Financial Reports Monitoring Pack - 31 December 2023
Argyll and Bute Council · 15 February 2024
Back to Policy and Resources Committee — 15 February 2024 and its agenda
Text extracted from the council's PDF. Layout and reading order may differ from the original.
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ARGYLL AND BUTE COUNCIL POLICY AND RESOURCES COMMITTEE FINANCIAL SERVICES 15 FEBRUARY 2024 FINANCIAL REPORTS MONITORING PACK – 31 DECEMBER 2023 1. INTRODUCTION 1.1 This report provides a summary of the financial monitoring reports as at the end of December 2023. There are five detailed reports, setting out the position as at 31 December 2023, which are summarised in this Executive Summary: • Revenue Budget Monitoring Report • Monitoring of Financial Risks • Capital Plan Monitoring Report • Treasury Monitoring Report • Reserves and Balances 2. DETAIL 2.1 Revenue Budget Monitoring Report 2.1.1 This report provides a summary of the current revenue budget monitoring position to ensure net expenditure is contained within budget. It provides corporate and departmental information with comparisons on a forecast outturn and a year to date basis. 2.1.2 There is a forecast overspend of £0.091m as at the end of December 2023. The key variances are: - Within Roads, numerous variances accumulating to a £1.257m overspend – this is arising from an under-recovery of income in Piers & Harbours as a result of a reduced number of berthings, in Public Conveniences due to delayed installation of turnstiles, and on Traffic Regulation Orders (TROs) in Roads. This is combined with overspends on Pupil Transport driver/escort costs, Street Lighting Maintenance, staff costs in Amenities due to high sickness and turnover and an unachievable saving in relation to Depot Rationalisation. These are partially offset by an underspend in Public Transport payments to operators. - Within Development and Economic Growth, numerous variances accumulating to a £0.306m overspend. These include Homeless B&B costs, a reduction in income for fish export certificates following Brexit, reduction in building warrant income and legal costs within Environmental Health. - Within Executive Director Kirsty Flanagan there is an over-recovery of vacancy savings and increased ferry grant income amounting to a favourable projection of £0.612m. - Within Treasury Management, there is a forecast underspend of £0.294m in relation to a discount received on the early repayment of three loans. - Within Council Tax income, an over-recovery of £0.187m is projected based on current collection rates.
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- Within NDR, an underspend of £0.180m as costs have come through lower than budget. - Within Legal and Regulatory Support, there is a favourable variance of £0.168m resulting from historic water refunds. - Within Education, there is slippage on Scottish Government 100 day Promise funding due to delays in recruitment which is partially offset by an overspend from Schools Residential placements due to a higher than budgeted demand for this service resulting in an overall £0.020m underspend. - Within Customer and Support Services, a net underspend of £0.011m arising from an underspend on software licenses within ICT and on the Argyll and Bute Manager training program partially offset the under-recovery of income in the print and mail room due to increased digitalisation, 2.1.3 There is a year to date overspend of £6.724m. More focus is on the forecast outturn position, hence why sometimes the year to date position is not updated. The year to date variances mainly relate to the timing of income and expenditure and recharging of costs to capital. 2.1.4 With regard to the ongoing financial impact of COVID-19, there are £5.512m of reserves committed to manage the impact of the pandemic. The detail behind these commitments is contained within Appendix 2 of the Reserves and Balances report. 2.1.5 Total policy savings relevant to 2023-24 financial year amount to £6.953m. The table below outlines their progress as at 31 December 2023. Category No. of Options 2023-24 £000 2023- 24 FTE 2024-25 £000 2024- 25 FTE Future Years £000 Future Years FTE Delivered 10 5,843.5 (0.7) 5,891.0 (0.7) 6,058.0 (0.7) On Track to be Delivered 4 656.0 2.5 629.0 11.9 560.0 12.4 Still to be Implemented 1 0.5 0.0 0.5 0.0 0.5 0.0 Being Developed 0 0.0 0.0 0.0 0.0 0.0 0.0 Will not be achieved 2 248.5 0.0 248.5 0.0 248.5 0.0 Potential Shortfall 2 180.0 0.0 180.0 0.0 180.0 0.0 Delayed 1 24.0 0.0 24.0 0.0 24.0 0.0 TOTAL 20 6,952.5 1.8 6,973.0 11.2 7,071.0 11.7 2.1.6 There are two savings marked as not going to be achieved. A cost pressure has been recognised in 2024-25 for one of these and the other will be met by underspends within the Service which will remove these savings targets. Two further savings are categorised as having a shortfall and one is currently delayed. Health and Social Care Partnership (HSCP) – Financial Update
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2.1.7 The forecast outturn position at the end of December is an estimated overspend of £0.443m for 2023-24 (forecast to come in on budget for Social Work and overspend of £0.443m for Health). The HSCP’s financial position will continue to be monitored and Financial Services staff will engage with the HSCP Chief Financial Officer to ensure that mitigation actions are in place to address the deficit and ensure that no additional funding is required from the Council. 2.2 Monitoring of Financial Risks 2.2.1 This report outlines the process and approach developed in carrying out a financial risks analysis and provides an update on the current assessment of financial risks. 2.2.2 There are 5 Council wide revenue risks identified for 2023-24 currently amounting to £2.835m. 2.2.3 There are currently 39 departmental risks totalling £5.265m. Of the 39 departmental risks, 6 are categorised as likely. These will continue to be monitored and action taken to mitigate or manage these risks. 2.2.4 The current top three risks in terms of the financial impact are noted in the table below. SERVICE TITLE OF RISK DESCRIPTION OF RISK LIKELIHOOD FINANCIAL IMPACT £000 Roads and Infrastructure Services Roads Maintenance - Bridges, Culverts & Sea Defences Extreme localised weather may result in loss of bridge, culvert, road or sea defence. 3 750 Roads and Infrastructure Services Waste PPP - Indexation Historical payments made towards Waste PPP based on indexation rates have been challenged by Renewi resulting in a potential cost to the council. 3 586 Roads and Infrastructure Services Winter Maintenance Adverse weather conditions which require greater than budgeted number of gritting runs. 4 365 2.2.5 2.2.6 There have been no changes to the departmental risks since the report as presented to the Policy and Resources Committee on 7 December 2023. There is a risk that there are revenue costs of circa £0.900m incurred as a result of significant rainfall in Autumn 2023 will not be fully covered by the Bellwin scheme. This issue and three other potential risks relating to funded childcare for 1 and 2 year olds, the proposed new school campus on Mull and digital access for learners are covered in section 3.6 of the Financial Risks report.
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2.3 Capital Plan Monitoring Report 2.3.1 2.3.2 This report provides a summary of the current capital plan monitoring position. Information is provided in terms of monitoring year to date budget, current full year budget, future years total budget and funding and non-financial in terms of project performance. In recent years, the Council has agreed additional funding for the capital programme totalling £10.803m to address specific costs related to dealing with COVID, inflationary pressures arising as a consequence of the factors detailed in paragraph 2.3.3 below and other cost pressures on the capital plan. To date, £8.1m has been allocated to projects leaving a balance of £2.703m available for allocation as required. 2.3.3 The impact of the pandemic along with the UK exit from the European Union, the Russian invasion of Ukraine and sanctions on Russian owned entities has seen significant price increases as well as disruptions to the supply chain and longer lead in times. The increased rate of inflation impacts costs such as energy prices, labour, packaging and transport. These all have an effect on the overall contract price and make it extremely challenging to manage expenditure and the availability of supply. As a result of this it should be noted that there are likely to be other significant financial impacts which are not quantifiable at this stage. 2.3.4 Actual net expenditure to date is £24.334m compared to a budget for the year to date of £24.309m giving rise to an overspend for the year to date of £0.025m (0.10%). 2.3.5 The forecast outturn for 2023-24 is a forecast net expenditure of £34.239m compared to an annual budget of £41.791m giving rise to a forecast underspend for the year of £7.552m (18.07%). 2.3.6 The forecast total net projects costs on the capital plan are £216.052m compared to a total budget for all projects of £216.975m giving rise to a forecast overspend for the overall capital plan of £0.910m (0.42%). 2.3.7 In respect of total project performance, there are 157 projects within the capital plan, 140 are complete or on target, 2 are off target and recoverable and 15 projects are off track. 2.4 Treasury Monitoring Report 2.4.1 This report provides information on the current levels and recent transactions in relation to the capital financing limit, total borrowing, temporary borrowing and long term borrowing and investments. 2.4.2 The net movement in external borrowing for the period 1 November 2023 to 31 December 2023 was a decrease of £3m.
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2.4.3 Borrowing is below the Capital Financing Requirement for the period to 31 December 2023, at this stage in the financial year capital expenditure is below target. 2.4.4 The levels of investments were £56.929m at 31 December 2023. The average rate of return achieved was 5.054% which is below the target SONIA (Sterling Overnight Index Average) rate for the same period of 5.187%. 2.5 Reserves and Balances 2.5.1 This report summarises the overall level of reserves and balances and monitors the spending of the earmarked reserves, providing detailed information on the unspent budget earmarked balances. 2.5.2 The Council has a total of £666.354m unusable reserves that are not backed with resources. They are required purely for accounting purposes. 2.5.3 At 31 March 2023, the Council had a total of £93.828m of usable reserves. Of this: • £2.916m relates to the Repairs and Renewals Fund • £4.503m relates to Capital Funds • £86.409m was held in the General Fund, with £79.466m of this balance earmarked for specific purposes. 2.5.4 During 2023-24, the amount of £4.776m which was previously agreed to be utilised from the one-off reprofiling gain from the Loans Fund Review was drawn down into Earmarked Reserves to be used to fund the Capital Programme as detailed in paragraph 3.5.1 of the reserves report. This results in the total earmarked balance increasing to £84.242m. 2.5.5 Of the earmarked balance of £84.242m: • £41.505m is invested or committed for major initiatives/capital projects • £6.032m has already been drawn down • £13.087m is still to be drawn down in 2023-24 • £23.618m is planned to be spent in future years 2.5.6 The table below summarises the position of the unallocated General Fund balance. Further explanation of the figures can be found at Section 3.4 of the Reserves and Balances report. Heading Detail £000 Unallocated General Fund as at 31 March 2023 This is the balance that is unallocated over and above the 2% contingency, which amounts to £5.6911 1,252
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Budgeted allocation to General Fund for 2023-24 Budget Per the Budget Motion at Council on 23 February 2023 19 Earmarked Balances no longer required Per paragraph 3.3.3 – amount previously earmarked that can be released back to the general fund 104 Current Forecast Outturn for 2023-24 as at 31 December 2023 Per paragraph 3.4.2. (91) Social Work outturn adjustment Per paragraph 3.4.3 - Social Work would expect to transfer any surplus to internal IJB reserves 0 Allocation from unallocated general fund balance Per paragraph 3.4.4 (8) Estimated Unallocated balance as at 31 March 2024 1,276 2.5.6 It can be seen that, after taking into consideration the budgeted allocation to the General Fund agreed by Council on 23 February 2023, the earmarked balances no longer required, the current forecast outturn position for 2023-24 and the proposed allocation for floral displays the Council is forecast to have a £1.276m surplus over contingency. 2.6 VIREMENTS OVER £0.200m (Revenue) 2.6.1 Virement is the process of transferring budget between cost centres, services or departments or between capital projects. The Council’s constitution notes that virements over £0.200m require approval by Council. This section of the report will be used to outline revenue virements in the period that require approval. Capital virements are included within the capital monitoring report. 2.6.2 For the period November and December, there is one virement requiring authorisation: - £0.900m of funding recognised for Discretionary Housing payments. This is Scottish Government funding via Circular 03/2023. 3. RECOMMENDATIONS 3.1 It is recommended that the Policy and Resources Committee:
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a) Consider the revenue budget monitoring report as at 31 December 2023. b) Note the financial risks for 2023-24. c) Note the capital plan monitoring report as at 31 December 2023 and approve the proposed changes to the capital plan outlined in Appendix 4 of that report. d) Note the treasury monitoring report as at 31 December 2023. e) Consider the reserves and balances report as at 31 December 2023. f) Recommend to Council that the revenue virements over £0.200m during November and December 2023 are approved. 4. IMPLICATIONS 4.1 Policy – None. 4.2 Financial - Outlines the revenue and capital monitoring for 2023-24 as at 31 December 2023 4.3 Legal - None. 4.4 HR - None. 4.5 Fairer Scotland Duty - None. 4.5.1 Equalities – protected characteristics - None. 4.5.2 Socio-economic Duty - None. 4.5.3 Islands - None. 4.6 Climate Change - None. 4.7 Risk - Risks are included in financial risks report. 4.8 Customer Service - None. Kirsty Flanagan Executive Director /Section 95 Officer 12 January 2024 Policy Lead for Finance and Commercial Services - Councillor Gary Mulvaney For further information contact Anne Blue, Head of Financial Services anne.blue@argyll-bute.gov.uk
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REVENUE BUDGET MONITORING REPORT AS AT 31 DECEMBER 2023 POLICY AND RESOURCES COMMITTEE 15 FEBRUARY 2024 2023-24 Overall Position: There is a forecast overspend of £0.091m as at the end of December 2023. Within Executive Director Douglas Hendry, there is a forecast underspend of £0.188m due to slippage in the utilisation of 100 day promise funding and historic water refunds offset by an overspend within Residential Schools due to a higher than budgeted demand for this service. Within Executive Director Kirsty Flanagan, there is a forecast overspend of £0.940m due to an under-recovery of income in Piers & Harbours due to a reduction in the number of berthings, in Public Conveniences due to the delayed installation of turnstiles, Print & Mail Room due to a shift to digital communication channels resulting in a reduction in printing activity, a reduction in Building Warrant and Fish Export Certificate income and on Traffic Regulation Orders (TROs) in Roads. This reduction in income is combined with overspends on Pupil Transport driver/escort costs, Temporary Accommodation for Housing Homeless, Legal costs in Environmental Health, Street Lighting Maintenance, staff costs in Amenities due to high sickness and turnover and an unachievable saving in relation to Depot Rationalisation. These are partially offset by an over-recovery of vacancy savings, an underspend in Public Transport payments to operators, underspend in IT software licences and an underspend in training for Argyll & Bute Manager courses. Social Work is currently forecasting to break even at the end of the financial year. This is due to a combination of the over-recovery of vacancy savings, income from fees, charges and recharges and the use of non-recurring reserves to offset cost pressures arising from a high demand for services and the use of agency staff to fill staffing recruitment and retention gaps across adult services. There are forecast underspends within Treasury Management of £0.294m in relation to a discount received on the early repayment of three loans and within NDR of £0.180m due to actual costs being less than the available budget. There is also a projected over-recovery of £0.187m within Council Tax. There is a year to date overspend of £6.724m. The year to date variances within the departments tend to relate to the timing of income and expenditure and costs to capital not recharged yet. Key Highlights as at December 2023: • Council services are projecting an overspend of £0.301m as at 31 December 2023. • During November 2023, the 2023-24 pay settlement was agreed for Chief Officers and non teaching staff. As a result of this the Payroll Team implemented the first stage of the new relevant pay rates and processed the related back pay during the month of November. The final stage of the uplift will be implemented in two steps with the new rates being applied from the December pay run onwards and any arrears due to staff over the period 1st April 2023 to 15th November 2023 being calculated and paid by the end of February 2024. • As the pay settlement has now been received the budgets require to be adjusted to reflect the new employee costs and the corresponding Scottish Government funding will offset costs. It is hoped this will be completed in the January period and preliminary workings indicate that there should be no cost pressure as a result of the settlement. Key Financial Successes: Performance against budget for 2022-23 was an overall net favourable position of £3.326m underspend after adjusting for year-end earmarking. This breaks down as: • £0.347m net underspend in relation to Council service departmental expenditure
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• £6.937m net underspend in relation to other central costs largely due to a one-off treasury gain as a result of a discount on the early repayment of loans • £0.652m over-recovery of Council Tax income • £4.610m of unspent budget earmarkings Key Financial Challenges: Proposed Actions to address Financial Challenges: Addressing the long-term impact of the COVID pandemic on service demand and the increasing challenges facing departments across the Council in relation to the recruitment and retention of suitably qualified and experienced staff. Engagement and monitoring of both issues with departments to assess how these challenges are affecting service capacity and capability, staff attendance, utilisation of agency staff and costs. Collaboration with services and other back-office teams to consider and develop mitigating actions. Achieving a favourable year-end position and achieving savings targets in light of council wide risks to expenditure. Robust monitoring of the financial position and delivery of savings to ensure budget issues inform the budget monitoring process. Monitoring Social Work expenditure and more widely the IJB position as any overspend will transfer back to partner bodies in the first instance. Continue to work closely with the CFO of the IJB to ensure that early indication of any potential adverse financial outturn is identified and corrective action is agreed as appropriate to reduce the risk to the Council. Identifying further savings and delivering services more efficiently with less resources, as whilst a balanced 2023-24 budget was agreed in February 2023 there are still budget gaps in future years. The Council will continue to progress savings options identified, refine options that require further development and seek to identify further savings through themed reviews and business process reviews. Maintaining or improving the level of service income recovered, for example planning, building standards and car parking. Actively monitor income recovery and ensure Council fees and charges policies are regularly reviewed. Managing spend in service areas which are demand led and, to some extent, outwith service control, for example Winter Maintenance. Use a risk-based approach to budget monitoring to focus additional attention on these areas. Ongoing requirement to fund unavoidable inflationary increases in areas like utility costs, fuel, food etc. This is impacted further by the availability of supply because of the COVID-19 pandemic, UK exit from the European Union, Russia’s invasion of Ukraine and sanctions on Russian owned entities, to name a few influencing factors. Ensure emerging issues are highlighted as soon as possible so that the financial impact can be evaluated and reported through the budget monitoring and preparation processes. Cost of living crisis impacting on pay inflation negotiations which could result in pay awards above what is deemed affordable. Ensure emerging issues are highlighted as soon as possible so that the financial impact can be evaluated and reported through the budget monitoring and preparation processes.
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Forecast Outturn Position There is a forecast underspend of £0.301m for 2023-24 as at 31 December 2023. Department Annual Budget £'000 Forecast Outturn £'000 Current Forecast Variance £'000 Previous Forecast Variance £000 Change £000 Explanation Chief Executive's Unit 1,177 1,177 0 0 0 Executive Director (Douglas Hendry) 133,044 132,856 188 188 0 The projected underspend is due to slippage in the utilisation of Scottish Government 100 day promise funding and historic water refunds, offset by an overspend within Residential School Budgets due to a higher than budgeted demand for this service. Executive Director (Kirsty Flanagan) 56,363 57,303 (940) (1,005) 65 The projected variance is due to an under-recovery of income in Piers & Harbours as a result of a reduced number of berthings, in Public Conveniences due to the delayed installation of turnstiles, Print & Mail Room due to a shift to digital communication channels resulting in a reduction in printing activity, reduction in Building Warrant and Fish Export Certificate income and on TROs in Roads. This is combined with overspends on Pupil Transport driver/escort costs, Temporary Accommodation for Housing Homeless, Legal costs in Environmental Health, Street Lighting Maintenance, staff costs in Amenities due to high sickness and turnover and an unachievable saving in relation to Depot Rationalisation. These are partially offset by an over-recovery of vacancy savings, an underspend in Public Transport payments to operators, underspend in ICT software licences and an underspend in training for A&B Manager courses. Social Work 76,117 76,117 0 0 0 The projected break even position is due to a combination of the over-recovery of vacancy savings, income from fees, charges and recharges and the use of non- recurring reserves to offset cost pressures due to high demand for services and the use of agency staff to fill staffing recruitment and retention gaps across Adult Services. Central Budgets 27,178 26,704 474 294 180 The projected underspend results from recognition of a discount received on the early repayment of loans £0.294m and a projected underspend on NDR £0.180m Financed By (293,879) (294,066) 187 0 187 Projected over-recovery of Council tax income Total 0 91 (91) (523) 432
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Further information on the departmental forecast variances is included later on in the report. (1,200) (700) (200) 300 800 April May June July August September October November December January February £ 000 Forecast outturn position for each Department from the start of the financial year Chief Executive's Unit Executive Director (Douglas Hendry) Executive Director (Kirsty Flanagan) Social Work Central Budgets Financed By Underspend Overspend
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Year to Date Position The year to date position as at 31 December 2023 is an overspend of £6.724m and the main variances are noted below. Department YTD Actual £'000 YTD Budget £'000 YTD Variance £'000 Explanation Chief Executive's Unit 897 938 41 The year to date underspend can be attributed to profiling issues Executive Director (Douglas Hendry) 99,074 98,955 (119) The year to date overspend is due to overspends within the Residential School Budget, under recovery of commercial income and various budget profiles that require to be refined. These overspends are partially offset by slippage in 100 day promise funding and historic water refunds. Executive Director (Kirsty Flanagan) 48,197 42,028 (6,169) The year to date variance is mainly due an under-recovery of berthing income in Piers and Harbours, delay in the processing of recharges to capital within Roads, Housing expenditure incurred in advance of grants being received as well as an overspend in Fleet due to a timing difference between expenditure occurring and recharging services. Social Work 46,703 46,658 (45) The year to date overspend is mainly due to the use of agency staff across Homecare and Older People Residential Units in Adult Services. Central Budgets 6,765 6,333 (432) The year to date overspend can be attributed to profiling issues. Funding (196,006) (196,006) 0 Total Net Expenditure 5,630 (1,094) (6,724)
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Further information on the departmental year to date variances is included later on in the report. 0% 25% 50% 75% 100% Chief Executive's Unit Executive Director (Kirsty Flanagan) Executive Director (Douglas Hendry) Social W ork Central Budgets TOTAL Expenditure to date against the remaining budget for each Department YTD Actual £000 Remaining Budget £000
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OBJECTIVE SUMMARY – OVERALL COUNCIL POSITION AS AT 31 DECEMBER 2023 YTD Actual YTD Budget YTD Variance Variance Annual Budget Forecast Outturn Forecast Variance Variance £'000 £'000 £'000 % £'000 £'000 £'000 % Departmental Budgets Chief Executive's Unit 897 938 41 4.4% 1,177 1,177 0 0.0% Executive Director (Douglas Hendry) 99,074 98,955 (119) (0.1%) 133,044 132,856 188 0.1% Executive Director (Kirsty Flanagan) 48,197 42,028 (6,169) (14.7%) 56,363 57,303 (940) (1.7%) Social Work 46,703 46,658 (45) (0.1%) 76,117 76,117 0 0.0% Total Departmental Budgets 194,871 188,579 (6,292) (3.3%) 266,701 267,453 (752) (0.3%) Central Budgets Other Operating Income and Expenditure (1,060) (1,436) (376) 26.2% 3,874 3,874 0 0.0% Joint Boards 1,015 993 (22) (2.2%) 1,396 1,396 0 0.0% Non-Controllable Costs 6,810 6,776 (34) (0.5%) 21,908 21,434 474 2.2% Total Central Budgets 6,765 6,333 (432) (6.8%) 27,178 26,704 474 1.7% TOTAL NET EXPENDITURE 201,636 194,912 (6,724) (3.5%) 293,879 294,157 (278) (0.1%) Financed By Aggregate External Finance (142,863) (142,863) 0 0.0% (227,021) (227,021) 0 0.0% Local Tax Requirement (53,143) (53,143) 0 0.0% (59,301) (59,488) 187 (0.3%) Contributions to General Fund 0 0 0 0.0% (1,525) (1,525) 0 0.0% Earmarked Reserves 0 0 0 0.0% (6,032) (6,032) 0 0.0% Total Funding (196,006) (196,006) 0 0.0% (293,879) (294,066) 187 (0.1%) (Deficit)/Surplus for Period 5,630 (1,094) (6,724) 0 91 (91) CURRENT PROJECTED FINAL OUTTURNYEAR TO DATE POSITION
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SUBJECTIVE SUMMARY – OVERALL COUNCIL POSITION AS AT 31 DECEMBER 2023 YTD Actual YTD Budget YTD Variance Variance Annual Budget Forecast Outturn Forecast Variance Variance £'000 £'000 £'000 % £'000 £'000 £'000 % Subjective Category Employee Expenses 137,133 135,936 (1,197) (0.9%) 190,431 190,885 (454) (0.2%) Premises Related Expenditure 14,818 13,987 (831) (5.9%) 20,612 20,568 44 0.2% Supplies and Services 19,679 18,209 (1,470) (8.1%) 25,504 26,131 (627) (2.5%) Transport Related Expenditure 10,119 9,225 (894) (9.7%) 17,792 17,678 114 0.6% Third Party Payments 120,664 117,558 (3,106) (2.6%) 173,251 174,179 (928) (0.5%) Capital Financing 3,314 0 (3,314) 15,208 15,428 (220) (1.5%) TOTAL EXPENDITURE 305,727 294,915 (10,812) (3.7%) 442,798 444,869 (2,071) (0.5%) Income (300,097) (296,009) 4,088 (1.4%) (442,798) (444,778) 1,980 (0.5%) (Deficit)/Surplus for Period 5,630 (1,094) (6,724) 0 91 (91) YEAR TO DATE POSITION CURRENT PROJECTED FINAL OUTTURN YTD is year to date and represents the actual or budgeted expenditure and income for the financial year so far. Forecast Outturn is the estimate now of what expenditure or income will be for the whole of the financial year. The Variance is the difference between budget and actual or forecast outturn. A positive variance is when actual or forecast expenditure is less than budget or actual or forecast income is more than budget. A negative variance is shown in brackets and is when actual or forecast expenditure is more than budget or actual or forecast income is less than budget.
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CHIEF EXECUTIVE’S UNIT – AS AT 31 DECEMBER 2023 The department is currently forecasting spend in line with budget. The department has a year to date underspend of £0.041m (4.4%) which can be attributed to profiling issues. Forecast Outturn Position Service Annual Budget £000 Forecast Outturn £000 Current Forecast Variance £000 Previous Forecast Variance £000 Change £000 Chief Executive 1,177 1,177 0 0 0 Totals 1,177 1,177 0 0 0 Year to Date Position Key Financial Successes: • All savings options have been delivered. • The department’s 2022-23 outturn position was an underspend of £0.017m. This resulted from an overall underspend of £0.087m offset by earmarking of £0.070m due to auto-carry forwards including unspent grants and third party contributions. Key Financial Challenges: Proposed Actions to address Financial Challenges: To continue to deliver a high-quality service to support community engagement and participation. Regular monitoring, reflection and improvement cycle on service provision to ensure most efficient use of staffing and financial resources to meet national and local policy requirements for quality engagement. 0% 25% 50% 75% 100% Chief Executive Expenditure to date against the remaining budget for each Service YTD Actual £000 Remaining Budget £000
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To continue to deliver a high quality support service function to community organisations and community planning partners during a time of challenge arising from continuing reductions in funding. Seek to work in partnership with third sector organisations such as the TSI in Argyll and Bute to efficiently deliver full package of support to community organisations. Within the partnership working of the CPP we seek to establish working groups and collate resources within this to deliver high quality solutions to identified needs. Demands for funding from community applications to the Supporting Communities Fund higher than available annual funds by about 40%. Continue to monitor fund criteria adapting this to align with priority outcomes for Argyll & Bute and continue to support groups to seek alternative sources of funding from our database of funding providers.
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CHIEF EXECUTIVE’S UNIT – OBJECTIVE SUMMARY AS AT 31 DECEMBER 2023 Service Area YTD Actual £000 YTD Budget £000 YTD Variance £000 % Variance Annual Budget £000 Forecast Outturn £000 Forecast Variance £000 % Variance Explanation Chief Executive 307 304 (3) (1.0%) 421 421 0 0.0% Outwith Reporting Criteria Community Planning & Development 590 634 44 6.9% 756 756 0 0.0% Outwith Reporting Criteria 897 938 41 4.4% 1,177 1,177 0 0.0% YTD is year to date and represents the actual or budgeted expenditure and income for the financial year so far. Forecast Outturn is the estimate now of what expenditure or income will be for the whole of the financial year. The Variance is the difference between budget and actual or forecast outturn. A positive variance is when actual or forecast expenditure is less than budget or actual or forecast income is more than budget. A negative variance is shown in brackets and is when actual or forecast expenditure is more than budget or actual or forecast income is less than budget. An explanation is given for any variance which exceeds £50,000 or 10%.
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CHIEF EXECUTIVE’S UNIT – SUBJECTIVE SUMMARY AS AT 31 DECEMBER 2023 Subjective Category YTD Actual £000 YTD Budget £000 YTD Variance £000 % Variance Annual Budget £000 Forecast Outturn £000 Forecast Variance £000 % Variance Explanation Employee 667 666 (1) (0.2%) 924 924 0 0.0% Outwith Reporting Criteria Supplies and Services 8 9 1 11.1% 12 12 0 0.0% Accumulation of underspends across a range of account codes Transport 6 11 5 45.5% 14 14 0 0.0% Underspend on staff travel budgets Third Party 278 289 11 3.8% 294 294 0 0.0% Outwith Reporting Criteria Income (62) (37) 25 (67.6%) (67) (67) 0 0.0% Unbudgeted income received from Bord Na Gaidhlig to fund a new post within Gaelic Development. The budgets will be adjusted in January period to recognise the income / expenditure for the post. Totals 897 938 41 4.4% 1,177 1,177 0 0.0% YTD is year to date and represents the actual or budgeted expenditure and income for the financial year so far. Forecast Outturn is the estimate now of what expenditure or income will be for the whole of the financial year. The Variance is the difference between budget and actual or forecast outturn. A positive variance is when actual or forecast expenditure is less than budget or actual or forecast income is more than budget. A negative variance is shown in brackets and is when actual or forecast expenditure is more than budget or actual or forecast income is less than budget. An explanation is given for any variance which exceeds £50,000 or 10%.
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CHIEF EXECUTIVE’S UNIT – RED VARIANCES AS AT 31 DECEMBER 2023 Service Area Annual Budget £000 Forecast Outturn £000 Forecast Variance £000 % Variance Explanation 0 0.0% A red variance is a forecast variance which is greater than +/- £50,000.
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EXECUTIVE DIRECTOR (DOUGLAS HENDRY) – AS AT 31 DECEMBER 2023 The department is currently forecasting an under spend of £0.188m (0.1%) which is due to slippage in the utilisation of Scottish Government 100 day promise funding and historic water refunds, offset by an overspend within Residential School Budgets due to a higher than budgeted demand for the service. The department has a year to date (YTD) overspend of £0.119m (0.1%). The YTD position is due to overspends within the Residential School Budget, under recovery of commercial income and various budget profiles that require to be refined. These overspends are partially offset by slippage in 100 day promise funding and historic water refunds. Forecast Outturn Position Service Annual Budget £000 Forecast Outturn £000 Current Forecast Variance £000 Previous Forecast Variance £000 Change £000 Executive Director (Douglas Hendry) 452 452 0 0 0 Head of Commercial Services 11,654 11,654 0 0 0 Head of Education 105,006 104,986 20 91 (71) Head of Legal and Regulatory Support 15,932 15,764 168 0 168 Totals 133,044 132,856 188 91 97 Year to Date Position Key Financial Successes: The 2022-23 year-end consolidated outturn position was an under spend of £2.202m after adjusting for automatic earmarking. Contributing factors included: • Effective contract management of NPDO and Hub School contracts, including a lower-than-expected insurance premium as a result of the annual renegotiation of insurance costs. 0% 25% 50% 75% 100% Executive Director (Douglas Hendry) Head of Commercial Services Head of Education Head of Legal and Regulatory Support Expenditure to date against the remaining budget for each Service YTD Actual £000 Remaining Budget £000
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• Successful negotiations with utility suppliers achieved both historic water charge refunds and ongoing reductions to water rates. • Implementation of NDEEF project resulting in recurring annual saving in utilities and a significant contribution to meeting Net Zero targets. • Income generation within Early Years. • Increased rental income within One Council Property. Key Financial Challenges: Proposed Actions to address Financial Challenges: The legacy impact of COVID-19 on our young learners has led to an increased demand on the additional support need functions of the Education Service in response to the growing health and wellbeing needs of our young people and their families. Analysis and review of delivery models, robust costings of any service redesign required and continual monitoring of associated budgets Impact of the current cost of living crisis on the cost of the school day for learners and their families. Work with schools to ensure effective use of PEF to close the poverty related attainment gap and identify other funding sources to ensure equity of experience for all children. Impact of the current cost of living crisis on uptake in demand led service areas like catering, design services and licensing. Continually refine/develop systems to accurately forecast outturns and the impact on the future financial outlook. Strategies in place to redesign services in line with future demand. Ensure that Catering and Cleaning Services remain efficient and effective given the requirement to increase free school meal provision for P6/7 and Early Years, the impact of high inflation on produce and a requirement to adhere to the Statutory Guidance supporting Nutritional Requirements for Food and Drink in Schools (Scotland) Regulations 2020. Support a longer-term service re-design project, including collaborative working with partners and cross department support with implementation of revised service delivery models. Continual monitoring and review of costs and budgets, ensuring that any efficiencies and savings are secured for the Council Manage delivery of legislative/policy requirements that may not be fully funded by Scottish Government therefore placing additional burdens on the Council, for example, expansion of Universal Free School Meals for P6 and 7s. Analysis of new obligations and whether they incur additional costs not met through increased funding allocations. Work will be designed and implemented in the most effective way within resource availability. The Council has a requirement to deliver 1140 hours of Early Learning and Childcare (ELC). The ring-fenced grant was reduced in 2022-23 and again this year, reducing funding by £1.478m. Robust service costings, financial monitoring and timely reporting to ensure the service can be delivered within the financial resources available. Medium term forecasting on population to shape ongoing service redesign. Analysis of potential to extend income generation using “spare” capacity to trial paid care for under 2’s Impact of high inflationary uplifts within the NPDO/HUB School contracts. Ensuring continued effective contract management of NPDO/HUB Schools to minimise the impact of high inflationary uplifts.
