Financial Reports Monitoring Pack - 31 August 2023
Argyll and Bute Council · 12 October 2023
Back to Policy and Resources Committee — 12 October 2023 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 12 OCTOBER 2023 FINANCIAL REPORTS MONITORING PACK – 31 AUGUST 2023 1. INTRODUCTION 1.1 This report provides a summary of the financial monitoring reports as at the end of August 2023. There are five detailed reports, setting out the position as at 31 August 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 underspend of £0.009m as at the end of August 2023. The key variances are: - Underspend of £0.400m from Education due to slippage on Scottish Government 100 day Promise funding due to delays in recruitment - Underspend of £0.400m from Executive Director Kirsty Flanagan in respect of an over-recovery of vacancy savings - Overspend of £0.400m from Piers and Harbours due to an under-recovery of berthing income - Overspend of £0.309m from Schools Residential placements due to a higher than budgeted demand for this service - Overspend of £0.042m from Pupil Transport due to an overspend against staffing costs for driver/escorts - Under-recovery of £0.040m door entry income for public conveniences (indicative start date of September for door entry installs) 2.1.3 There is a year to date overspend of £1.957m. 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.
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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 August 2023. Category No. of Options 2023-24 £000 2023- 24 FTE 2024-25 £000 2024- 25 FTE Future Years £000 Future Years FTE Delivered 9 1,012.5 (0.7) 1,030.0 (0.7) 1,030.0 (0.7) On Track to be Delivered 5 5,487.0 9.4 5,490.0 11.9 5,588.0 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 8.7 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 2.1.7 The forecast outturn position at the end of August is an estimated overspend of £0.900m for 2023-24 (forecast to come in on budget for Social Work and overspend of £0.900m 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 6 Council wide revenue risks identified for 2023-24 currently amounting to £3.661m. 2.2.3 There are currently 41 departmental risks totalling £5.550m. Of the 41 departmental risks, 5 are categorised as likely. These will continue to be monitored and action taken to mitigate or manage these risks.
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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 There have been 3 changes to the departmental risks since the report as presented to the Policy and Resources Committee on 10 August 2023. These are outlined in paragraph 3.4.1 of the Financial Risks Report. 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.
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2.3.4 Actual net expenditure to date is £14.178m compared to a budget for the year to date of £14.135m giving rise to an overspend for the year to date of £0.043m (0.30%). 2.3.5 The forecast outturn for 2023-24 is a forecast net expenditure of £43.149m compared to an annual budget of £43.618m giving rise to a forecast underspend for the year of £0.469m (1.08%). 2.3.6 The forecast total net projects costs on the capital plan are £215.191m compared to a total budget for all projects of £215.138m giving rise to a forecast overspend for the overall capital plan of £0.053m (0.02%). 2.3.7 In respect of total project performance, there are 156 projects within the capital plan, 153 are complete or on target, 2 are off target and recoverable and 1 project is 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 July 2023 to 31 August 2023 was a decrease of £7m. 2.4.3 Borrowing is below the Capital Financing Requirement for the period to 31 August 2023, at this stage in the financial year capital expenditure is below target. Capital expenditure continued to be lower than anticipated over the last twelve months however there is an expectation this will increase back up again over 2023-24 which will continue to be monitored closely 2.4.4 The levels of investments were £96.750m at 31 August 2023. The average rate of return achieved was 4.991% which is below the target SONIA (Sterling Overnight Index Average) rate for the same period of 5.168%. 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.
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2.5.4 Of the earmarked balance of £79.466m: • £37.047m is invested or committed for major initiatives/capital projects • £3.411 has already been drawn down • £25.559m is still to be drawn down in 2023-24 • £13.449m is planned to be spent in future years. 2.5.5 During 2023-24, the amount of £2.619m 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 £82.085m with the amount invested or committed for major initiatives/capital projects as at August increasing to £39.666m. 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 £5.691m 1,252 Budgeted allocation to General Fund for 2023-24 Budget Per the Budget Motion at Council on 23 February 2023 19 Current Forecast Outturn for 2023-24 as at 31 August 2023 Per paragraph 2.1.2 9 Social Work outturn adjustment Social Work would expect to transfer any surplus to internal reserves (0) Allocation from unallocated general fund balance Per EDI committee decision re floral displays (8) Estimated Unallocated balance as at 31 March 2024 1,272 2.5.6 It can be seen that, after taking into consideration the Budget Motion, the current forecast outturn for 2023-24, the expected adjustment in relation to the Social Work outturn, the Council is forecast to have a £1.272m surplus over contingency.
