Item 8 General Services Revenue Budgetary Control Report to 31 January 2025 (Period 10)
West Dunbartonshire Council · 26 March 2025
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WEST DUNBARTONSHIRE COUNCIL Report by the Chief Officer – Resources Council – 26 March 2025 ___________________________________________________________________ Subject: General Services Revenue Budgetary Control Report to 31 January 2025 (Period 10) 1. Purpose 1.1 The purpose of this report is to advise Council of the 2024/25 Revenue Budget position at 31 January 2025 and the forecast position of the General Fund Reserve as at 31 March 2025. 2. Recommendations 2.1 Council is asked to note a current projected annual underlying adverse variance on the revenue account of £3.454m (1.22% of total budget). 2.2 Council is asked to approve any procurement and contract award of projects related to Central Repairs Account recurring budget to be made by the Chief Officer Resources in consultation with the Procurement Manager if the contract cost is within the approved budget and the tender is in line with normal tender parameters. 2.3 Grant delegated authority to Chief Officer for Roads, Neighbourhood and Transport to award contracts in relation to the procurement of replacement tyres if the contract cost is within the approved budget and the tender is in line with normal tender parameters. 3. Background 3.1 The revised 2024/25 revenue budget presented to Council in December was £292.199m. Since then, the budget relating to the transfer to earmarked reserves for the pension smoothing fund and the rebuilding of the reserves used to balance the 2024/25 budget have now been reallocated from expenditure to resources. These amounts were grossing up the expenditure amount in the prior budgetary control report. Overall, this has had a nil impact on the Council’s net expenditure budget. In addition, the Council has recognised the additional use of resources (excluding earmarked reserves) which revises the 2024/25 revenue budget as follows: Service £m £m Revised budget as at Period 7 292.199 Derecognition of amount to rebuild reserves: Right sizing expenditure budget in relation to rebuilding of reserves Reserves (10.495) Additional Resources: ITEM 8
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Share of £19.862m – Pay – Children’s Services Education 0.072 Share of £19.862m – Pay – Children’s Services HSCP Requisition 0.343 Scottish Disability Assistance – Now distributed HSCP Requisition 0.054 Teachers Pensions Education 1.523 Additional No one Left Behind Funding Housing & Employability 0.003 WDLT payaward Education 0.274 Total Additional Resources (8.226) Revised budget as at Period 10 283.973 4. Main Issues 4.1 The summary report at Appendix 1 highlights a projected net annual underlying adverse variance (overspend) of £3.454m (1.22% of the total budget). The current projection shows a decline in the year end position from the figure reported at Period 7, with an increase in the anticipated overspend of £1.332m as detailed in the table below. Appendix 2 provides more detailed service reports by Chief Officer. In addition, services are projecting the use of £1.683m of earmarked reserves. £m £m Net adverse variance at Period 7 2.122 Movements in service variance Resources – The main reason relates to an overspend in relation to the level of repairs and maintenance required (£0.563m). This is partially offset by improved positions across other services within Resources (£0.110m). A cost pressure has been created in 2025/26 due to the need to increase the repairs and maintenance budget. 0.453 Education – The main reason for relates to favourable variances within employee costs. (0.333) Roads & Neighbourhood Services – The main reason relates to the use of the smoothing fund for previous savings whose implementation has been delayed. (0.386) Housing & Employability – The main reason for this overspend relates to the transfer of the HMTO surplus (£0.594m) to the Housing Revenue Account as agreed Council 5 March 2025. 0.568 Requisition (HSCP) – The requisition has increased due to the share of the 24/25 pay award funding as agreed Council 5 March 2025. 0.488 Non GAE Allocation – A reduction in employee costs driven by the decrease in pension contributions will mean a reduction in the central support allocation costs recharged out to non GAE services such as the HRA. 0.500 Other service movements less than £0.050m 0.042 Total movement in service variances 1.332 Net adverse variance at Period 10 3.454
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4.2 Information on any projected annual variances in excess of £0.050m after the use of earmarked reserves, are highlighted and noted within Appendix 3, with additional information on action being taken to minimise or mitigate overspends where possible. 4.3 A list of agreed efficiencies and management adjustments totalling £6.649m is shown within Appendix 4. Current indications show, £6.442m is on target to be achieved. However, Appendix 4 also shows that it is anticipated that £0.207m will not be achieved and will be funded by the smoothing fund for 2024/25 only, with the expectation that the full saving will be achieved in future years. In addition, the smoothing fund has also been used to fund prior year savings which have not been achieved relating to the transfer of parking enforcement enforcement powers from the Police to the Council (£0.325m) and the opportunity to generate additional income from council buildings (£0.191m), which increases the total 2024/25 use of the smoothing fund to £0.723m. General Fund Reserves Position 4.4 Appendix 5 shows the latest position in respect of Unallocated and Earmarked Reserves and shows the projected balance as at 31 March 2025: Unearmarked Balance (£m) Earmarked Balance (£m) Total General Fund Reserves (£m) As at 31 March 2024 4.418 9.115 13.533 In year movements 1.634 4.660 6.294 Projected in year use of reserves (3.454) (1.683) (5.137) Projected Balance as at 31 March 2025 2.598 12.092 14.690 4.5 A breakdown of the 2024/25 earmarked balances and the movements in reserves is summarised in Appendix 6. 4.6 The Council’s General Fund contingency (Prudential Target) is set at 3% of net expenditure for 2024/25 and amounts to £5.400m. After taking into consideration the forecast adverse outturn position of £3.454m at 31 January 2025, the Council is currently forecast to be £2.802m below the current Prudential Target as at 31 March 2025. In addition, the June Finance Update advised how the additional benefit from the reduction in pension contributions would continue to rebuild reserves with an additional £1.621m forecast over 2025/2026. 4.7 The Council’s Standing Orders have been changed to have contract authorisation submitted to service committees and delegated authority sought to appoint the contractor of the returned tender if the contract cost is within the approved budget and the tender is in line with normal tender parameters.