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EXECUTIVE DIRECTOR (DOUGLAS HENDRY) – OBJECTIVE SUMMARY AS AT 31 DECEMBER 2023 Service Service Area YTD Actual £000 YTD Budget £000 YTD Variance £000 % Variance Annual Budget £000 Forecast Outturn £000 Forecast Variance £000 % Variance Explanation Executive Director (Douglas Hendry) Central/Management Costs 290 291 1 0.3% 452 452 0 0.0% Outwith Reporting Criteria 290 291 1 0.3% 452 452 0 0.0% Head of Commercial Services Catering 846 747 (99) (13.3%) 1,265 1,265 0 0.0% The YTD overspend is due to the timing of income and expenditure. Head of Commercial Services Central/Management Costs 1,133 1,060 (73) (6.9%) 1,728 1,728 0 0.0% The YTD overspend is due to the timing of income and expenditure. Head of Commercial Services CHORD 110 75 (35) (46.7%) 63 63 0 0.0% The YTD overspend is due to the timing of recharges to capital. Head of Commercial Services Cleaning 45 258 213 82.6% 481 481 0 0.0% The YTD underspend is due to the timing of recharges for cleaning and the reduced use of bank staff. Head of Commercial Services Culture, Heritage, Recreation & Sport 4,541 4,391 (150) (3.4%) 5,980 5,980 0 0.0% The YTD overspend is due to the profiling of utilities and CRA budgets. Head of Commercial Services Events & Commercial Catering 294 7 (287) (4100.0%) 3 3 0 0.0% The YTD overspend is due to an under recovery of income and high staff costs within Commercial Cafés and Events. The new senior manager is currently working with finance reviewing the current business model. Head of Commercial Services Property Portfolio (185) (124) 61 (49.2%) (191) (191) 0 0.0% The YTD underspend is due to the timing of One Council Property income. Head of Commercial Services Property Services 188 766 578 75.5% 817 817 0 0.0% The YTD underspend is due to the receipt of historic water charge refunds and the profile of property fee income. Head of Commercial Services Shared Offices 900 850 (50) (5.9%) 1,508 1,508 0 0.0% The YTD overspend is due to the profiling of refuse collection recharges.
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7,872 8,030 158 2.0% 11,654 11,654 0 0.0% Head of Education Additional Support for Learning 8,304 8,212 (92) (1.1%) 11,625 11,625 0 0.0% The main contributing factor to the YTD overspend is the budget profile relating to the pay award costs for ASN Assistants. Head of Education Central/Management Costs 1,797 1,720 (77) (4.5%) 2,325 2,325 0 0.0% The YTD position is due to overspends in Licence fees, profiling that requires refining, partially offset by a number of small underspends elsewhere within the service. Head of Education Community Learning & Development 5 3 (2) (66.7%) 13 13 0 0.0% The YTD overspend is within the Central Repairs Account (CRA) which is managed across the Service and is profile related. Head of Education COVID 109 112 3 2.7% 136 136 0 0.0% Outwith Reporting Criteria Head of Education Early Learning & Childcare 5,273 5,353 80 1.5% 9,993 9,993 0 0.0% The main contributing factor for the YTD underspend is due to delays in recruitment within ELC settings. This is partially offset by a YTD overspend in the 1140 Hours budget which will be rectified through a drawdown from Earmarked Reserves. Head of Education Primary Education 29,057 28,699 (358) (1.3%) 38,133 38,133 0 0.0% The YTD position is due to overspends in the school adaptations and maintenance budget due to a higher level of minor repairs than budget allows, some of which will be covered from earmarkings and the remainder offset by underspends elsewhere. Additionally, profiling of cleaning and grounds maintenance recharges requires refining. There is also a YTD under-recovery in school meal income and YTD overspend in teacher cover costs for which journals require to be processed. These overspends are partially offset by a YTD underspend in PEF.
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Head of Education Pupil Support 1,881 1,778 (103) (5.8%) 2,636 3,016 (380) (14.4%) The YTD overspend in the Schools Residential Budget is due to a higher demand for service than budget allows. A forecast variance of £380k has been recorded through the ledger reflecting this position. The YTD overspend is partially offset by an underspend in Psychological Services which is profile-related. Head of Education Schools - Central Services 1,372 1,364 (8) (0.6%) 2,393 1,993 400 16.7% Outwith Reporting Criteria Head of Education Secondary Education 28,370 28,196 (174) (0.6%) 37,752 37,752 0 0.0% The YTD position is due to overspends in the school adaptations and maintenance budget due to a higher level of minor repairs than budget allows, some of which will be covered from earmarkings and the remainder offset by underspends elsewhere. Additionally, profiling of cleaning and grounds maintenance recharges requires refining. There is also a YTD under-recovery in Education Maintenance Allowance and school meal income for which journals require to be processed. These overspends are partially offset by a YTD underspend in PEF. 76,168 75,437 (731) (1.0%) 105,006 104,986 20 0.0% Head of Legal & Regulatory Support Central/Management Costs 193 184 (9) (4.9%) 271 271 0 0.0% Outwith Reporting Criteria Head of Legal & Regulatory Support Community Safety 131 126 (5) (4.0%) 185 185 0 0.0% Outwith Reporting Criteria Head of Legal & Regulatory Support Elections 42 9 (33) (366.7%) 37 37 0 0.0% The YTD overspend is due to the current budget profile.
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Head of Legal & Regulatory Support Governance 552 438 (114) (26.0%) 726 726 0 0.0% The YTD overspend is due to spend on Council Chambers ICT Equipment for which earmarked reserves are to be drawn down. Head of Legal & Regulatory Support Governance, Risk & Safety 414 412 (2) (0.5%) 581 581 0 0.0% Outwith Reporting Criteria Head of Legal & Regulatory Support Legal Services 359 399 40 10.0% 749 749 0 0.0% The YTD underspend is due to delays in recruitment and the over-recovery of licencing income. Head of Legal & Regulatory Support NPDO and Hub Schools 11,824 12,316 492 4.0% 11,481 11,313 168 1.5% The YTD underspend is partially due to the receipt of historic water charge refunds and a forecast variance has been processed for £168k to reflect this. The remaining underspend is due to the timing of income and expenditure. Head of Legal & Regulatory Support Procurement, Commercial and Contract Management 766 827 61 7.4% 1,218 1,218 0 0.0% The YTD underspend is due to delays in recruitment. Head of Legal & Regulatory Support Trading Standards & Advice Services 463 486 23 4.7% 684 684 0 0.0% Outwith Reporting Criteria 14,744 15,197 453 3.0% 15,932 15,764 168 1.1% 99,074 98,955 (119) (0.1%) 133,044 132,856 188 0.1% YTD is year to date and represents the actual or budgeted expenditure and income for the financial year so far. Forecast Outturn is the estimate now of what expenditure or income will be for the whole of the financial year. The Variance is the difference between budget and actual or forecast outturn. A positive variance is when actual or forecast expenditure is less than budget or actual or forecast income is more than budget. A negative variance is shown in brackets and is when actual or forecast expenditure is more than budget or actual or forecast income is less than budget. An explanation is given for any variance which exceeds £50,000 or 10%.
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EXECUTIVE DIRECTOR (DOUGLAS HENDRY) – SUBJECTIVE SUMMARY AS AT 31 DECEMBER 2023 Subjective Category YTD Actual £000 YTD Budget £000 YTD Variance £000 % Variance Annual Budget £000 Forecast Outturn £000 Forecast Variance £000 % Variance Explanation Employee 76,419 76,746 327 0.4% 106,222 105,822 400 0.4% Non-Education: The YTD underspend of £42k is due to delays in recruitment. Education: The £285k YTD underspend is mainly within staffing budgets in ELC settings, Secondary Schools and Learning Centres. Under the Scheme of Devolved School Management (DSM) schools are permitted flexibility at year end, therefore no forecast variance will be processed in relation to any remaining underspend. Premises 6,540 5,835 (705) (12.1%) 8,467 8,299 168 2.0% Non-Education: The YTD underspend of £107k is largely due to historic water charge refunds. Education: The £812k overspend is mainly due to repairs and maintenance costs within schools and capital costs relating to 1140 Hours expansion - £200k from earmarked reserves will be drawn down to cover a proportion of this. £131k is due to Utilities profiling and £120k is due to profiling of cleaning, grounds maintenance and CRA budgets. The remainder is offset by underspends elsewhere. Supplies and Services 9,264 9,730 466 4.8% 13,497 13,497 0 0.0% Non-Education: The YTD overspend is £193k. Earmarked reserves to be drawn down for costs of Council Chambers ICT Equipment. Education: The £659k underspend is mainly due to underspends in PEF due to profiling and school budgets. Under the Scheme of Devolved School Management (DSM) schools are permitted flexibility at year end, therefore no forecast variance has been processed in relation to this. Transport 297 293 (4) (1.4%) 397 397 0 0.0% Non-Education: Outwith Reporting Criteria. Education: Outwith Reporting Criteria. Third Party 31,524 31,666 142 0.5% 41,797 42,177 (380) (0.9%) Non-Education: The YTD underspend of £260k is largely due to the timing of large payments in respect of NPDO/Hub contracts and the timing of recharges. Education: The YTD overspend of £118k is due to increased demand within Schools Residential Accommodation.
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Income (24,970) (25,315) (345) 1.4% (37,336) (37,336) 0 0.0% Non-Education: The YTD over-recovery of income of £411k is due to the timing of school catering recharges and Property Fee income. Education: The under-recovery of income of £756k is due to the profile of income for Education Maintenance Allowances and school meals. Journals at year end are required to reduce this variance. Totals 99,074 98,955 (119) (0.1%) 133,044 132,856 188 0.1% YTD is year to date and represents the actual or budgeted expenditure and income for the financial year so far. Forecast Outturn is the estimate now of what expenditure or income will be for the whole of the financial year. The Variance is the difference between budget and actual or forecast outturn. A positive variance is when actual or forecast expenditure is less than budget or actual or forecast income is more than budget. A negative variance is shown in brackets and is when actual or forecast expenditure is more than budget or actual or forecast income is less than budget. An explanation is given for any variance which exceeds £50,000 or 10%.
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EXECUTIVE DIRECTOR (DOUGLAS HENDRY) – RED VARIANCES AS AT 31 DECEMBER 2023 Service Area Annual Budget £000 Forecast Outturn £000 Forecast Variance £000 % Variance Explanation Education - Pupil Support 2,636 3,016 (380) (14.4%) Higher than budgeted demand for placements within Residential Schools. Education - Schools Central Services 2,393 1,993 400 16.7% Slippage in the use of 100 day promise funding for additional teachers and support staff that will be fully utilised in 2024-25. Legal and Regulatory Support - NPDO and Hub Schools 11,484 11,316 168 1.5% Historic water charges refund paid to NPDO Schools A red variance is a forecast variance which is greater than +/- £50,000.
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EXECUTIVE DIRECTOR (KIRSTY FLANAGAN) – AS AT 31 DECEMBER 2023 The department has a forecast overspend of £0.940m (1.7%). This is due to an under-recovery of income in Piers & Harbours as a result of a reduced number of berthings, in Public Conveniences due to the delayed installation of turnstiles, Print & Mail Room due to a shift to digital communication channels resulting in a reduction in printing activity, reduction in Building Warrant and Fish Export Certificate income and on TROs in Roads. This is combined with overspends on Pupil Transport driver/escort costs, Temporary Accommodation for Housing Homeless, Legal costs in Environmental Health, Street Lighting Maintenance, staff costs in Amenities due to high sickness and turnover levels and an unachievable saving in relation to Depot Rationalisation. These are partially offset by an over-recovery of vacancy savings, an underspend in Public Transport payments to operators, underspend in ICT software licences and an underspend in training for A&B Manager courses. The department has a year to date overspend of £6.169m (14.7%). This is mainly due an under-recovery of berthing income in Piers and Harbours, delays in the processing of recharges to capital within Roads, Housing expenditure incurred in advance of grants being received and an overspend in Fleet due to a timing difference between expenditure occurring and recharging services. Forecast Outturn Position Year to Date Position Service Annual Budget £000 Forecast Outturn £000 Current Forecast Variance £000 Previous Forecast Variance £000 Change £000 Executive Director (Kirsty Flanagan) 524 (88) 612 601 11 Head of Customer Support Services 9,061 9,050 11 11 0 Head of Development and Economic Growth 8,370 8,676 (306) (150) (156) Head of Financial Services 6,682 6,682 0 (210) 210 Head of Roads and Infrastructure Services 31,726 32,983 (1,257) (1,257) 0 Totals 56,363 57,303 (940) (1,005) 65 0% 25% 50% 75% 100% Executive Director (Kirsty Flanagan) Head of Customer Support Services Head of Development and Economic Growth Head of Financial Services Head of Roads and Infrastructure Services Expenditure to date against the remaining budget for each Service YTD Actual £000 Remaining Budget £000
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Key Financial Successes: During 2022-23 the department had an over-recovery of Planning Fee and Building Warrant income, an over-recovery of NDR commission due to a successful debt recovery campaign during the year (which focussed on high level debts) plus an over recovery of vacancy savings. Key Financial Challenges: Proposed Actions to address Financial Challenges: Ensuring that services spend to budget and do not overspend after the department had an overspend of £1.5m after automatic earmarkings in 2022-23. Detailed monitoring in the key areas overspent in 2022-23 to flag up concerns early and mitigate before becoming an overspend. Department / Service ongoing ability to meet future savings / efficiency requirements. Monitoring of trends / expenditure levels / service configuration and the Service Packages Policy Options savings process. Rising cost of materials, software and consultancy services across the service will result in a reduction in activity or overspends. Costs are monitored regularly and contained as much as possible with any unavoidable overspends highlighted as soon as known. Financial Services to continue to deliver a high-quality support service function during a time of substantial uncertainty and challenge arising from continuing reductions in funding whilst costs are increasing due to ongoing high levels of inflation and service demand caused by world events. Ensure the team is operating as efficiently and effectively as possible by building resilience across the team and working collaboratively with other services of the Council to support evidence-based decision making. Carry out the improvements identified during the Revenue and Benefits Business Process Review to maximise income generation and deliver efficiencies in service provision. Winter Maintenance costs are difficult to estimate as they are very much dependant on the weather. Close monitoring of Winter Maintenance activity and reporting of the financial implications through the budget monitoring process. The Council agreed the winter policy, setting out the intervention level and locations to be treated. The number of treatments is determined by weather conditions. The current budget provision provides for 58 full equivalent runs. There is a sophisticated weather monitoring system in place consisting of several weather stations, this is supported by a forecasting and meteorological service which is collaboratively procured by West of Scotland local authorities. Dangerous buildings costs as there is no budget for this expenditure and the council has no control over the demand for the service. Building Standards, Legal Services and Financial Services are working closely to manage debt recovery and to consider other options to minimise corporate risk exposure.
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Due to the nature of the various components of Waste Management there are ongoing challenges with: • The introduction of the Deposit Return Scheme • Uncertainty with recycling income/ gate fee costs due to the volatility of the market • Challenges in the legislative changes around the disposal of Biodegradable Municipal Waste To closely monitor all service components of Waste Management and review the Waste Strategy in conjunction with our contractual partner Renewi (previously Shanks).
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EXECUTIVE DIRECTOR (KIRSTY FLANAGAN) – OBJECTIVE SUMMARY AS AT 31 DECEMBER 2023 Service Service Area YTD Actual £000 YTD Budget £000 YTD Variance £000 % Variance Annual Budget £000 Forecast Outturn £000 Forecast Variance £000 % Variance Explanation Executive Director (Kirsty Flanagan) Central/Management Costs 245 143 (102) (71.3%) 524 (88) 612 116.8% Based on the YTD vacancy savings recovered, it is currently anticipated that an over recovery is likely to be achieved in the region of £400K. There is also a forecast underspend due to the receipt of funding for ferries previously funded internally of £212k. 245 143 (102) (71.3%) 524 (88) 612 116.8% Head of Customer Support Services Central/Management Costs 113 129 16 12.4% 174 174 0 0.0% Underspend on payments to other bodies due to the timing of payments. Head of Customer Support Services Communications 192 233 41 17.6% 324 324 0 0.0% Underspend in employee costs due to vacancies which will be used to cover future consultancy costs. Head of Customer Support Services Customer Service Centres 1,112 1,056 (56) (5.3%) 1,522 1,585 (63) (4.1%) Under-recovery of income for recharges for Print and Mail Room. Shift to digital communication channels resulting in reduction in mail and printing activity but same recharge model being applied. Cost pressure to be added for future years to accommodate these changes. Head of Customer Support Services HR 1,958 2,008 50 2.5% 2,678 2,648 30 1.1% Underspend due to pausing Argyll and Bute Manager programme and not having to purchase training modules Head of Customer Support Services ICT 3,024 2,936 (88) (3.0%) 4,307 4,263 44 1.0% Underspend projected for software licence purchases. Head of Customer Support Services Registrars 28 28 0 0.0% 56 56 0 0.0% Outwith Reporting Criteria. 6,427 6,390 (37) (0.6%) 9,061 9,050 11 0.1%
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Head of Development & Economic Growth Airports 954 922 (32) (3.5%) 1,210 1,210 0 0.0% Outwith Reporting Criteria. Head of Development & Economic Growth Building Control (140) (157) (17) 10.8% (144) (94) (50) 34.7% Under-recovery of building warrant income. Head of Development & Economic Growth Central/Management Costs 422 399 (23) (5.8%) 579 579 0 0.0% Outwith Reporting Criteria. Head of Development & Economic Growth Culture & Heritage 117 162 45 27.8% 228 228 0 0.0% Underspend due to Rothesay Pavilion not being open - budget will be earmarked for future costs once operational. Head of Development & Economic Growth Development Management 119 168 49 29.2% 315 315 0 0.0% Over-recovery of planning fee income due to one-off high value planning applications. Head of Development & Economic Growth Development Policy 290 281 (9) (3.2%) 392 392 0 0.0% Outwith Reporting Criteria. Head of Development & Economic Growth Economic Development 827 1,270 443 34.9% 1,150 1,150 0 0.0% Underspend is due to grant income received in advance of expenditure which is partially offset against expenditure that requires draw down from earmarked reserves. Head of Development & Economic Growth Environmental Health 903 777 (126) (16.2%) 1,188 1,294 (106) (8.9%) Overspend due to reduction in Fish Export Certificate income Head of Development & Economic Growth Environmental Initiatives 88 86 (2) (2.3%) 120 120 0 0.0% Outwith Reporting Criteria. Head of Development & Economic Growth Housing 3,887 3,362 (525) (15.6%) 3,096 3,246 (150) (4.8%) Overspend reflects demand for the provision of homeless accommodation which is being met using Bed and Breakfast establishments. Head of Development & Economic Growth Private Landlords (314) 0 314 0.0% 0 0 0 0.0% Underspend is due to income for Private Landlord Registration fees received against a zero budget. Head of Development & Economic Growth Transportation Policy 372 169 (203) (120.1%) 236 236 0 0.0% Overspend is due to expenditure for SUSTRANS and CWSR
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incurred in advance of grant claim. 7,525 7,439 (86) (1.2%) 8,370 8,676 (306) (3.7%) Head of Financial Services Accounting & Budgeting 1,901 1,921 20 1.0% 2,672 2,672 0 0.0% Outwith Reporting Criteria. Head of Financial Services Internal Audit & Fraud 242 249 7 2.8% 338 338 0 0.0% Outwith Reporting Criteria. Head of Financial Services Revenues & Benefits 2,288 2,410 122 5.1% 3,023 3,023 0 0.0% Underspend is due to Benefits Admin Government Grants received ahead of profile & over- recovery of Council Tax Water and sewage collection income due to a new billing order bringing in more income than budget. Head of Financial Services Scottish Welfare Fund 602 624 22 3.5% 649 649 0 0.0% Outwith Reporting Criteria. 5,033 5,204 171 3.3% 6,682 6,682 0 0.0% Head of Roads & Infrastructure Services Amenity 3,021 2,728 (293) (10.7%) 3,248 3,367 (119) (3.7%) Forecast variance relates to overspend across amenities for use of roads staff to cover vacancies and sickness (£85K), under-recovery of hire of facilities income (£28K) and public convenience income due to delay with fitting of door charging mechanism (£40K). There is also a high risk of a CRA overspend in Parks CRA, no forecast variance entered to date pending proposed CRA spend across RIS. At this stage there is an anticipated over- recovery of crematorium income of £34K. YTD variance higher than Forecast Variance mainly due to budget profile out of alignment with actuals particularly with Cemeteries and Crematoria income which is difficult to profile due to the nature of the service. Also payroll variance as pay award
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exceeds payroll budget allocated. Head of Roads & Infrastructure Services Car Parking (292) (456) (164) 36.0% (582) (582) 0 0.0% Overspend due to timing of income for Electric Vehicle Chargers where electricity is paid in advance of receiving the income which should be rectified over the financial year. Head of Roads & Infrastructure Services Central/Management Costs 2,606 2,384 (222) (9.3%) 3,013 3,013 0 0.0% Overspend is due to the profile of the income budget which will be rectified by the end of the year as well as costs for the RIS Review Consultants which will be met from a drawdown from earmarked reserves. Head of Roads & Infrastructure Services Depots 303 241 (62) (25.7%) (429) (321) (108) 25.2% Delay in rental income and timing of expenditure causing small overspend which will be rectified over the financial year. Forecast variance due to saving for Depot Rationalisation no longer being achievable in year. Head of Roads & Infrastructure Services Fleet & Transport 7,008 6,320 (688) (10.9%) 8,624 8,666 (42) (0.5%) Overspend due to the timing of Fleet recharges to other services. Forecast variance for overspend for additional Pupil Transport costs which is partially offset against an underspend in Public Transport due to a reduction in payments to operators. Head of Roads & Infrastructure Services Infrastructure 286 539 253 46.9% 763 763 0 0.0% Underspend due to the timing of Flood and Coastal Protection works which will be rectified over the financial year.
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Head of Roads & Infrastructure Services Marine (3,309) (5,125) (1,816) 35.4% (4,350) (3,500) (850) 19.5% YTD variance higher than projection due to timing of cash flow in comparison to profiling of budget and delay in receiving grant from Transport Scotland. Forecast overspend due to the under-recovery of income from Berthing charges and additional employee costs to cover absence. Head of Roads & Infrastructure Services Network & Traffic Management 180 66 (114) (172.7%) 129 179 (50) (38.8%) Forecast overspend due to the under recovery of TRO income based on current shortfalls in income to date and prior years' total income. Head of Roads & Infrastructure Services Road Safety 82 92 10 10.9% 88 88 0 0.0% Small underspend due to the timing of PPE purchases. Head of Roads & Infrastructure Services Roads & Lighting 10,361 7,422 (2,939) (39.6%) 7,092 7,180 (88) (1.2%) YTD overspend due to the timing of income in comparison to the profiling of the budget, mainly due to a delay in recharges for capital funded activity which will be rectified over the financial year. Forecast variance for overspend in Street Lighting due to increased levels of maintenance required to meet the service's responsibilities. Head of Roads & Infrastructure Services Waste 8,721 8,641 (80) (0.9%) 14,130 14,130 0 0.0% YTD variance mainly relates to private contractor costs, including co-mingled gate fee and H&L residual waste, partly due to profiling of budget and anticipated tonnages reductions over winter months. Also payroll variance partly due to pay award exceeding payroll budget allocated (including overtime arrears). 28,967 22,852 (6,115) (26.8%) 31,726 32,983 (1,257) (4.0%) 48,197 42,028 (6,169) (14.7%) 56,363 57,303 (940) (1.7%)
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YTD is year to date and represents the actual or budgeted expenditure and income for the financial year so far. Forecast Outturn is the estimate now of what expenditure or income will be for the whole of the financial year. The Variance is the difference between budget and actual or forecast outturn. A positive variance is when actual or forecast expenditure is less than budget or actual or forecast income is more than budget. A negative variance is shown in brackets and is when actual or forecast expenditure is more than budget or actual or forecast income is less than budget. An explanation is given for any variance which exceeds £50,000 or 10%.
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EXECUTIVE DIRECTOR (KIRSTY FLANAGAN) – SUBJECTIVE SUMMARY AS AT 31 DECEMBER 2023 Subjective Category YTD Actual £000 YTD Budget £000 YTD Variance £000 % Variance Annual Budget £000 Forecast Outturn £000 Forecast Variance £000 % Variance Explanation Employee 31,566 31,142 (424) (1.4%) 44,179 43,935 244 0.6% YTD overspend in Development Management due to additional staff whose costs will be offset against additional Planning income that will be received this financial year and additional costs in Marine to cover absences, Private Landlords which will be offset against income and within Pupil Transport. The forecast underspend relates to an over-recovery of vacancy savings, underspend on Staff Training Course Fees and additional funding received for ferries all partially offset by overspends in Marine, Pupil Transport and Depot costs due to a saving not being achieved in year. Premises 2,175 2,222 47 2.1% 3,447 3,447 0 0.0% Outwith Reporting Criteria. Supplies and Services 7,813 6,428 (1,385) (21.6%) 8,931 8,887 44 0.5% YTD overspend relates to Economic Development for expenditure that is funded from grant income; Purchase of Car Parking Machines that will be offset against budget sitting in Third Party Payments; costs for the new HR and Payroll system (covered from an earmarked reserve which will be drawn down later in the year) and materials in Roads that is offset against additional income for recharges to capital. Forecast variance for an underspend in ICT software licences. Transport 9,336 8,365 (971) (11.6%) 16,328 16,328 0 0.0% YTD overspend for vehicle repairs and maintenance in Fleet, which will be offset against additional income for recharges to the services and External Hires in Roads that will be offset against additional income for recharges to capital. Third Party 47,629 44,324 (3,305) (7.5%) 64,472 64,677 (205) (0.3%) YTD overspend within Economic Development, Transportation and Housing for expenditure that is funded from grant income. Additional external contractor costs in Roads that will be offset against additional income for recharges to capital. These overspends are partially offset against an underspend in Benefit Payments. Forecast variance relates to overspends in Street Lighting for maintenance costs, additional employee costs to cover absence and vacancies within Amenities and Housing Temporary Accommodation. These are partially offset by underspends in Public Transport payments to Bus Operators.
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Capital Financing 0 0 0 0.0% 2,398 2,398 0 0.0% Outwith Reporting Criteria. Income (50,322) (50,453) (131) 0.3% (83,392) (82,369) (1,023) 1.2% YTD under-recovery of income from Berthing charges in Piers and Harbours and Housing Benefit Income within Revenues & Benefits which is mainly offset against un- budgeted income in Economic Development and Housing, which will fund expenditure throughout the year. Forecast variance relates to the under-recovery of income in Piers and Harbour for Berthing, under-recovery of income from door entry systems within Public Conveniences and under-recovery of income from TROs, Building Warrants and Fish Export Certificates. Totals 48,197 42,028 (6,169) (14.7%) 56,363 57,303 (940) (1.7%) YTD is year to date and represents the actual or budgeted expenditure and income for the financial year so far. Forecast Outturn is the estimate now of what expenditure or income will be for the whole of the financial year. The Variance is the difference between budget and actual or forecast outturn. A positive variance is when actual or forecast expenditure is less than budget or actual or forecast income is more than budget. A negative variance is shown in brackets and is when actual or forecast expenditure is more than budget or actual or forecast income is less than budget. An explanation is given for any variance which exceeds £50,000 or 10%.
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EXECUTIVE DIRECTOR (KIRSTY FLANAGAN) – RED VARIANCES AS AT 31 DECEMBER 2023 Service Area Annual Budget £000 Forecast Outturn £000 Forecast Variance £000 % Variance Explanation Vacancy Savings (251) (651) 400 (159.4%) Over-recovery of vacancy savings. Public Transport 5,266 5,118 148 2.8% Underspend in Operator Payments. Pupil Transport 1,020 1,210 (190) (18.6%) Overspend in transport costs for drivers/escorts. Piers & Harbours (2,655) (1,905) (750) 28.2% Under-recovery of income from Berthing charges. Street Lighting 262 350 (88) (33.6%) Overspend on maintenance costs. Traffic Regulation Orders (110) (60) (50) 45.5% Under-recovery of income from Traffic Regulation Orders. Depots (108) 0 (108) 100.0% Proposed saving for Depot Rationalisation no longer being achievable in year. Central Management Costs 48 (153) 201 418.8% Underspend due to receipt of funding for ferries previously funded internally. Piers & Harbours 408 508 (100) (24.5%) Overspend in employee costs to cover absences. Housing 27 102 (75) (277.8%) Overspend for Temporary Accommodation costs in Homelessness. Environmental Health (128) (38) (90) 70.3% Reduction in Fish Export Cetificate income as a consequence of the UK leaving the EU. A red variance is a forecast variance which is greater than +/- £50,000.
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SOCIAL WORK – AS AT 31 DECEMBER 2023 The department is currently forecasting to break even at the end of the financial year. This is due to a combination of the over-recovery of vacancy savings, income from fees, charges and recharges and the use of non-recurring reserves to offset cost pressures due to high demand for services and the use of agency staff to fill staffing recruitment and retention gaps across Adult Services. The department has a year to date overspend of £0.045m (0.1%) which is mainly due to the use of agency staff across Homecare and Older People Residential Units in Adult Services. Forecast Outturn Position Service Annual Budget £000 Forecast Outturn £000 Current Forecast Variance £000 Previous Forecast Variance £000 Change £000 Chief Officer Integration 278 (183) 461 461 0 Head of Strategic Planning and Performance 480 472 8 8 0 Head of Health and Community Care 39,125 40,727 (1,602) (1,602) 0 Head of Acute and Complex Care 19,812 19,321 491 491 0 Head of Children and Families 16,422 15,780 642 642 0 Totals 76,117 76,117 0 0 0 Year to Date Position Key Financial Successes: Delivered an underspend of £3.556m at the end of 2022/23 after automatic earmarkings of £1.078m. The total underspend of £4.634m has been transferred to IJB reserves and should allow for future investment and transformation across Social Work. -60% -35% -10% 15% 40% 65% 90% 115% Chief Officer Integration Head of Adult Services Head of Children and Families Head of Strategic Planning and Performance Expenditure to date against the remaining budget for each Service YTD Actual £000 Remaining Budget £000
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Key Financial Challenges: Proposed Actions to address Financial Challenges: Deliver the outstanding savings total for 2023/24 of £0.621m (as at December 2023). Maintain a close working relationship with the HSCP Service Improvement Team to quickly and efficiently identify and assess options for delivering the outstanding savings. Development and delivery of future service redesigns which will be necessary to contain service expenditure within the allocated resource, noting that in year savings still need to be identified for 23/24 to address the 23/24 budget gap, as well as budget gaps in future years. Support from finance to assist strategic managers to develop and identify further savings and to look beyond the short term to identify and plan the changes which will be needed to address the expected ongoing budget challenges over the current, and future, years. Use of agency staff to support service delivery across Social Work, but particularly in Older People services, due to recruitment and retention challenges within the service. Year to date spend at December 2023 of £2.288m. Close working relationship with the HSCP to support the costing of a plan to stabilise the service and ensure it is operationally and financially sustainable. This includes an exit plan from the reliance on agency staff. Cost of living crisis affecting pay inflation negotiations and financial sustainability of service providers, which could affect affordability and sustainability of service delivery. Ensure emerging issues are highlighted as soon as possible so that the financial impact can be evaluated and reported through the budget monitoring and preparation processes.