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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 July and August, there are 3 virements requiring authorisation: - £0.311m harvested within Social Work against the vacancy savings target for the August period - £0.732m moved from Chief Officer Integration to Head of Health and Community Care to recognise Scottish Government Multi-Disciplinary Team funding and spend - £0.950m moved between cost centres within Social Work to recognise Scottish Government Care at Home expenditure 3. RECOMMENDATIONS 3.1 It is recommended that the Policy and Resources Committee: a) Consider the revenue budget monitoring report as at 31 August 2023 b) Note the financial risks for 2023-24 c) Note the capital plan monitoring report as at 31 August 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 August 2023 e) Consider the reserves and balances report as at 31 August 2023 f) Recommend to Council that the revenue virements over £0.200m during July and August 2023 are approved 4. IMPLICATIONS 4.1 Policy – None. 4.2 Financial - Outlines the revenue and capital monitoring for 2023-24 as at 31 August 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.
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4.8 Customer Service - None. Kirsty Flanagan Executive Director /Section 95 Officer 8 September 2023 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 AUGUST 2023 POLICY AND RESOURCES COMMITTEE 12 OCTOBER 2023 2023-24 Overall Position: There is a forecast underspend of £0.009m as at the end of August 2023. Within Executive Director Douglas Hendry, there is a forecast underspend of £0.091m due to slippage in utilisation of 100 day promise funding 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 £0.082m due to an under-recovery of berthing income in Piers and Harbours, an under-recovery of income in Public Conveniences and an overspend in Pupil Transport driver/escort costs. These are partially offset with an over-recovery of vacancy savings and an underspend in Public Transport payments to operators. 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 is a year to date underspend of £1.957m. 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 August 2023: • Council services are projecting an underspend of £0.009m as at 31 August 2023. It is early in the budget monitoring process and projections will be refined for the next monitoring report. 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 • £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.
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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 £0.009m for 2023-24 as at the end of August 2023 Department Annual Budget £'000 Forecast Outturn £'000 Current Forecast Variance £'000 Previous Forecast Variance £000 Change £000 Explanation Chief Executive's Unit 1,038 1,038 0 0 0 Executive Director (Douglas Hendry) 131,942 131,851 91 (309) 400 The projected underspend is due to slippage in the use of 100 day promise funding offset by an overspend within Residential School Budgets due to a higher than budgeted demand for this service. Executive Director (Kirsty Flanagan) 54,759 54,841 (82) 0 (82) The projected overspend is due to an under-recovery of berthing income in Piers & Harbours, an under-recovery of income in Public Conveniences and an overspend in Pupil Transport driver/escort costs. These are partially offset with an over-recovery of vacancy saving and an underspend in Public Transport payments to operators. Social Work 76,118 76,118 0 376 (376) 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. Central Budgets 26,640 26,640 0 0 0 Financed By (290,497) (290,497) 0 0 0 Total 0 (9) 9 67 (58)
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Further information on the departmental forecast variances is included later on in the report. (400) 100 600 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 the end of August 2023 is an underspend of £1.957m and the main variances are noted below. Department YTD Actual £'000 YTD Budget £'000 YTD Variance £'000 Explanation Chief Executive's Unit 488 460 (28) The year to date overspend can be attributed to a profiling issue from the new Shared Prosperity Fund. A new cost centre will be set up to recognise costs/income from this scheme and correct the profile issues causing the variance. Executive Director (Douglas Hendry) 50,209 51,536 1,327 The year to date underspend position is due to receipt of historic utility refunds, underspends in Education within employee budgets, this is partially offset by the overspend within the Residential Schools budget. The underspends in School and Learning Centre Budgets fall within the Scheme of Devolved School Management in schools which are permitted flexibility at the end of the year so no forecast variance for this part of the underspend is required. Executive Director (Kirsty Flanagan) 23,312 23,443 131 The year to date underspend is mainly due to the timing of income in comparison to the budget profile partially offset by expenditure incurred which is funded by grant income which has not been received. Social Work 17,313 17,150 (163) The year to date overspend is mainly due to the use of agency staff across Homecare and Older People Residential Units. Central Budgets 3,735 4,425 690 The year to date underspend can be attributed to profiling issues. Funding (120,823) (120,823) 0 Total Net Expenditure (25,766) (23,809) 1,957