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4.8 This report asks Council to approve any procurement and contract award of projects related to Central Repairs Account recurring budget within Corporate Assets to be made by the Chief Officer Resources in consultation with the Procurement Manager if the contract cost is within the approved budget and the tender is in line with normal tender parameters. This is required due to the time constraints required to deliver spend in each financial year. There is a risk should this not be approved that essential health and safety work covered by this budget will not be carried out in an appropriate timescale. 4.9 The Fleet Service have undertaken a prioritisation exercise to determine the corporate fleet requirements including the and the procurement of replacement tyres which is a revenue budget item. To facilitate the purchase of tyres approval is sought to undertake the procurement and contract award by the Chief Officer – Roads and Neighbourhood in consultation with the Procurement Service and to appoint the contractor of the returned tender if the contract cost is within the approved budget and the tender is in line with normal tender parameters. This request for the authorisation for delegated authority is being made to Council as the project timelines for the contract award being issued are before the next IRED committee in May 2025. 5. Option Appraisal 5.1 No option appraisal was required for this report. 6. People Implications 6.1 There are no people implications. 7. Financial and Procurement Implications 7.1 The report notes the projected in-year financial position for both General Services revenue and capital budgets. 8. Risk Analysis 8.1 The main risks are as follows: (a) The present variances should be viewed in the knowledge that there are a number of variable factors which could arise between now and 31 March which could affect the year end; (b) As a consequence of current market conditions, capital receipts may either not be received or they may be less than anticipated. The budget assumption is that all capital receipts achieved in 2024/25 will be used for principal and premium repayments within the loan charges budget. Any shortfall in capital receipts below that budgeted amount will adversely affect the revenue budget position. This is being closely monitored and any issues will be reported to Council;
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(c) As a consequence of current market conditions, inflation remains volatile and interest rates are reducing more gradually than initially anticipated. To forecast for the full year costs budget assumptions have been required (particularly around energy costs and interest rates). These assumptions continue to change regularly and therefore it is likely that the projected year end budgetary position will change from that reported. 9. Equalities Impact Assessment (EIA) 9.1 No equalities impact assessment was required in relation to this report. 10. Environmental Sustainability 10.1 No assessment of environmental sustainability was required in relation to this report. 11. Consultation 11.1 All services involved in delivering the revenue and capital budgets have been consulted in the compilation of this report. 12. Strategic Assessment 12.1 Proper budgetary control and sound financial practice are cornerstones of good governance and support Council and officers to pursue the strategic priorities of the Council’s current Strategic Plan. This report forms part of the financial governance of the Council. __________________ Laurence Slavin Chief Officer – Resources Date: 28 March 2025 __________________________________________________________________ Person to Contact: Carol Alderson. Finance Manager Council Offices, Church Street, Dumbarton E-mail: carol.alderson@west-dunbarton.gov.uk Appendices: Appendix 1 - Revenue Budgetary Control 2024/25 – Corporate Summary; Appendix 2 - Revenue Budgetary Control 2024/25 – Chief Officer Summaries; Appendix 3 - Analysis of Revenue Variances over £50,000; Appendix 4 - Monitoring of Efficiencies Appendix 5 - Reconciliation of General Fund Reserves Appendix 6 - Monitoring of Earmarked Balances
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Background Papers: • Ledger output – Period 10; • General Services Revenue Estimates 2024/25 Wards Affected All Wards