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SOCIAL WORK – OBJECTIVE SUMMARY AS AT 31 DECEMBER 2023 Service Service Area YTD Actual £000 YTD Budget £000 YTD Variance £000 % Variance Annual Budget £000 Forecast Outturn £000 Forecast Variance £000 % Variance Explanation Chief Officer Integration Integration Headquarters 241 409 168 41.1% 569 577 (8) (1.4%) The YTD variance is as a result of timing differences on planned payments to NHS. The forecast variance is outwith reporting criteria. Chief Officer Integration Social Work Central Support (856) (579) 277 (47.8%) (291) (760) 469 (161.2%) The YTD variance is due to over-recovery on vacancy savings combined with underspends on centrally held funding. The forecast underspend is due to an over-recovery on vacancy savings (£248k) combined with underspends on centrally held funds, printing & stationery and postages. (615) (170) 445 (6.8%) 278 (183) 461 (162.6%) Head of Strategic Planning & Performance Management & Central Costs 314 312 (2) (0.6%) 446 447 (1) (0.2%) Outwith reporting criteria. Head of Strategic Planning & Performance Service Development 23 31 8 25.8% 34 25 9 26.5% The YTD and forecast variances are due to staff vacancies resulting in both a payroll underspend and an under-recovery on Charges to Health Boards. 337 343 6 25.2% 480 472 8 26.2% Head of Health and Community Care Management & Central Costs 422 896 474 52.9% 1,303 552 751 57.6% The YTD variance is mainly due to underspends on centrally held funds. The forecast underspend is mainly due to underspends on centrally held funds and staff vacancies. Head of Health and Community Care Older People 25,015 23,235 (1,780) (7.7%) 37,822 40,175 (2,353) (6.2%) The YTD variance reflects demand within the care home placement and homecare budgets and overspends on employee costs due to the use of agency staff in residential units and homecare. The forecast overspend reflects demand driven overspends within the care home placement budgets (£1.1m) and homecare (£1.6m). High staff costs across HSCP residential units due to agency cover are also contributing to forecast overspend. These overspends are partially offset by staffing underspends across ACM teams and
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underspends on payments to other services from the delayed discharge budgets. 25,437 24,131 (1,306) (5.4%) 39,125 40,727 (1,602) (4.1%) Head of Acute and Complex Care Learning Disabilities 7,014 7,447 433 5.8% 14,174 13,592 582 4.1% The YTD variance reflects demand for residential placements partially offset by demand for supported living. The forecast underspend reflects known demand for Residential Placements partially offset by overspends on Supported Living and Respite due to demand. Head of Acute and Complex Care Management & Central Costs 63 95 32 33.7% 130 102 28 21.5% Both the YTD and forecast variances are due to underspends in areas such as printing and stationary, travel and payments to other bodies. Head of Acute and Complex Care Mental Health 1,560 1,520 (40) (2.6%) 2,720 2,761 (41) (1.5%) Outwith reporting criteria. Head of Acute and Complex Care Physical Disability 1,800 1,746 (54) (3.1%) 2,788 2,866 (78) (2.8%) The YTD variance reflects demand for service within the supported living budgets and overspends on purchases within the IES store. This is partially offset by underspends in the residential budget. The forecast overspend reflects higher than budgeted demand for Supported Living and higher than budgeted equipment purchasing in the Integrated Equipment Service. These are offset slightly by a forecast underspends in the Residential Care budgets. 10,437 10,808 371 33.8% 19,812 19,321 491 21.3% Head of Children & Families Child Protection 2,326 2,507 181 7.2% 3,674 3,393 281 7.6% The YTD variance is as a result of payroll underspends due to vacancies as well as underspends on travel and subsistence combined with demand for services across contact & welfare. The forecast underspend is as a result of demand for contact and welfare services as well as forecast underspends in the Area Teams on payroll costs, payments to other bodies, travel and subsistence. Head of Children & Families Children with a Disability 681 648 (33) (5.1%) 983 1,026 (43) (4.4%) Outwith reporting criteria.
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Head of Children & Families Criminal Justice 192 193 1 0.5% 224 172 52 23.2% The YTD variance is outwith reporting criteria. The forecast underspend is due to vacancies within the Criminal Justice team. Head of Children & Families Looked After Children 5,596 5,830 234 4.0% 7,832 7,507 325 4.1% The YTD variance is as a result of demand for fostering, kinship and adoption placements as well as YTD over-recovery of income for provision of nursery meals. This is combined with payroll underspends due to vacancies and long term absence. The forecast underspend is as a result of demand for fostering, kinship and adoption placements as well as on supporting young people leaving care. There is also an over-recovery on income from the Home Office for unaccompanied asylum seeking children. This is all partially offset by demand for external residential placements and payroll overspends in the children's houses. Head of Children & Families Management & Central Costs 2,312 2,368 56 2.4% 3,709 3,682 27 0.7% The YTD variance is as a result of the receipt of grant income in advance of budget profile. The forecast variance is outwith reporting criteria. 11,107 11,546 439 3.8% 16,422 15,780 642 3.9% GRAND TOTAL 46,703 46,658 (45) (0.1%) 76,117 76,117 0 0.0% YTD is year to date and represents the actual or budgeted expenditure and income for the financial year so far. Forecast Outturn is the estimate now of what expenditure or income will be for the whole of the financial year. The Variance is the difference between budget and actual or forecast outturn. A positive variance is when actual or forecast expenditure is less than budget or actual or forecast income is more than budget. A negative variance is shown in brackets and is when actual or forecast expenditure is more than budget or actual or forecast income is less than budget. An explanation is given for any variance which exceeds £50,000 or 10%.
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SOCIAL WORK – SUBJECTIVE SUMMARY AS AT 31 DECEMBER 2023 Subjective Category YTD Actual £000 YTD Budget £000 YTD Variance £000 % Variance Annual Budget £000 Forecast Outturn £000 Forecast Variance £000 % Variance Explanation Employee 26,109 25,010 (1,099) (4.4%) 34,990 36,089 (1,099) (3.1%) The YTD overspend is due to the use of agency staff across the HSCP (£2.2m YTD variance; £2.8m forecast), partially offset by over-recovery on vacancy savings and payroll underspends due to vacancies. The forecast underspend is mainly due to forecast payroll underspends and over- recovery of vacancy savings offset by agency costs. Premises 1,187 834 (353) (42.3%) 1,544 1,848 (304) (19.7%) The YTD overspend is mainly due to overspends on utilities, central repairs and property maintenance. The forecast overspend is due to anticipated overspends on utilities due to current market conditions as well as on central repairs and property maintenance. Some of the utility overspend is offset by an over-recovery on income for recharges to other bodies for shared costs. Supplies & Services 1,567 1,091 (476) (43.6%) 1,439 2,110 (671) (46.6%) The YTD and forecast overspend is mainly due to forecast slippage on agreed savings targets within C&F and homecare in addition to higher than budgeted purchase of equipment in the integrated equipment store and telecare. Transport 443 504 61 12.1% 683 569 114 16.7% The YTD and forecast underspend is due to various travel underspends across the whole department following changes to working practices post Covid-19 and the number of staff vacancies. Third Party 39,699 39,819 120 0.3% 61,895 62,238 (343) (0.6%) The YTD underspend is largely due to budget profiling and timing of payments to third parties across purchased care services. The forecast overspend is as a result of demand for purchased care services across Adult Services and residential care with C&F. This is partially offset by underspends in Fostering and Adoption as well as underspends on unallocated centrally held funds.
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Income (22,302) (20,600) 1,702 (8.3%) (24,434) (26,737) 2,303 (9.4%) The YTD and forecast over recovery of income is mainly due to increased income from fees, charges and recharges. Totals 46,703 46,658 (45) (0.1%) 76,117 76,117 0 0.0% YTD is year to date and represents the actual or budgeted expenditure and income for the financial year so far. Forecast Outturn is the estimate now of what expenditure or income will be for the whole of the financial year. The Variance is the difference between budget and actual or forecast outturn. A positive variance is when actual or forecast expenditure is less than budget or actual or forecast income is more than budget. A negative variance is shown in brackets and is when actual or forecast expenditure is more than budget or actual or forecast income is less than budget. An explanation is given for any variance which exceeds £50,000 or 10%.
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SOCIAL WORK – RED VARIANCES AS AT 31 DECEMBER 2023 Service Area Annual Budget £000 Forecast Outturn £000 Forecast Variance £000 % Variance Explanation Social Work Central Support (320) (789) 469 (146.6%) The forecast underspend is due to an over-recovery on vacancy savings (£248k) combined with underspends on centrally held funds, printing & stationery and postages. Management & Central Costs 1,303 552 751 57.6% The forecast underspend is mainly due to underspends on centrally held funds and staff vacancies. Older People 37,829 40,182 (2,353) (6.2%) The forecast overspend reflects demand driven overspends within the care home placement budgets (£1.1m) and homecare (£1.6m). High staff costs across HSCP residential units due to agency cover are also contributing to the forecast overspend. These overspends are partially offset by staffing underspends across ACM teams and underspends on payments to other services from the delayed discharge budgets. Learning Disability 14,189 13,607 582 4.1% The forecast underspend reflects known demand for Residential Placements partially offset by overspends on Supported Living and Respite due to demand. Physical Disability 2,792 2,870 (78) (2.8%) The forecast overspend reflects higher than budgeted demand for Supported Living and higher than budgeted equipment purchasing in the Integrated Equipment Service. This is offset slightly by a forecast underspend in the Residential Care budgets. Child Protection 3,674 3,393 281 7.6% The forecast underspend is as a result of demand for contact and welfare services as well as forecast underspends in the Area Teams on payroll costs, payments to other bodies, travel and subsistence. Criminal Justice 224 172 52 23.2% The forecast underspend is due to vacancies within the Criminal Justice team. Looked After Children 7,832 7,507 325 4.1% The forecast underspend is as a result of demand for fostering, kinship and adoption placements as well as on supporting young people leaving care. There is also an over-recovery on income from the Home Office for unaccompanied asylum seeking children. This is all partially offset by demand for external residential placements and payroll overspends in the children's houses. A red variance is a forecast variance which is greater than +/- £50,000.
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MONITORING OF SAVINGS – AS AT 31 DECEMBER 2023 New policy savings were identified for the three year period 2023-24 to 2025-26 and these were agreed by Council in February 2023. Council agreed to policy savings of £6.145m in 2023-24 rising to £6.260m by 2025-26. The position of historical policy saving options is as follows: - 2022/23 – those not delivered or that have further increases in value in 2023-24 onwards total £0.187m - 2021/22 – those not delivered or that have further increase in value in 2023-24 onwards total £0.195m - 2020/21 – those not delivered total £0.050m - 2019/20 – all delivered - 2018/19 - those not delivered total £0.376m The 2023-24 savings have been removed from departmental budgets, however, it is important to monitor whether the saving has actually been delivered to ensure that costs are not continuing resulting in an overspend by the end of the year. It is also important to ensure that any preparatory work required to deliver savings in future years is on track. There are two savings where the department has indicated they will not be achieved, two are categorised as having a potential shortfall and one is currently delayed as summarised below: Saving Saving Agreed Status Detail Shortfall/ Delayed Value TB07 – Depots Feb-18 Will not be achieved Savings to date via the Oban project, tidying up NDR costs form previous disposals and removing security costs. The remainder of the outstanding saving is based on removing the smallest depot budget from each town but cannot do this without the capital investment to create fit for purpose single depot facilities. Working through possible alternative delivery model and updated business case for Lochgilphead – there is a shortfall between possible capital costs and likely income from vacated sites. This saving will not be achieved and a cost pressure has been put through for this for 2024-25. Work will be ongoing on the depot rationalisation across the area and future savings will be brought once known. £107,500
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R&I17 - Public transport fare scale increase Feb-21 Will not be achieved Fare increase did not offset the saving advised by the Stantec review. This saving will not be achieved and shortfall has been absorbed by underspends elsewhere in the service. £29,000 TB13b Roads and Amenity Services charging (non-statutory services) Feb-18 Potential Shortfall - there is a risk that the original saving will not be achieved in full. The original proposal was to introduce charges for providing lighting design and increase charges by 20% for road construction consents, skips, scaffolds, hoarding, permits and licences. Whilst some additional income has been generated through third party works, opportunities are expected to be limited over the foreseeable future due to staff shortages and other competing demands. £150,000 TB12b Stadiums Feb-18 Potential Shortfall - there is a risk that the original saving will not be achieved in full. Discussions had stalled with partners in the Oban and Lorn area with regard to Mossfield stadium to create a sports Hub, attract external funding to improve facilities and therefore attract additional events to the arena. The users group has now reconvened and will be reporting to the steering group. It should be noted there is generally a downturn in usage of pitches partly due to more clubs booking all weather pitches at high schools and the loss of a well established club disbanding which will result in the loss of income. The Mossfield Sport Group have highlighted that certain clubs along with the Shinty Associations have expressed concerns with regards to the condition of the Pavilion and changing facilities and this is likely to impact on income. East King Street bookings have reduced due to the condition of the changing facilities and clubs having to play their fixtures elsewhere. £30,000 TB09 – Public Conveniences Feb-18 Delayed - The full saving will not be achieved in line with the original estimated timescale. Door access control project has an indicative start date of November for installs. This delay has missed the busy summer months and October holidays so expected income over winter will be minimal. We have no way to accurately predict income levels but the system allows for regular reporting and itemisation so we will quickly be in a position to profile future income. £24,000 All policy saving options previously agreed are noted in the table below for information.
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2023-24 2023-24 £000 FTE Executive Director Douglas Hendry CS01 Feb-22 Commercial Services Climate Change & Resource Efficiency 63.0 0.00 On Track to be Delivered CS03 Feb-22 Commercial Services Stretch Targets for One Council Income & Events 20.0 0.00 Delivered EDU2324-001 Feb-23 Education Estimated saving due to change in pupil numbers 700.00 0.0 Delivered EDU2324-002 Feb-23 Education Removal of non-statutory Cultural Coordinator post. 15.00 0.8 Delivered Executive Director Kirsty Flanagan DEG05(a) Feb-20 Development and Economic Growth Raise additional fees by adopting the current Building Cost Information Service (BCIS) guide for the cost of building work. Regular service users have been informed of this change. 50.00 0.0 Delivered DEG07 Feb-21 Development and Economic Growth Additional income through fees and charges for s64 Non-Material Amendment Submissions, non e-planning application submissions and property history searches 28.00 0.0 Delivered DEG01 Feb-22 Development and Economic Growth Crown Estate Administration Contribution to Project Delivery 104.0 0.00 Delivered DEG2324-002 Feb-23 Development and Economic Growth Reduce discretionary budget to minimum. Retain budget to pay memberships to SCDI, SLAED & HOPS but remove remainder of discretionary budget. 21.50 0.0 Delivered DEG2324-001 Feb-23 Development and Economic Growth Long-term vacant 0.5FTE building standards surveyors post that arose through an employee reducing their working hours is no longer requires in structure. 24.00 0.5 Delivered FIS2324-001 Feb-23 Financial Services Service Concessions - Alteration to accounting treatment to align the repayment of borrowing relating to new schools over their asset life. Guidance from Scottish Government now permits this change of accounting treatment. Further detail will be provided to Council in due course. 4,831.00 0.0 Delivered FIS2324-002 Feb-23 Financial Services The Service has identified savings through rightsizing of budgets, an organisational restructure with investment in modern apprenticeships and temporary staff designed to boost income from the billing of additional local taxes and the recovery of associated debt. In addition efficiency savings from increased productivity, increased levels of process automation and moving more customers to transact with the service over the internet will allow previously outsourced review works to be carried out internally. 493.00 0.0 On Track to be Delivered TB07 Feb-18 Roads and Infrastructure Services Create one main depot in key areas to reduce costs 172.50 0.0 Will not be achieved TB13b Feb-18 Roads and Infrastructure Services Roads & Amenity Services charging (non- statutory services) 150.0 0.00 Potential Shortfall TB12b Feb-18 Roads and Infrastructure Services Review charges for stadiums to enable improvement work 30.00 0.0 Potential Shortfall TB09 Feb-18 Roads and Infrastructure Services Public Conveniences - Progress sustainable models including turnstiles and franchising; establish simpler asset transfer process 24.00 0.0 Delayed R&I17 Feb-21 Roads and Infrastructure Services Public transport fare scale increase 76.00 0.0 Will not be achieved R&I05 Feb-21 Roads and Infrastructure Services Design service fees - bringing in line with industry standards and reduce cost of consultancy. Two posts created as a spend to save 50.00 -2.0 Delivered R&I09 Feb-21 Roads and Infrastructure Services Road inspections find and fix - reduce reactive work by proactivity. Moving to AI technology as technology develops 40.00 1.0 On Track to be Delivered R&I15 Feb-21 Roads and Infrastructure Services Emergency services support and fuel provision from our fuel supplies 0.50 0.0 Still to be Implemented RIS2324-001 Feb-23 Roads and Infrastructure Services Support Communities to move to different approaches to delivering School Crossing Patrols through engagement with Parent Council and Communities. 60.00 1.5 On Track to be Delivered TOTAL 6,952.5 1.8 Template Ref Saving Agreed Service Savings Option Status of Implementation
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ARGYLL AND BUTE COUNCIL FINANCIAL SERVICES POLICY AND RESOURCES COMMITTEE 15 FEBRUARY 2024 FINANCIAL RISKS ANALYSIS 2023-24 1 EXECUTIVE SUMMARY 1.1 The main purpose of this report is to provide a summary of the key financial risks facing the Council. 1.2 A number of Council wide risks, both revenue and capital, have been identified along with risks for each department and service of the Council. For each departmental risk the financial impact has been quantified and the likelihood assessed based on the standard risk matrix. 1.3 There are 5 Council wide revenue risks identified for 2023-24 currently amounting to £2.835m. 1.4 There are currently 39 departmental risks totalling £5.265m. Of the 39 departmental risks, 6 are categorised as likely. 1.5 The financial risks are monitored routinely and actions put in place to continue to mitigate the risks.
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ARGYLL AND BUTE COUNCIL FINANCIAL SERVICES POLICY AND RESOURCES COMMITTEE 15 FEBRUARY 2024 FINANCIAL RISKS ANALYSIS 2023-24 2. INTRODUCTION 2.1 This report outlines the process and approach developed in carrying out a financial risks analysis and provides a note of the current assessment of financial risks for 2023-24. 3 DETAIL 3.1 Introduction 3.1.1 The Council is currently in a period of significant financial challenge. In developing its budget to address both restricted resources and cost and demand pressures there are a number of financial risks the Council needs to consider and manage. 3.1.2 There are a number of risks that affect the income or expenditure across the whole council and these have been identified. Financial risks have been considered by each department and service of the Council. 3.1.3 For each risk, the financial impact has been quantified and the likelihood assessed based on the standard risk matrix as follows: 1 – Remote 2 – Unlikely 3 – Possible 4 – Likely 5 – Almost Certain 3.1.4 The Argyll and Bute Integrated Joint Board (IJB) with responsibility for Social Work and a range of Health services was established and came into effect on 1 April 2016. The IJB is responsible for financial and strategic oversight of these services. It is the responsibility of the IJB to consider the individual financial risks associated with Integration Services and they are therefore not contained within this report. A Council wide risk has been included in respect of the IJB being unable to deliver the social care service within the budget allocated. 3.2 Council Wide Risks Revenue 3.2.1 Utility costs remain a volatile area and it is difficult to accurately predict how the prices could vary. The outturn in respect of utilities for 2022-23 was an overspend of £0.597m which was due to the unprecedented inflationary uplifts within the
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energy market although forward purchasing sheltered the Council from the full impact. During 2023-24 the Council re-contracted for its energy needs and was exposed to significantly higher market rates creating an in year cost pressure of £0.936m with a proposal to fund this from the £1.4m contingency set aside for inflationary increases as part of the 2023-24 budget setting process. With the volatility of utilities pricing it is very difficult to predict the impact going forward but a financial risk based on a 20% variation based on the original utilities budget amounts to £0.827m. 3.2.2 The SJC pay award for 2023-24 is now settled and the budgets will be updated in the January period to reflect the additional staff costs and offsetting associated Scottish Government income. Initial workings have indicated that the funding will offset the additional costs and there will be no in-year pressure resulting from the pay award. 3.2.3 At the budget meeting on 24 February 2023, the Council agreed 6 new policy savings options that would deliver savings over the period 2023-24 to 2025-26. The savings to be delivered in 2023-24 amount to £6.145m. Whilst the Council have a good track record in delivering savings, a 10% shortfall on this savings target would amount to £0.615m. 3.2.4 The estimated level of council tax income is based on current and forecast Band D equivalents and non-payment rates. This reflects our most recent experience in terms of the council tax base and likely collection rates. A 1% variation in council tax income amounts to approximately £0.593m. 3.2.5 In respect of the Health and Social Care Partnership, it is the responsibility of the Chief Officer and Chief Financial Officer to manage the HSCP financial position. If an overspend is forecast, a budget recovery plan will be prepared and submitted to the IJB, the Council and NHS Highland. Where recovery plans are unsuccessful and an overspend occurs at the financial year end, and the HSCP has insufficient reserves to meet the overspend, then the partners will be required to make additional payments to the HSCP. Whilst any additional payments by the Council and NHS Highland will be deducted from future years funding, there is still a financial risk that the Council may have to pay out additional monies in year. As at 31 December 2023, the net HSCP outturn in 2023-24 is estimated to be a £0.443m overspend (Social Work forecasting a breakeven position and an overspend of £0.443m from Health). As Social Work are currently projecting a breakeven position and the IJB holds significant financial reserves, there is a nil value on the risk. 3.2.6 There is an ongoing requirement to fund unavoidable inflationary cost increases in areas like fuel, food etc. This has been predominantly caused by the lack of availability of supply of labour and materials as a result of the COVID-19 pandemic, the UK exit from the European Union, Russia’s invasion of Ukraine and sanctions on Russian owned entities and ongoing events in the Middle East. Inflation has been falling and the Bank of England estimates that it should continue to fall this year. We will continue to closely monitor the situation and update our financial forecasts using the best information available to us. A 1% general inflation increase has been included with a financial impact of £0.800m.
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3.2.7 The Council wide risks are noted within the table below. Description Likelihood Assessed Financial Impact £000 Energy costs increase by 20% greater than anticipated 3 827 10% shortfall on Savings Options 2 615 1% variation in Council Tax Income 2 593 IJB refer to Council for additional funding to deliver social work services 1 0 1% variation of General Inflation Risk 4 800 Total 2,835 Capital 3.2.8 The finance settlement announcement on 20 December 2022 provided details of the Local Government funding for 2023-24 and there is therefore certainty as to what our funding is in respect of the General Capital Grant and the specific capital grants already distributed. 3.2.9 The capital plan for 2023-24 includes an estimate of £1.195m in respect of capital receipts. This is based on an assessment provided by the Special Projects Team in January 2023. A 10% variation equates to £0.120m and this would require to be managed across the capital programme. 3.2.10 General feedback from Scotland Excel and the Project Managers indicates that price increases and uncertainty continue to be experienced as well as disruptions to the supply chain and longer lead times, particularly in relation to the construction sector and material availability. This can be attributed to a number of factors such as the drag on markets and supplies of the COVID-19 pandemic, UK exit from the European Union, Russia’s invasion of Ukraine and sanctions on Russian owned entities and ongoing events in the Middle East, to name a few. 3.2.11 The increased rate of inflation impacts costs such as energy prices, labour, packaging and transport. These all have an effect on the overall contract price and make it extremely challenging to manage expenditure and the availability of supply. 3.2.12 While it has been possible to estimate the impact of these pressures on some projects, and therefore either include those projections within the capital monitoring report or adjust the capital programme accordingly, for others it is more difficult and no forecast has been projected at this stage but there are likely to be further significant financial impacts not yet reported. 3.2.13 Surveys have been completed in the Councils Learning Estates in relation to Reinforced Autoclaved Aerated Concrete (RAAC) with only 1 building confirmed as having it present with steps underway for its removal. This will include a decant
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of the students for approximately 9 months plus total removal and replacement of the roof during 2024. The estimated costs associated with this are £3m which will require additional funding. The Council is also currently undertaking both desktop and on-site assessments to establish if RAAC is elsewhere in the Estate in over 650 buildings with priority being given to categories of building where there is high and sustained footfall. No RAAC has been confirmed in these categories of building thus far. 3.3 Departmental/Service Risks 3.3.1 The detail of each departmental financial risk is included within Appendix 1. The following table provides a summary of the number of risks within each department and likelihood category with the financial impact. Department 1 - Remote 2 - Unlikely 3 - Possible 4 - Likely 5 - Almost Certain Total No £000 No £000 No £000 No £000 No £000 No £000 Chief Executive's Unit 0 0 0 0 0 0 0 0 0 0 0 0 Executive Director Douglas Hendry 2 20 6 560 7 600 5 565 0 0 20 1,745 Executive Director Kirsty Flanagan 5 335 2 230 11 2,590 1 365 0 0 19 3,520 Total 7 355 8 790 18 3,190 6 930 0 0 39 5,265 3.3.2 The current top three risks in terms of the financial impact are noted in the table below. SERVICE TITLE OF RISK DESCRIPTION OF RISK LIKELIHOOD FINANCIAL IMPACT £000 Roads and Infrastructure Services Roads Maintenance - Bridges, Culverts & Sea Defences Extreme localised weather may result in loss of bridge, culvert, road or sea defence. 3 750 Roads and Infrastructure Services Waste PPP - Indexation Historical payments made towards Waste PPP based on indexation rates have been challenged by Renewi resulting in a potential cost to the council. 3 586 Roads and Infrastructure Services Winter Maintenance Adverse weather conditions which require greater than budgeted number of gritting runs. 4 365
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3.3.3 The risks which are likely, but not included above, are noted below: SERVICE TITLE OF RISK DESCRIPTION OF RISK LIKELIHOOD FINANCIAL IMPACT £000 Council Wide - Commercial Services Council Wide Central Repairs Increased demands on central repair budgets (CRA) due to a decrease in Capital funding, increase in statutory and emergency repairs and increases in supplier/contractor charges. This impacts on all departments of the Council with a Central Repairs Budget. 4 300 Legal and Regulatory Support Contract RPI for NPDO and Hub Schools Increase in RPI would result in higher costs. 4 100 Legal and Regulatory Support NPDO - Reduction in insurance savings within NPDO Schools Increase in insurance costs as a result of the long-term effects of Covid-19 on the insurance market and flood claims. 4 75 Legal and Regulatory Support Elections More than 1 by-election required outwith standard election cycle. 4 60 Legal and Regulatory Support Licensing Reduced numbers of licensing applications leading to reduced income. 4 30 3.4 Changes to Financial Risks since last report 3.4.1 There have been no changes to the departmental risks since the financial risks report was presented to the Policy and Resources Committee on 7 December 2023. 3.5 Monitoring of Financial Risks 3.5.1 Financial risks will be reviewed and monitored on a two monthly basis and will be included in the pack of financial reports submitted to Policy and Resources Committee.