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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 Remaining Budget
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OBJECTIVE SUMMARY – OVERALL COUNCIL POSITION AS AT 31 AUGUST 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 488 460 (28) (6.1%) 1,038 1,038 0 0.0% Executive Director (Douglas Hendry) 50,209 51,536 1,327 2.6% 131,942 131,851 91 0.1% Executive Director (Kirsty Flanagan) 23,312 23,443 131 0.6% 54,759 54,841 (82) (0.2%) Social Work 17,313 17,150 (163) (1.0%) 76,118 76,118 0 0.0% Total Departmental Budgets 91,322 92,589 1,267 1.4% 263,857 263,848 9 0.0% Central Budgets Other Operating Income and Expenditure (1,954) (2,205) (251) 11.4% 3,921 3,921 0 0.0% Joint Boards 626 623 (3) (0.5%) 1,496 1,496 0 0.0% Non-Controllable Costs 5,063 6,007 944 15.7% 21,223 21,223 0 0.0% Total Central Budgets 3,735 4,425 690 15.6% 26,640 26,640 0 0.0% TOTAL NET EXPENDITURE 95,057 97,014 1,957 2.0% 290,497 290,488 9 0.0% Financed By Aggregate External Finance (90,545) (90,545) 0 0.0% (226,268) (226,268) 0 0.0% Local Tax Requirement (30,278) (30,278) 0 0.0% (59,301) (59,301) 0 0.0% Contributions to General Fund 0 0 0 0.0% (1,517) (1,517) 0 0.0% Earmarked Reserves 0 0 0 0.0% (3,411) (3,411) 0 0.0% Total Funding (120,823) (120,823) 0 0.0% (290,497) (290,497) 0 0.0% (Deficit)/Surplus for Period (25,766) (23,809) 1,957 0 (9) 9 CURRENT PROJECTED FINAL OUTTURNYEAR TO DATE POSITION
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SUBJECTIVE SUMMARY – OVERALL COUNCIL POSITION AS AT 31 AUGUST 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 70,496 71,166 670 0.9% 188,731 188,422 309 0.2% Premises Related Expenditure 9,748 9,985 237 2.4% 19,031 19,327 (296) (1.6%) Supplies and Services 10,295 11,202 907 8.1% 24,901 24,949 (48) (0.2%) Transport Related Expenditure 5,383 5,066 (317) (6.3%) 17,636 17,578 58 0.3% Third Party Payments 66,476 64,666 (1,810) (2.8%) 173,541 174,705 (1,164) (0.7%) Capital Financing 942 0 (942) 14,523 14,523 0 0.0% TOTAL EXPENDITURE 163,340 162,085 (1,255) (0.8%) 438,363 439,504 (1,141) (0.3%) Income (189,106) (185,894) 3,212 (1.7%) (438,363) (439,513) 1,150 (0.3%) (Deficit)/Surplus for Period (25,766) (23,809) 1,957 0 (9) 9 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 AUGUST 2023 The department is currently forecasting spend in line with budget. The department has a year to date overspend of £0.028m 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 1,038 1,038 0 0 0 Totals 1,038 1,038 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. 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 0% 25% 50% 75% 100% Chief Executive Expenditure to date against the remaining budget for each Service YTD Actual… Remaining Budget £000
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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 AUGUST 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 158 155 (3) (1.9%) 419 419 0 0.0% Outwith Reporting Criteria Community Planning & Development 330 305 (25) (8.2%) 619 619 0 0.0% Outwith Reporting Criteria 488 460 (28) (6.1%) 1,038 1,038 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 AUGUST 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 335 335 0 0.0% 887 887 0 0.0% Outwith Reporting Criteria Supplies and Services 5 5 0 0.0% 12 12 0 0.0% Outwith Reporting Criteria Transport 4 6 2 33.3% 14 14 0 0.0% Underspend on staff travel budgets. Third Party 167 131 (36) (27.5%) 142 142 0 0.0% Grants have been paid out in relation to the Shared Prosperity Fund. A new cost centre will be set up during September to recognise all costs/income relating to this scheme which will rectify the profiling issues causing the YTD variance. Income (23) (17) 6 (35.3%) (17) (17) 0 0.0% Income has been received in relation to the Shared Prosperity Fund. A new cost centre will be set up during September to recognise all costs/income relating to this scheme which will rectify the profiling issues causing the YTD variance. Totals 488 460 (28) (6.1%) 1,038 1,038 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 AUGUST 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 AUGUST 2023 The department is currently forecasting an underspend of £0.091m which is due to slippage in the utilisation of 100 day promise funding offset by an overspend within Residential School Budgets due to a higher than budgeted demand for this service. The department has a year to date (YTD) underspend of £1.327m (2.6%). The year to date underspend position is due to receipt of historic utility refunds, underspends in Education within employee budgets, this is partially offset by the overspend within the Residential Schools budget. The underspends in School and Learning Centre Budgets fall within the Scheme of Devolved School Management in schools which are permitted flexibility at the end of the year so no forecast variance for this part of the underspend is required. Forecast Outturn Position Service Annual Budget £000 Forecast Outturn £000 Current Forecast Variance £000 Previous Forecast Variance £000 Change £000 Executive Director (Douglas Hendry) 126 126 0 0 0 Head of Commercial Services 11,689 11,689 0 0 0 Head of Education 104,175 104,084 91 (309) 400 Head of Legal and Regulatory Support 15,952 15,952 0 0 0 Totals 131,942 131,851 91 (309) 400 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. • 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. 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… Remaining Budget…
