ILE Revenue and Capital Budget Monitoring Report
Renfrewshire Council · 28 August 2024
Back to Infrastructure, Land and Environment Policy Board — 28 August 2024 and its agenda
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___________________________________________________________________ To: Infrastructure Land & Environment Policy Board On: 28 August 2024 ___________________________________________________________________ Report by: Director of Finance and Resources Director of Environment, Housing & Infrastructure ___________________________________________________________________ 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 Infrastructure, Land and Environment Policy Board is an overspend position of £0.736m (2.4%) against the revised budget for the year. 1.2 The projected capital outturn at 31 March 2025 for projects reporting to the Infrastructure, Land and Environment 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 Environment & Infrastructure 30,330 31,147 (0.736) (2.4%) Capital Environment & Infrastructure 18,722 18.722 0.000 0.0% 2. Recommendations 2.1 Members are requested to: a) Note the projected Revenue outturn overspend position of £0.736m; b) Note the projected Capital outturn break-even position;
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c) Agree to homologate the budget adjustments detailed at section 6.3 and 6.4; d) Note the budget adjustments detailed at section 6.5; and e) Approve the budget adjustments detailed at section 6.6. 3. Revenue Budget Projection – overspend of £0.736m by 31 March 2025 3.1 The tables in Appendix 1 and 2 present the projected year-end position for all services reporting to this board, by both objective analysis (which division is spending the budget – appendix 1) and subjective analysis (what the budget is spent on – appendix 2). 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 Environment, Housing and Infrastructure – (£0.736m) overspend 4.1 Waste Services – (£0.356m) overspend by 31 March 2025 This reflects the financial position for Refuse Collection, Refuse Disposal and Household Waste Recycling Centres. The overspend for Refuse Collection, in the main relates to an under-recovery of income (£445k) with the estimated under recovery for trade waste equating to £316k. In addition to an overspend in transport costs. Similar to other areas within the services, the impact of inflationary increases for goods and services remains a contributing factor to the overspend currently projected for this service area. For example: • Increase non-fair wear and tear costs as a result of the increased cost of replacement parts. • A reduction in demand for trade waste uplifts, resulting in an under- recovery of £315k being reported. • A reduction in the volume of bin sales, resulting in an under-recovery of £110k.
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The current anticipated underspend for Refuse Disposal (£0.050m) mainly relates to the over-recovery of recyclate income, offset by higher contractor costs. In addition, the service will contribute around £66k of expenditure to take forward the Recycling Improvement Fund grant, as some activities undertaken are not covered by the conditions of grant. These costs will be funded by the Change Fund in 2024 with the aim of improving our recycling and reducing disposal costs to the Council in future years. 4.2 Fleet Services – (£0.140m) overspend by 31 March 2025 The current anticipated overspend forecast in Fleet Services reflects the impact of inflation on material and contractor costs. 4.3 Infrastructure and Assets – (£0.162m) overspend by 31 March 2025 The projected overspend represents an under-recovery in income of £100k. These income streams include construction consents, scaffolding permits, etc, which by their nature are demand-led, meaning they are difficult to predict. the remainder of the overspend is driven by inflationary pressures, in areas such as work by contractors and software costs. However, this forecast will continue to be closely monitored throughout the financial year. 5. Subjective Analysis - Significant Variances 5.1 Employee Costs - £0.443m underspend by 31 March 2025 The underspend in the main relates to the current vacancies that the services areas are carrying. However, as highlighted in the Budget Monitoring report presented to this board at Period 10 2023/24, the service has taken significant steps to reduce overtime levels, including a review undertaken by the Finance team, which has resulted in a budget transfer adding £320k being actioned to account for pay settlements, and this is reflected in the projected underspend. 5.2 Transport Related – (£0.455m) overspend by 31 March 2025 The projected overspend (7.9%) is largely a result of significant increases in relation to vehicle hire (£107k), the cost of replacement parts for vehicles and specialist contractors (£300k). 5.3 Supplies and Services – (£0.822m) overspend by 31 March 2025 This projected overspend (6.2%) predominantly sits within Infrastructure and Assets and Refuse Disposal. The Infrastructure and Assets overspend (£84k) relates to increased software and work by contractor costs and within Refuse Disposal this relates to contractor related disposal costs.