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3.5.2 During the 2023-24 budget setting process a contingency of £1.4m was agreed which was circa 0.5% of the Councils budget at that time. This was included due to the volatility in prices, the increases in inflation together with continuing increased demand. The risk associated with Winter Maintenance will be monitored closely over the coming months and should it materialise it is recommended that this contingency is used to offset the pressure. 3.6 Potential Future Risks 3.6.1 Scottish Government are, over the next 2 years, proposing to extend funded childcare to all 1 and 2 year olds across Scotland. This brings significant financial and qualitative risks to the service. The needs and legislative requirements for this age range would mean significant capital work across our estate and in many settings there is not the space so extensions would be required. Having this age range in the same play space as 3/4 year olds seriously impacts on the ability of practitioners to effectively support age appropriate learning and play. It is uncertain when this risk will arise. 3.6.2 The Council’s bid to the Scottish Governments Learning Estate Investment Programme (LEIP) for funding for a new school campus on Mull was successful. While this is good news and will provide welcome investment in the school estate it does come with a financial pressure that is required to be funded if the project is to proceed. The Scottish Government will fund up to 50% of eligible costs leaving the Council to fund circa £20m therefore Council need to consider full affordability options before agreeing to progress with this project. There are £9m in earmarked reserves set aside for this purpose with funding required for the remaining balance. A paper outlining possible funding options will be presented to Council in due course. 3.6.3 As a result of significant rainfall Argyll and Bute Council activated the Bellwin scheme in relation to the recovery of costs associated with the incident. The funding from this scheme is welcomed however eligibility criteria of costs are restrictive. Primarily the first £0.529m has to be covered by the Local Authority of which £0.398m has been identified from Crown Estates funding with the possibility this could be topped up further once the Crown Estate full year allocation of funding is confirmed. Secondly, capital expenditure does not qualify therefore any long term replacements to infrastructure such as bridges cannot be claimed through the scheme therefore if not already part of the capital programme will require funding. Estimated costs were submitted to the Scottish Government on 5 December 2023 along with a request to extend the scheme by ten months to allow for all works to be completed. The Scottish Government have subsequently rejected this request and will only extend the claim by two months. The revenue costs are being finalised but there is a risk that costs of circa £0.900m in revenue could extend beyond the claim period and therefore may not be eligible for the scheme. 3.6.4 In its present configuration, Argyll and Bute Council’s digital network does not have the capacity to accommodate the requirements of the Scottish Government’s vision for digital access over the next four years, including a device
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for every learner, which would entail a large increase in the number of devices accessing the network. The network requires to be redesigned to allow digital access on the scale proposed by the Scottish Government. In addition to investment in bandwidth, device management and protection, there is a requirement to replace existing network hardware in all schools. Following an independent consultation on the network by Insight, IT and Education have co- authored a paper “Resourcing Educations Digital Aspirations” that identifies the work required to meet the Scottish Governments expectations. COSLA have raised this issue with the Scottish Government and there is an expectation that this will be fully funded as it is a Scottish Government commitment but there remains a risk associated with this. 4 CONCLUSION 4.1 This report summarises the key financial risks facing the Council. There are 5 Council wide risks and 39 departmental risks identified with 6 categorised as likely. The financial risks are monitored routinely and actions put in place to continue to mitigate the risks. 5 IMPLICATIONS 5.1 Policy - None. 5.2 Financial - The financial value of each risk is included within the appendix. 5.3 Legal - None. 5.4 HR - None. 5.5 Fairer Scotland Duty - None. 5.5.1 Equalities – protected characteristics - None. 5.5.2 Socio-economic Duty - None. 5.5.3 Islands - None. 5.6 Climate Change - None. 5.7 Risk - Financial risks are detailed within the appendix. 5.8 Customer Service - None. Kirsty Flanagan Executive Director/Section 95 Officer 12 January 2024 Policy Lead for Finance and Commercial Services - Councillor Gary Mulvaney APPENDICES Appendix 1 – Detail of Department/Service financial risks For further information contact Anne Blue, Head of Financial Services anne.blue@argyll-bute.gov.uk
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APPENDIX 1 DEPARTMENT/SERVICE FINANCIAL RISKS AS AT 31 DECEMBER 2023 DEPARTMENT SERVICE TITLE OF RISK DESCRIPTION OF RISK MITIGATING ACTIONS IN PLACE LIKELIHOOD FINANCIAL IMPACT £000 LIKELIHOOD FINANCIAL IMPACT £000 Executive Director Douglas Hendry Commercial Services Catering Costs - Provision of Meals to Early Years Children The Children and Young People (Scotland) Act placed duties on Councils to provide meals in an Early Years setting to entitled children where sessions span over lunch time. The total quantum of grant funding is reducing and may not be sufficient to fund the additional costs depending on uptake and the additional costs to support the meal provision in partner provider settings. Joint strategy with procurement colleagues to reduce potential impact of supplier charges. Control food wastage/portion controls. 2 100 2 100 Executive Director Douglas Hendry Commercial Services Catering Purchases Increased supplier charges and higher than average inflation on food costs. In addition to this the Scottish Government reviewed the regulations that govern the food and drinks provided in schools and implemented revised regulations. The revised standards focus on reducing sugar, reducing red processed meat and increasing fibre. Thus far, there has been an increase in costs in produce and a reduction in demand for school meals. Joint strategy with procurement colleagues to reduce potential impact of supplier charges. Control food wastage/portion controls; introduction of online ordering to help manage food waste. Analysis and regular review of menu choices. 2 100 2 100 Executive Director Douglas Hendry Commercial Services Catering - Implementation of Universal Free School Meals in Primary Schools for P6 and P7 pupils The Scottish Government may not give the local authority adequate funds to support the policy to expand free school meals in primary schools to include P6 and P7 pupils (the scheme has already been implemented for P1 to P5 pupils). Although expansion paused for full implementation for P6&7, FSM expanded through entitlement to Scottish Child Payment. Senior manager connected into the National Operational Delivery Group. This enables the Council's viewpoint to be considered. 2 100 2 100 Executive Director Douglas Hendry Commercial Services Rental Income from Properties Due to current economic climate, there may be reduced ability to recover rental income from leased properties or place suitable tenants in properties as leases come to an end. Management of leasehold properties by Estates team, any issues with debt recovery being dealt with in line with Council debt recovery policy. 2 60 2 60 Executive Director Douglas Hendry Commercial Services Surplus Properties Ongoing market difficulties lead to increased numbers of surplus properties, in addition, as Our Modern Workspace Project gains traction more properties will become surplus to operational requirements. There are residual running costs associated with all surplus properties. One Council property team in place who will monitor market conditions and work with prospective tenants/ purchasers to let/sell surplus properties. 3 50 3 50 Executive Director Douglas Hendry Commercial Services Leisure Service Level Agreements Increase in RPI and/or other running costs (eg utilities, payroll etc) resulting in requests for additional funding. Monitoring annual alteration to contract RPI rate, communication with service providers and mitigation through financial forecasting and review of existing budget. 3 50 3 50 Executive Director Douglas Hendry Council Wide - Commercial Services Council Wide Central Repairs Increased demands on central repair budgets (CRA) due to a decrease in Capital funding, increase in statutory and emergency repairs and increases in supplier/contractor charges. This impacts on all departments of the Council with a Central Repairs Budget. Joint strategy with procurement colleagues to reduce potential impact of supplier/contractor charges. Close monitoring of central repairs budgets and commitments and instructing only statutory tests/inspections and essential repairs. 4 300 4 300 As at 31 October 2023 As at 31 December 2023
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DEPARTMENT SERVICE TITLE OF RISK DESCRIPTION OF RISK MITIGATING ACTIONS IN PLACE LIKELIHOOD FINANCIAL IMPACT £000 LIKELIHOOD FINANCIAL IMPACT £000 Executive Director Douglas Hendry Education ASN Support Demand for ASN support continues to increase. Scottish Government statistics suggest a 3% year on year increase, resulting in an additional resource requirement. Particularly where gaps in our enhanced provision exist. The medium- term detriments on the development of young children which occurred as a consequence of service closures during the COVID pandemic have increased demands on the service as children require additional support to catch up. The Additional Support for Learning National Implementation plan continues to inform our strategic direction in line with the Angela Morgan Review. Service is currently looking at alternative options for service delivery to mitigate the inescapable pressures. Continuing to ensure robust assessment of needs, monthly monitoring of budget, any delays in recruitment factored into projections to enable informed decision making on allocation of funding for new/amended /additional support packages. Following a full ASN review, the service are currently investing in the development of four new learning centres in order to provide greater equity in meeting the more complex needs of some learners as well as considering plans to develop enhanced wellbeing resources across our learning estate in future. This aims to reduce the frequency of children having to be educated in high cost out of area placements. 3 200 3 200 Executive Director Douglas Hendry Education Pre-Five Units - retention of partner providers Failure in the commissioning or retention of pre-five partner provider units to deliver 1140 hours would result in an increased pressure on the Council to deliver the service. Annual financial appraisal; Support network; Short-term cash injections. 3 100 3 100 Executive Director Douglas Hendry Education Legislative Requirements - Children and Young People (Scotland) Act - ELC 1140 hours The Council has been required to deliver 1140 hours of Early Learning and Childcare since August 2021. The Scottish Government has committed to funding this and the Council has revised its service model to align it to the Scottish Government's reduced funding profile. A risk remains that actual costs of delivery exceed the Government Grant in any given year. For example, if child numbers are higher than estimated, this may require additional staffing which has not been included in the staffing model funded by Scottish Government. Scottish Government has included plans to further expand on eligibility for 1140 hours to all 2 year olds and some one year olds within the current Parliamentary session. As yet there has been no funding commitment. However this will place unknown cost pressures on both our capital and revenue budgets Continuous monitoring and review of the service model, usage and resources. 3 100 3 100 Executive Director Douglas Hendry Education Legislative Requirements - Education (Scotland) Act The Education (Scotland) Act 2000 requires Councils to undertake assessments of the need for the provision of Gaelic Medium Primary Education (GMPE) and the duty to support and promote Gaelic Education. This may lead to additional staffing requirements depending upon the demand for Gaelic from parents. Continuous monitoring and review of the service model and resources available within budget. 3 50 3 50 Executive Director Douglas Hendry Legal and Regulatory Support Hub DBDA/DBFM Schools - Litigation Increased risk of the requirement to litigate to conclude final capital contract payments due. Monitoring claims and mitigation through robust challenge of any additional claims. 2 150 2 150 Executive Director Douglas Hendry Legal and Regulatory Support Contract RPI for NPDO and Hub Schools Increase in RPI would result in higher costs. Monitoring annual alteration to contract RPI rate and mitigation through financial forecasting and review of existing budget. 4 100 4 100
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DEPARTMENT SERVICE TITLE OF RISK DESCRIPTION OF RISK MITIGATING ACTIONS IN PLACE LIKELIHOOD FINANCIAL IMPACT £000 LIKELIHOOD FINANCIAL IMPACT £000 Executive Director Douglas Hendry Legal and Regulatory Support NPDO - Reduction in insurance savings within NPDO Schools Increase in insurance costs as a result of the long-term effects of Covid-19 on the insurance market and flood claims. Monitoring annual alteration to contract insurance rate and mitigation through financial forecasting and review of existing budget. 4 75 4 75 Executive Director Douglas Hendry Legal and Regulatory Support Legal Services - Litigation Increased number of litigation cases. Ensure Legal Services are gateway to access all legal advice and that advice is sought at earliest opportunity. 3 50 3 50 Executive Director Douglas Hendry Legal and Regulatory Support NPDO/Hub DBFM contract management efficiencies Reduction in ability to generate contract management efficiencies. Monitoring annual efficiencies generated and mitigation through robust contract management and application of contract specifications/requirements. 2 50 2 50 Executive Director Douglas Hendry Legal and Regulatory Support Elections More than 1 by-election required outwith standard election cycle. Outwith direct management control. 4 60 4 60 Executive Director Douglas Hendry Legal and Regulatory Support Licensing Reduced numbers of licensing applications leading to reduced income. Monitoring of trends and reporting the financial impact in the budget monitoring. 4 30 4 30 Executive Director Douglas Hendry Legal and Regulatory Support Children's Panel Increased number of referrals increasing costs through increases in the running costs. Maximise the use of council facilities/resources for panel session in the first instance. 1 10 1 10 Executive Director Douglas Hendry Legal and Regulatory Support Legal Services Failure to minimise Council wide use of external legal advice. Ensure legal services are gateway to access all legal advice. 1 10 1 10 Executive Director Kirsty Flanagan Customer Support Services Software Licences Potential risk of being under licensed for software which will be identified via software audits which would incur additional costs. ICT security and compliance officer in post and duties include review of systems to ensure fully licenced. 2 100 2 100 Executive Director Kirsty Flanagan Customer Support Services Additional Bandwidth for Education Additional costs required to be incurred in relation to additional bandwidth required to deliver the Education Digital Strategy due to a more digitalised learning curriculum. Work closely with Education on Digital Devices for All strategy to ensure necessary IT is in place. 3 50 3 50 Executive Director Kirsty Flanagan Development and Economic Growth Environmental Health- export certificates Downturn in requests for export certificates as a result of UK withdrawal from EU, changes to international trading agreements or business economy. Reduction in demand creates a budget pressure on environmental health budget. Monitor income and resources required for export health certificates / attestations required to support the export market. Continue with food safety regulation activities associated and support at 3rd country audits. Pursue debt rigorously with key customers through seeking regular payments. 2 130 2 130 Executive Director Kirsty Flanagan Development and Economic Growth Dangerous Buildings interventions Building Standards having to deal with an increasing level of dangerous building work which has significant financial implications for Council. Monitor activity and seek to recover costs from the owner. 3 100 3 100 Executive Director Kirsty Flanagan Development and Economic Growth Planning fees reduced by Scottish Government Potential that the Scottish Government may reduce planning fees due to poor performance by the Planning Authority. The Scottish Government has recently appointed a national Planning Performance Champion however the detail of how this role intends to incentivise improvement/penalise poor performance at a local authority level remains unclear at this time Maintain high levels of performance as articulated by performance markers detailed in Planning Performance Framework annual report. 1 100 1 100 Executive Director Kirsty Flanagan Development and Economic Growth Planning fee shortfalls Due to downturn in economic / building activity, in particular renewable energy development and other major developments could lead to planning fee income shortfalls leading to revenue budget pressures. Current income levels are looking more positive, however, we are dependent on some high value applications coming in which, if they don't materialise, will impact the overall position. Will continue to monitor Development Management income and expenditure tightly and investigate further income generation streams. 1 50 1 50 Executive Director Kirsty Flanagan Development and Economic Growth Building Warrant fee shortfalls Due to loss of commercial income and downturn in economic / building activity, building warrant fee income shortfalls leading to revenue budget pressures. Continue to monitor Building Standards income and expenditure tightly and investigate further income generation streams. 1 50 1 50
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DEPARTMENT SERVICE TITLE OF RISK DESCRIPTION OF RISK MITIGATING ACTIONS IN PLACE LIKELIHOOD FINANCIAL IMPACT £000 LIKELIHOOD FINANCIAL IMPACT £000 Executive Director Kirsty Flanagan Development and Economic Growth Homelessness Temporary Accommodation Income Unpredictable number of Homeless applications. Inability to recover rent. Increase costs of property maintenance and tenancy change over. Provision of Housing Options information and advice service to minimise number of applicants proceeding to full homeless application. Implementation of Rapid Rehousing Plan. 3 50 3 50 Executive Director Kirsty Flanagan Development and Economic Growth Animal Health Carrying out livestock seizure to protect welfare of the animals Monitor activity and seek to recover costs from the disposal of the animals. 1 10 1 10 Executive Director Kirsty Flanagan Financial Services Council Tax Debt Collection Recovery Recovery of debt becomes more difficult to pursue in the current economic climate. This is in relation to historical debt that has accumulated over many years therefore any adverse collection rates will impact on the year end debt provision as opposed to the in-year financial position, hence no forecast variance has been reported within the current year. Robust monitoring of arrangements with debt collection agency and performance against target collection rates. 3 345 3 345 Executive Director Kirsty Flanagan Financial Services Housing Benefit Subsidy Loss of Housing Benefit Subsidy due to exceeding LA error threshold. Processes in place for handling of claims accurately and efficiently. 1 125 1 125 Executive Director Kirsty Flanagan Financial Services Sundry Debt Recovery Recovery of debt becomes more difficult to pursue in the current economic climate. Additional staff are being put in place in the Sundry Debt Team who will work jointly with Legal Services to enhance the robustness of the Council's debt recovery processes. 3 85 3 85 Executive Director Kirsty Flanagan Financial Services Non-Domestic Rates Relief Risk of demand changing due to legislative changes outwith our control for charitable relief for Arms Length External Organisations (ALEO). Outwith direct management control. 3 30 3 30 Executive Director Kirsty Flanagan Roads and Infrastructure Services Waste PPP - Indexation Historical payments made towards Waste PPP based on indexation rates have been challenged by Renewi resulting in a potential cost to the council. Conversations are in place between Council and Renewi with the aim of minimising the potential impact. 3 586 3 586 Executive Director Kirsty Flanagan Roads and Infrastructure Services Waste - Compost Like Output (CLO) Compost Like Output is an element of waste that has been heat treated and can only be used for landfill site restoration. Renewi are currently producing more CLO than we need and it is building up in our landfill sites - this has been flagged up as a concern by SEPA and will need to be removed. Discussions ongoing with Renewi and the Council on steps forward and what element the council is responsible for. 3 164 3 164 Executive Director Kirsty Flanagan Roads and Infrastructure Services Roads Maintenance - Bridges, Culverts & Sea Defences Extreme localised weather may result in loss of bridge, culvert, road or sea defence. Routine inspections to deal with potential weak areas - based on a stitch in time repair regime. 3 750 3 750 Executive Director Kirsty Flanagan Roads and Infrastructure Services Winter Maintenance Adverse weather conditions which require greater than budgeted number of gritting runs. Monitor weather conditions and apply gritting policy to minimise costs. 4 365 4 365 Executive Director Kirsty Flanagan Roads and Infrastructure Services Roads Maintenance - Roads Network Adverse weather conditions result in deterioration of the road network necessitating greater spend on repair of defects. Manage maintenance budgets to ensure that spend is prioritised to deal with safety defects. 3 230 3 230 Executive Director Kirsty Flanagan Roads and Infrastructure Services Car Parking Income Reduced number of visitors to the area and use of council owned car parks resulting in a reduction in income. Closely monitor income levels throughout the year, especially in high visitor seasons. 3 200 3 200 39 5,265 39 5,265
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ARGYLL AND BUTE COUNCIL POLICY & RESOURCES COMMITTEE FINANCIAL SERVICES 15 FEBRUARY 2024 CAPITAL BUDGET MONITORING REPORT – 31 DECEMBER 2023 1.0 EXECUTIVE SUMMARY 1.1 This report provides an update on the position of the capital budget as at 31 December 2023. The report provides information on the financial position in respect of the capital plan and the performance in terms of delivery of capital plan projects. 1.2 Financial Position: Current Year to Date – actual net expenditure to date is £24,334k compared to a budget for the year to date of £24,309k resulting in an overspend for the year to date of £25k (0.10%). Forecast Outturn for 2023-24 – forecast net expenditure for the full financial year is £34,239k compared to an annual budget of £41,791k giving rise to a forecast underspend for the year of £7,552k (18.07%). Total Capital Plan – forecast total net project costs on the total capital plan are £216,885k compared to a total budget for all projects of £216,065k giving rise to a forecast overspend for the overall capital plan of £820k (0.38%). 1.3 Project Delivery: Asset Sustainability – Out of 85 projects there are 70 projects (82%) on track, 2 projects (3%) off track but recoverable and 13 projects off track (15%). Service Development - Out of 42 projects there are 41 projects (98%) on track, 0 projects (0%) off track but recoverable and 1 projects (2%) off track. Strategic Change – Out of 30 projects there are 29 projects (97%) on track, 0 projects (0%) are off track but recoverable and 1 projects (3%) off track. 1.4 1.5 The Capital Programme is funded by various income streams as detailed in Appendix 5. Additional funding has been allocated from revenue to clear small overspends across a number of projects. Originally the Council was projecting £1,195k of capital receipts this financial year. However, the revised forecast for the financial year is now £484k, of which £160k have been received. This is as a result of delays in assets sales rather than a permanent reduction and over the life of the programme there is no overall impact. The estimated level of receipts will be kept under review as market conditions change, as will values following due diligence undertaken by prospective purchasers on the condition of asset.
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ARGYLL AND BUTE COUNCIL POLICY & RESOURCES COMMITTEE FINANCIAL SERVICES 15 FEBRUARY 2024 CAPITAL BUDGET MONITORING REPORT – 31 December 2023 2.0 INTRODUCTION 2.1 2.2 2.3 2.4 2.5 2.6 2.7 This report provides an update on the position of the capital budget as at 31 December 2023. The report provides information on the financial position in respect of the capital plan and the performance in terms of delivery of capital plan projects. Following the decision at Policy and Resources Committee on 9 December 2021, the Rothesay Pavilion project was put on pause whilst potential funding options were being considered. At the budget meeting in February 2023 additional funding was allocated to this project which will allow the project to progress towards success by supporting completion of certain work stages. The financial information included within this report now includes amounts relating to Phase 1 of the Rothesay Pavilion project. Campbeltown Flood Scheme has seen compensation events raised by the contractor which has resulted in a forecasted overspend of £0.710m. These are currently being discussed with the consultant and cost saving approaches are being sought to bring the project in on budget though at this stage the current forecasted overspends have been included within the figures and the project is marked as off track. Surveys have been completed in the Councils Learning Estates in relation to RAAC with only 1 building confirmed as having it present with steps underway for its removal. This will include a decant of the students for approximately 9 months plus total removal and replacement of the roof during 2024. The estimated costs associated with this are £3m which will require additional funding and will be considered as part of the 2024-25 budget setting process. The Councils bid to the Scottish Governments Learning Estate Investment Programme (LEIP) for funding for a new school campus on Mull was successful. While this is good news and will provide welcome investment in the school estate it does come with a financial pressure that is required to be funded if the project is to proceed. The Scottish Government will fund up to 50% of eligible costs therefore the Council will be required to fund circa £20m. As a result of significant rainfall Argyll and Bute Council activated the Bellwin scheme in relation to the recovery costs associated with the incident. The funding from this scheme is welcomed however eligibility criteria of costs are restrictive. Capital expenditure does not qualify therefore any long term replacements to infrastructure such as bridges cannot be claimed through the scheme therefore if not already part of the capital programme will require funding. Works to the value of £1.8m have been carried out already with future anticipated works costing circa £2.5m being identified, both which will require capital funding allocated. New Waste legislation has been introduced on the disposal of Persistent Organic Pollutants (POPs). POPs are organic chemical substances which pose a risk to human health and the environment due to their persistence in the environment, bioaccumulation through the food chain and long-range environmental transport across a wide geographical range. These items of waste will need to be stored separately from general waste at landfill sites before being disposed of which will incur additional capital expenditure. A forecast of £110k has been reported in the capital monitoring which is currently shown as an overspend and will require additional funding to be identified.
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2.8 2.9 2.10 A £1m cost pressure was identified during 2021-22 in relation to repairs to the A884 Ardbeg Sea Wall, where severe storm damage resulted in failure of the sea wall on Bute. Emergency works were carried out and a permanent solution is currently being developed. Additional funding of £1m was allocated for this purpose at the Council meeting on 24 February 2022 however there remains a risk that costs will exceed this. Feasibility report underway to progress the permanent works and estimated costs. The impact of the pandemic along with the UK exit from the European Union, the Russian invasion of Ukraine and sanctions on Russian owned entities has seen significant price increases as well as disruptions to the supply chain and longer lead in times. The increased rate of inflation impacts costs such as energy prices, labour, packaging and transport. These all have an effect on the overall contract price and make it extremely challenging to manage expenditure and the availability of supply. As a result of this it should be noted that there are likely to be other significant financial impacts which are not quantifiable at this stage, as follows: Rothesay Pavilion – despite additional funding being awarded there remains a funding gap to allow full completion of the original intended works. Harbour Investment Programme – likely to be contractual cost increases in future years (expected to be funded from increased fees and charges). Universal Free School Meals – delayed roll out to P6 and P7 and uncertain capital funding levels available from the Scottish Government. Distributions of 2023-24 funding have not yet been announced. Bridges Fund - A scheme of bridge capital works was developed and 80% funded through the Local Bridge Maintenance Fund with £5.450m of funding approved. Increased capital contract costs from when the scheme was developed to now, has the schemes costing approximately £12m. Discussions are in place to request the original funding be approved to cover a smaller scheme with less bridges. In general, capital contracts across the programme are seeing significant price increases. Although the direct impact of COVID on most local services has reduced or even ceased altogether over the last 12 months, COVID-19 in conjunction with the UK exit from the European Union and the Russian invasion of Ukraine, continues to affect worldwide supply chains. In recent years additional funding of £10.803m has been allocated to the capital programme for this purpose which has mitigated the impact to date however, as detailed in the table below, only £2.703m remains unallocated to projects facing inflationary pressures. Funding for Capital Inflationary Pressures £m COVID-19 Funding 0.257 February 2021 Budget Meeting - Capital Cost Pressures 4.646 February 2022 Budget Meeting - Capital Cost Pressures 3.900 February 2023 Budget Meeting – Capital Projects Inflation Pressures 2.000 Total Additional Funding Allocated to Capital 10.803 Allocated to Projects within Capital Programme (5.779) Committed for future years (2.321) Balance Remaining 2.703 3.0 RECOMMENDATIONS 3.1 Note the contents of this report and the financial summaries as detailed in Appendix 8 and approve the proposed changes to the capital plan detailed in Appendix 4.
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4.0 CURRENT YEAR TO DATE FINANCIAL POSITION 4.1 4.2 Overall Position Actual net expenditure to date is £24,334k compared to a budget for the year to date of £24,309k resulting in an overspend for the year to date of £25k (0.10%). Project/Department Position The table below shows the year to date net expenditure against the year to date budget by project type and service: Project Type: Year to Date Budget £'000 Year to Date Actual £'000 Variance £'000 Asset Sustainability 10,679 10,704 (25) Service Development 2,477 2,477 0 Strategic Change 11,153 11,153 0 Total 24,309 24,334 (25) Service: ICT 869 869 0 Education 4,069 4,069 0 Live Argyll 562 562 0 Health & Social Care Partnership 613 613 0 Shared Offices 781 782 (1) Roads & Infrastructure 12,980 13,004 (24) Development & Economic Growth 754 754 0 CHORD 3,681 3,681 0 Total 24,309 24,334 (25) Material variances are explained in Appendix 1 and there are a number of small variances contributing to the year to date overspend.
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5.0 FORECAST OUTTURN 2023-24 5.1 Overall Position Forecast net expenditure for the full financial year is £34,239k compared to an annual budget of £41,791k giving rise to a forecast underspend for the year of £7,552k (18.07%). 5.2 Project/Department Position The table below shows the forecast expenditure and budget for the year by project type and service. Project Type: Annual Budget £'000 Forecast Outturn £'000 Forecast Variance £'000 Asset Sustainability 24,786 18,380 6,406 Service Development 201 (45) 246 Strategic Change 16,804 15,904 900 Total 41,791 34,239 7,552 Service: ICT 1,428 1,428 0 Education 6,917 5,940 977 Live Argyll 1,084 1,084 0 Health & Social Care Partnership 2,201 944 1,257 Shared Offices 1,906 1,907 (1) Roads & Infrastructure 23,496 18,177 5,319 Development & Economic Growth (931) (931) 0 CHORD 5,690 5,690 0 Total 41,791 34,239 7,552 Material variances are explained in Appendix 2 and there are a number of smaller variances contributing to the forecast underspend.
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6.0 TOTAL PROJECT COSTS 6.1 Overall Position Forecast total net project costs on the total capital plan are £216,885k compared to a total budget for all projects of £216,065k giving rise to a forecast overspend for the overall capital plan of £910k (0.38%). 6.2 Project/Department Position The table below shows the forecast expenditure and budget for the total capital plan by project type and service. Project Type: Capital Plan Budget £'000 Forecast Project Costs £'000 Total Capital Plan Variance £'000 Asset Sustainability 59,393 59,503 (110) Service Development 22,358 22,358 0 Strategic Change 134,314 135,024 (710) Total 216,065 216,885 (820) Service: ICT 6,380 6,380 0 Education 45,636 45,636 0 Live Argyll 2,971 2,971 0 Health & Social Care Partnership 4,752 4,752 0 Shared Offices 23,539 23,539 0 Roads & Infrastructure 59,281 60,101 (820) Development & Economic Growth 5,307 5,307 0 CHORD 68,199 68,199 0 Total 216,065 216,885 (820) Material variances are explained in Appendix 3 and there are a number of smaller variances leading to the forecast overspend.
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7.0 TOTAL PROJECT PERFORMANCE 7.1 Overall Position There are 157 projects within the Capital Plan, 140 are Complete or On Target, 2 are Off Target and Recoverable and 15 are Off Track. 7.2 Project Position The table below shows the Performance Status of the Projects in the Capital Plan. Project Type: Complete/ On Target Off Target/ Recoverable Off Target/ Problem Total Asset Sustainability 70 2 13 85 Service Development 41 0 1 42 Strategic Change 29 0 1 30 Total 140 2 15 157 Service: ICT 7 0 0 7 Education 30 0 1 31 Live Argyll 19 0 0 19 Health & Social Care Partnership 16 0 1 17 Shared Offices 23 1 0 24 Roads & Infrastructure 22 1 13 36 Development & Economic Growth 17 0 0 17 CHORD 6 0 0 6 Total 140 2 15 157
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7.3 Chart of Performance Status The graph provides a view of the Performance Status of the Projects included in the Capital Plan: 0 10 20 30 40 50 60 70 80 90 Asset Sustainability Service Development Strategic Change Off Target/ Problem Off Target/ Recoverable Complete/ On Target
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8.0 OFF TRACK PROJECTS 8.1 The Off-Track projects are noted in the table below and variance reports are included in Appendix 6. Project Type Project What is Off Track? Explanation RIS - Service Development Fleet Management Current Year Expenditure Slippage into future years. Delays in the delivery of orders has led to this slippage. A number of vehicles (£800k) are forecast for delivery in March 2024, if these vehicles face any delays further slippage will occur before the year end. RIS - Asset Sustainability Environmental Projects Current Year Expenditure Slippage into future years. Planning applications and associated works are ongoing for the Cemeteries where works are still to commence. No further capital expenditure forecast for 2023-24 now that Tobermory Cemetery works are complete. RIS - Asset Sustainability Play Park Renewal Current Year Expenditure Slippage into future years. Engagement with Local Communities is taking place to determine the works which will go ahead, as these discussions are still taking place no expenditure is forecast to occur within 2023-24. RIS - Asset Sustainability Footway Improvements Current Year Expenditure Slippage into future years. The full footways programme for 2023-24 was not delivered within the year due to adverse weather, sickness within the team and other commitments. These works are forecasted to be carried out in 2024-25 alongside the 2024-25 programme. RIS - Asset Sustainability Active Travel Current Year Expenditure Slippage into future years. The full footways programme for 2023-24 was not delivered within the year due to adverse weather, sickness within the team and other commitments. These works are forecasted to be carried
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out in 2024-25 alongside the 2024-25 programme. RIS - Asset Sustainability Flood Prevention Current Year Expenditure Slippage into future years. Resources were reallocated to the numerous emergencies which arose from the October 2023 weather incident. Resources were reallocated accordingly hence delays in existing projects. There were also unsuccessful tender processes due to excessive costs being quoted on returns which required retendering. RIS - Asset Sustainability Coastal Protection Current Year Expenditure Slippage into future years. Resources were reallocated to the numerous emergencies which arose from the October 2023 weather incident. Resources were reallocated accordingly hence delays in existing projects. RIS - Asset Sustainability Coastal Change Adaptation Current Year Expenditure Slippage into future years. Resources were reallocated to the numerous emergencies which arose from the October 2023 weather incident. Resources were reallocated accordingly hence delays in existing projects. RIS - Asset Sustainability Bute Seawall Repairs Current Year Expenditure Slippage into future years. Resources were reallocated to the numerous emergencies which arose from the October 2023 weather incident. Resources were reallocated accordingly hence delays in existing projects. RIS - Asset Sustainability Helensburgh Flood Mitigation Current Year Expenditure Slippage into future years. Resources were reallocated to the numerous emergencies which arose from the October 2023 weather incident. Resources were reallocated accordingly hence delays in existing projects. There were also unsuccessful tender processes
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due to excessive costs being quoted on returns which required retendering. RIS - Asset Sustainability Bridge Strengthening Current Year Expenditure Slippage into future years. Resources were reallocated to the numerous emergencies which arose from the October 2023 weather incident. Resources were reallocated accordingly hence delays in existing projects. RIS - Asset Sustainability Local Bridge Maintenance Fund Current Year Expenditure Slippage into future years. Resources were reallocated to the numerous emergencies which arose from the October 2023 weather incident. Resources were reallocated accordingly hence delays in existing projects. RIS - Strategic Change Campbeltown Flood Scheme Current Year Expenditure & Total Project Expenditure Slippage into future years due to revised cash flow forecasts provided from Consultant and Contractor. As we approach the year end the financial position becomes clearer and total Project Expenditure is reporting an overspend due to an overspend on the Burnside Square project and compensation events that have been raised by the Contractor. PropEdu-Asset Sustainability Secondary Schools Current Year Expenditure Slippage into future years due to delays to the roof works at Islay High School. Works had been programmed to start in 2023-24 however delays due to weather conditions, tender returns exceeding project budget and redesigns of the scope of works has led to a slippage being reported. PropNonEdu- Asset Sustainability Tigh an Rudha Current Year Expenditure Slippage into future years. The project is delayed due to tender returns for Tigh An Rudha exceeding the anticipated costs of the project. HSCP projects are on pause while future of the Tigh an Rudha is determined.
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9.0 9.1 RIS - Asset Sustainability POPs Waste Total Project Expenditure Project is currently showing an overspend as the funding for the essential works of separating POPs waste has still to be identified. STRATEGIC CHANGE PROJECTS Appendix 7 gives detailed information in respect of the Strategic Change Projects within the Capital Plan. The appendix gives details of the forecast cost of each project against the approved budget, the start and anticipated completion date of the project and an assessment of the risks of the project and, if these are not green, gives an explanation of the problem.
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10.0 10.1 CHANGES TO CAPITAL PLAN The table below shows proposed changes to the Capital Plan at summary level which include slippages, accelerations and virements. Explanations relating to the specific projects involved can be seen in Appendix 4. The updated gross expenditure capital plan incorporating these proposed changes can be found in Appendix 9. Department Prev. Agreed Changes 2023-24 2023-24 2024-25 2025-26 Future Years Total Capital Plan £’000 £’000 £’000 £’000 £’000 £’000 Asset Sustainability (1,595) (6,430) 6,430 0 0 0 Service Development 34 (246) 246 0 0 0 Strategic Change (8,222) (900) (2,990) (11,000) 14,890 0 Total (9,783) (7,576) 3,686 (11,000) 14,890 0 Service: ICT 154 0 0 0 0 0 Education (903) (977) 977 0 0 0 Live Argyll (207) 0 0 0 0 0 Health & Social Care Partnership 6 (1,257) 1,257 0 0 0 Shared Offices (364) 1 (1) 0 0 0 Roads & Infrastructure (7,424) (5,343) 1,453 (11,000) 14,890 0 Development & Economic Growth (523) 0 0 0 0 0 Major Projects (522) 0 0 0 0 0 Total (9,783) (7,576) 3,686 (11,000) 14,890 0 11.0 FUNDING 11.1 The Capital Programme is funded by various income streams as detailed in Appendix 5. Additional funding has been allocated from revenue to clear small overspends across a number of projects.
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12.0 12.1 12.2 12.3 12.4 12.5 12.6 12.7 12.8 IMPLICATIONS Policy – Monitors progress against the capital plan. Financial – Monitors funding and commitments of the capital plan. Legal – Available funding may not address all Statutory and Regulatory requirements in relation to Health and Safety. HR – Available funding may have an impact on the sustainability of the Property Design Team and Infrastructure Design Team. Fairer Scotland Duty – None. 12.5.1 Equalities – protected characteristics – None. 12.5.2 Socio-economic Duty – None. 12.5.3 Islands – None. Climate Change – The Council is committed to addressing climate change via projects within the capital plan. Risk – There are risks around increasing capital contract costs and the level and timing of capital receipts. Customer Service – None. Kirsty Flanagan Executive Director / Section 95 Officer 12 January 2024 Policy Lead for Finance and Commercial Services – Councillor Gary Mulvaney APPENDICES - Appendix 1 – Year To Date finance variance explanations - Appendix 2 – Forecast Outturn variance explanations - Appendix 3 – Total Project finance variance explanations - Appendix 4 – Changes to Capital Plan and Financial Impact - Appendix 5 – Capital Funding - Appendix 6 - Off Track project variance reports - Appendix 7 - Cumulative spend, completion dates and risks relating to significant capital projects. - Appendix 8 - Financial Summary – Overall - Financial Summary – Executive Director Kirsty Flanagan - Financial Summary – Executive Director Douglas Hendry - Appendix 9 - Updated/Revised Capital Plan For further information contact: Anne Blue, Head of Financial Services anne.blue@argyll-bute.gov.uk
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APPENDIX 1 – Year to Date Financial Variance Explanations Listed below are the projects where the variance is +/- £50k. Project YTD Budget £’000 YTD Actual £’000 (Over)/ Under Variance £’000 Explanation Other variances under £50k (25) Total value of non-material variances less than +/-£50k Total (25)
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APPENDIX 2 – Outturn Variance Explanations Listed below are the projects where the current year variance is +/- £50k. Project Annual Budget £’000 Outturn £’000 Total (Over)/ Under Forecast Variance £’000 Explanation Fleet Management 2,512 2,266 246 Slippage into future years. Delays in the delivery of orders has led to this slippage. A number of vehicles (£800k) are forecast for delivery in March 2024, if these vehicles face any delays further slippage will occur before the year end. Environmental Projects 650 200 450 Slippage into future years. Planning applications and associated works are ongoing for the Cemeteries where works are still to commence. No further capital expenditure forecast for 2023-24 now that Tobermory Cemetery works are complete. Play Park Renewal 312 0 312 Slippage into future years. Engagement with Local Communities is taking place to determine the works which will go ahead, as these discussions are still taking place no expenditure is forecast to occur within 2023-24. Footway Improvements 750 450 300 Slippage into future years. The full footways programme for 2023-24 was not delivered within the year due to adverse weather, sickness within the team and other commitments. These works are forecasted to be carried out in 2024-25 alongside the 2024-25 programme. Active Travel 389 189 200 Slippage into future years. The full footways programme for 2023-24 was not delivered within the year due to adverse weather, sickness within the team and other commitments. These works are forecasted to be carried out in 2024-25 alongside the 2024-25 programme. Flood Prevention 807 340 467 Slippage into future years. Resources were reallocated to the numerous emergencies which arose from the October 2023 weather incident. Resources were reallocated accordingly hence delays within existing projects. There were also unsuccessful tender processes due to excessive costs being quoted on returns which require retendering. Coastal Protection 99 6 93 Slippage into future years. Resources were reallocated to the numerous emergencies which arose from the October 2023 weather incident. Resources were reallocated accordingly hence delays within existing projects. Coastal Change Adaptation 158 41 117 Slippage into future years. Resources were reallocated to the numerous emergencies which arose from the October 2023 weather incident. Resources were reallocated accordingly hence delays within existing projects. Helensburgh Flood Mitigation 428 1 427 Slippage into future years. Resources were reallocated to the numerous emergencies which arose from the October 2023 weather incident. Resources were reallocated accordingly hence delays within existing projects. There were also
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unsuccessful tender processes due to excessive costs being quoted on returns which require retendering. Bridge Strengthening 1,336 373 963 Slippage into future years. Resources were reallocated to the numerous emergencies which arose from the October 2023 weather incident. Resources were reallocated accordingly hence delays within existing projects. Local Bridge Maintenance Fund 1,000 173 827 Slippage into future years. Resources were reallocated to the numerous emergencies which arose from the October 2023 weather incident. Resources were reallocated accordingly hence delays within existing projects. Campbeltown Flood Scheme 9,702 8,802 900 Slippage into future years due to revised cash flow forecasts provided from Consultant and Contractor. As we approach the year end the financial position becomes clearer and total project expenditure is reporting an overspend due to an overspend on the Burnside Square project and compensation events that have been raised by the Contractor. Secondary Schools 1,129 852 277 Slippage into future years due to delays to the roof works at Islay High School. Works had been programmed to start in 2023-24 though delays due to weather conditions, tender returns exceeding project budget and redesigns of the scope of works has led to a slippage being reported. Block Allocation - Education 916 216 700 Unallocated Education Block Allocation was kept aside to cover any of the RAAC costs which may have accelerated into 2023-24. Block allocation not required in 2023-24 has now been slipped into 2024-25. Tigh an Rudha 600 109 491 Slippage into future years. The project is delayed due to tender returns for Tigh An Rudha exceeding the anticipated costs of the project. HSCP projects are on pause while future of the Tigh an Rudha is determined. Block Allocation - HSCP 766 0 766 Slippage into future years. HSCP Block Allocation had not fully been allocated in 2023-24 as programme of works was in limbo while decision on Tigh an Rudha was being made. Above mentioned delays to the Tigh an Rudha has resulted in the HSCP Block Allocation slipping into 2024-25 along with the funding already allocated to Tigh an Rudha. Other variances under £50k 16 Total value of non-material variances less than +/-£50k. Total 7,552 APPENDIX 3 – Total Project Finance Variances Listed below are the projects where the total project variance is +/- £50k.
