Item 11 General Services Budgetary Control Report to 31 January 2024
West Dunbartonshire Council · 27 March 2024
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WEST DUNBARTONSHIRE COUNCIL Report by the Chief Officer – Resources Council – 27 March 2024 ___________________________________________________________________ Subject: General Services Budgetary Control Report to 31 January 2024 (Period 10) 1. Purpose 1.1 This report provides an update on the General Services revenue budget and the approved capital programme to 31 January 2024. 2. Recommendations 2.1 Council is asked to: i) note a current projected annual adverse variance on the revenue account of £0.433m (0.2% of total budget); and ii) note that projected expenditure on the capital account is lower than the 2023/24 budget by £59.397m (64.42% of budget), made up of £59.786m (64.84% of budget) of project re-profiling, and an in-year overspend of £0.388m (0.42% of budget). 3. Background Revenue 3.1 At the meeting of West Dunbartonshire Council (the Council) on 1 March 2023, Members agreed the revenue estimates for 2023/2024. A total net budget of £265.160m was approved for General Services. 3.2 Since the budget was agreed, additional funding has been provided by the Scottish Government of £7.675m; revising the total net budget to £271.229m as shown in the table below: Service £m £m Agreed 2023/24 Revenue Budget 1 March 2023 265.160 Additional Funding: No One Left Behind Housing & Employability 0.189 Child Poverty Housing & Employability 0.078 Teacher’s Pay Award Education 2.724 Summer 23 Programme Education 0.080 Local Govt Pay Award (Para 4.8) All 4.589 Training for Support Staff Education 0.015 Total Additional Funding 7.675 Additional Revenue Support Grant (Para 4.9) (1.606) Revised 2023/24 Revenue Budget as at Period 10 271.229 ITEM 11
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Capital 3.3 At its 1 March 2023 meeting, the Council also agreed the updated General Services Capital Plan for 2023/2024 to 2031/32. The three years from 2023/24 to 2025/26 were approved in detail with the remaining years being indicative at that stage. After adjusting for anticipated re-profiling from 2022/23 into 2023/24, the budget agreed for 2023/24 was £79.916m, as noted below. 3.4 Since then, budget adjustments have taken place through • further 2022/23 capital re-profiling • additional external funding • additional income received in 2022/23 which should have been carried forward into 2023/24 per grant conditions This results in a revised 2023/24 capital budget of £92.199m, as follows: £m Agreed 2023/24 Capital Budget (Council – March 2023) 79.916 Additional re-profiling from 2022/23 – following year end 9.206 Additional income received in 2022/23 0.125 New Funding Nature Restoration Fund 0.257 Cycling, Walking and Safer Streets 0.561 Strathclyde Partnership for Transport 0.650 Road Safety 0.134 School Upgrades 0.200 Play Parks 0.157 Community Bus 0.008 Building Upgrades – New Weather Pitches & Outdoor Classroom 0.360 East End Resurfacing 0.175 Dalmonach Steps Upgrade 0.200 Pappert 2G Pitch 0.250 Revised 2023/24 Capital Budget as at Period 10 92.199 4. Main Issues Revenue 4.1 The summary report at Appendix 1 highlights a projected annual adverse variance (overspend) of £0.433m (0.2% of the total budget). This is an improved position of £2.352m from the £2.785m adverse position reported at period 7. This is primarily due to: • additional revenue support grant of £1.606m as detailed in the table above and at paragraph 4.9; • an in-depth review of the Roads and Neighbourhood services budget which identified opportunities to improve the projected year end outturn by £0.700m as reported to the IRED Committee on 7 February 2024.
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Appendix 2 provides more detailed service reports by Chief Officer. 4.2 Information on projected annual variances in excess of £0.050m 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 management adjustments totalling £11.809m is shown within Appendix 4. Current indications show, £11.157m is on target to be achieved. However, Appendix 4 also shows that it is anticipated that £0.651m will not be achieved and will be funded by the smoothing fund for 2023/24 only, with the expectation that the full saving will be achieved in future years. 4.4 A breakdown of the 2023/24 earmarked balances are shown within Appendix 5 and is summarised as follows: £m Earmarked balances brought forward from 2022/23 24.590 Adjustment to revenue reserve in relation to cost of living initiatives, transferred from capital reserve 0.225 Revised Earmarked balances brought forward from 2022/23 24.815 Anticipated forecast spend 2023/24 (11.963) Amounts due to be released in 2023/24 (1.820) Balance anticipated to be c/fwd into 2024/25 11.032 4.5 Due to the current financial challenges facing the Council, recruitment restrictions have been implemented and the filling of vacancies is subject to active review. For variances linked to this action (beyond the budgeted turnover targets), in year savings through not filling vacancies, are now being removed from services and held in a central code. This has resulted in a number of favourable service variances being removed from services and held centrally (currently £0.990m). This has no impact on the overall projected outturn of the Council, simply on how that outturn is reported. 4.6 With vacancy savings being removed from service budgets and transferred to a central budget, other projected overspends identified within services are now more clearly reported. This demonstrates that, if the Council were to only meet the budgeted turnover level of vacancies, there would be a far more significant overspend which highlights the extent to which the Council cannot afford to operate with its current full establishment. 4.7 The effects of removing the vacancy savings from service budgets to a central budget as at Period 10 are noted below: Service with Vacancy Transfers at Period 10 Variance in BCR (under)/over £000 Vacancy Savings Moved to Central Budget (under)/over £000 Variance if vacancies were not removed (under)/over £000 Resources 478 63 415