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5.4 Support Services – (£0.041m) overspend by 31 March 2025 This overspend relates software costs for the fleet management systems. 5.5 Income – £0.164m over-recovery by 31 March 2025 The projected over-recovery relates to recharge income within Roads operations, predominately offset by an anticipated under-recovery for trade waste income, as mentioned in note 4.1. 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. 6.3 Since the budget approval in February 2024, the Director now seeks homologation from the Board for the following affected virements: Revenue Budget Adjustments Service Subjective Heading Amount (£m) Reason Environment & Infrastructure Third Party Payments 0.027 SPT - 24/25 inflationary increase from Miscellaneous Services Environment & Infrastructure Employee Costs 0.300 Motion - Environmental Task Force and Team Up to Clean Up from reserves Environment & Infrastructure Employee Costs 0.320 Overtime inflationary increase from Miscellaneous Services Total 0.647 6.4 Also, due to the service undertaking a restructure in 2023/24 an exercise was carried out to realign budgets to reflect the new departmental structure. Again, the Director now seeks homologation from the Board for the following affected virements: Revenue Budget Adjustments
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Service Subjective Heading Amount (£m) Reason Environment & Infrastructure Employee Costs 0.326 Budget Re-alignment Environment & Infrastructure Transport Costs (0.248) Budget Re-alignment 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 Service Subjective Heading Amount (£m) Reason Environment & Infrastructure Employee Costs (1.841) Contribution to reserves re reduction in employer's superannuation Environment & Infrastructure Employee Costs 1.609 Pay award 2023/24, including additional public holiday 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. For Infrastructure Land & Environment the revised capital spend for 2024/25 is £18.722m. 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 between years have taken place, to reflect revised programming of some capital projects. Details of these adjustments, which amount to £6.839m, are as follows: Project Amount (£m) Budget increase due to grant award from Transport Scotland Active Travel Funding Tier 1 0.496 Total SPT - People in Place Fund 0.050 People and Place: Local Authority Direct Award (LADA) 0.049 Budget increase due to grant award from Scottish Government Road Safety 0.272 Budget carried forward from 2023/24 into 2024/25 to reflect updated timing Roads/Footways Upgrade Programme 2.707 Vehicle Replacement Programme 1.179 Lighting Columns Replacement 0.873
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Traffic Management 0.274 Core pathways & cycle network 0.037 Parks Improvement Programme 0.003 Improvements to Outdoor Access and Play Area Programme 0.035 Total Active Travel Transformation Fund 0.301 Flooding 0.205 Multi-Purpose Bins 0.110 Parks - Multi Use Games Area 0.107 Nature Restoration Fund 0.056 Lawn Tennis Association 0.056 Strathclyde Partnership Transport 0.165 Budget accelerated from 2024/25 into 2023/24 to reflect updated timing Bridge Assessment/Strengthening (0.056) Renewal of Play Parks (0.080) Total 6.839 Implications of the Report 1. Financial The projected budget outturn position for the Infrastructure, Land and Environment Revenue budget is an overspend of £0.736m. 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 the Infrastructure, Land and Environment Capital budget is a break-even position. 2. HR & Organisational Development While staffing budgets form a significant proportion of the service’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
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Building strong, safe and resilient communities purpose and safe for the community, to maximise accessibility. 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 assets and infrastructure. 6. Information Technology There are no direct implications arising from the recommendations in this report. 7. Equality & Human Rights 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. 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 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