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Project Capital Plan Budget £’000 Forecast Project Costs £’000 Total (Over)/ Under Forecast Variance £’000 Explanation Campbeltown Flood Scheme 15,215 16,925 (710) Total Project Expenditure is reporting an overspend due to an overspend on the Burnside Square project and compensation events that have been raised by the Contractor. POPs Waste 0 110 (110) Total Project Expenditure is reporting an overspend due to the funding still to be identified for the essential works to separate and store POPs Waste items. Other variances under £50k (0) Total value of non-material variances less than +/-£50k. Project Managers are working to reduce these small individual overspends by identifying underspends elsewhere within the capital plan. Total (820)
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APPENDIX 4 – Changes to Capital Plan and Financial Impact OVERALL COST CHANGES Project 2023- 24 £’000 2024- 25 £’000 2025- 26 £’000 Future Years £’000 Total Capital Plan £’000 Recommendation Explanation Lochgilphead Depot Rationalisation 25 0 0 0 25 Transfer budget from the Capital Grant Area Control Accounts to cover the projected overspend in the project. Demolition of unsafe buildings required prior to advancing project. Town Centre Funds - Dunoon Castle Gardens 10 0 0 0 10 Transfer budget from the Capital Grant Area Control Accounts to cover the projected overspend in the project. Overspend carried forward from prior year. Oban Depot Development Project 5 0 0 0 5 Transfer budget from the Capital Grant Area Control Accounts to cover the projected overspend in the project. Small overspend due to late engineer fees incurred. Glengorm - Cell and Transfer Station 4 0 0 0 4 Transfer budget from the Capital Grant Area Control Accounts to cover the projected overspend in the project. Small overspend due to additional materials found during project. Riverside Leisure Centre Refurbishment 1 0 0 0 1 Transfer budget from the Capital Grant Area Control Accounts to cover the projected overspend in the project. Small overspend due to water ingress issues. Tobermory Top Flat 6 0 0 0 6 Transfer budget from the Capital Grant Area Control Accounts to cover the projected overspend in the project. Small overspend due to late property fees incurred. Capital Fund – Area Control Accounts (51) 0 0 0 (51) Utilise budget from the Area control accounts to cover overspends detailed above. Total Cost Changes 0 0 0 0 0
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SLIPPAGES AND ACCELERATIONS Project 2023- 24 £’000 2024- 25 £’000 2025-26 £’000 Future Years £’000 Total Capital Plan £’000 Recommendation Explanation Harbour Investment Programme (3,890) (11,000) 14,890 0 Reprofile future years expenditure Earlier in 2023-24, Burnett Building 1 (1) 0 Accelerate from 2024-25 Works scheduled for 2024-25, accelerate from 2024-25 to cover building survey costs. Fleet Management (246) 246 0 Slip budget from 2023-24 Slippage into future years. Delays in the delivery of orders has led to this slippage. A number of vehicles (£800k) are forecast for delivery in March 2024, if these vehicles face any delays further slippage will occur before the year end. Environmental Projects (450) 450 0 Slip budget from 2023-24 Slippage into future years. Planning applications and associated works are ongoing for the Cemeteries where works are still to commence. No further capital expenditure forecast for 2023-24 now that Tobermory Cemetery works are complete. Play Park Renewal (312) 312 0 Slip budget from 2023-24 Slippage into future years. Engagement with Local Communities is taking place to determine the works which will go ahead, as these discussions are still taking place no expenditure is forecast to occur within 2023-24. Footway Improvements (300) 300 0 Slip budget from 2023-24 Slippage into future years. The full footways programme for 2023- 24 was not delivered within the year due to adverse weather, sickness within the team and other commitments. These works are forecasted to be carried out in 2024-25 alongside the 2024-25 programme. Active Travel (200) 200 0 Slip budget from 2023-24 Slippage into future years. The full footways programme for 2023- 24 was not delivered within the year due to adverse weather, sickness within the team and other commitments. These works are forecasted to be carried out in 2024-25 alongside the 2024-25 programme. Flood Prevention (467) 467 0 Slip budget from 2023-24 Slippage into future years. Resources were reallocated to the numerous emergencies which arose from the October 2023 weather incident. Resources were reallocated accordingly hence delays within existing projects. There were also unsuccessful tender processes due to excessive costs being quoted on returns which require retendering.
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Coastal Protection (93) 93 0 Slip budget from 2023-24 Slippage into future years. Resources were reallocated to the numerous emergencies which arose from the October 2023 weather incident. Resources were reallocated accordingly hence delays within existing projects. Coastal Change Adaptation (117) 117 0 Slip budget from 2023-24 Slippage into future years. Resources were reallocated to the numerous emergencies which arose from the October 2023 weather incident. Resources were reallocated accordingly hence delays within existing projects. Bute Seawall Repairs (41) 41 0 Slip budget from 2023-24 Slippage into future years. Resources were reallocated to the numerous emergencies which arose from the October 2023 weather incident. Resources were reallocated accordingly hence delays within existing projects. Helensburgh Flood Mitigation (427) 427 0 Slip budget from 2023-24 Slippage into future years. Resources were reallocated to the numerous emergencies which arose from the October 2023 weather incident. Resources were reallocated accordingly hence delays within existing projects. There were also unsuccessful tender processes due to excessive costs being quoted on returns which require retendering. Bridge Strengthening (963) 963 0 Slip budget from 2023-24 Slippage into future years. Resources were reallocated to the numerous emergencies which arose from the October 2023 weather incident. Resources were reallocated accordingly hence delays within existing projects. Local Bridge Maintenance Fund (827) 827 0 Slip budget from 2023-24 Slippage into future years. Resources were reallocated to the numerous emergencies which arose from the October 2023 weather incident. Resources were reallocated accordingly hence delays within existing projects. Campbeltown Flood Scheme (900) 900 0 Slip budget from 2023-24 Slippage into future years due to revised cash flow forecasts provided from Consultant and Contractor. As we approach the year end the financial position becomes clearer. Secondary Schools (277) 277 0 Slip budget from 2023-24 Slippage into future years due to delays to the roof works at Islay High School. Works had been programmed to start in 2023-24 though delays due to weather conditions, tender returns exceeding project budget and redesigns of the scope of works has led to a slippage being reported. Block Allocation - Education (700) 700 0 Slip budget from 2023-24 Unallocated Education Block Allocation was kept aside to cover any of the RAAC costs which may have accelerated into 2023-24. Block allocation not required in 2023-24 has now been slipped into 2024-25. Tigh an Rudha (491) 491 0 Slip budget from 2023-24 Slippage into future years. The project is delayed due to tender returns for Tigh An Rudha exceeding the anticipated costs of the
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project. HSCP projects are on pause while future of the Tigh an Rudha is determined. Block Allocation - HSCP (766) 766 0 Slip budget from 2023-24 HSCP Block Allocation had not fully been allocated in 2023-24 as programme of works was in limbo while decision on Tigh an Rudha was being made. Above mentioned delays to the Tigh an Rudha has resulted in the HSCP Block Allocation slipping into 2024-25 along with the funding already allocated to Tigh an Rudha. Total Slippages and Accelerations (7,576) 3,686 (11,000) 14,890 0 Net Impact of Changes (7,576) 3,686 (11,000) 14,890 0
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CAPITAL PROGRAMME FUNDING Appendix 5 Estimated Capital Funding Carry Forwards from 22-23 Slippage / Acceleration Additional Funding Updated Capital Funding Available Estimated Capital Funding Carry Forwards from 22-23 Slippage / Acceleration Additional Funding Updated Capital Funding Available Estimated Capital Funding Carry Forwards from 22-23 Slippage / Acceleration Additional Funding Updated Capital Funding Available General Capital Grant 11,900 222 -222 0 11,900 9,851 -276 0 129 9,704 10,007 54 0 0 10,061 Capital Grant - Area Control Accounts 0 0 0 51 51 0 0 0 0 0 0 0 0 0 0 Transfer to Revenue for Private Sector Housing Grant (PSHG) -1,033 0 0 0 -1,033 -1,033 0 0 0 -1,033 -1,033 0 0 0 -1,033 Capital Receipts 1,195 -60 -651 0 484 350 0 651 0 1,001 400 0 0 0 400 Flooding Allocation 155 0 0 0 155 155 0 0 0 155 155 0 0 0 155 Ring Fenced Capital Grant 5,800 0 14 0 5,814 304 0 314 400 1,018 0 0 -324 0 -324 Restricted Funding 1,613 0 -522 1,394 2,485 0 0 488 2,065 2,553 0 0 34 50 84 Funded by Reserves 11,909 6,533 0 243 18,685 8,187 289 0 186 8,662 1,175 -155 0 0 1,020 Additional Funding from Revenue 25 0 0 117 142 0 0 0 0 0 0 0 0 0 0 Insurance 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Harbour Investment Programme 22,235 -13,035 -6,000 0 3,200 27,025 -5,025 2,110 0 24,110 29,700 20,300 -11,000 0 39,000 Prudential Borrowing 20,718 -6,510 -10,889 74 3,393 27 6,434 11,106 0 17,567 0 1,388 5 0 1,393 Loans Fund Review 0 2,694 651 0 3,345 1,331 0 -651 0 680 0 0 0 0 0 COVID Funding 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 74,517 -10,156 -17,619 1,879 48,621 46,197 1,422 14,018 2,780 64,417 40,404 21,587 -11,285 50 50,756 BREAKDOWN OF ADDITIONAL FUNDING Additional Funding 2023-24 2024-25 2025-26 Reported Source Tobermory Top Flat - SHF 30 Jan-23 Revenue Funding Dunoon STEM Hub 50 Jan-23 Revenue Funding Dunoon STEM Hub 150 Jan-23 Grant Funding Dunoon Cycle Bothy 145 Jan-23 Grant Funding Gartbreck - Capping 118 Mar-23 Reserves Dunoon Cycle Bothy 74 Mar-23 Scottish Government Tigh Na Rhuda 400 50 Mar-23 Scottish Government Helensburgh and Rosneath Cycleways 290 Jun-23 SPT SPT - Bus Infrastructure 25 Jun-23 SPT Dunoon STEM Hub 1,750 Jun-23 Rural Growth Deal Rural Growth Deal planning stages 132 Jun-23 Rural Growth Deal Public Conveniences Upgrade - Coastal Communities Fund 200 Jul-23 Coasal Communities Fund Tobermory Harbour Wall and Railings, Phase 2 100 Jul-23 Coasal Communities Fund Tobermory Harbour Wall and Railings, Phase 2 250 Jul-23 Scottish Government Server Sustainability 95 Jul-23 Earmarked Reserves Oban Depot Development 67 Aug-23 Revenue Funding Roads Recon - STTS Funding 347 Aug-23 STTS Roads Recon - STTS Funding 40 Sep-23 STTS Coastal Change Adaptation 129 Sep-23 Scottish Government Telecomms Network 236 Oct-23 Earmarked Reserves Clean Energy - NDEEF1 -50 Oct-23 Earmarked Reserves Rural Growth Deal - Clyde Engineering 25 Oct-23 Earmarked Reserves Capital Grant - Area Control Accounts 51 Dec-23 Control accounts Rural Growth Deal 5 Dec-23 Rural Growth Deal Total 1,879 2,780 50 2025-262024-252023-24
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OFF TRACK PROJECT Appendix 6 Project Name: Fleet Management Project Manager: John Blake Risk: Low Initial Start Date: On-going Proposed End Date: On-Going How was this project initially funded? Prudential Borrowing Please detail any additional funding. Previously Reported Committee and Date: Next Reported Committee and Date: Why is the project classified as off target? Project is off target due to current year forecasted expenditure slipping out with 2023-24. What has caused the issue outlined above? The above issue has been caused due to procurement delays, continuation of delays caused by superconductor shortages in the vehicle manufacturing industry. What action will be taken to rectify this issue? Forecasts have been updated to reflect the updated anticipated delivery dates of ordered vehicles. What are the implications of the action proposed? Proposed actions will result in slippages being reported for 2023-24 and future year’s forecasts changing to reflect the above mentioned delays. A number of deliveries are currently forecasted for March 2024, any delays to these deliveries will result in further slippages out with 2024 before the year end.
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OFF TRACK PROJECT Appendix 6 Project Name: Environmental Projects Project Manager: Hugh O’Neill Risk: Low Initial Start Date: On-going Proposed End Date: N/A How was this project initially funded? Scottish Government General Capital Grant Allocation Please detail any additional funding. Coastal Community Funding Previously Reported Committee and Date: N/A - First off track report Next Reported Committee and Date: Why is the project classified as off target? Forecasted expenditure slipping out with 2023-24 What has caused the issue outlined above? Works at Tobermory Cemetery were completed in July 2023. Planning applications and associated prep work are ongoing for the cemetery works in Campbeltown, Strachur, Sandbank, Lismore and Calgary. Slippage occurred due to initial profiling inaccuracy. No further capital expenditure is due on these cemeteries in 2023-24, therefore the profile requires amendment. What action will be taken to rectify this issue? Forecasts have been updated to reflect the forecasted expenditure on the planned cemetery works. What are the implications of the action proposed? Proposed actions will result in slippages being reported for 2023-24. No further implications associated with this slippage, the original forecast for 2023-24 was overstated as not enough planning time was considered when setting the capital profile.
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OFF TRACK PROJECT Appendix 6 Project Name: Play Park Renewal Project Manager: Hugh O’Neill Risk: Low Initial Start Date: 2021-22 - 1st year of funding Proposed End Date: 2025-26 - final year of funding (estimate) How was this project initially funded? Scottish Government Specific Capital Grant Please detail any additional funding. Previously Reported Committee and Date: N/A - first time reported as off track Next Reported Committee and Date: Why is the project classified as off target? Forecasted expenditure slipping out with 2023-24 What has caused the issue outlined above? A full engagement process for the consideration of the improvement of 28 play parks across the area was completed in July 2023. Area committees have been updated with the reported findings and are now engaging with the local community councils. Due to the timing of these discussions, spend in 2023-24 is no longer forecast to occur. Slippage was caused by the original profile not allowing for as much planning and engagement time as was required. What action will be taken to rectify this issue? Forecasts have been updated to reflect that no expenditure is expected to occur in 2023-24. What are the implications of the action proposed? Proposed actions will result in slippages being reported for 2023-24.
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OFF TRACK PROJECT Appendix 6 Project Name: Footway Improvements Active Travel - works part of Footway Capital Scheme Project Manager: Hugh O’Neill Risk: Low Initial Start Date: On-going Proposed End Date: N/A How was this project initially funded? Scottish Government General Capital Grant Allocation Please detail any additional funding. Previously Reported Committee and Date: Next Reported Committee and Date: Why is the project classified as off target? Forecast expenditure slipping out with 2023-24 What has caused the issue outlined above? Due to adverse weather, sickness within the team and other commitments the full footway works scheduled for 2023-24 were not completed within the year. What action will be taken to rectify this issue? Forecast expenditure for the remaining schemes has been slipped into 2024-25 as this is when the schemes will be carried out. What are the implications of the action proposed? Remaining 2023-24 schemes will now be completed during 2024-25 programme of works.
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OFF TRACK PROJECT Appendix 6 Project Name: Flood Prevention Coastal Protection Coastal Change Adaptation Bute Seawall Repairs Helensburgh Flood Mitigation Bridge Strengthening Local Bridge Maintenance Fund Project Manager: Elsa Simoes Risk: Low Initial Start Date: N/A Proposed End Date: N/A How were these project initially funded? Scottish Government General Capital Grant Allocation Scottish Government Specific Capital Grant Allocation - Coastal Change Adaptations Please detail any additional funding. Previously Reported Committee and Date: Next Reported Committee and Date: Why are the projects classified as off target? Forecasted expenditure has slipped out with 2023-24 for the above Asset Sustainability projects. What has caused the issue outlined above? The team tasked with delivering these projects were tasked with allocating resources to the numerous emergencies which arose from the October 2023 flooding. Resources were reallocated accordingly from the Capital Plan – this resulted in those schemes being reprogrammed. Resources were not available to reach the anticipated forecasted expenditure for 2023-24. Unsuccessful tender processes due to excessive costs being quoted on returns also required retendering and further consumed resources. What action will be taken to rectify this issue? Forecasted expenditure has been slipped outwith 2023-24. Feasibility of achieving the current 2024-25 levels of work will be considered during year end discussions. What are the implications of the action proposed? Works previously programmed for 2023-24 have been pushed back to 2024-25 as tender processes continue to be progressed.
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OFF TRACK PROJECT Appendix 6 Project Name: Campbeltown Flood Scheme Project Manager: Jamie Salmon Risk: High Initial Start Date: 01/08/2016 Works Contract commenced - 27/05/2022 Proposed End Date: Q1 2024-25 with defect period running to February 2026 How was this project initially funded? Scottish Government Prudential Borrowings Please detail any additional funding. Previously Reported Committee and Date: Next Reported Committee and Date: Why is the project classified as off target? Current year forecast expenditure slipping out with 2023-24 and total project forecasting an overspend. What has caused the issue outlined above? Current year slippage has been caused by the live nature of the Construction and Services Contracts. Budget is updated on a Monthly basis considering the monthly revised cashflow predictions from AECOM (the consultant) and Dawson Wam (the contractor). The cause for forecasted expenditure to slip out with 2023-24 was due to additional works being required at Dalaruan Street Culvert. These works were compensation events involving Scottish Gas and Scottish Water to carry out diversions and enabling works. These works delayed the progress on Dalaruan Street culvert and as such the slippage reflects this. Overspend is forecasted due to the following: £500k of compensation events which have been raised by the Contractor £300k overspend on the Burnside Square Services and Works project within the scheme What action will be taken to rectify this issue? Profile has been updated to reflect the up-to-date cashflow predictions from AECOM and Dawson Wam, Estates, Public Utilities and Infrastructure Design. Compensation events have been monitored closely to ensure these have been managed in accordance with the condition of contract (Works Contract) – this is ongoing as with all contracts managed by Infrastructure Design. What are the implications of the action proposed? The project is now forecasted to be overspent.
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OFF TRACK PROJECT Appendix 6 Project Name: Secondary Schools Project Manager: Rhona Mitchell Risk: Low Initial Start Date: N/A Proposed End Date: N/A How was this project initially funded? Block allocation Please detail any additional funding. Previously Reported Committee and Date: Next Reported Committee and Date: Why is the project classified as off target? Forecasted expenditure has slipped out with 2023-24. What has caused the issue outlined above? Delays to the works on the roof at Islay High School has caused forecasted expenditure for 2023-24 to slip into 2024-25. Works had been programmed to start in 2023-24 though delays due to weather conditions, tender returns exceeding project budget and redesigns of the scope of works has led to a slippage being reported. What action will be taken to rectify this issue? Capital monitoring has been updated to reflect the delay in the project commencing, works are ongoing to bring project scope in line with budgetary constraints after previous tender returns exceeding this. What are the implications of the action proposed? Works are now scheduled to commence in 2024-25.
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OFF TRACK PROJECT Appendix 6 Project Name: Tigh An Rhuda Project Manager: Rhona Mitchell Risk: Med Initial Start Date: Proposed End Date: How was this project initially funded? Scottish Government Capital Grant Block allocation Please detail any additional funding. SG Island Funding Previously Reported Committee and Date: Next Reported Committee and Date: Why is the project classified as off target? Forecasted expenditure has slipped out with 2023-24. What has caused the issue outlined above? The project is delayed due to tender returns for Tigh An Rudha exceeding the anticipated costs of the project. HSCP projects are on pause while future of the Tigh an Rudha scope of works is determined. What action will be taken to rectify this issue? Forecasted expenditure has been slipped to reflect that Tigh An Rudha will not commence until at least 2024-25. What are the implications of the action proposed? Scope of project is still to be fully determined, as such no expenditure is expected for the remainder of 2023-24.
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OFF TRACK PROJECT Appendix 6 Project Name: POPs Waste Project Manager: A Millar Risk: Med Initial Start Date: November 2023 Proposed End Date: TBC How was this project initially funded? TBC Please detail any additional funding. Previously Reported Committee and Date: Next Reported Committee and Date: Why is the project classified as off target? Project is currently reporting a forecasted overspend. What has caused the issue outlined above? New Waste legislation has been introduced on the disposal of Persistent Organic Pollutants (POPs). POPs are organic chemical substances which pose a risk to human health and the environment due to their persistence in the environment, bioaccumulation through the food chain and long-range environmental transport across a wide geographical range. These items of waste will need to be stored separately from general waste at landfill sites before being disposed of which will incur additional capital expenditure. A forecast of £110k has been reported in the capital monitoring which is currently shown as an overspend and will require additional funding to be identified. What action will be taken to rectify this issue? Funding will be identified during the budget setting process. Once identified the forecasted overspend will be eliminated. What are the implications of the action proposed? No further implications.
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Strategic Change Projects - Cumulative Spend, Start/Finish Dates and Project Risks APPENDIX 7 Strategic Change Projects Prior Years Spend £'000 Current Year Forecast £'000 Total Project Forecast £'000 Total Project Budget £'000 Project Start Date Estimated Completion Date Project Risks Identified Explanation Campbeltown Flood Scheme 4,992 8,802 15,925 15,215 01/08/2016 02/05/2024 Red Contractor's updated programming of work moved Public Utility works from 22/23 to 23/24 Street Lighting LED Replacement 3,226 61 3,900 3,900 01/08/2016 31/12/2024 Green Tender for final package of works still to be awarded. Helensburgh Waterfront Development 23,415 977 24,392 24,392 01/04/2017 31/03/2024 Green Physically complete, retentions outstanding CHORD Oban 7,279 626 7,905 7,905 27/10/2016 31/03/2022 Green Issues with contract close out impacting on timescales. TIF - Halfway House Roundabout 66 56 640 640 tbc tbc Green Scope of project still to be determined - budget to be reprofiled. CHORD Rothesay 15,231 6,737 24,012 24,012 tbc tbc Green Project recommenced. Harbour Investment Programme 7,397 3,243 91,335 91,335 01/04/2017 31/03/2028 Green Budget slipped into future years. Dunoon Primary 10,635 234 10,869 10,869 18/12/2014 30/04/2020 Green Physically complete - negotiations with contractor delaying payment of final sums outstanding. Kirn Primary School 10,085 34 10,119 10,119 24/04/2014 31/10/2017 Green Physically complete - negotiations with contractor delaying payment of final sums outstanding. Replacement of Oban High 2,844 406 3,250 3,250 24/04/2014 31/01/2019 Green Physically complete - negotiations with contractor delaying payment of final sums outstanding. Helensburgh Office Rationalisation 11,538 300 11,838 11,838 25/04/2013 31/12/2022 Green Project subject to legal dispute. CHORD Dunoon 12,495 27 12,522 12,522 03/02/2012 09/03/2018 Green Main contract complete and retentions paid. Landscaping and remediation works ongoing but issues with water ingress may require works in 22-23. Kilmory Business Park Phase 2AA 47 560 1,129 1,129 01/02/2022 01/09/2024 Green Development Agreement still to be concluded. Carbon Management - Non Education 29 21 50 50 01/04/2015 31/12/2024 Green Projects being determined. Dunoon Pier OBC 2,844 0 2,844 2,844 03/02/2012 26/02/2016 Green Project complete. Campbeltown Office Rationalisation 595 1 596 596 01/02/2015 31/03/2019 Green Complete. TIF - Oban Airport Business Park 489 56 590 590 22/01/2015 31/12/2025 Green Campbeltown Schools Redevelopment 2,092 38 2,130 2,130 16/02/2012 30/11/2018 Green Physically complete - negotiations with contractor delaying payment of financial sums outstanding. CHORD - Helensburgh 6,529 28 6,557 6,557 29/09/2011 30/04/2015 Green Main contract complete. Art project proposed for 23-24. TIF - North Pier Extension 214 0 214 214 06/12/2017 06/12/2021 Green Complete. TIF - Lorn/Kirk Road 2,169 1 2,170 2,170 22/01/2015 31/03/2021 Green Complete. Carbon Management Fuel Conversions 107 0 107 107 01/02/2014 31/03/2019 Green Complete. Kilmory Biomass Carbon Management 956 0 956 956 20/09/2012 31/03/2019 Green Complete. Clean Energy - NDEEF1 964 224 1,331 1,331 tbc 31/03/2024 Green Clean Energy - NDEEF2 0 50 1,140 1,140 tbc tbc Green Net Zero 0 0 366 366 tbc tbc Green Strategic Change Total 129,739 22,482 240,388 239,678 Project Risk Classifications: Green - Risks can be managed and are viewed as stable or reducing. Amber - Risks are increasing but are still manageable. Red - Risks are increasing or have increased to such an extent they may affect delivery of the project. Capital Expenditure Dates Risks
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ARGYLL AND BUTE COUNCIL - CAPITAL PLAN MONITORING REPORT - OVERALL COUNCIL Appendix 8 FINANCIAL SUMMARY - NET EXPENDITURE Current Financial Year To Date Budget Actual (Over)/Under Variance Budget Forecast (Over)/Under Variance Budget Forecast (Over)/Under Variance £000s £000s £000s £000s £000s £000s £000s £000s £000s EXPENDITURE Asset Sustainability Projects Executive Director Douglas Hendry 5,557 5,558 (1) 10,402 8,169 2,233 23,042 23,042 0 Executive Director Kirsty Flanagan 5,552 5,576 (24) 15,609 11,436 4,173 38,026 38,136 (110) Asset Sustainability Total 11,109 11,134 (25) 26,011 19,605 6,406 61,068 61,178 (110) Service Development Projects Executive Director Douglas Hendry 321 321 0 526 526 0 16,438 16,438 0 Executive Director Kirsty Flanagan 2,264 2,264 0 6,244 5,998 246 38,354 38,354 0 Service Development Total 2,585 2,585 0 6,770 6,524 246 54,792 54,792 0 Strategic Change Projects Campbeltown Schools Redevelopment 0 0 0 38 38 0 2,130 2,130 0 Dunoon Primary 2 2 0 234 234 0 10,869 10,869 0 Replacement of Oban High 0 0 0 406 406 0 3,250 3,250 0 Kirn Primary School 0 0 0 34 34 0 10,119 10,119 0 Carbon Management - Non Education 0 0 0 21 21 0 50 50 0 Carbon Management Business Cases 0 0 0 0 0 0 201 201 0 NPDO Schools Solar PV Panel Installations 0 0 0 0 0 0 761 761 0 Non NPDO Schools Solar PV Panel Installations 0 0 0 0 0 0 400 400 0 Carbon Management Fuel Conversions 0 0 0 0 0 0 107 107 0 Carbon Management Capital Property Works 2016/17 0 0 0 0 0 0 19 19 0 Carbon Management - Group Heating Conversion Project 0 0 0 0 0 0 1,938 1,938 0 Kilmory Biomass Carbon Management 0 0 0 0 0 0 956 956 0 Oil to Gas Heating Conversions 0 0 0 0 0 0 182 182 0 Campbeltown Office Rationalisation 0 0 0 1 1 0 596 596 0 Helensburgh Office Rationalisation 0 0 0 300 300 0 11,838 11,838 0 Clean Energy - NDEEF1 145 145 0 224 224 0 1,331 1,331 0 Clean Energy - NDEEF2 0 0 0 50 50 0 1,140 1,140 0 Net Zero 0 0 0 0 0 0 366 366 0 Campbeltown Flood Scheme 7,293 7,293 0 9,702 8,802 900 15,215 15,925 (710) Street Lighting LED Replacement 31 31 0 61 61 0 3,900 3,900 0 Harbour Investment Programme 1,131 1,131 0 3,200 3,200 0 91,292 91,292 0 Harbour Investment Programme Non - PB 0 0 0 43 43 0 43 43 0 TIF - Lorn/Kirk Road 0 0 0 1 1 0 2,170 2,170 0 TIF - North Pier Extension 0 0 0 0 0 0 214 214 0 TIF - Oban Airport Business Park 1 1 0 56 56 0 590 590 0 TIF - Halfway House Roundabout 0 0 0 56 56 0 640 640 0 CHORD - Helensburgh 0 0 0 28 28 0 6,557 6,557 0 CHORD Dunoon 0 0 0 27 27 0 12,522 12,522 0 CHORD Oban 0 0 0 626 626 0 7,905 7,905 0 CHORD Rothesay 3,605 3,605 0 6,737 6,737 0 24,012 24,012 0 Helensburgh Waterfront Development 76 76 0 977 977 0 24,392 24,392 0 HWD - FFE (Funded by LA) 0 0 0 34 34 0 350 350 0 Kilmory Business Park Phase 2AA 0 0 0 560 560 0 1,129 1,129 0 Dunoon Pier OBC 0 0 0 0 0 0 2,844 2,844 0 Strategic Change Total 12,284 12,284 0 23,416 22,516 900 240,028 240,738 (710) Total Expenditure 25,978 26,003 (25) 56,197 48,645 7,552 355,888 356,708 (820) INCOME Asset Sustainability Executive Director Douglas Hendry 0 0 0 (128) (128) 0 (578) (578) 0 Executive Director Kirsty Flanagan (430) (430) 0 (1,097) (1,097) 0 (1,097) (1,097) 0 Asset Sustainability Total (430) (430) 0 (1,225) (1,225) 0 (1,675) (1,675) 0 Service Development Projects Executive Director Douglas Hendry 0 0 0 0 0 0 (7,771) (7,771) 0 Executive Director Kirsty Flanagan (108) (108) 0 (6,569) (6,569) 0 (24,663) (24,663) 0 Service Development Total (108) (108) 0 (6,569) (6,569) 0 (32,434) (32,434) 0 Strategic Change Projects Helensburgh Office Rationalisation 0 0 0 0 0 0 (349) (349) 0 Dunoon Primary 0 0 0 0 0 0 (137) (137) 0 Campbeltown Flood 0 0 0 0 0 0 (270) (270) 0 Harbour PB (1,131) (1,131) 0 (3,200) (3,200) 0 (91,292) (91,292) 0 01 TIF - Lorn/Kirk Road 0 0 0 (113) (113) 0 (2,154) (2,154) 0 H'burgh CHORD Public Realm Imprv 0 0 0 0 0 0 (570) (570) 0 Helensburgh Waterfront Development 0 0 0 (2,320) (2,320) 0 (7,979) (7,979) 0 Kilmory Business Park Phase 2AA 0 0 0 (979) (979) 0 (979) (979) 0 CHORD - Dunoon Waterfront 0 0 0 0 0 0 (10) (10) 0 CHORD - Oban 0 0 0 0 0 0 (1,624) (1,624) 0 Strategic Change Total (1,131) (1,131) 0 (6,612) (6,612) 0 (105,714) (105,714) 0 Total Income (1,669) (1,669) 0 (14,406) (14,406) 0 (139,823) (139,823) 0 Net Total 24,309 24,334 (25) 41,791 34,239 7,552 216,065 216,885 (820) Full Year This Financial Year Total Project Costs 31 December 2023