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Regulatory and Regeneration (612) 244 (856) People and Technology (283) 115 (398) Citizens, Culture & Facilities (67) 406 (473) Roads and Neighbourhood 1,074 79 995 Miscellaneous 329 83 246 Central Budget 990 4.8 The 2023/24 budget has been increased to reflect the £4.589m of funding made available by the Scottish Government for the 2023/24 pay award which was based on the total local government workforce. Council have the autonomy to allocate funding based on local needs and priorities. Therefore, as reported to Council as part of the financial update paper on 20 December 2023, the budgetary control report assumes 100% of the funding will be retained by the Council pending a Council decision to be taken on 6 March 2024, when the Council agrees the 2024/25 budget. 4.9 The staff of the Health and Social Care Partnership (HSCP) make up 35% of the overall Council staff costs (excluding Teachers) which represents £1.606m as a proportion of the £4.589m of funding. If, on 6 March 2024, Council decide to pass through all or some of this additional Revenue Support Grant funding to the HSCP, the amount passed through will increase the need to use Council reserves to offset any in-year variance. Capital 4.10 The current progress on the capital plan is shown in Appendices 6 to 9. 4.11 The overall programme summary report at Appendix 6 shows that planned 2023/24 expenditure is lower than the 2023/24 budget by £59.397m (64.42% of budget), made up of £59.786m (64.84% of budget) of project re-profiling, and an in-year overspend of £0.388m (0.42% of budget). 4.12 Appendix 6 also provides an analysis of the overall programme at each alert status and a summary budgetary control report including detailing the number of projects and corresponding spend as a percentage of the overall programme currently at red, amber or green alert status for project life and the current year. The current projections are based on best judgement as to how these projects will continue in operation during the remainder of the year. 4.13 Appendices 7 and 8 detail the financial analysis of projects at red and green status respectively (currently no amber) and provide additional information on action being taken to minimise or mitigate under or overspends where possible. Appendix 9 provides an analysis of resources. 4.14 From the analysis within the appendices it can be seen there are a number of projects with identified re-profiling to date. Those with re-profiling valued at greater than £0.500m, are listed as follows:
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Project Name Period 7 Re-profiling (£m) Period 10 Re-profiling (£m) Movement (£m) Strathleven Place 1.540 1.540 0 New West Bridgend Community Centre 0.990 1.053 0.063 Regeneration/Local Economic Development 1.911 2.422 0.511 Regeneration Fund 3.824 3.824 0 Clydebank Can on the Canal 0.707 0.707 0 LUF 0 14.871 14.871 District Heating Network Expansion 6.959 7.109 0.150 Heritage Fund 0.558 0 0 River Leven Flood Prevention Scheme 0.620 0.620 0 Gruggies Burn 0.930 0.930 0 Vehicle Replacement Strategy 0.500 0.900 0.400 Vehicle Replacement 0 2.859 2.859 Waste Transfer Station 1.780 1.780 0 Exxon City Deal 7.845 7.845 0 Depot Rationalisation 1.938 2.138 0.200 Schools Estate Improvement Plan 0.985 3.700 2.715 Schools Estate Improvement Plan - next Phase - Faifley Campus 0 1.916 1.916 HSCP ICT Upgrade of systems 0.534 0.534 0 4.15 For comparison purposes, a summary of the change in re-profiling since the last budgetary control report presented to Council is noted below: Period 7 Period 10 Movement £m £m £m Overall capital plan 91.266 92.199 0.933 Overall variance (36.365) (59.397) (23.033) Re-Profiling (35.988) (59.786) (23.798) Net over/ under (0.377) 0.388 0.765 % Re-Profiling 39.43% 64.84% 25.41%
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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 results for both the revenue and capital budgets; (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 2023/24 will be used to the principal and premium repayments within the loan charges budget. Any shortfall in capital receipts below that budgeted will affect the revenue budget position. This is being closely monitored and any issues will be reported to Council; (c) As a consequence of current market conditions, inflation is at an all-time high and interest rates continue to rise. To forecast for the full year costs budget assumptions have been required (particularly around energy and interest costs). 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.
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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: 7 March 2024 __________________________________________________________________ Person to Contact: Janine Corr, Accountant Council Offices, Church Street, Dumbarton E-mail: janine.corr@west-dunbarton.gov.uk Appendices: Appendix 1 - Revenue Budgetary Control 2023/24 – Corporate Summary; Appendix 2 - Revenue Budgetary Control 2023/24 – Chief Officer Summaries; Appendix 3 - Analysis of Revenue Variances over £50,000; Appendix 4 - Monitoring of Efficiencies Appendix 5 - Monitoring of Earmarked Balances Appendix 6 - Overall Capital Programme Summary; Appendix 7- Analysis of Projects at Red Status; Appendix 8 - Analysis of Projects at Green Status; Appendix 9 - Analysis of Capital Resources. Background Papers: • Ledger output – Period 10; • General Services Revenue Estimates 2023/24 • General Services Capital Plan Update - Council 1 March 2023. Wards Affected All Wards