ILE Revenue and Capital Budget Monitoring Report P6
Renfrewshire Council · 6 November 2024
Back to Infrastructure, Land and Environment Policy Board — 6 November 2024 and its agenda
Text extracted from the council's PDF. Layout and reading order may differ from the original.
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___________________________________________________________________ To: Infrastructure Land & Environment Policy Board On: 6 November 2024 ___________________________________________________________________ Report by: Director of Finance and Resources Director of Environment, Housing & Infrastructure ___________________________________________________________________ Heading: Revenue and Capital Budget Monitoring 2024/25 at 13 September 2024 ___________________________________________________________________ 1. Summary 1.1 At the close of reporting period 6 on 13 September 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 £1.210m (3.9%) 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 Director of Environment, Housing & Infrastructure 31,072 32,282 (1,210) (3.9%) Total 31,072 32,282 (1,210) (3.9%) Capital Environment & Infrastructure 18,517 18,517 0 0.0% 2. Recommendations 2.1 Members are requested to:
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a) Note the projected Revenue outturn overspend position of £1.210m; b) Note the projected Capital outturn break-even position; and c) Note the budget adjustment detailed at section 6.3. d) Approve the budget adjustments proposed at sections 6.4 3. Revenue Budget Projection – overspend of £1.353m 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 4.1 Environment, Housing and Infrastructure – (£1.210m) projected overspend Waste Services – (£1.068m) 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 (£666k), which includes an estimated under-recovery of income relating to trade waste equating to £556k. Commercial Waste customer volumes have reduced over the last few years due to a number of factors, namely: - • A number of customers have not returned to using the trade waste service post-pandemic, • The operating hours of some business have changed since the pandemic, which has had an impact on the reducing numbers of customers utilising the service, as well as a reduction in the required frequency of the service provision.
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• The service is reviewing the opportunities to reduce costs attributable to the collection and disposal of trade waste to better align with customer numbers and tonnages collected. It is also anticipated that there will be a projected overspend in employee costs (£320k) as a result of agency staff and overtime being utilised to cover vacancies, in addition to a projected overspend in transport costs as a result of non-fair wear and tear costs being higher than budgeted. 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. The current anticipated underspend for Refuse Disposal (£0.050m) mainly relates to the over-recovery of recyclate income, offset by higher contractor costs. Neighbourhood Services - £299k underspend by 31 March 2025 The current projected underspend for Neighbourhood Services has increased from £42k to £299k since the previous board. The majority of this relates to an increase of income of £171k in the main due to higher recharges to capital (£61k) for salary costs. The remaining movement sits within Work by Contractors, which is a difficult budget to forecast, due to the reactive nature of the service. This forecast will continue to be closely monitored throughout the financial year. Fleet Services – (£0.233m) overspend by 31 March 2025 The current anticipated overspend forecast in Fleet Services reflects the impact of inflation on material and contractor costs. Due to the significant cost increases we have seen recently; this requires the service level agreements to be reviewed to ensure operational services are charged appropriately to cover costs. In addition, the income projection has been amended to reflect an under-recovery of recharge income as a result of some services returning/disposing of some of their aging fleet. These services will therefore no longer be recharged for fair wear and tear related costs. Social Transport – (£0.293) overspend by 31 March 2025 The two main areas of this projected overspend relate to employee costs (£167k) and external vehicle hire (£129k). At present, there has been a
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requirement to recruit agency staff due to sickness and vacancies and due to the ageing fleet within the Social Transport service, this has resulted in a significant increase in reliance of external hires to support the service. Infrastructure and Assets – (£0.036m) overspend by 31 March 2025 The projected overspend has reduced since the previous board due to an improvement within the projected income under-recovery, which has been reduced from £100k to £10k. The 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 - £0.070m 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 previous reports, the service has taken significant steps to reduce overtime levels. It should be noted, however, that the service has incurred increased costs in relation to agency staff with these costs now projected until the end of the year, resulting in the decreased reported underspend (£0.443m at Period 3). 5.2 Transport Related – (£2.142m) overspend by 31 March 2025 The projected overspend has significantly increased since the last reporting period as a result of reflecting the accurate ledger coding of income and expenditure in relation to recharges. A virement of £1.5m is requested at 6.4 to mitigate this variance. This will realign the budgets to reflect the projected expenditure and income more accurately. In addition, included within this overspend is a significant increase in the cost of replacement parts for vehicles, vehicle hire to cover service requirements due to the disposal of some of the aging fleet and specialist contractors (£475k).