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MONITORING REPORT Budget Actual Variance Budget Forecast Variance Budget Forecast Variance £000s £000s £000s £000s £000s £000s £000s £000s £000s EXPENDITURE Asset Sustainability Education 3,747 3,747 0 5,859 4,882 977 13,409 13,409 0 Live Argyll 561 561 0 1,062 1,062 0 2,125 2,125 0 Health and Social Care Partnership 613 613 0 2,147 890 1,257 3,452 3,452 0 Shared Offices 636 637 (1) 1,334 1,335 (1) 4,056 4,056 0 Asset Sustainability Total 5,557 5,558 (1) 10,402 8,169 2,233 23,042 23,042 0 Service Development Projects Ardrishaig Primary Pre 5 Unit 0 0 0 0 0 0 2 2 0 Bowmore Primary School - Pre 5 Unit 0 0 0 0 0 0 149 149 0 Clyde Cottage - 600 hour provision 0 0 0 0 0 0 556 556 0 Craignish Primary School - Pre 5 Extension 0 0 0 0 0 0 400 400 0 Iona Primary School - Pre 5 Unit 0 0 0 0 0 0 490 490 0 Islay High and Rosneath Primary School Pitches 0 0 0 0 0 0 719 719 0 Lochgoilhead Primary School - Pre 5 Unit 0 0 0 0 0 0 391 391 0 Park Primary Extension/Pre Fives Unit 0 0 0 0 0 0 341 341 0 Tarbert High School - Biomass enabling work 0 0 0 0 0 0 0 0 0 Sandbank Gaelic Pre Five Unit 0 0 0 0 0 0 491 491 0 Bunessan Primary School - Gaelic Medium Improvements 0 0 0 0 0 0 120 120 0 Early Learning and Childcare 0 0 0 0 0 0 850 850 0 Early Learning and Childcare - 1140 Hours 320 320 0 320 320 0 7,774 7,774 0 CO2 Monitoring - Covid Mitigation in Schools 0 0 0 113 113 0 192 192 0 Early Learning and Childcare - 1140 Hours - CFCR 0 0 0 0 0 0 1,379 1,379 0 Bowmore Primary School - Gaelic Medium Grant 0 0 0 38 38 0 38 38 0 Riverside Leisure Centre Refurbishment 1 1 0 1 1 0 1,246 1,246 0 Dunclutha Childrens Home 0 0 0 54 54 0 1,300 1,300 0 Service Development Total 321 321 0 526 526 0 16,438 16,438 0 Strategic Change Projects Campbeltown Schools Redevelopment 0 0 0 38 38 0 2,130 2,130 0 Dunoon Primary 2 2 0 234 234 0 10,869 10,869 0 NPDO Schools Solar PV Panel Installations 0 0 0 0 0 0 761 761 0 Non NPDO Schools Solar PV Panel Installations 0 0 0 0 0 0 400 400 0 Carbon Management Fuel Conversions 0 0 0 0 0 0 107 107 0 Carbon Management Capital Property Works 2016/17 0 0 0 0 0 0 19 19 0 Carbon Management - Group Heating Conversion Project 0 0 0 0 0 0 1,938 1,938 0 Kilmory Biomass Carbon Management 0 0 0 0 0 0 956 956 0 Oil to Gas Heating Conversions 0 0 0 0 0 0 182 182 0 Campbeltown Office Rationalisation 0 0 0 1 1 0 596 596 0 Helensburgh Office Rationalisation 0 0 0 300 300 0 11,838 11,838 0 Clean Energy - NDEEF1 145 145 0 224 224 0 1,331 1,331 0 Clean Energy - NDEEF2 0 0 0 50 50 0 1,140 1,140 0 Net Zero 0 0 0 0 0 0 366 366 0 CHORD Oban 0 0 0 626 626 0 7,905 7,905 0 CHORD Rothesay 3,605 3,605 0 6,737 6,737 0 24,012 24,012 0 CHORD - Helensburgh 0 0 0 28 28 0 6,557 6,557 0 CHORD Dunoon 0 0 0 27 27 0 12,522 12,522 0 Helensburgh Waterfront Deveopment 76 76 0 977 977 0 24,392 24,392 0 HWD - FFE (Funded by LA) 0 0 0 34 34 0 350 350 0 Kilmory Business Park Phase 2AA 0 0 0 560 560 0 1,129 1,129 0 Dunoon Pier OBC 0 0 0 0 0 0 2,844 2,844 0 Strategic Change Total 3,828 3,828 0 10,297 10,297 0 125,964 125,964 0 Total Expenditure 9,706 9,707 (1) 21,225 18,992 2,233 165,444 165,444 0 INCOME Asset Sustainability Education 0 0 0 (125) (125) 0 (125) (125) 0 Shared Offices 0 0 0 (3) (3) 0 (3) (3) 0 Asset Sustainability Total 0 0 0 (128) (128) 0 (578) (578) 0 Service Development Projects Sandbank Gaelic Pre Five Unit 0 0 0 0 0 0 (485) (485) 0 Bunessan Primary School - Gaelic Medium Improvements 0 0 0 0 0 0 (30) (30) 0 Early Learning and Childcare 0 0 0 0 0 0 (918) (918) 0 Early Years 1140 Hours 0 0 0 0 0 0 (6,300) (6,300) 0 Bowmore Primary School - Gaelic Medium Grant 0 0 0 0 0 0 (38) (38) 0 Service Development Total 0 0 0 0 0 0 (7,771) (7,771) 0 Strategic Change Helensburgh Office Rationalisation 0 0 0 0 0 0 (349) (349) 0 Dunoon Primary School 0 0 0 0 0 0 (137) (137) 0 H'burgh CHORD Public Realm Imprv 0 0 0 0 0 0 (570) (570) 0 Helensburgh Waterfront Development 0 0 0 (2,320) (2,320) 0 (7,979) (7,979) 0 HWD - FFE (Funded by LA) 0 0 0 0 0 0 (350) (350) 0 CHORD - Oban 0 0 0 0 0 0 (1,624) (1,624) 0 Net Departmental Total 9,706 9,707 (1) 17,798 15,565 2,233 145,097 145,097 0 31 December 2023 Total Project CostsFull Year This Financial YearCurrent Financial Year To Date Appendix 8 FINANCIAL SUMMARY NET EXPENDITURE - EXECUTIVE DIRECTOR DOUGLAS HENDRY
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ARGYLL AND BUTE COUNCIL - CAPITAL PLAN MONITORING REPORT Current Financial Year To Date Budget Actual (Over)/Under Variance Budget Year End Forecast (Over)/Under Variance Budget Forecast (Over)/Under Variance £000s £000s £000s £000s £000s £000s £000s £000s £000s EXPENDITURE Asset Sustainability Projects Flood Prevention 101 101 0 807 340 467 1,305 1,305 0 Coastal Protection 2 2 0 99 6 93 199 199 0 Coastal Change Adaptation 30 30 0 158 41 117 287 287 0 Bute Sea Wall Repairs 46 46 0 100 59 41 680 680 0 Helensburgh Flood Mitigation 1 1 0 428 1 427 428 428 0 Bridge Strengthening 240 240 0 1,336 373 963 1,686 1,686 0 Local Bridge Maintenance Fund 123 123 0 1,000 173 827 5,203 5,203 0 Roads Reconstruction 3,619 3,619 0 7,419 7,419 0 15,419 15,419 0 Roads Reconstruction - Helensburgh CHORD 0 0 0 47 47 0 47 47 0 Roads Reconstruction - Oban CHORD 0 0 0 3 3 0 3 3 0 Helensburgh CHORD - Signage etc 0 0 0 10 10 0 10 10 0 Lighting 0 0 0 440 440 0 1,040 1,040 0 Environmental Projects 191 191 0 650 200 450 1,021 1,021 0 Play Park Refurbishment 0 0 0 312 0 312 938 938 0 Public Convenience Upgrades 54 54 0 282 282 0 282 282 0 Footway Improvements 381 381 0 750 450 300 750 750 0 Glengorm - Capping 0 0 0 0 0 0 0 0 0 Glengorm - Cell and Transfer Station (PB) 89 89 0 89 89 0 89 89 0 Gartbreck - Capping 6 6 0 6 6 0 200 200 0 POPs Waste 0 24 (24) 0 24 (24) 0 110 (110) EV Quick Chargers 0 0 0 62 62 0 62 62 0 Tobermory Car Park 0 0 0 96 96 0 96 96 0 Active Travel 0 0 0 389 189 200 389 389 0 Block Allocation - RIS 0 0 0 0 0 0 4,268 4,268 0 Server Sustainability 120 120 0 352 352 0 1,177 1,177 0 PC Replacement 306 306 0 518 518 0 1,835 1,835 0 Telecomms Network 243 243 0 256 256 0 480 480 0 Asset Sustainability Total 5,552 5,576 (24) 15,609 11,436 4,173 38,026 38,136 (110) Service Development Projects Preliminary design for Regional Transport projects 0 0 0 16 16 0 221 221 0 Campbeltown Old Quay 0 0 0 0 0 0 1,381 1,381 0 Fleet Management - Prudential Borrowing 1,188 1,188 0 2,187 2,187 0 4,861 4,861 0 Fleet Management 0 0 0 325 79 246 4,538 4,538 0 Lismore Ferry 0 0 0 15 15 0 672 672 0 Oban Depot Development Project 9 9 0 9 9 0 2,189 2,189 0 Lochgilphead Depot Rationalisation 33 33 0 33 33 0 62 62 0 Jackson's Quarry Refurbishment 0 0 0 0 0 0 285 285 0 Witchburn Road Demolition 0 0 0 0 0 0 158 158 0 Safe Streets, Walking and Cycling (CWSS) 0 0 0 370 370 0 3,383 3,383 0 SPT - bus infrastructure 0 0 0 0 0 0 1,430 1,430 0 Cycleways - H&L (FSPT) 7 7 0 300 300 0 3,402 3,402 0 Helensburgh Public Realm - Arts Strategy Fund 0 0 0 50 50 0 53 53 0 Town Centre Funds 341 341 0 718 718 0 4,329 4,329 0 Rural Growth Deal 160 160 0 162 162 0 212 212 0 Dunoon Cycle Bothy 220 220 0 292 292 0 563 563 0 Dunoon STEM Hub 19 19 0 713 713 0 2,558 2,558 0 Ardrishaig North Active Travel 75 75 0 112 112 0 880 880 0 Nature Restoration Fund 0 0 0 346 346 0 346 346 0 Gibraltar Street Public Realm Improvements 12 12 0 222 222 0 250 250 0 Hermitage Park 0 0 0 26 26 0 3,388 3,388 0 West Coast UAV Innovation Logistics and Training Hub 0 0 0 0 0 0 0 0 0 Applications Projects 200 200 0 348 348 0 3,193 3,193 0 Service Development Total 2,264 2,264 0 6,244 5,998 246 38,354 38,354 0 Strategic Change Projects Campbeltown Flood Scheme 7,293 7,293 0 9,702 8,802 900 15,215 15,925 (710) Street Lighting LED Replacement 31 31 0 61 61 0 3,900 3,900 0 Harbour Investment Programme 1,131 1,131 0 3,200 3,200 0 91,292 91,292 0 Harbour Investment Programme - Non PB 0 0 0 43 43 0 43 43 0 TIF - Lorn/Kirk Road 0 0 0 1 1 0 2,170 2,170 0 TIF - Oban Airport Business Park 1 1 0 56 56 0 590 590 0 TIF - Halfway House Roundabout 0 0 0 56 56 0 640 640 0 Strategic Change Total 8,456 8,456 0 13,119 12,219 900 114,064 114,774 (710) Total Expenditure 16,272 16,296 (24) 34,972 29,653 5,319 190,444 191,264 (820) INCOME Asset Sustainability EV Quick Chargers 0 0 0 (27) (27) 0 (27) (27) 0 Roads Reconstruction (430) (430) 0 (470) (470) 0 (470) (470) 0 Tobermory Car Park 0 0 0 (400) (400) 0 (400) (400) 0 Asset Sustainability Total (430) (430) 0 (1,097) (1,097) 0 (1,097) (1,097) 0 Service Development Projects Applications Projects 0 0 0 (46) (46) 0 (437) (437) 0 Safe Streets, Walking and Cycling 0 0 0 (376) (376) 0 (2,988) (2,988) 0 SPfT 0 0 0 (25) (25) 0 (1,268) (1,268) 0 Cycleways - H&L (FSPT) 0 0 0 (590) (590) 0 (3,502) (3,502) 0 Town Centre Funds 0 0 0 (625) (625) 0 (2,237) (2,237) 0 Rural Growth Deal (81) (81) 0 (182) (182) 0 (212) (212) 0 Dunoon STEM Hub 0 0 0 (2,050) (2,050) 0 (2,558) (2,558) 0 Ardrishaig North Active Travel 0 0 0 0 0 0 (50) (50) 0 Dunoon Cycle Bothy 0 0 0 (394) (394) 0 (563) (563) 0 Gibraltar Street Public Realm Improvements 0 0 0 0 0 0 (250) (250) 0 Hermitage Park 0 0 0 0 0 0 (3,319) (3,319) 0 Fleet Management - PB 0 0 0 (2,187) (2,187) 0 (4,861) (4,861) 0 Fleet Management (27) (27) 0 (27) (27) 0 (27) (27) 0 Lochgilphead Depot Rationalisation 0 0 0 0 0 0 0 0 0 Millpark Depot Demolition Insurance 0 0 0 0 0 0 (53) (53) 0 Oban Depot - Mill Park Insurance Claim 0 0 0 0 0 0 (1,681) (1,681) 0 Oban Depot - Appin Depot Sale 0 0 0 0 0 0 0 0 0 Oban Depot - Revenue Contribution 0 0 0 (67) (67) 0 0 0 0 Lismore Ferry 0 0 0 0 0 0 (500) (500) 0 Witchburn Road Demolition 0 0 0 0 0 0 (157) (157) 0 Service Development Total (108) (108) 0 (6,569) (6,569) 0 (24,663) (24,663) 0 Strategic Change Projects Campbeltown Flood 0 0 0 0 0 0 (270) (270) 0 Harbour PB (1,131) (1,131) 0 (3,200) (3,200) 0 (91,292) (91,292) 0 01 TIF - Lorn/Kirk Road 0 0 0 (113) (113) 0 (2,154) (2,154) 0 Strategic Change Total (1,131) (1,131) 0 (3,313) (3,313) 0 (93,716) (93,716) 0 Total Income (1,669) (1,669) 0 (10,979) (10,979) 0 (119,476) (119,476) 0 Net Departmental Total 14,603 14,627 (24) 23,993 18,674 5,319 70,968 71,788 (820) 31 December 2023 Full Year This Financial Year Total Project Costs FINANCIAL SUMMARY NET EXPENDITURE - EXECUTIVE DIRECTOR KIRSTY FLANAGAN Appendix 8
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CAPITAL PLAN 2023-24 APPENDIX 9 Overall Summary Service Previous Years £000's 2023-24 £000s 2024-25 £000s 2025-26 £000s 2026-27 £000s 2027-28 £000s Total Education 39,077 6,037 5,006 3,521 0 0 53,641 Shared Offices 17,661 1,910 3,343 977 0 0 23,891 ICT 2,529 1,474 1,593 1,221 0 0 6,817 RIS 26,197 24,731 46,640 44,028 17,623 0 159,219 DEG 18,331 3,424 2,653 0 0 0 24,408 HSCP 1,246 972 2,085 477 0 0 4,780 Live Argyll 1,274 1,084 636 427 0 0 3,421 CHORD 68,156 8,989 2,461 105 0 0 79,711 Overall Total 174,471 48,621 64,417 50,756 17,623 0 355,888
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CAPITAL PLAN 2023-24 APPENDIX 9 Education Category Service Project Previous Years £000's 2023-24 £000s 2024-25 £000s 2025-26 £000s 2026-27 £000s 2027-28 £000s Total £000s Asset Sustainability Education Asbestos Control/Removal Works 0 7 0 0 0 0 7 Block Allocation - Education 0 216 866 520 0 0 1,602 Digital Inclusion 20-21 0 9 0 0 0 0 9 Free School Meals 0 379 900 1,495 0 0 2,774 Homeless Houses - Housing Quality Standard 0 1 0 0 0 0 1 Internal Refurbishment Budget 0 7 0 0 0 0 7 Lochgilphead Primary School Demolition 0 0 0 0 0 0 0 Pre-5's/Nurseries 0 0 0 0 0 0 0 Primary Schools 0 3,370 2,420 1,280 0 0 7,070 School Houses - Housing Quality Standard 0 13 0 0 0 0 13 Secondary Schools 0 852 820 226 0 0 1,898 Asset Sustainability Total 0 4,854 5,006 3,521 0 0 13,381 Service Development Education Ardrishaig Primar School - Pre Five Extension 2 0 0 0 0 0 2 Bowmore Primary School - Gaelic Medium Grant 0 38 0 0 0 0 38 Bowmore Primary School - Pre Five Unit 149 0 0 0 0 0 149 Bunessan Primary School - Gaelic Medium Improvements 120 0 0 0 0 0 120 Clyde Cottage - 600 hours provision 556 0 0 0 0 0 556 CO2 Monitoring - Covid Mitigation in Schools 79 113 0 0 0 0 192 Craignish Primary School - Pre Five Extension (600 hours funding) 400 0 0 0 0 0 400 Early Learning and Childcare 850 0 0 0 0 0 850 Early Learning and Childcare - 1140 Hours 7,454 320 0 0 0 0 7,774 Early Learning and Childcare - 1140 Hours - CFCR 1,379 0 0 0 0 0 1,379 Iona Primary School - Pre Five Unit (600 hours funding) 490 0 0 0 0 0 490 Islay High & Rosneath PS Pitches 719 0 0 0 0 0 719 Lochgoilhead Primary School - Pre Five Unit (600 hours funding) 391 0 0 0 0 0 391 Park Primary Extension and Pre Fives Unit 341 0 0 0 0 0 341 Sandbank Gaelic Pre Five Unit 491 0 0 0 0 0 491 Service Development Total 13,421 471 0 0 0 0 13,892 Strategic Change Education Campbeltown Schools Redevelopment 2,092 38 0 0 0 0 2,130 Dunoon Primary School 10,635 234 0 0 0 0 10,869 Kirn Primary School 10,085 34 0 0 0 0 10,119 Replacement of Oban High School 2,844 406 0 0 0 0 3,250 Strategic Change Total 25,656 712 0 0 0 0 26,368 Overall Total 39,077 6,037 5,006 3,521 0 0 53,641
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CAPITAL PLAN 2023-24 APPENDIX 9 Shared Office Category Service Project Previous Years £000's 2023-24 £000s 2024-25 £000s 2025-26 £000s 2026-27 £000s 2027-28 £000s Total £000s Asset Sustainability Shared Offices 5-7 East Clyde Street - Coastal Communities Fund 0 0 0 0 0 0 0 Argyll House, Dunoon 0 9 0 0 0 0 9 Asbestos Capital Property Works 0 51 0 0 0 0 51 Block Allocation 0 152 298 427 0 0 877 Bowmore Area Office 0 76 0 0 0 0 76 Burnett Building 0 3 107 0 0 0 110 Capital Property Works 0 38 0 0 0 0 38 Fire Risk Assessment Works 0 14 0 0 0 0 14 Helensburgh and Lomond Civic Centre - Emergency Heating Pipework 0 130 0 0 0 0 130 Hill Street Dunoon Rewire 0 33 0 0 0 0 33 Kilmory Castle 0 0 1,409 0 0 0 1,409 Legionella Control Works 0 144 0 0 0 0 144 Manse Brae District Office 0 0 0 0 0 0 0 Manse Brae Roads Office 0 2 0 0 0 0 2 Our Modern Workspace 0 683 480 0 0 0 1,163 Asset Sustainability Total 0 1,335 2,294 427 0 0 4,056 Strategic Change Shared Offices Campbeltown Office Rationalisation 595 1 0 0 0 0 596 Carbon Management - Group Heating Conversion Project (Prudential Borrowing)1,938 0 0 0 0 0 1,938 Carbon Management Business Cases (FPB) 201 0 0 0 0 0 201 Carbon Management Capital Property Works 16/17 19 0 0 0 0 0 19 Carbon Management Fuel Conversions (FPB) 107 0 0 0 0 0 107 Clean Energy - NDEEF1 964 224 143 0 0 0 1,331 Clean Energy - NDEEF2 0 50 540 550 0 0 1,140 Helensburgh Office Rationalisation (FPB,REC) 11,538 300 0 0 0 0 11,838 Kilmory Biomass Project OBC (FPB,REV) 956 0 0 0 0 0 956 Net Zero 0 0 366 0 0 0 366 Non-NPDO Schools PV Panel Installations 400 0 0 0 0 0 400 NPDO Schools Solar PV Panel Installations 761 0 0 0 0 0 761 Oil to Gas Heating Conversions (FPB) 182 0 0 0 0 0 182 Strategic Change Total 17,661 575 1,049 550 0 0 19,835 Overall Total 17,661 1,910 3,343 977 0 0 23,891
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CAPITAL PLAN 2023-24 APPENDIX 9 Major Projects Category Service Project Previous Years £000's 2023-24 £000s 2024-25 £000s 2025-26 £000s 2026-27 £000s 2027-28 £000s Total £000s Strategic Change CHORD CHORD - Dunoon 12,495 27 0 0 0 0 12,522 CHORD - Helensburgh -Public Realm Imprv 6,529 28 0 0 0 0 6,557 CHORD - Oban 7,279 626 0 0 0 0 7,905 CHORD - Rothesay 15,231 6,737 1,973 71 0 0 24,012 Helensburgh Waterfront Development 23,415 977 0 0 0 0 24,392 HWD - FFE 316 34 0 0 0 0 350 Kilmory Business Park Phase 2AA 47 560 488 34 0 0 1,129 OBC for Dunoon Pier 2,844 0 0 0 0 0 2,844 Strategic Change Total 68,156 8,989 2,461 105 0 0 79,711 Overall Total 68,156 8,989 2,461 105 0 0 79,711
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CAPITAL PLAN 2023-24 APPENDIX 9 ICT Category Service Project Previous Years £000's 2023-24 £000s 2024-25 £000s 2025-26 £000s 2026-27 £000s 2027-28 £000s Total £000s Asset Sustainability ICT Block Allocation - ICT 0 0 132 0 0 0 132 PC Replacement 0 518 648 669 0 0 1,835 Server Sustainability 0 352 425 400 0 0 1,177 Telecomms Network 0 256 72 152 0 0 480 Asset Sustainability Total 0 1,126 1,277 1,221 0 0 3,624 Service Development ICT Applications Projects 2,529 348 316 0 0 0 3,193 Service Development Total 2,529 348 316 0 0 0 3,193 Overall Total 2,529 1,474 1,593 1,221 0 0 6,817
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CAPITAL PLAN 2023-24 APPENDIX 9 Roads and Infrastructure Services Category Service Project Previous Years £000's 2023-24 £000s 2024-25 £000s 2025-26 £000s 2026-27 £000s 2027-28 £000s Total £000s Asset Sustainability RIS Block Allocation 0 0 0 4,268 0 0 4,268 Bridge Strengthening 0 373 1,313 0 0 0 1,686 Bute Sea Wall Repairs 0 59 621 0 0 0 680 Coastal Change Adaptation 0 41 246 0 0 0 287 Coastal Protection 0 6 193 0 0 0 199 Environmental Projects 0 200 821 0 0 0 1,021 EV Quick Chargers 0 62 0 0 0 0 62 Flood Prevention 0 340 772 155 38 0 1,305 Footway Improvements 0 450 300 0 0 0 750 Glengorm - Capping 0 0 0 0 0 0 0 Glengorm - Cell and Transfer Station (PB) 0 89 0 0 0 0 89 Helensburgh CHORD - Signage etc 0 10 0 0 0 0 10 Helensburgh Flood Mitigation 0 1 427 0 0 0 428 Investment in Active Travel 0 189 200 0 0 0 389 Lighting 0 440 600 0 0 0 1,040 Local Bridge Maintenance Fund 0 173 4,827 203 0 0 5,203 Plant and Machinery 0 0 0 0 0 0 0 Public Convenience Upgrades 0 282 0 0 0 0 282 Roads Reconstruction 0 7,419 8,000 0 0 0 15,419 Roads Reconstruction - Helensburgh CHORD 0 47 0 0 0 0 47 Roads Reconstruction - Oban CHORD 0 3 0 0 0 0 3 Tobermory Car Park 0 96 0 0 0 0 96 Asset Sustainability Total 0 10,280 18,867 5,017 38 0 34,202 Service Development RIS Campbeltown Old Quay 1,381 0 0 0 0 0 1,381 Depot Rationalisation 0 0 0 0 0 0 0 Fleet Management - Prudential Borrowing 2,674 1,941 246 0 0 0 4,861 Jackson's Quarry Refurbishment 285 0 0 0 0 0 285 Lismore Ferry Replacement 637 15 20 0 0 0 672 Lochgilphead Depot Rationalisation 29 33 0 0 0 0 62 Oban Depot Development 2,180 9 0 0 0 0 2,189 Preliminary design for Regional Transport projects (tif) 205 16 0 0 0 0 221 Witchburn Road Demolition 158 0 0 0 0 0 158 Service Development Total 10,582 2,339 1,446 0 0 0 14,367 Strategic Change RIS Campbeltown Flood Scheme 4,992 8,802 1,410 11 0 0 15,215 Harbour Investment Programme PB 7,397 3,200 24,110 39,000 17,585 0 91,292 Street Lighting LED Replacement 3,226 61 613 0 0 0 3,900 Strategic Change Total 15,615 12,063 26,133 39,011 17,585 0 110,407 Overall Total 26,197 24,682 46,446 44,028 17,623 0 158,976
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CAPITAL PLAN 2023-24 APPENDIX 9 Development and Economic Growth Category Service Project Previous Years £000's 2023-24 £000s 2024-25 £000s 2025-26 £000s 2026-27 £000s 2027-28 £000s Total £000s Service Development DEG Ardrishaig North Active Travel 755 112 13 0 0 0 880 Cycleways - H&L (FSPT) 2,812 300 290 0 0 0 3,402 Dunoon Cycle Bothy 259 292 12 0 0 0 563 Dunoon STEM Hub 95 713 1,750 0 0 0 2,558 Gibraltar Street Public Realm Improvements 28 222 0 0 0 0 250 Helensburgh Public Realm - Arts Strategy Fund 3 50 0 0 0 0 53 Hermitage Park 3,362 26 0 0 0 0 3,388 Nature Restoration Fund 0 346 0 0 0 0 346 Rural Growth Deal 50 162 0 0 0 0 212 Safe Streets, Walking and Cycling (CWSS) 3,013 370 0 0 0 0 3,383 SPT - bus infrastructure 1,405 0 25 0 0 0 1,430 Town Centre Funds 3,611 718 0 0 0 0 4,329 Service Development Total 15,393 3,311 2,090 0 0 0 20,794 Strategic Change DEG 01 TIF - Lorn/Kirk Road 2,169 1 0 0 0 0 2,170 05 TIF - North Pier Extension 214 0 0 0 0 0 214 09 TIF - Oban Airport Business Park 489 56 45 0 0 0 590 TIF - Halfway House Roundabout 66 56 518 0 0 0 640 Strategic Change Total 2,938 113 563 0 0 0 3,614 Overall Total 18,331 3,424 2,653 0 0 0 24,408
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CAPITAL PLAN 2023-24 APPENDIX 9 Health & Social Care Partnership Category Service Project Previous Years £000's 2023-24 £000s 2024-25 £000s 2025-26 £000s 2026-27 £000s 2027-28 £000s Total £000s Asset Sustainability HSCP Ardfenaig 0 27 0 0 0 0 27 Block Allocation 0 0 1,058 184 0 0 1,242 Capital Property Works 0 79 0 0 0 0 79 Digitalising telecare 0 100 0 0 0 0 100 Dunoon Hostel 0 0 0 0 0 0 0 Eadar Glinn 0 0 0 0 0 0 0 East King Street Childrens Home 0 58 0 0 0 0 58 Glencruitten Hostel 0 81 36 143 0 0 260 Gortonvogie 0 1 0 0 0 0 1 Greenwood/Woodlands 0 216 0 0 0 0 216 Lochgilphead Resource Centre 0 16 0 0 0 0 16 Rothesay Community Education Centre 0 0 0 0 0 0 0 Shellach View 0 144 0 0 0 0 144 Thomson Home Rothesay 0 0 0 0 0 0 0 Tigh An Rudha HFE 0 109 991 150 0 0 1,250 Tobermory Top Flat 0 28 0 0 0 0 28 Asset Sustainability Total 0 918 2,085 477 0 0 3,480 Service Development HSCP Dunclutha Childrens Home 1,246 54 0 0 0 0 1,300 Service Development Total 1,246 54 0 0 0 0 1,300 Overall Total 1,246 972 2,085 477 0 0 4,780
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CAPITAL PLAN 2023-24 APPENDIX 9 Live Argyll Category Service Project Previous Years £000's 2023-24 £000s 2024-25 £000s 2025-26 £000s 2026-27 £000s 2027-28 £000s Total £000s Asset Sustainability Live Argyll Aqualibrium 0 343 48 40 0 0 431 Corran Halls Gaelic Centre 0 113 46 84 0 0 243 Inveraray CARS 0 0 0 0 0 0 0 Kintyre Community Education Centre - Lift Shaft Refurbishment 0 2 0 0 0 0 2 LA - Indoor Cycles 0 0 0 0 0 0 0 Lochgilphead Library Relocation 0 14 0 0 0 0 14 Moat Centre (Roofing) 0 0 0 0 0 0 0 Queen's Hall - Partition Wall 0 0 0 0 0 0 0 Riverside Leisure Centre - Health Suite Upgrade 0 204 0 0 0 0 204 Rothesay Swimming Pool 0 40 25 50 0 0 115 The Moat Centre - Gym Store 0 0 0 0 0 0 0 The Moat Centre - Heating Upgrade 0 0 0 0 0 0 0 The Moat Centre - Window Upgrade 0 0 0 0 0 0 0 Victoria Halls, Helensburgh 0 78 0 0 0 0 78 Asset Sustainability Total 0 1,062 636 427 0 0 2,125 Service Development Live Argyll Riverside Leisure Centre Refurbishment 1,245 1 0 0 0 0 1,246 Service Development Total 1,245 1 0 0 0 0 1,246 Strategic Change Live Argyll Carbon Management 29 21 0 0 0 0 50 Strategic Change Total 29 21 0 0 0 0 50 Overall Total 1,274 1,084 636 427 0 0 3,421
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ARGYLL AND BUTE COUNCIL POLICY AND RESOURCES COMMITTEE FINANCIAL SERVICES 15 FEBRUARY 2024 TREASURY MANAGEMENT MONITORING REPORT – 31 DECEMBER 2023 1.0. EXECUTIVE SUMMARY 1.1. This report sets out the Council’s treasury management position for the period 1 November 2023 to 31 December 2023 and includes information on: Overall borrowing position Borrowing activity Investment activity Economic background Interest rate forecast Prudential Indicators 1.2. Estimated borrowing is below the Capital Financing Requirement for the period to 31 December 2023, at this stage in the financial year capital expenditure is below target. 1.3. The net movement in external borrowing in the period 1 November 2023 to 31 December 2023 was £3m. 1.4. The levels of investments were £56.929m at 31 December 2023. The rate of return achieved was 5.054% compared to the target SONIA rate which was 5.187%. 1.5. The Council has significant cash balances which are invested in accordance with its Annual Treasury Management Strategy on the basis of security first, liquidity second and then return.
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ARGYLL AND BUTE COUNCIL POLICY AND RESOURCES COMMITTEE FINANCIAL SERVICES 15 FEBRUARY 2024 TREASURY MANAGEMENT MONITORING REPORT – 31 DECEMBER 2023 2.0. INTRODUCTION 2.1. This report sets out the Council’s treasury management position for the period 1 November 2023 to 31 December 2023 and includes information on: Overall borrowing position Borrowing activity Investment activity Economic background Interest rate forecast Prudential Indicators 3.0. DETAIL Overall Borrowing Position 3.1. The table below details the estimated capital financing requirement (CFR) and compares this with the estimated level of external debt at 31 March 2023. The CFR represents the underlying need for the Council to borrow to fund its fixed assets and accumulated capital expenditure. Forecast Forecast Forecast 2023/24 2024/25 2025/26 £000 £000 £000 CFR at 1 April 291,782 286,645 316,648 Net Capital Expenditure 6,593 42,195 40,911 Less Loans Fund Principal Repayments (5,950) (6,254) (6,573) Less: NPDO Repayment (5,780) (5,938) (6,235) Estimated CFR 31 March 286,645 316,648 344,751 Less Funded by NPDO (111,564) (105,784) (105,846) Estimated Net CFR 31 March 175,081 210,864 238,905 Estimated External Borrowing at 31 March 142,534 170,835 189,152 Gap 32,547 40,029 49,753 3.2. Borrowing is below the Capital Financing Requirement for the period to 31 December 2023. Whilst borrowing rates are still comparatively low, the Council has delayed taking out any new long term borrowing, as rates are expected to drop towards the end of 2024 plus the Council has significant cash balances which reduces the need to borrow in the short term. 3.3. The Council’s Treasury Management Strategy states that any decision to borrow in advance will be within forward approved Capital Financing Requirement estimates.
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3.4. The Council’s estimated net capital financing requirement at 31 December 2023 is £175.081m. The table below shows how this has been financed. £109.377m is funded by loans and there are substantial internal balances of £122.633m of which £56.929m are currently invested, as detailed in section 3.7, leaving a net internal balance of £65.704m. Position at 31/10/23 Position at 31/12/23 £000 £000 Loans 112 109 Net Internal Balances 72 66 Total CFR 184 175 3.5. During the period from 1 November 2023 to 31 December 2023, £24m of loans were repaid and was replaced with new borrowing of £21m. The analysis of the movement in borrowing is shown in the table below: Actual £m (24) 21 Net Movement in External Borrowing (3) External Loans Repaid 1st November 2023 to 31st December 2023 Borrowing undertaken 1st November 2023 to 31st December 2023 3.6. The table below summarises the movement in the level and rate of temporary borrowing at the start and end of the period. £000 % Rate Temp borrowing at 31st October 2023 328 4.40% Temp borrowing at 31st December 2023 222 4.40%
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Investment Activity 3.7. The average rate of return achieved in the Council’s investments to 31 December 2023 was 5.054% compared to the SONIA (Sterling Overnight Index Average) rate for the same period of 5.187%. The Council’s rate of return is marginally less than SONIA due to the rapid rise in interest rates which increased SONIA faster than the Council was able to redeem its existing lower rated investments. At 31 December 2023 the Council had £56.929m of short term investments at an average rate of 5.054%. The table below details the counterparties that the investments were placed with, the maturity date, the interest rate and the credit rating applicable for each counterparty. Counterparty Maturity Amount £000 Interest Rate Rating S&P Clydesdale Bank Instant 2,779 5.15% Short Term A-2, Long Cambridgeshire County Council 22/01/2024 5,000 1.00% AA London Borough of Croydon 10/10/2024 5,000 4.10% AA National Bank of Kuwait 09/04/2024 7,500 5.13% Short Term A-1, Long First Abu Dhabi Bank 09/05/2024 5,000 5.27% Short Term A-1+, London Borough of Croydon 10/06/2024 5,000 5.30% AA Close Brothers 31/01/2024 2,500 5.87% Short Term A-1, Long First Abu Dhabi Bank 01/02/2024 5,000 5.93% Short Term A-1+, First Abu Dhabi Bank 09/08/2024 5,000 6.16% Short Term A-1+, Goldman Sachs 16/02/2024 5,000 5.93% Short Term A-1, Long Australia and New Zealand Banking Group 16/02/2024 5,000 5.92% Short Term A-1+, MMF- Federated Call 1,600 0.00% AAA MMF - Legal and General Call 2,550 0.00% AAA Total 56,929 3.8. All investments and deposits are in accordance with the Council’s approved list of counterparties and within the limits and parameters defined in the Treasury Management Practices. The counterparty list is constructed based on assessments by leading credit reference agencies adjusted for additional market information available in respect of counterparties. 3.9. The Council has significant cash balances which are invested in accordance with its Annual Treasury Management Strategy. These cash balances are in excess of what is required for normal operating purposes but the economic environment for investments has improved over the last few months with an increase in interest rates, making investing these monies easier than in previous years. Economic and Interest Rate Forecasts 3.10. The latest economic background is shown in Appendix 1 with the interest rate forecast in Appendix 2. Prudential Indicators 3.11. The prudential indicators for 2023-24 are attached in Appendix 3.
