety None directly arising from this report. 9. Procurement None directly arising from 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 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
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Appendix 1 Objective Summary Annual Budget at Period 3 Budget Adjustments Revised Annual Budget at Period 6 Projected Outturn Previous Projected Outturn Variance Movement £000 £000 £000 £000 £000 % £000 Directorate and Service Co-ordination 1,271 95 1,366 1,254 112 8.2% 170 (58) Refuse Collection 4,766 44 4,810 5,657 (847) (17.6%) (1,045) 198 Household Waste Recycling Centres 936 0 936 1,027 (91) (9.7%) (83) (8) Refuse Disposal 7,046 281 7,327 7,470 (143) (2.0%) (74) (69) Streetscene 6,815 400 7,215 7,326 (111) (1.5%) (322) 211 Sustainability and Place 443 (11) 432 506 (74) (17.1%) (22) (52) Fleet Services (84) 7 (77) 236 (313) (406.5%) (96) (217) Social Transport 1,597 (1) 1,596 1,555 41 2.6% 32 9 Roads Operations 3,065 0 3,065 3,039 26 0.8% 46 (20) Infrastructure and Assets 1,844 (110) 1,734 1,980 (246) (14.2%) (32) (214) Transportation & Development 1,050 (13) 1,037 1,113 (76) (7.3%) 0 (76) Parking of Vehicles (1,181) 0 (1,181) (273) (908) (76.9%) (922) 14 Street Lighting Maintenance Work 382 0 382 522 (140) (36.6%) (140) 0 Energy Management Unit 261 149 410 410 0 0.0% 0 0 Strathclyde Partnership for Transport Requisition 3,238 0 3,238 3,238 0 0.0% 0 0 NET EXPENDITURE 31,449 841 32,290 35,060 (2,770) (8.6%) (2,488) (283) RENFREWSHIRE COUNCIL REVENUE BUDGET MONITORING STATEMENT 2023/24 1 April 2023 to 15 September 2023 Budget Variance (Adverse) or Favourable POLICY BOARD : INFRASTRUCTURE, LAND AND ENVIRONMENT
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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. As reported previously, the overspend in the main, relates to increased costs relating to bins, caddies and bin liner supplies. Both Streetscene and Waste Services are experiencing high levels of overtime that is likely to continue throughout this financial year. This is in large part due to additional annual leave days agreed as part of the pay award, additional public holidays and 2024 being a leap year, totalling six extra days costs. In addition, the LGV driver training referred to in the previous Operational Performance Report from August will result in another 4 days to be covered for drivers. In addition, there has been a reduction in demand for special uplifts. In relation to the movement in Refuse Disposal, there are increased inflationary costs linked to the Clyde Valley Waste contract. In addition and in relation to other recyclable waste, the recyclates market is highly volatile and as a result this will be closely monitored through the remainder of the year. 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. There is also a cost pressure in relation the memorial safety team which will be addressed through the use of ringfenced reserves in advance of a recurring budget being baselined in future years. Consistent with other areas within the service, the projected outturn is showing inflationary pressures in other supplies and services. The Operational Management team continue to closely scrutinise costs. Fleet Services The current projected overspend within Fleet Services, in the main reflects the impact inflationary impact on contractor, material and tyre costs. Infrastructure and Assets As previously reported, the current projected overspend is as a result of reduced construction consent income, 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 with the finance
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Appendix 1 Objective Heading Key Reasons for Projected Variance 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. The position will be closely monitored throughout the year, with an expected drawdown from ringfenced reserves being actioned at the end of the financial year to cover the shortfall that will result during 2023/24. Street Lighting Maintenance Work An overspend is projected for this service, which is predominantly on the repairs and maintenance of lighting columns, due to the increased cost of materials. This will be closely monitored throughout the remainder of the financial year with mitigating actions by management where required.
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Appendix 1 Subjective Summary Annual Budget at Period 3 Budget Adjustments Revised Annual Budget at Period 6 Projected Outturn Previous Projected Outturn Variance Movement £000 £000 £000 £000 £000 % £000 £000 Employees 23,450 294 23,744 24,894 (1,150) (4.8%) (565) (587) Premises Related 1,226 0 1,226 1,353 (127) (10.4%) (101) (26) Transport Related 6,000 (2) 5,998 6,397 (399) (6.7%) (230) (169) Supplies and Services 12,215 920 13,137 14,231 (1,094) (8.3%) (1,133) 39 Third Party Payments 3,271 0 3,271 3,259 12 0.4% 12 0 Transfer Payments 112 2 114 153 (39) (34.2%) (40) 1 Support Services 34 1 35 46 (11) (31.4%) (12) 1 Depreciation and Impairment Losses 0 0 0 0 0 0.0% 0 0 GROSS EXPENDITURE 46,308 1,215 47,525 50,333 (2,808) (5.9%) (2,069) (741) Income (14,859) (376) (15,235) (15,273) 38 0.2% (419) 457 NET EXPENDITURE 31,449 839 32,290 35,060 (2,770) (8.6%) (2,488) (283) POLICY BOARD : INFRASTRUCTURE, LAND AND ENVIRONMENT Budget Variance (Adverse) or Favourable RENFREWSHIRE COUNCIL REVENUE BUDGET MONITORING STATEMENT 2023/24 1 April 2023 to 15 September 2023
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Appendix 2