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5.3 Supplies and Services – (£0.859m) overspend by 31 March 2025 This projected overspend predominantly sits within Roads and Refuse Disposal. The overspend in supplies and services related to the Roads Service (£573k) relates to work by contractor and bitumen costs which are incurred by the Service due to carrying out Capital works. These additional costs are cancelled out by the resulting additional Capital income the Service receives for carrying out these Capital works. Any overspend in this area is effectively offset by an over recovery of income. 5.4 Income – £1.992m over recovery by 31 March 2025 As highlighted in paragraph 5.2, following the adoption of the accurate accounting treatment of recharges, the reported position is showing a significant over-recovery of recharge income in relation to Fleet Services. Included within this projected over-recovery is the recharge income within Roads operations, which is predominately offset by an anticipated under- recovery for trade waste income, as mentioned in note 4.1. A virement of £1.5m is requested at 6.4 to mitigate this variance. This will realign the budgets to more accurately reflect the projected income. 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 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:
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Revenue Budget Adjustments Service Subjective Heading Amount (£m) Reason Fleet Services Transport Related 1.500 Alignment of the external vehicle hire costs budget and income budget for Fleet recharges Fleet Services Income (1.500) Total 0 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 £18.517m 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 3. 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 £0.205m, are as follows: Capital Budget Adjustments Project Amount (£m) Reason Roads/Footway Upgrade Programme 0.035 Budget increase to reflect contribution for Wright Street resurfacing from developer. Lighting Column Replacement 0.037 Budget increase to reflect transfer from core/pathways and cycle network. Roads/Footways Upgrade Programme (0.037) Budget decrease to reflect transfer to Lighting Column Replacement as project will upgrade footways and lighting. SPT: People in Place Fund 0.022 Budget increase for new grant award from Transport Scotland. Renewal of Play Parks (0.462) Budget decrease to reflect confirmation of grant award from Scottish Government in 2024/25. Parks: Multi Use Game Area (0.100) Budget decrease as had been incorrectly carried forward from 2023/24.
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Capital Budget Adjustments Project Amount (£m) Reason Public Realm: Paisley Abbey 0.300 Budget increase to reflect contribution from Economy & Regeneration Service. Total (0.205) Implications of the Report 1. Financial The projected budget outturn position for the Infrastructure, Land and Environment Revenue budget is an overspend of £1.210m. 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 by budget holders 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 Council’s revenue budgets, there are no direct implications arising from the recommendations arising from 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
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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 There are no direct implications arising from the recommendations in this report. 12. Cosla Policy Position N/a
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13. Childrens 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 Geoff Borland, Finance Manager (Capital)