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4.0. CONCLUSION 4.1 In the period from 1 November 2023 to 31 December 2023, the Council’s borrowing remained unchanged, and is currently below the Capital Financing Requirement. There are substantial internal balances, of which £56.929m is currently invested. The investment returns were 5.054%. 5.0. IMPLICATIONS 5.1. Policy None 5.2. Financial Complies with Annual Treasury Strategy 5.3. Legal None 5.4. HR None 5.5. Fairer Duty Scotland: 5.5.1 Equalities – protected characteristics None 5.5.2 Socio-economic Duty None 5.5.3 Islands None 5.6. Climate Change None 5.7. Risk None 5.8. Customer Service None Kirsty Flanagan Section 95 Officer 4 January 2024 Policy Lead for Finance and Commercial Services - Councillor Gary Mulvaney Appendix 1 – Economic Background Appendix 2 – Interest Rate Forecast Appendix 3 – Prudential Indicators For further information contact Anne Blue, Head of Financial Services anne.blue@argyll-bute.gov.uk
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Appendix 1 – Economics Update The third quarter of 2023/24 saw: - A 0.3% m/m decline in real GDP in October, potentially partly due to unseasonably wet weather, but also due to the ongoing drag from higher interest rates. Growth for the second quarter, ending 30th September, was revised downwards to -0.1% and growth on an annual basis was also revised downwards, to 0.3%; - A sharp fall in wage growth, with the headline 3myy rate declining from 8.0% in September to 7.2% in October, although the ONS “experimental” rate of unemployment has remained low at 4.2%; - CPI inflation continuing on its downward trajectory, from 8.7% in April to 4.6% in October, then again to 3.9% in November; - Core CPI inflation decreasing from April and May’s 31 years’ high of 7.1% to 5.1% in November, the lowest rate since January 2022; - The Bank of England holding Bank Rate at 5.25% in November and December; - A steady fall in 10-year gilt yields as investors revised their interest rate expectations lower. The revision of GDP data in Q2 to a 0.1% q/q fall may mean the mildest of mild recessions has begun. Indeed, real GDP in October fell 0.3% m/m which does suggest that the economy may stagnate again in Q3. The weakness in October may partly be due to the unseasonably wet weather. That said, as the weakness was broad based it may also be the case that the ongoing drag from higher interest rates is more than offsetting any boost from the rise in real wages. However, the rise in the flash composite activity Purchasing Managers Index, from 50.7 in November to 51.7 in December, did increase the chances of the economy avoiding a contraction in Q3. The improvement was entirely driven by the increase in the services activity balance from 50.9 to 52.7. (Scores above 50 point to expansion in the economy, although only tepid in this instance.) The press release noted that this was primarily driven by a revival in consumer demand in the technological and financial services sectors. This chimes with the further improvement in the GfK measure of consumer confidence in December, from -24 to -22. The services PMI is now consistent with non-retail services output growing by 0.5% q/q in Q3, but this is in stark contrast to the manufacturing sector where the output balance slumped from 49.2 to 45.9 and, at face value, the output balance is consistent with a 1.5% q/q fall in manufacturing output in Q3. The 0.3% m/m fall in retail sales volumes in October means that after contracting by 1.0% q/q (which was downwardly revised from -0.8% q/q) in Q2, retail activity remained weak at the start of Q3. That suggests higher interest rates are taking a bigger toll on real consumer spending. Higher interest rates have filtered through the financial channels and weakened the housing market but, overall, it remains surprisingly resilient with the Halifax house price index recently pointing to a 1.7% year on year increase whilst Nationwide’s December data pointed to a -1.8% year on year decrease. However, the full weakness in real consumer spending and real business investment has yet to come as currently it is estimated that around two thirds to a half of the impact of higher interest rates on household interest payments has yet to be felt.
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Overall, we expect real GDP growth to remain subdued throughout 2024 as the drag from higher interest rates is protracted but a fading of the cost-of-living crisis and interest rate cuts in the second half of 2024 will support a recovery in GDP growth in 2025. The labour market remains tight by historical standards, but the sharp fall in wage growth seen in October will reinforce the growing belief in markets that interest rates will be cut mid-2024. Wage growth eased in October much faster than the consensus expected. Total earnings fell by 1.6% m/m, which meant the headline 3myy rate eased from 8.0% in September to 7.2% in October. This news will be welcomed by the Bank of England. Indeed, the timelier three-month annualised rate of average earnings growth fell from +2.4% to -1.2%. Excluding bonuses, it fell from 5.3% to 2.0%. Furthermore, one of the Bank’s key barometers of inflation persistence, regular private sector pay growth, dropped from 7.9% 3myy to 7.3%, which leaves it comfortably on track to fall to 7.2% by December, as predicted by the Bank in November. The fall in wage growth occurred despite labour demand being stronger in October than expected. The three-month change in employment eased only a touch from +52,000 in September to +50,000 in October. But resilient labour demand was offset by a further 63,000 rise in the supply of workers in the three months to October. That meant labour supply exceeded its pre-pandemic level for the first time, and the unemployment rate remained at 4.2% in October. In the three months to November, the number of job vacancies fell for the 17th month in a row, from around 959,000 in October to around 949,000. That has reduced the vacancy to unemployment ratio as demand for labour eases relative to supply, which may support a further easing in wage growth in the coming months. CPI inflation fell from 6.7% in September to 4.6% in October, and then again to 3.9% in November. Both these falls were bigger than expected and there are clear signs of easing in domestic inflationary pressures. The fall in core CPI inflation from 5.7% to 5.1% in November was bigger than expected (consensus forecast 5.6%). That’s the lowest rate since January 2022. Some of the decline in core inflation was due to the global influence of core goods inflation, which slowed from 4.3% to 3.3%. But some of it was due to services inflation falling from 6.6% to 6.3%. The Bank views the latter as a key barometer of the persistence of inflation and it came in further below the Bank’s forecast of 6.9% in its November Monetary Policy Report. This will give the Bank more confidence that services inflation is now on a firmly downward path. The Bank of England sprung no surprises with its December monetary policy committee (MPC) meeting, leaving interest rates at 5.25% for the third time in a row and pushing back against the prospect of near-term interest rate cuts. The Bank continued to sound hawkish, with the MPC maintaining its tightening bias saying that “further tightening in monetary policy would be required if there were evidence of more persistent inflationary pressures”. And it stuck to the familiar script, saying that policy will be “sufficiently restrictive for sufficiently long” and that “monetary policy is likely to need to be restrictive for an extended period of time”. In other words, the message is that the MPC is not yet willing to endorse investors’ expectations that rates will be cut as soon as May 2024. Looking ahead, our colleagues at Capital Economics forecast that the recent downward trends in CPI and core inflation will stall over the next few months before
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starting to decline more decisively again in February. That explains why we think the Bank of England won’t feel comfortable cutting interest rates until H2 2024. The fall in UK market interest rate expectations in December has driven most of the decline in 10-year gilt yields, which have fallen in line with 10-year US Treasury and euro-zone yields. 10-year gilt yields have fallen from 4.68% in October 2023 to around 3.70% in early January, with further declines likely if the falling inflation story is maintained. Investors’ growing expectations that the Fed will cut interest rates soon has led to an improvement in risk sentiment, which has boosted the pound and other risky assets. In addition, the rise in the pound, from $1.21 in November to $1.27 now, has also been supported by the recent relative decline in UK wholesale gas prices. The further fall in 10-year real gilt yields in December has supported the recent rise in the FTSE 100. That said, the index remains 5% below its record high in February 2023. This modest rise in equities appears to have been mostly driven by strong performances in the industrials and rate-sensitive technology sectors. But UK equities have continued to underperform US and euro-zone equities. The FTSE 100 has risen by 2.2% in December, while the S&P 500 has risen by 3.8%. This is partly due to lower energy prices, which have been a relatively bigger drag on the FTSE 100, due to the index’s high concentration of energy companies. In the chart below, the rise in gilt yields across the curve in the first half of 2023/24, and therein PWLB rates, is clear to see, prior to the end of year rally based on a mix of supportive domestic and international factors. 3.00% 3.40% 3.80% 4.20% 4.60% 5.00% 5.40% 5.80% 6.20% 6.60% 7.00% PWLB Rates 3.4.23 - 29.12.23 1 Year 5 Year 10 Year 25 Year 50 Year 50 year target %
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MPC meetings 2nd November and 14th December 2023 On 2nd November, the Bank of England’s Monetary Policy Committee (MPC) voted to keep Bank Rate on hold at 5.25%, and on 14th December reiterated that view. Both increases reflected a split vote, the latter by 6 votes to 3, with the minority grouping voting for an increase of 0.25% as concerns about “sticky” inflation remained in place. Nonetheless, with UK CPI inflation now at 3.9%, and core inflating beginning to moderate (5.1%), markets are voicing a view that rate cuts should begin in Q1 2024/25, some way ahead of the indications from MPC members. Of course, the data will be the ultimate determinant, so upcoming publications of employment, wages and inflation numbers will be of particular importance, and on-going volatility in Bank Rate expectations and the gilt yield curve can be expected. In addition, what happens outside of the UK is also critical to movement in gilt yields. The US FOMC has kept short-term rates in the range of 5.25%-5.50%, whilst the ECB has moved its Deposit rate to a probable peak of 4%. Markets currently expect both central banks to start cutting rates in 2024.
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Appendix 2 – Interest Rate Forecast The Council has appointed Link Group as its treasury advisors and part of their service is to assist the Council to formulate a view on interest rates. The PWLB rate forecasts below are based on the Certainty Rate (the standard rate minus 20 bps) which has been accessible to most authorities since 1st November 2012. Link provided the following forecasts on 08 January 2024. These are forecasts for Bank Rate, average earnings and PWLB certainty rates, gilt yields plus 80 bps. The Link forecast for average earnings are averages i.e., rates offered by individual banks may differ significantly from these averages, reflecting their different needs for borrowing short-term cash at any one point in time. Additional notes by Link on this forecast table: - Our central forecast for interest rates was previously updated on 7 November and reflected a view that the MPC would be keen to further demonstrate its anti-inflation credentials by keeping Bank Rate at 5.25% until at least H2 2024. We expect rate cuts to start when both the CPI inflation and wage/employment data are supportive of such a move, and when there is a likelihood of the overall economy enduring at least a slowdown or mild recession over the coming months (although most recent GDP releases have surprised with their on-going robustness). Naturally, timing on this matter will remain one of fine judgment: cut too soon, and inflationary pressures may well build up further; cut too late and any downturn or recession may be prolonged. In the upcoming months, our forecasts will be guided not only by economic data releases and clarifications from the MPC over its monetary policies and the Government over its fiscal policies, but also international factors such as policy development in the US and Europe, the provision of fresh support packages to support the faltering recovery in China as well as the on-going conflict between Russia and Ukraine, and Gaza and Israel. A SUMMARY OVERVIEW OF THE FUTURE PATH OF BANK RATE Our central forecast for interest rates was previously updated on 7th November and reflected a view that the MPC would be keen to underpin its anti-inflation credentials by keeping Bank Rate at 5.25% until at least H2 2024. We expect rate cuts to start when both the CPI inflation and wage/employment data are unequivocally supportive of such a move, and that there is a strong likelihood of the overall economy enduring tepid growth (at best) or a mild recession (at worst) over the coming months. Naturally, timing on this matter will remain one of fine judgment: cut too soon, and inflationary pressures may well build up further; cut too late and any downturn or recession may be prolonged. Link Group Interest Rate View 08.01.24 Mar-24 Jun-24 Sep-24 Dec-24 Mar-25 Jun-25 Sep-25 Dec-25 Mar-26 Jun-26 Sep-26 Dec-26 Mar-27 BANK RATE 5.25 5.25 4.75 4.25 3.75 3.25 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3 month ave earnings 5.30 5.30 4.80 4.30 3.80 3.30 3.00 3.00 3.00 3.00 3.00 3.00 3.00 6 month ave earnings 5.20 5.10 4.60 4.10 3.70 3.30 3.10 3.10 3.10 3.10 3.10 3.10 3.10 12 month ave earnings 5.00 4.90 4.40 3.90 3.60 3.20 3.10 3.10 3.10 3.10 3.10 3.20 3.20 5 yr PWLB 4.50 4.40 4.30 4.20 4.10 4.00 3.80 3.70 3.60 3.60 3.50 3.50 3.50 10 yr PWLB 4.70 4.50 4.40 4.30 4.20 4.10 4.00 3.90 3.80 3.70 3.70 3.70 3.70 25 yr PWLB 5.20 5.10 4.90 4.80 4.60 4.40 4.30 4.20 4.20 4.10 4.10 4.10 4.10 50 yr PWLB 5.00 4.90 4.70 4.60 4.40 4.20 4.10 4.00 4.00 3.90 3.90 3.90 3.90
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In the upcoming months, our forecasts will be guided not only by economic data releases and clarifications from the MPC over its monetary policies and the Government over its fiscal policies, but also international factors such as policy development in the US and Europe, the provision of fresh support packages to support the faltering recovery in China as well as the on-going conflict between Russia and Ukraine, and Gaza and Israel. On the positive side, consumers are still anticipated to be sitting on some excess savings left over from the pandemic, which could cushion some of the impact of the above challenges and may be the reason why the economy is performing a little better at this stage of the economic cycle than may have been expected. Nonetheless, with approximately 400,000 households per quarter facing a mortgage interest reset at higher levels than their current rate, the economy will face on-going headwinds from that source, in addition to lower income households having to spend disproportionately on essentials such as food, energy and rent payments. PWLB RATES The short and medium part of the gilt curve has rallied since the start of November as markets price in a quicker reduction in Bank Rate through 2024 and 2025 than held sway back then. This reflects market confidence in inflation falling back in a similar manner to that already seen in the US and the Euro-zone. At the time of writing there is c70 basis points difference between the 5 and 50 year parts of the curve. The balance of risks to the UK economy: - The overall balance of risks to economic growth in the UK is even. Downside risks to current forecasts for UK gilt yields and PWLB rates include: - Labour and supply shortages prove more enduring and disruptive and depress economic activity (accepting that in the near-term this is also an upside risk to inflation and, thus, could keep gilt yields high for longer). The Bank of England has increased Bank Rate too fast and too far over recent months, and subsequently brings about a deeper and longer UK recession than we currently anticipate. Geopolitical risks, for example in Ukraine/Russia, the Middle East, China/Taiwan/US, Iran and North Korea, which could lead to increasing safe-haven flows. Upside risks to current forecasts for UK gilt yields and PWLB rates: - Despite the recent tightening to 5.25%, the Bank of England allows inflationary pressures to remain elevated for a long period within the UK economy, which then necessitates Bank Rate staying higher for longer than we currently project. The pound weakens because of a lack of confidence in the UK Government’s pre-election fiscal policies, resulting in investors pricing in a risk premium for holding UK sovereign debt. Projected gilt issuance, inclusive of natural maturities and Quantitative Tightening (QT), could be too much for the markets to comfortably digest without higher yields compensating.
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Appendix 3 – Prudential Indicators PRUDENTIAL INDICATOR 2023-24 2023-24 2024-25 2025-26 (1). EXTRACT FROM BUDGET Forecast Outturn Original Estimate Forecast Outturn Forecast Outturn Capital Expenditure £'000 £'000 £'000 £'000 Non - HRA 6,593 43,110 42,195 40,911 TOTAL 6,593 43,110 42,195 40,911 Ratio of financing costs to net revenue stream Non - HRA 4.25% 4.37% 4.40% 4.43% Net borrowing requirement brought forward 1 April * 291,782 304,498 286,645 316,648 carried forward 31 March * 286,645 372,359 316,648 344,751 in year borrowing requirement (5,137) 67,861 30,003 28,103 In year Capital Financing Requirement Non - HRA (5,137) 67,861 30,003 28,103 TOTAL (5,137) 67,861 30,003 28,103 Capital Financing Requirement as at 31 March Non - HRA 286,645 372,359 316,648 344,751 TOTAL 286,645 372,359 316,648 344,751
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PRUDENTIAL INDICATOR 2023-24 2024-25 2025-26 (2). TREASURY MANAGEMENT PRUDENTIAL INDICATORS £'M £'M £'M Authorised limit for external debt - borrowing 268 283 305 other long term liabilities 112 113 108 TOTAL 380 396 413 Operational boundary for external debt - borrowing 263 278 300 other long term liabilities 109 110 105 TOTAL 372 388 405 Upper limit for fixed interest rate exposure Principal re fixed rate borrowing 190% 190% 190% Upper limit for variable rate exposure Principal re variable rate borrowing 60% 60% 60% Upper limit for total principal sums invested for over 364 days £20m £20m £20m (per maturity date) Maturity structure of new fixed rate borrowing during 2023/24upper limit lower limit under 12 months 30% 0% 12 months and within 24 months 30% 0% 24 months and within 5 years 30% 0% 5 years and within 10 years 40% 0% 10 years and above 100% 0%
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ARGYLL AND BUTE COUNCIL POLICY AND RESOURCES COMMITTEE FINANCIAL SERVICES 15 FEBRUARY 2024 RESERVES AND BALANCES – UPDATE AS AT 31 DECEMBER 2023 1 EXECUTIVE SUMMARY 1.1 The main purpose of this report is to advise Members of the overall level of reserves held by the Council as well as providing detail on the monitoring of the earmarked balances held within the General Fund. 1.2 The Council has a total of £666.354m unusable reserves that are not backed with resources. They are required purely for accounting purposes. 1.3 At 31 March 2023 the Council had a total of £93.828m of usable reserves. Of this: • £2.916m relates to the Repairs and Renewals Fund • £4.503m relates to Capital Funds • £86.409m was held in the General Fund, with £79.466m of this balance earmarked for specific purposes. 1.4 During 2023-24, the amount of £4.776m which was previously agreed to be utilised from the one-off reprofiling gain from the Loans Fund Review was drawn down into Earmarked Reserves to be used to fund the Capital Programme as detailed in paragraph 3.5.1. This results in the total earmarked balance increasing to £84.242m. 1.5 Of the earmarked balance of £84.242m: • £41.505m is invested or committed for major initiatives/capital projects • £6.032m has already been drawn down • £13.087m is still to be drawn down in 2023-24 • £23.618m is planned to be spent in future years 1.6 The Council’s General Fund contingency level is set at 2% of net expenditure for 2023-24 which equates to £5.691m. At the beginning of the financial year there was £1.252m of unallocated General Fund Balance (over and above contingency). After taking into consideration the budgeted allocation to the General Fund agreed by Council on 23 February 2023, the earmarked balances no longer required, the current forecast outturn position for 2023-24 and the proposed allocation for floral displays the Council is forecast to have a £1.276m surplus over contingency.
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ARGYLL AND BUTE COUNCIL POLICY AND RESOURCES COMMITTEE FINANCIAL SERVICES 15 FEBRUARY 2024 RESERVES AND BALANCES - UPDATE AS AT 31 DECEMBER 2023 2. INTRODUCTION 2.1 This report outlines current balances on the Council’s reserves, both usable and unusable. It also provides detail on the monitoring of the earmarked balances within the General Fund. 3. DETAIL 3.1 Types of Reserves 3.1.1 Usable Reserves - Councils have powers to establish certain resource backed reserves which can be used to fund expenditure. The powers of councils to establish reserves are laid out in Schedule 3 of the Local Government (Scotland) Act 1975. These allow councils to establish a Renewal and Repairs Fund, Insurance Fund and Capital Fund. Councils can also establish a Useable Capital Receipts Reserve. The Council must also maintain a General Fund and can earmark balances for specific purposes within the General Fund. 3.1.2 Unusable Reserves – Councils are also required to establish certain reserves that are not backed by resources. They are required purely for accounting purposes and do not represent resources available for councils to utilise. The Pensions Reserve, Revaluation Reserve, Capital Adjustment Account, Financial Instruments Adjustment Account and Accumulated Absences Account are examples of unusable reserves. 3.2 Reserve Balances at 31 March 2023 3.2.1 The balances on each type of reserve at 31 March 2023 are set out in the two tables below, per the Unaudited Accounts for 2022-23. Unusable Reserves £000 Revaluation Reserve 174,952 Capital Adjustment Account 268,788 Financial Instruments Adjustment Account (1,871) Pensions Reserve 232,073 Accumulated Absences Account (7,588) Total Unusable Reserves 666,354 Usable Reserves £000 Repairs and Renewals Fund 2,916 Capital Fund and Usable Capital Receipts Reserve 4,503 General Fund 86,409 Total Usable Reserves 93,828 Total Reserves 760,182
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3.2.2 The Revaluation Reserve represents the unrealised gains in the valuation of fixed assets. The Capital Adjustment Account represents the difference between depreciation based on proper accounting practice and statutory charges for financing capital expenditure. The Financial Instruments Adjustment Account represents the difference between gains and losses on borrowing and statutory capital financing charges. The Pensions Reserve represents the difference between pension costs based on proper accounting practice and payments made for pension costs. The Accumulated Absences Account represents the costed difference between holiday pay entitlement and actual holidays taken at 31 March. 3.2.3 The Repairs and Renewals Fund was established to support funding of renewal and replacement of school equipment. Schools can only draw on the Repairs and Renewals Fund to the extent they have previously paid into the Fund and contributions must be contained within schools devolved budgets. 3.2.4 The Capital Fund was established to receive all capital receipts generated by the Council and can be used to support the capital plan or meet the principal repayments on loan charges. The Council decides as part of the budget process each year how it wishes to draw funding from the Capital Fund. 3.2.5 The Usable Capital Receipts Reserve relates to the accumulated unspent capital receipts from sale of council houses prior to transfer of the housing stock. The reserve forms part of the Council’s Strategic Housing Fund and can only be used for investment in social housing. The reserve will be used in accordance with the approach to investing in housing agreed by the Council in August 2012. 3.3 General Fund 3.3.1 The General Fund balance at 31 March 2023 can be analysed as follows: Balance 31/03/23 £000 Balance on General Fund as at 31 March 2022 96,081 Decrease to General Fund balance at end of 2022-23 (9,672) Earmarked Balances (79,466) Contingency allowance at 2% of net expenditure (5,691) Unallocated balance as at 31 March 2023 1,252 3.3.2 The General Fund includes balances that the Council has agreed to earmark for specific purposes. Some of these earmarked balances will be spent during the current financial year and some of them will be held over and spent in later years. The table below shows the balance at 31 March 2023, the new amount earmarked from the Loans Fund gain (see section 3.5.1), the amounts that are currently invested or set aside for major initiatives, the amount already spent and planned to be spent in the current year, the amount to be spent in future years and any sums no longer required to be earmarked. Appendix 1 provides further details on the breakdown of unspent budget earmarkings. Officers have
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reviewed and updated the spending profiles. Appendix 2 provides further details on the breakdown of COVID reserves. 3.3.3 Investment in Affordable Housing £0.104m – this earmarked balance provides cash backed reserves for the loans to registered social landlords. It is estimated that as at 31 March 2024, the balance on the remaining loans will be £3.059m, therefore £0.104m can be released back to the general fund. 3.4 Unallocated General Fund Balance Earmarking Category Balance 31/03/2023 - per year end published report New Earmarkings in year Invested or committed for major initiatives /capital projects Drawn- down to 2023-24 Budget as at 31/12/23 Still to be drawn- down in 2023-24 Planned Spend Future Years Released to General Fund £000 £000 £000 £000 £000 £000 £000 Strategic Housing Fund 7,247 6,847 400 Investment in Affordable Housing 3,163 3,059 104 Capital Projects 16,059 4,776 20,835 Lochgilphead and Tarbert Regeneration 1,460 1,460 Support for Rural Growth Deal 756 756 Asset Management Investment 2,098 2,070 28 Piers and Harbours Investment Fund 2,789 2,789 Scottish Government Initiatives 2,834 383 152 2,299 CHORD 378 150 228 DMR Schools 1,394 669 692 33 Energy Efficiency Fund 218 218 Existing Legal Commitments 476 476 Unspent Grant 13,179 489 1,811 4,684 6,195 Unspent Third Party Contribution 265 31 97 137 Previous Council Decision - Other 3,808 1,699 225 424 1,460 Redundancy Provision 1,578 500 1,078 Supporting Organisational Change 1,426 111 89 1,226 One Council Property Team 566 189 377 Fleet - Timing Delay 658 174 484 Hermitage Park 19 5 14 Electric Vehicle Chargers 17 0 17 COVID-19 5,512 257 592 3,347 1,316 Unspent Budget 13,566 1,140 1,782 2,666 7,978 Totals 79,466 4,776 41,401 6,032 13,387 23,318 104
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3.4.1 The Council’s General Fund contingency is set at 2% of net expenditure for 2023-24 and amounts to £5.691m. At the beginning of the financial year there was £1.252m of unallocated General Fund Balance (over and above contingency). After taking into consideration the budgeted allocation to the General Fund agreed by Council on 23 February 2023, the earmarked balances no longer required, the current forecast outturn position for 2023-24 and the proposed allocation for floral displays the Council is forecast to have a £1.276m surplus over contingency. 3.4.2 The revenue budget position as at 31 December 2023 was estimated to be a £0.091m overspend. 3.4.3 Social Work, as a part of the Integrated Joint Board (IJB), are able to hold any surplus within reserves therefore it is expected that any underspend that materialises would be transferred to the IJB reserves and the General Fund of the Council would not be impacted. Note that as at 31 December, Social Work was projecting a breakeven position. 3.4.4 The Environment, Development and Infrastructure Committee on 31 August 2023 agreed to pursue a blended model of options for the provision of floral displays and recommended the additional revenue cost for 2023-24 of £0.008m be funded from the unallocated General Fund and built into the budget outlook estimates for future years. 3.4.5 The table below summarises the position of the unallocated General Fund balance taking into consideration the points noted above. Heading Detail £000 Unallocated General Fund as at 31 March 2023 This is the balance that is unallocated over and above the 2% contingency, which amounts to £5.691m 1,252 Budgeted allocation to General Fund for 2023-24 Budget Per the Budget Motion at Council on 23 February 2023 19 Earmarked Balances no longer required Per paragraph 3.3.3 – amount previously earmarked that can be released back to the general fund 104 Current Forecast Outturn for 2023-24 as at 31 December 2023 Per paragraph 3.4.2. (91) Social Work outturn adjustment Per paragraph 3.4.3 - Social Work would expect to transfer any surplus to internal IJB reserves 0 Allocation from unallocated general fund balance Per paragraph 3.4.4 (8) Estimated Unallocated balance as at 31 March 2024 1,276
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3.5 Loans Fund Review 3.5.1 At the Council meeting on 27 February 2020, it was agreed that the one-off re- profiling gain of £20.561m generated by the loans fund review should be used partly to create a provision for the increasing principal repayments over the next 10 years (£7.649m) with the remainder of the gain (£12.912m) used to fund known liabilities/cost pressures. The table below shows what has been drawn down against the one-off gain and the remaining balance. Agreed Allocation Transferred to Earmarked Reserves in previous years Transferred to Earmarked Reserves 23-24 Balance Remaining £000 £000 £000 £000 Provision for increasing principal repayments 7,649 7,649 Funding Gap in Capital Programme 2,619 (2,619) 0 Significant Strategic Change Projects 5,013 (2,856) (2,157) 0 Completed Projects 5,280 (5,280) 0 20,561 (8,136) (4,776) 7,649 4. CONCLUSION 4.1 The report outlines the overall reserves and balances for the Council covering the purpose and level of each reserve. It also provides detail as to expenditure against earmarked balances held within the General Fund. 4.2 As at 31 December 2023 the estimated unallocated General Fund, after taking into consideration the budget motion, the current forecast outturn for 2023-24 and the proposed allocation for floral displays, the Council is estimated to have a £1.276m surplus over contingency. 5. IMPLICATIONS 5.1 Policy - Earmarked funds and funds set aside for delivery of Single Outcome Agreement are available to support Council Policy. 5.2 Financial - Outlines the balances held with the Council’s usable and unusable reserves. 5.3 Legal - None. 5.4 HR - None. 5.5 Fairer Scotland Duty- None. 5.5.1 Equalities – protected characteristics - None. 5.5.2 Socio-economic Duty - None. 5.5.3 Islands - None. 5.6 Climate Change - None. 5.7 Risk - A contingency of £5.691m (equivalent to 2% of net expenditure) has been set aside as part of the
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general fund. This has been subject to a risk assessment. 5.8 Customer Service - None. Kirsty Flanagan Executive Director/Section 95 Officer 12 January 2024 Policy Lead for Finance and Commercial Services - Councillor Gary Mulvaney APPENDICES Appendix 1 – Earmarked Reserves breakdown of unspent budget Appendix 2 – Earmarked Reserves breakdown of COVID earmarkings For further information contact Anne Blue, Head of Financial Services anne.blue@argyll-bute.gov.uk
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APPENDIX 1 Earmarked Reserves - Unspent Budget As at 31 December 2023 Ref Department Service Description Opening Balance Budget Drawdown New earmarkings in year Remaining Balance Still to be drawndown in 23- 24 Planned to spend in future years Plans for Use Amount Planned to be Spent in 2023- 24 Amount Planned to be Spent in 2024- 25 Amount Planned to be Spent from 2025/26 onwards 001 Chief Executive's Unit Community Planning Communities and Partnership Team 8,855 0 8,855 0 8,855 The funds have originated from externally sourced income due to an employee being seconded to the Scottish Community Development Centre (SCDC). The funds will be used to support the team in relation to meeting its priorities of Building Back Better (Communities), Climate Change and the review of the Argyll and Bute Outcome Improvement Plan. 0 8,855 002 Executive Director (Douglas Hendry) Across Services / Education Digital Projects (Supply Staff Booking System) 25,100 9,900 15,200 0 15,200 To deliver a number of Digital Service Transformation Projects with a commitment of £0.035m towards a Supply Staff Booking system. Phase 1 of the project is nearing completion. 9,900 15,200 003 Executive Director (Douglas Hendry) Commercial Services Rothesay Academy - Demolition and Waste Disposal 953,875 73,655 880,220 0 880,220 Since Rothesay Academy was vacated over 15 years ago no site clearance has taken place and there are potential Health and Safety and insurance cover implications due to deterioration of the building. £55,000 earmarking has allowed clearance of remaining materials and debris. Also £840,000 to fund estimated future costs of demolition (subject to removal of listed status) to be added to an existing earmarking . There are potential Health and Safety and insurance cover implications due to deterioration of the building. 73,655 880,220 0 004 Executive Director (Douglas Hendry) Commercial Services Rothesay Pavilion Charity 750,000 0 750,000 0 750,000 Agreed at Council meeting February 2020, £750k additional revenue support subject to conditions which seek to minimise the risk to the Council as far as is reasonably practicable including requirement for adequate business and financial management and regular reporting by RPC. 0 750,000 005 Executive Director (Douglas Hendry) Commercial Services Rothesay Pavilion Essential repairs 306,400 0 306,400 0 306,400 Essential repairs to deal with potential health and safety risks and to avoid further deterioration. Budget provision was approved by the Policy and Resources Committee on 21 August 2014. 0 306,400 006 Executive Director (Douglas Hendry) Commercial Services Estates - NDR Revaluation Appeals 84,688 24,750 59,938 59,938 0 The Council agreed to make provision to meet the cost of appealing Non Domestic Rates (NDR) revaluations which were imposed from April 2017. The remaining funds were carried forward to the 2023/24 revaluation cycle however a recent change in position by the Scottish Government may restrict the appeals which can be made. This is still under discussion and Gerald Eve Surveyors have been appointed as specialist advisers on this matter. In the event that appeals are limited there may be an opportunity to utilise Gerald Eve for more general valuation advice subject to Procurement approval. 84,688 0 007 Executive Director (Douglas Hendry) Commercial Services Demolition of former Lochgilphead Primary and Rothesay Secondary School 0 0 0 0 0 To fund the demolition of the former Lochgilphead Primary School and former Rothesay Academy (subject to the removal of the listing). Lochgilphead Primary complete and remainder of funds to be used to commence Rothesay Project. This project now completed. 0 0 008 Executive Director (Douglas Hendry) Commercial Services Mid Argyll Community Pool 30,000 30,000 0 0 0 At the Council Budget meeting on 23 February 2023, the Council committed to a one-off investment of £0.030m to Mid Argyll Community Pool in response to an external funding request. Paid. 30,000 0 009 Executive Director (Douglas Hendry) Commercial Services MacTaggart Leisure Islay 30,000 30,000 0 0 0 At the Council Budget meeting on 23 February 2023, the Council committed to a one-off investment of £0.030m to MacTaggart Leisure, Islay in response to an external funding request. Paid. 30,000 0 010 Executive Director (Douglas Hendry) Commercial Services Site Investigation Works 21,013 0 21,013 21,013 0 For Site Investigation works in relation to Tweeddale Street Car Park and Oban Airport Business Park, exploring commercial opportunities to develop the sites and raise revenue income for Argyll and Bute Council. HUB North were instructed to procure contractors to undertake the site investigations these are now complete. The remainder of the budget is intended to be utilised for other site investigation and pre-development works to further develop commercial opportunities across the council area. 21,013 0 011 Non Departmental / Executive Director (Douglas Hendry) Across Services / Commercial Services Information Management (Estates Survey Work) 12,697 0 12,697 12,697 0 To support a number of initiatives in respect of improving the Council's information management in line with the transformation agenda and increasing the pace of change as outlined in the BV Review. The planned initiatives include: Estates Survey work £122k, Digitalisation of Title Deeds £92k, document management and workflow system for Planning, Building Standards and Environmental Health £77k and a balance of funding to explore information management solutions in a strategic and coherent way £209k 12,697 0 012 Executive Director (Douglas Hendry) Commercial Services (2023 Contract Inflation Adjustments) MAKI/Islay Pools SLA - inflationary increase 9,523 9,523 0 0 0 Additional pressure resulting from the February 2023 inflation rate being higher than the assumptions built into the non-pay inflation calculation which went to Council at budget setting and reflects the difference between what was in the budget and what will need to be paid under the SLAs. The February inflation figure wasn't known until the middle of March, after the budget was set, and the recent trend in inflation reductions turned around in February with an increase. 9,523 0 0 013 Executive Director (Douglas Hendry) Education ASN Review 1,255,000 0 1,255,000 0 1,255,000 To fund capital costs of ASN adaptations as part of ASN Review to increase equity of provision across Argyll and Bute. This will be subject to a business case as part of the wider ASN review. Update: Business case now approved and working group set up with quotes for works being carried out Jan 2024. 0 1,255,000 0 014 Executive Director (Douglas Hendry) Education Reduced Teacher Staffing Costs - Strike Action 800,000 0 800,000 0 800,000 To fund one off savings in 2024-25 from the underspend in staffing from strike action. 0 800,000 0 015 Executive Director (Douglas Hendry) Education (2023 Digital Projects) School Wi- Fi Upgrades 200,000 33,076 166,924 116,924 50,000 To extend Wi-Fi coverage within school settings through the purchase of additional hardware such as access points, switches and other networking hardware. This will result in more flexible learning spaces and support the growing number of devices within schools. 150,000 50,000 0