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There are no direct implications arising from the recommendations in this report. 12. Cosla Policy Position N/a 13. Children’s Rights There are no direct implications arising from the recommendations in this report. 14. 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. List of Background Papers The Capital Investment Programme 2024/25 to 2028/29, Council 28 February 2024 Author: Lisa Dickie, Finance Business Partner, Gordon McNeil, Director of Environment, Housing & Infrastructure 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 : INFRASTRUCTURE, LAND AND ENVIRONMENT 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 and Service Development 1,216 79 1,295 1,329 (34) (2.6%) Refuse Collection 4,812 (39) 4,773 5,263 (490) (10.3%) Household Waste Recycling Centres 934 84 1,018 934 84 8.2% Refuse Disposal 7,569 (26) 7,543 7,493 50 0.7% Neighbourhood Services 7,283 (1,031) 6,252 6,210 42 0.7% Fleet Services (35) (223) (258) (118) (140) (54.3%) Social Transport 1,279 (152) 1,127 1,136 (9) (0.8%) Roads Operations 3,065 37 3,102 3,102 0 0.00% Infrastructure and Assets 1,728 (182) 1,546 1,708 (162) (10.4%) Transportation & Active Travel 1,037 (569) 468 473 (5) (1.0%) Parking of Vehicles (695) 42 (653) (599) (54) (8.2%) Street Lighting Maintenance Work 552 (32) 520 517 3 0.7% Energy Management Unit 335 (3) 332 332 (0) (0.1%) Strathclyde Partnership for Transport Requisition 3,238 27 3,265 3,287 (22) (0.7%) NET EXPENDITURE 32,318 (1,988) 30,330 31,147 (736) (2.4%)
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Appendix 2 RENFREWSHIRE COUNCIL REVENUE BUDGET MONITORING STATEMENT 2024/25 1 April 2024 to 21 June 2024 POLICY BOARD : INFRASTRUCTURE, LAND AND ENVIRONMENT 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 23,617 (968) 22,649 22,206 443 2.0% Premises Related 1,227 (2) 1,225 1,238 (13) (1.1%) Transport Related 5,998 (248) 5,750 6,205 (455) (7.9%) Supplies and Services 13,692 (357) 13,335 14,157 (822) (6.2%) Third Party Payments 3,271 27 3,298 3,292 6 0.2% Transfer Payments 114 36 150 168 (18) (11.8%) Support Services 34 0 34 75 (41) (120.8%) Depreciation and Impairment Losses 0 0 0 0 0 0.0% GROSS EXPENDITURE 47,953 (1,512) 46,441 47,341 (900) (1.9%) Income (15,635) (476) (16,111) (16,275) 164 1.0% NET EXPENDITURE 32,318 (1,988) 30,330 31,066 (736) (2.4%)
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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-27 to 31-Mar-27 £000 £000 £000 £000 £000 £000 ENVIRONMENT & INFRASTRUCTURE Active Travel Funding Tier 1 809 496 1,305 1,305 0 0% 4,142 4,142 0 0% LADA 0 49 49 49 0 0% 49 49 0 0% Roads/Footways Upgrade Programme 5,000 2,707 7,707 7,707 0 0% 102,385 102,385 0 0% Vehicle Replacement Programme 2,303 1,179 3,482 3,482 0 0% 11,582 11,582 0 0% Bridge Assessment/Strengthening 377 (56) 321 321 0 0% 1,321 1,321 0 0% Lighting Columns Replacement 500 873 1,373 1,373 0 0% 3,373 3,373 0 0% Traffic Management 0 274 274 274 0 0% 274 274 0 0% Core pathways & cycle network 0 37 37 37 0 0% 200 200 0 0% Parks Improvement Programme 28 3 31 31 0 0% 1,204 1,204 0 0% Improvements to Outdoor Access and Play Area Programm 81 35 116 116 0 0% 1,828 1,828 0 0% Total Active Travel Transformation Fund 620 301 921 921 0 0% 250 250 0 0% Total SPT - People in Place Fund 0 50 50 50 0 0% 50 50 0 0% Flooding 0 205 205 205 0 0% 205 205 0 0% Multi Purpose Bins 0 110 110 110 0 0% 170 170 0 0% Road Safety 0 272 272 272 0 0% 953 953 0 0% Renewal of Play Parks 1,580 (80) 1,500 1,500 0 0% 1,694 1,694 0 0% Parks - Multi Use Games Area 0 107 107 107 0 0% 112 112 0 0% Nature Restoration Fund 335 56 391 391 0 0% 472 472 0 0% Lawn Tennis Association 0 56 56 56 0 0% 350 350 0 0% Recycling Improvement Fund 250 0 250 250 0 0% 774 774 0 0% Strathclyde Partnership Transport 0 165 165 165 0 0% 165 165 0 0% TOTAL INFRASTRUCTURE, LAND & ENVIRONMENT BOARD 11,883 6,839 18,722 18,722 0 0% 133,110 133,110 0 0% RENFREWSHIRE COUNCIL CAPITAL INVESTMENT STRATEGY - NON-HOUSING SERVICES 1st April to 21st June 2024 POLICY BOARD: INFRASTRUCURE, LAND & ENVIRONMENT Current Year 2024-25 Full Programme - All years Budget Variance (Adverse) or Favourable Budget Variance (Adverse) or Favourable