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Appendix 1 RENFREWSHIRE COUNCIL REVENUE BUDGET MONITORING STATEMENT 2024/25 1 April 2024 to 13 September 2024 POLICY BOARD : INFRASTRUCTURE, LAND AND ENVIRONMENT Objective Summary Annual Budget at Period 3 Budget Adjustments Revised Annual Budget at Period 6 Projected Outturn Budget Variance (Adverse) or Favourable Previous Projected Outturn Variance Movement £000 £000 £000 £000 £000 % £000 £000 Directorate and Service Development 1,295 0 1,295 1,286 9 0.7% (34) 43 Refuse Collection 4,773 75 4,848 6,008 (1,160) (23.9%) (490) (670) Household Waste Recycling Centres 1,018 0 1,018 976 42 4.1% 84 (42) Refuse Disposal 7,543 1 7,544 7,494 50 0.7% 50 0 Neighbourhood Services 6,252 20 6,272 5,973 299 4.8% 42 257 Fleet Services (258) 0 (258) (25) (233) (90.3%) (140) (93) Social Transport 1,127 0 1,127 1,420 (293) (26.0%) (9) (284) Roads Operations 3,102 281 3,383 3,344 39 1.2% 0 39 Infrastructure and Assets 1,546 34 1,580 1,616 (36) (2.3%) (162) 126 Transportation & Active Travel 468 320 788 749 39 4.9% (5) 44 Parking of Vehicles (653) (29) (682) (741) 59 8.7% (54) 113 Street Lighting Maintenance Work 520 0 520 497 23 4.4% 3 20 Energy Management Unit 332 40 372 372 0 0.0% (0) 0 Strathclyde Partnership for Transport Requisition 3,265 0 3,265 3,313 (48) (1.5%) (22) (26) NET EXPENDITURE 30,330 742 31,072 32,282 (1,210) (3.9%) (736) (474)
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Appendix 2 RENFREWSHIRE COUNCIL REVENUE BUDGET MONITORING STATEMENT 2024/25 1 April 2024 to 13 September 2024 POLICY BOARD : INFRASTRUCTURE, LAND AND ENVIRONMENT Subjective Summary Annual Budget at Period 3 Budget Adjustments Revised Annual Budget at Period 6 Projected Outturn Budget Variance (Adverse) or Favourable Previous Projected Outturn Variance Movement £000 £000 £000 £000 £000 % £000 £000 Employees 22,649 12 22,661 22,731 (70) (0.3%) 443 (513) Premises Related 1,225 0 1,225 1,273 (48) (3.9%) (13) (35) Transport Related 5,750 249 5,999 8,141 (2,142) (35.7% ) (455) (1,687) Supplies and Services 13,335 49 13,384 14,243 (859) (6.4%) (822) (37) Third Party Payments 3,298 0 3,298 3,318 (20) (0.6%) 6 (26) Transfer Payments 150 0 150 166 (16) (10.7% ) (18) 2 Support Services 34 680 714 761 (47) (6.6%) (41) (6) GROSS EXPENDITURE 46,441 990 47,431 50,633 (3,202) (6.8%) (900) (2,302) Income (16,111) (248) (16,359) (18,351) 1,992 12.2% 164 1,828 NET EXPENDITURE 30,330 742 31,072 32,282 (1,210) (3.9%) (736) (474)
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Appendix 3 Prior Years Approved Budget Revised Projected Expenditure Budget Adjustments Budget Outturn Total Approved Projected to 31/03/2024 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 £000 ENVIRONMENT & INFRASTRUCTURE Active Travel Funding Tier 1 0 1,305 0 1,305 1,305 0 0% 4,142 4,142 0 0% LADA 0 49 0 49 49 0 0% 49 49 0 0% Roads/Footways Upgrade Programme 0 7,707 35 7,742 7,742 0 0% 24,142 24,142 0 0% Vehicle Replacement Programme 0 3,482 0 3,482 3,482 0 0% 11,582 11,582 0 0% Bridge Assessment/Strengthening 0 321 0 321 321 0 0% 1,321 1,321 0 0% Lighting Columns Replacement 0 1,373 37 1,410 1,410 0 0% 3,410 3,410 0 0% Traffic Management 0 274 0 274 274 0 0% 274 274 0 0% Core pathways & cycle network 163 37 (37) 0 0 0 0% 163 163 0 0% Parks Improvement Programme 1,173 31 0 31 31 0 0% 1,204 1,204 0 0% Improvements to Outdoor Access and Play Area Programm 1,712 116 0 116 116 0 0% 1,828 1,828 0 0% Active Travel Transformation Fund 319 921 0 921 921 0 0% 1,240 1,240 0 0% SPT - People in Place Fund 0 50 22 72 72 0 0% 72 72 0 0% Flooding 0 205 0 205 205 0 0% 205 205 0 0% Multi Purpose Bins 60 110 0 110 110 0 0% 170 170 0 0% Road Safety 681 272 0 272 272 0 0% 953 953 0 0% Renewal of Play Parks 238 1,500 (462) 1,038 1,038 0 0% 2,044 2,044 0 0% Parks - Multi Use Games Area 104 107 (100) 7 7 0 0% 112 112 0 0% Nature Restoration Fund 377 391 0 391 391 0 0% 1,258 1,258 0 0% Lawn Tennis Association 295 56 0 56 56 0 0% 350 350 0 0% Recycling Improvement Fund 374 250 0 250 250 0 0% 374 374 0 0% Public Realm - Paisley Abbey 0 0 300 300 300 0 0% 300 300 0 0% Strathclyde Partnership Transport 0 165 0 165 165 0 0% 165 165 0 0% TOTAL INFRASTRUCTURE, LAND & ENVIRONMENT BOARD 5,496 18,722 (205) 18,517 18,517 0 0% 55,358 55,358 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. RENFREWSHIRE COUNCIL CAPITAL INVESTMENT STRATEGY - NON-HOUSING SERVICES 1st April to 13th September 2024 POLICY BOARD: INFRASTRUCURE, LAND & ENVIRONMENT Current Year 2024-25 Full Programme - All years Budget Variance (Adverse) or Favourable Budget Variance (Adverse) or Favourable