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Ref Department Service Description Opening Balance Budget Drawdown New earmarkings in year Remaining Balance Still to be drawndown in 23- 24 Planned to spend in future years Plans for Use Amount Planned to be Spent in 2023- 24 Amount Planned to be Spent in 2024- 25 Amount Planned to be Spent from 2025/26 onwards 016 Executive Director (Douglas Hendry) Education Education Transformation Fund 146,579 1,942 144,637 144,637 0 At the Council meeting on 27 February 2020, it was agreed to input £400k into Education Digital Learning. The additional funds have been spent in 20/21, 21/22 and 22/23 as part of the ongoing transformation work in the Education service, focussing on digital and virtual learning technology and the development of learning clusters. This will continue into 2023/24. 146,579 0 017 Executive Director (Douglas Hendry) Education MCR Pathways Pilot 80,000 40,872 39,128 0 39,128 Funding to support implementation of MCR Pathways mentoring programme within three secondary schools for 2023-24 academic year. Funding will allow the employment of a dedicated Co-ordinator within each setting to develop and implement the programme which is designed to benefit care experienced and other disadvantaged pupils through targeted mentoring support. 40,872 39,128 0 018 Executive Director (Douglas Hendry) Education Gaelic Specific Grant 30,000 0 30,000 0 30,000 Proposal to fund the continuation of the Principal Teacher Languages (Gaelic focus) post for the 2023- 24 academic year to promote and develop Gaelic Medium Education across Argyll and Bute. This earmarking refers to the Council contribution towards the Gaelic grant for 22-23. 0 30,000 0 019 Executive Director (Douglas Hendry) Education (2023 Digital Projects) Cashless Catering 30,000 0 30,000 5,000 25,000 To support the ongoing implementation of the new cashless catering system during the testing and roll out phase. 5,000 25,000 0 020 Executive Director (Douglas Hendry) Education Skype for Business for Education / Digital Projects (Skype for Business) 10,000 0 10,000 10,000 0 To fund the initial capital costs for the implementation of Skype for Business for Education. This will bring the Education service in line with other council departments and will improve staff collaboration and modernise school telephony to deliver the service more efficiently and cost effectively. A balance was released back to the general fund in 2021-22 because the rollout project was almost complete with only £0.01m expected spend in 23/24. 10,000 0 021 Executive Director (Douglas Hendry) Education Education Learning Estate Condition Surveys 1,815 0 1,815 1,815 0 To fund the delivery of School Core Facts (SCF) compliant Condition Surveys for prioritised School Buildings. 1,815 0 022 Executive Director (Douglas Hendry) Legal and Regulatory Services Education Purchasing Officers 210,000 37,000 173,000 0 173,000 The earmarked funds will be used to fund an education purchasing team within the Procurement Service for two years. The team will embed good procurement practice, train headteachers on current procurement process requirements, develop spend plans that evidence best value. 37,000 173,000 023 Non Departmental / Executive Director (Douglas Hendry) Across Services / Legal and Regulatory Services Information Management (Digitalisation of Title Deeds) 92,000 0 92,000 0 92,000 To support a number of initiatives in respect of improving the Council's information management in line with the transformation agenda and increasing the pace of change as outlined in the BV Review. The planned initiatives include: Estates Survey work £122k, Digitalisation of Title Deeds £92k (delay on spending due to COVID-19), document management and workflow system for Planning, Building Standards and Environmental Health £77k and a balance of funding to explore information management solutions in a strategic and coherent way £209k 0 92,000 024 Executive Director (Douglas Hendry) Legal and Regulatory Services Councillor IT Equipment 44,557 0 44,557 0 44,557 There is currently no budget for the provision and renewal of IT equipment for members. the earmarking identifies a resource to utilise spend for that purpose to ensure that members have continued support in maintaining and replacing vital IT equipment. 0 44,557 025 Executive Director (Douglas Hendry) Legal and Regulatory Services Digital Projects: Hybrid Council meetings 43,302 0 43,302 0 43,302 The funding will be used to maintain the ICT equipment used to support the provision of on-line and hybrid Council meetings. 0 43,302 026 Executive Director (Douglas Hendry) Legal and Regulatory Services Debt Counselling & Welfare Rights 21,452 0 21,452 0 21,452 To meet the cost of a Debt Counselling and Welfare Rights Management System. 0 21,452 027 Executive Director (Douglas Hendry) Legal and Regulatory Support (2023 Contract Inflation Adjustments) NPDO and DBFM School Contracts – inflationary increase 350,000 350,000 0 0 0 Additional pressure resulting from the February 2023 inflation rate being higher than the assumptions built into the non-pay inflation calculation which went to Council at budget setting and reflects the difference between what was in the budget and what will need to be paid under the NPDO/Hub DBFM Schools contracts. The February inflation figure wasn't known until the middle of March, after the budget was set, and the recent trend in inflation reductions turned around in February with an increase. 350,000 0 0 028 Executive Director (Douglas Hendry) Legal and Regulatory Support (2023 Digital Projects) Replacement of Council Chambers Online Meeting Equipment 130,000 0 130,000 130,000 0 Current online meeting system is less than resilient and has failed on a number of occasions, leading to issues at strategic committees. A condition assessment by the incumbent maintenance contractor has highlighted that the current equipment is now at end of life and unsupportable due to the obsolescence of the system. Discussions with ICT have taken place to identify a simpler more robust solution to be procured. 130,000 0 0 029 Executive Director (Kirsty Flanagan) Customer Support Services (2023 Digital Projects) iTrent Project 332,000 0 332,000 147,000 185,000 Combination of parallel running of the new iTrent system alongside the legacy systems for up to 18 months whilst iTrent is implemented and additional staffing resource to implement iTrent in late June 2024 and support staff for the first 3 months of operation through summer 2024. Total includes £73k from Financial services for funding additional staffing resource to implement the payroll components of the iTrent HR and Payroll System by the end of June 2024 and support staff for the first 3 months of operation during summer 2024. 147,000 185,000 0 030 Executive Director (Kirsty Flanagan) Customer Support Services Security Operations Centre Subscription 113,594 0 113,594 53,594 60,000 There is a requirement to pay for a 3-year subscription at £60,000 per annum with a cost pressure being added to the ICT revenue budget to cover the costs from year 4 onwards. There is unallocated funding of £103,545 from the earmarking (172) created at 2020/21 year end for 'Digital Projects' combined with this earmarking to cover these costs for 3 years. 53,594 60,000 031 Executive Director (Kirsty Flanagan) Customer Support Services Growing our Own and Modern Apprentices 109,150 0 109,150 95,790 13,360 Funding earmarked to support trainee development and modern apprenticeship opportunities based on priority workforce risk areas. These areas have been identified and proposals developed. £95,790 to be spent in 23/24 and £13,360 to be spent in 24/25 to fund a graduate trainee and 3 apprentices to deliver trainee development and modern apprenticeship opportunities 95,790 13,360 032 Non Departmental / Executive Director (Kirsty Flanagan) Across Services / Customer Support Services Digital Projects (Increase in Schools Bandwidth) 63,455 0 63,455 63,455 0 To complete one of a number of Digital Service Transformation projects with a commitment of £0.064m to increase Schools Bandwidth. 63,455 0 033 Executive Director (Kirsty Flanagan) Customer Support Services (2023 Digital Projects) Resilient Website Project 60,000 0 60,000 60,000 0 Cybersecurity action to move to a cloud based website platform that would improve resilience and enable service continuity in the event of a cyber attack. Procurement in progress for resilient website solution and Scotgov Cloud Services Project providing input. Contract Award expected by end 2023. 60,000 0 0
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Ref Department Service Description Opening Balance Budget Drawdown New earmarkings in year Remaining Balance Still to be drawndown in 23- 24 Planned to spend in future years Plans for Use Amount Planned to be Spent in 2023- 24 Amount Planned to be Spent in 2024- 25 Amount Planned to be Spent from 2025/26 onwards 034 Executive Director (Kirsty Flanagan) Customer Support Services (2023 Digital Projects) Digital Project Officer 60,000 0 60,000 60,000 0 Employ a temporary Digital Project Officer as part of OD changes. 60,000 0 0 035 Executive Director (Kirsty Flanagan) Customer Support Services Implementation of Gaelic Language Plan 30,000 0 30,000 30,000 0 Agreed at Council Meeting February 2021. Provision of funding for delivery and implementation of the council’s Gaelic Language Plan in recognition of the contribution that Gaelic makes to economic growth and to the tourism sector, and to enable delivery of key activities within the plan which currently receive no revenue funding. 30,000 0 036 Executive Director (Kirsty Flanagan) Customer Support Services (2023 Digital Projects) Digital Engagement Services Developer 28,000 7,242 20,758 4,388 16,370 To fund 50% of a new temporary LGE10 post. The post is a Digital Engagement Services Developer that will provide capacity to deliver service efficiencies through the use of the new CREATE/RPA software. The other 50% of the post can be funded from a current vacancy. New temporary Digital Developer took up post on 18/09 and funds will be used for salary across the rest of the year – to be drawn down in FQ4. 11,630 16,370 0 037 Executive Director (Kirsty Flanagan) Customer Support Services Business Development Training 27,601 288 27,313 27,313 0 This budget is funding ongoing leadership development, coaching, action learning sets and commissioned training including Priority Management. 27,601 0 038 Executive Director (Kirsty Flanagan) Customer Support Services Learning and Development 19,436 0 19,436 19,436 0 In order to maximise the opportunities and efficiencies of digital learning, this funding will be used to support the extension of digital learning in order to deliver the Digital Learning Strategy, which was approved in FQ4 20/21. 19,436 0 039 Executive Director (Kirsty Flanagan) Customer Support Services Establishing HR Service Centre 13,824 0 13,824 13,824 0 To facilitate the implementation of technical efficiency improvements and new processes 13,824 0 040 Non Departmental / Executive Director (Kirsty Flanagan) Across Services / Customer Support Services Digital Projects (Replacement Learning Management System) 11,470 0 11,470 11,470 0 To deliver a number of Digital Service Transformation Projects with an original commitment of £0.030m towards a replacement Learning Management System £0.030m. 11,470 0 041 Executive Director (Kirsty Flanagan) Development & Economic Growth Planning Income (Saving 23-24) 340,000 340,000 0 0 0 To fund one off operational saving MGT5 agreed for the 2023/24 budget 340,000 0 0 042 Executive Director (Kirsty Flanagan) Development & Economic Growth Planning Income 60,000 0 60,000 60,000 0 To fund additional resources to support and develop the Council's planning service. 60,000 0 0 043 Executive Director (Kirsty Flanagan) Development and Economic Growth Oban TIF (Tax Incremental Financing) 385,193 0 385,193 116,000 269,193 Will be used to fund the TIF Programme office for a further 3 years as well as the programme office for Rural Growth Deal beyond the funding that was agreed at Council for this in February 2021. 116,000 269,193 044 Executive Director (Kirsty Flanagan) Development and Economic Growth Strategic Events & Festivals 80,664 0 80,664 40,946 39,718 At the Council meeting on 25 February 21, a decision was taken to agree £90k funding for Events and Festivals for 22/23, in order that the application process can commence during 21/22 and that this agreed figure be augmented by any underspend remaining from the 20/21 financial year. At 24 February 22, decision made to agree £90k for 23/24, in order that the application process can commence during 22/23 and that this agreed figure be augmented by any underspend remaining from the 21/22 financial year. Applications have been received and payments will be made in 2023-2024. 40,946 39,718 045 Executive Director (Kirsty Flanagan) Development and Economic Growth Island Post 50,461 0 50,461 50,461 0 To fund a temporary post at LGE11 to assist with the National Islands Plan Implementation Route Map 2020-2025. 50,461 0 046 Non Departmental / Executive Director (Kirsty Flanagan) Across Services / Development and Economic Growth Information Management (Document Management and Workflow for Planning, Building Standards and Environmental Health) 21,177 0 21,177 21,177 0 To support a number of initiatives in respect of improving the Council's information management in line with the transformation agenda and increasing the pace of change as outlined in the BV Review. The planned initiatives include: Estates Survey work £122k, Digitalisation of Title Deeds £92k, document management and workflow system for Planning, Building Standards and Environmental Health £77k and a balance of funding to explore information management solutions in a strategic and coherent way £209k Hoping to implement the replacement for IDOX in March 2024 but there have been severe issues/delays with the new programme 21,177 0 047 Executive Director (Kirsty Flanagan) Development and Economic Growth Royal National Mod 20,000 0 20,000 20,000 0 One off funding allocation for the Royal National Mod agreed as part of the budget setting process for 2019/20. Grant contract issued. Proposed payment of £20k per annum starting 2020/21 (2023/24 final payment of £20k) 20,000 0 048 Executive Director (Kirsty Flanagan) Financial Services Financial Systems 33,748 0 33,748 33,748 0 To fund the completion of the implementation of the Oracle Fusion Financial Management System, a software update for cash receipting to ensure card payments can still be taken and the procurement and implementation of a new system to manage the requirements of the IFRS16 Leases accounting standard. 33,748 0 049 Executive Director (Kirsty Flanagan) Financial Services Accounting and Budgeting Team Resilience 30,664 0 30,664 16,664 14,000 To fund the implementation of a new staffing structure in 2022/23 as agreed at ELT on 12 April 2022 which has been implemented. The residual funding is being used to meet the costs of ongoing professional accountancy training over the period 2022/23 to 2026/27 16,664 14,000 050 Executive Director (Kirsty Flanagan) Financial Services CIPFA 24,040 1,835 22,205 4,165 18,040 CIPFA Training - To fund the professional training costs for staff undertaking the CIPFA professional accountancy qualification. 6,000 18,040 051 Executive Director (Kirsty Flanagan) Roads & Infrastructure Waste Variation Monies 1,967,056 3,344 1,963,712 716,540 1,247,172 This will be used to fund/part-fund various waste infrastructure projects that will support the council’s compliance with the 2025 ban on the Landfill of Biodegradable Municipal Waste. This will include scoping work for the creation of a waste transfer station at Helensburgh and landfill cell construction works at Gartbreck (£640k for Capital works on Gartbreck completed in 2022/23, reserve will be drawn down for this in 2023/24). 719,884 410,000 837,172 052 Executive Director (Kirsty Flanagan) Roads & Infrastructure 3G pitches / Tarbert Sports Pitches 375,022 76,749 298,273 3,251 295,022 In November 2018, the Council agreed to a maintenance funding package to be progressed for a number of 3G pitches including Tarbert. This funding will provide an estimated 6.5 years’ worth of ongoing maintenance up to 2025-26. 80,000 80,000 215,022 053 Executive Director (Kirsty Flanagan) Roads & Infrastructure Green Transport Initiatives 140,000 0 140,000 0 140,000 At the Council meeting on 27 February 2020, it was agreed to input £400k in Green transport, investment in footway and cycle path maintenance supporting the healthy wellbeing and green agenda. Spend has been delayed due to COVID and this will be taken forward in 23/24. £260k Footways Reconstruction programme now spent and will be drawn down against capital programme during 23/24. £140k Ardrishaig North Project spent in 22/23 and drawn down in 24/25. 0 140,000
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Ref Department Service Description Opening Balance Budget Drawdown New earmarkings in year Remaining Balance Still to be drawndown in 23- 24 Planned to spend in future years Plans for Use Amount Planned to be Spent in 2023- 24 Amount Planned to be Spent in 2024- 25 Amount Planned to be Spent from 2025/26 onwards 054 Executive Director (Kirsty Flanagan) Roads & Infrastructure Climate Change 81,884 0 81,884 81,884 0 At the Council meeting on 27 February 2020, it was agreed to input £500k budget to mitigate the impacts of weather related damage and climate change with specific emphasis on gully cleaning and drainage improvements. Spend has been delayed due to COVID and the intention is to spend the funds on 2 Gully Motors plus staff over next 2 years. Vehicles have been received and budget will be drawn down to cover their cost. The remaining budget will be used towards running the vehicles. 81,884 0 055 Executive Director (Kirsty Flanagan) Roads & Infrastructure Amenity Services introduction of management information system 28,099 0 28,099 0 28,099 Delay with introduction of amenity time recording system due to increased costs. Discussions ongoing to find alternative cheaper solution. The software/system being introduced by HR/Payroll during 2023- 24 offers a time-recording facility. Although not included in the current HR/Payroll spec, once the new system is up and running, the proposal would be to investigate the time-recording system to see if viable for amenity time recording purposes. 0 28,099 056 Executive Director (Kirsty Flanagan) Roads & Infrastructure Services (2023 Contract Inflation Adjustments) Waste PPP 255,000 0 255,000 150,000 105,000 Adjustment to inflation included in the budget based on updated RPIX figures at February 2023. Based on the current forecast it is anticipated the full earmarking will not be required and is unlikely to exceed £150K. For the purposes of balancing this spreadsheet I have entered £150K against 2023-24 and the balance against 2024-25 at this stage. Will be monitored monthly. 150,000 105,000 0 057 Non Departmental Non Departmental Underwriting development of Rothesay Pavilion 1,000,000 0 1,000,000 0 1,000,000 Funding to meet additional costs identified as necessary for the refurbishment of Rothesay Pavilion. 0 1,000,000 058 Non Departmental Non Departmental Oban TIF (Tax Incremental Financing - Excess NDR) 875,651 0 875,651 0 875,651 This is the surplus NDR after paying all Loans Charges in respect of TIF infrastructure projects. This fund will be used in the future as TIF projects are delivered. 0 0 875,651 059 Non Departmental Non Departmental Loans Fund 385,279 385,279 0 0 0 At the Council Budget meeting on 24 February 2022, Saving FS01, a Loans Fund Management/Operational saving for 22/23 budget of £0.500m was agreed with at least £0.200m to come from underspends in 21/22. The underspend position for 21/22 is £0.385m and this earmarking is being released as a saving to help bridge the 2023/24 budget gap. 385,279 0 060 Non Departmental Non Departmental Loans Fund 300,000 300,000 0 0 0 To fund one off operational saving MGT3 agreed for the 2023/24 budget 300,000 0 0 061 Non Departmental Non Departmental Information Management (Balance of Funding) 209,844 9,375 200,469 0 200,469 To support a number of initiatives in respect of improving the Council's information management in line with the transformation agenda and increasing the pace of change as outlined in the BV Review. The planned initiatives include: Estates Survey work £122k, Digitalisation of Title Deeds £92k, document management and workflow system for Planning, Building Standards and Environmental Health £77k and a balance of funding to explore information management solutions in a strategic and coherent way £209k 9,375 200,469 062 Non Departmental Non Departmental Spend to Save Route Optimisation Software 100,000 17,225 82,775 82,775 0 One-off re-profiling gain as a result of the loans fund review to fund known liabilities/cost pressures as agreed at budget setting meeting in February 2020 - Spend to save route optimisation (£0.100m) which will be spent over 2023/24. 100,000 0 063 Non Departmental / Social Work Non Departmental Engagement with Hub North re provision of services for olders adults and vulnerable people across Argyll and Bute 100,000 0 100,000 100,000 0 At the Council budget meeting February 23, an allocation of £0.1m from the Unallocated General Fund balance for the Health and Social Care Partnership to engage, in partnership with the Council, with Hub North to develop a strategic business case in relation to the provision of services for older adults and other vulnerable people across Argyll and Bute. 100,000 0 064 Non Departmental Non Departmental CHARTS 80,000 0 80,000 80,000 0 As agreed at Council on 24 February 2022, investment in CHARTS £0.075m. To support the organisation in delivering targeted support, in communities, to the culture, arts and heritage sector as part of its plans to contribute to overall economic recovery. At the Council Budget meeting on 23 February 2023, the Council committed to £0.075m one-off investment in CHARTS in response to an external funding request will be spent in 23-24 80,000 065 Non Departmental Non Departmental Community Resilience Fund 76,447 0 76,447 0 76,447 Fund established in 2012/13 to be spent over more than one year. Fund reduced at the Council meeting on 11 February 2016 0 76,447 13,565,615 1,782,055 0 11,783,560 2,665,905 9,117,655 4,447,960 7,189,810 1,927,845
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APPENDIX 2 COVID As at 31 December 2023 Ref Department Service Description Opening Balance Budget Drawdown Released back to General Fund New earmarkings in year Remaining Balance Still to be drawndown in 23- 24 Planned to spend in future years Plans for Use Amount Planned to be Spent in 2023- 24 Amount Planned to be Spent in 2024- 25 Amount Planned to be Spent from 2025/26 onwards 001 Chief Executive's Unit Community Planning Community Planning - temp post to support communities 55,000 0 55,000 55,000 0 Post supporting year 1 of supporting communities fund 55,000 0 002 Chief Executive's Unit Community Planning Covid impacts – support to communities’ 49,147 47,926 1,221 1,221 0 Funding provided in relation to the Local Self-Isolation Assistance Service. The Community Planning and Development Team will work with community groups to support their community response and resiliency to Test and Protect and the longer term impacts of COVID-19 on local community organisations. 49,147 0 003 Executive Director (Douglas Hendry) Education Logistics Funding - Safe Opening of Schools 699,036 0 699,036 50,000 649,036 Scottish Government funding to ensure the safe opening and operation of schools. Includes transport, PPE, cleaning, ventilation and expansion of estate. It is likely that any unused balances would have to be returned to the Scottish Government. Window replacement programme in schools with windows that do not open, this will improve ventilation. £500k to fund one off savings 2024-25. 50,000 649,036 004 Executive Director (Douglas Hendry) Education Additional Teaching/Support in Schools/Digital Devices/Family Home Learning Support Fund - £45m Grant 421,198 69,832 351,366 311,366 40,000 Continuation of funding for additional staffing, teachers, support staff, additional devices for pupils and additional family/home learning programmes. 381,198 40,000 005 Executive Director (Douglas Hendry) Education Education to Support Young People 191,042 160,560 30,482 0 30,482 As agreed at the Council Meeting on 25 February 2021 with an original allocation of £0.600m. Agreed to fund a package of measures to boost the wellbeing and build back the resilience of young people, in particular those most vulnerable, following the Covid-19 pandemic, including counselling and increased provision of childcare for children under three. Notes that the Scottish Government is yet to confirm details of funding for similar initiatives and, should our investment in children’s wellbeing qualify for this funding, the balance will be re-allocated to the Recovery and Renewal Fund. 160,560 30,482 006 Executive Director (Douglas Hendry) Education Recruitment of Additional Teachers and Support Staff in Schools 51,371 51,371 0 0 0 Fund additional teachers and support staff. Complete. 51,371 0 007 Executive Director (Douglas Hendry) Legal and Regulatory Services Welfare Rights Support 131,634 64,906 66,728 0 66,728 As agreed at the Council Meeting on 25 February 2021 - an allocation of £0.172m. As part of our focus on Improving Opportunities for People and Communities, agrees to provide additional resources to proactively support people experiencing poverty and hardship, by investing in two additional Welfare Rights support staff for two years. 64,906 66,728 008 Executive Director (Kirsty Flanagan) Customer Support Services Self Isolated Support / Self Isolated Support Grant (HR) 65,250 49,750 15,500 0 15,500 These were monies that were provided by Scotgov to fund additional overtime and resources for Shielding/Caring for People and Test and Protect activities. The funds are being used for a number of Customer Service and Business efficiency related projects including a system and consultancy of RPA (robotic process automation) and application development. A full corporate website upgrade and renewal using specialist web resources and the Digital Reception Project. Year 2 of Create/RPA low code and robotics system due for payment in October - £49k to be drawn down. Procurement underway for Digital Registration Platform with contract award due FQ3. 49,750 15,500 009 Executive Director (Kirsty Flanagan) Development and Economic Growth Staycation and Marketing Argyll and Bute 389,992 0 389,992 300,000 89,992 As agreed at the Council Meeting on 25 February 2021 with an original allocation of £0.800m. This will include provision of additional waste disposal facilities and other facilities that will be informed by the Motorhome and Informal Camping Survey. As agreed at Council on 24 February 2022, Staycation investment £0.100m. Augments the 2021/22 £0.5m staycation initiative with an additional investment of £100k, including support for community groups and partners in the provision of facilities which can support increasing staycation visitor numbers during the 2022/23 and 2023/24 seasons. 300,000 89,992 010 Executive Director (Kirsty Flanagan) Development and Economic Growth Tackling Digital Exclusion Top-Up Fund 217,600 0 217,600 217,600 0 As agreed at the Council Meeting on 25 February 2021. Establishes the Tackling Digital Exclusion Top Up Fund to support communities and in some cases individuals that are missing out on national programmes due to logistics and economies of scale. While vouchers are available from the UK and Scottish Governments in some cases these do not cover the full cost of infrastructure builds. Expenditure should be incurred during 23-24 to draw down against. 217,600 0 011 Executive Director (Kirsty Flanagan) Development and Economic Growth LACER Funding (Sector Support Grant) 95,398 0 95,398 95,398 0 Local Authority COVID Economic Recovery Fund grant. This will provide funding, either part of the small business development grant or standalone, to help micros and small business to implement projects that contribute to the sector as well as benefitting the business, for example: Tourism and hospitality, food and drink or retail. With option to provide additional business support to hard hit areas including Bute and Kintyre where unemployment remains higher than average - support via specialist advice, locally tailored grants to meet local priorities and targeted marketing activity. to be split £115,000 for Shop fronts and £35,000 Business support via Business Gateway (as at 25/10/23 Shop fronts have £84,248 remaining and Bus support have £11,150 should all be spent in 23/24 95,398 0 012 Executive Director (Kirsty Flanagan) Development and Economic Growth Economic Development - temp post to support economic recovery 55,000 0 55,000 55,000 0 As agreed at Policy & Resources committee on 9 December 2021, allocation of £0.055m to a post to support the economic and social recovery together with the building back stronger themes. To be used to fund Settlement Project Support Officer during 23-24. 55,000 0 013 Executive Director (Kirsty Flanagan) Development and Economic Growth EH Covid Posts 37,775 0 37,775 37,775 0 Funding initially for 2 posts for 2 years. Posts were initially recruited to with one leaving and the other going on maternity leave resulting in delays in expenditure. One employee is now back from maternity leave and earmarked reserve will be drawn down to cover their costs in 23-24. 37,775 0 014 Executive Director (Kirsty Flanagan) Development and Economic Growth LACER Funding (New Enterprise Support Grant) 31,159 0 31,159 31,159 0 Local Authority COVID Economic Recovery Fund grant. This funding would provide £3,000 grants to help new businesses start up and establish. Fund fully committed, there was a delay in getting all payments made and remainder will be made in 23-24. 31,159 0 015 Executive Director (Kirsty Flanagan) Development and Economic Growth LACER Funding (Shop Local) 26,793 0 26,793 26,793 0 Local Authority COVID Economic Recovery Fund grant. This funding would provide funding to continue the Shop Local scheme into 2022/23 and 2023/24, buying additional cards and allow the cards to gather momentum and support local businesses. 26,793 0 016 Executive Director (Kirsty Flanagan) Development and Economic Growth LACER Funding (Small Business Development Grant) 24,988 0 24,988 24,988 0 Local Authority COVID Economic Recovery Fund grant. This funding will provide funding of between £500 and £5,000 to help existing micro and small businesses to improve their resilience or growth via projects to implement green initiatives, implement digital development, implement marketing improvements and improve efficiency/innovation. Fully committed with final payments due in 2023- 2024. 24,988 0
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Ref Department Service Description Opening Balance Budget Drawdown Released back to General Fund New earmarkings in year Remaining Balance Still to be drawndown in 23- 24 Planned to spend in future years Plans for Use Amount Planned to be Spent in 2023- 24 Amount Planned to be Spent in 2024- 25 Amount Planned to be Spent from 2025/26 onwards 017 Executive Director (Kirsty Flanagan) Financial Services Housing Benefits Private 321,524 35,640 285,884 285,884 0 Specific funding allocation for Housing Benefit including DHP. Funds will be used to continue to support vulnerable people initially financially affected by the COVID-19 outbreak but now facing the cost of living crisis to sustain their tenancies. This earmarking will help offset potential overspends in the DHP/ Scottish Welfare Fund budget going forward. 321,524 0 018 Executive Director (Kirsty Flanagan) Financial Services Flexible Food Fund 194,156 107,620 86,536 86,536 0 Financial Insecurity funding from Scottish Government routed into the Argyll and Bute Flexible Food and Fuel Fund (ABFFFF) is aimed at tackling financial insecurity for adults and families across Argyll and Bute. Working in partnership with the Community Food Forum, Bute Advice Centre and ALIenergy, households with low incomes and no access to cash savings can apply for immediate financial support. The Fund helps support daily living expenses. In the period from 10 January 2021 to 30 November 2022 client gain in extra benefits income for families was £2.25 million with 1,550 families had been supported. The project has been extended to 31 March 2025 with funding coming from the UK Shared Prosperity Fund and this earmarking to support it. It is proposed that underspends from the Flexible Funding for Supporting People at tier 4 COVID will be used to support this project over the next two years to cover a funding gap of £50,000. The Scottish Government have provided this funding and have endorsed this award winning project promoting it as part of the solution to end the need for foodbanks nationally. 194,156 0 019 Executive Director (Kirsty Flanagan) Financial Services Flexible Funding for Supporting People while at Tier 4 COVID 76,357 4,666 71,691 71,691 0 Funding from SG to strengthen local authority responses to meet emerging needs and support people in their communities struggling with the restrictions and guidance at all protection levels re COVID, particularly those at risk through health and social inequalities. This support could cover the same types of support. In June 2021 the Council agreed to support 20 projects led by a range of Council officers, officers from the HSCP and members of the third sector to deliver wide ranging support across our region. A report will be presented to members in due course. 76,357 0 020 Executive Director (Kirsty Flanagan) Financial Services Self Isolated Support Grant 5,316 0 5,316 0 5,316 Unspent admin funding for processing Self isolation Support Grants. 0 5,316 021 Non Departmental Non Departmental Recovery and Renewal Fund 1,547,000 0 1,547,000 1,547,000 0 As agreed at Council on 24 February 2022, Recovery and Renewal Fund £1.547m. This is provision for future recovery, regeneration and renewal, as well as any future pressures which may arise following the Covid-19 pandemic through a dedicated Recovery and Renewal Fund. Commitments have been made against this fund as follows: Levelling up bid costs £0.150m, Scotland Loves Local overspend £0.037m and Rothesay Pavilion £1.360m. 1,547,000 0 022 Non Departmental Non Departmental COVID Funding 418,337 0 418,337 0 418,337 Net balance on COVID cost centres at year end 2022/23 with proposals on use to be developed. 0 0 418,337 023 Non Departmental Non Departmental Capital pressure 257,000 0 257,000 0 257,000 Pressure identified on the 20/21 COSLA COVID costs spreadsheets - requires to be earmarked to be drawn down when required against the Capital Plan. To be incurred during 23-24 and drawn down in 24- 25. 0 257,000 024 Non Departmental Non Departmental Levelling up Fund bids per P&R February 22 150,000 0 150,000 150,000 0 As agreed at Policy & Resources committee on 17 February 2022, an allocation of up to £0.150m to support Levelling Up Fund bids 150,000 0 5,512,073 592,271 0 0 4,919,802 3,347,411 1,572,391 3,939,682 1,154,054 418,337