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• 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 AUGUST 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 143 149 6 4.0% 126 126 0 0.0% Outwith Reporting Criteria 143 149 6 4.0% 126 126 0 0.0% Head of Commercial Services Catering 158 270 112 41.5% 1,302 1,302 0 0.0% The YTD underspend is due to the timing of income and expenditure. Head of Commercial Services Central/Management Costs 570 545 (25) (4.6%) 1,792 1,792 0 0.0% Outwith Reporting Criteria Head of Commercial Services CHORD 55 21 (34) (161.9%) 35 35 0 0.0% The YTD overspend is due to the timing of income and expenditure. Head of Commercial Services Cleaning (83) 141 224 158.9% 599 599 0 0.0% The YTD underspend is due to the timing of income and the reduced use of bank staff. Head of Commercial Services Culture, Heritage, Recreation & Sport 2,429 2,400 (29) (1.2%) 5,915 5,915 0 0.0% Outwith Reporting Criteria Head of Commercial Services Events & Commercial Catering 105 (6) (111) 1850.0% 3 3 0 0.0% The YTD overspend is due to timing of income, under recovery of income and high staff costs within Commercial Café's. Finance assisted management to look at cashflows, pricing, menu's and staffing model to recover current position. Head of Commercial Services Property Portfolio (90) (45) 45 (100.0%) (191) (191) 0 0.0% The YTD underspend is due to the timing of income and expenditure. Head of Commercial Services Property Services 379 473 94 19.9% 726 726 0 0.0% The YTD underspend is due to receipt of historic water refunds. Head of Commercial Services Shared Offices 494 469 (25) (5.3%) 1,508 1,508 0 0.0% Outwith Reporting Criteria 4,017 4,268 251 5.9% 11,689 11,689 0 0.0%
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Head of Education Additional Support for Learning 4,102 4,263 161 3.8% 11,366 11,366 0 0.0% The YTD underspend is due to delays in recruitment of ASN Assistants which may be offset by additional pay still to be coded against Pupil Support Teachers next month. Head of Education Central/Management Costs 956 928 (28) (3.0%) 2,287 2,287 0 0.0% Outwith Reporting Criteria Head of Education Community Learning & Development 9 2 (7) (350.0%) 13 13 0 0.0% The YTD overspend is due to the timing of income and expenditure. Head of Education COVID 48 55 7 12.7% 55 55 0 0.0% Funds to be drawn from Covid earmarkings to match expenditure which will eliminate adverse variance monthly. Head of Education Early Learning & Childcare (883) (796) 87 (10.9%) 9,544 9,544 0 0.0% YTD underspend of £106k in employee budgets in ELC settings due to delays in recruitment. There is also a YTD underspend of £63k in materials budgets within ELC settings which is profile-related. This will be rectified in the September period. The above underspends are partially offset by a YTD overspend in the premises budget in the 1140 cost centre. Earmarked reserve funding will be drawn down in September to rectify this variance. Head of Education Primary Education 16,116 16,352 236 1.4% 38,197 38,197 0 0.0% The YTD underspend is due to the timing of income and expenditure. Head of Education Pupil Support 805 821 16 2.0% 2,633 2,942 (309) (11.7%) The YTD underspend is due to the current budget profile which will be refined through September. This will change the true YTD variance to a £128k overspend in Schools Residential Budget due to a higher demand for service than budget allows. A forecast variance of £309k has been recorded through the ledger reflecting this position.
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Head of Education Schools - Central Services 922 937 15 1.6% 2,341 1,941 400 17.1% The YTD underspend is due to the current budget profile which will be refined through September. This will change the true YTD variance to a £166k underspend due to slippage in the use of 100 day promise funding for additional teachers and support staff. This funding will be fully utilised in 2024-25. Head of Education Secondary Education 16,567 16,867 300 1.8% 37,739 37,739 0 0.0% The YTD underspend position is largely due to underspends within Secondary schools staffing 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. 38,642 39,429 787 2.0% 104,175 104,084 91 0.1% Head of Legal & Regulatory Support Central/Management Costs 92 100 8 8.0% 271 271 0 0.0% Outwith Reporting Criteria Head of Legal & Regulatory Support Community Safety 96 95 (1) (1.1%) 176 176 0 0.0% Outwith Reporting Criteria Head of Legal & Regulatory Support Elections 2 5 3 60.0% 36 36 0 0.0% The YTD underspend is due to the timing of income and expenditure. Head of Legal & Regulatory Support Governance 161 176 15 8.5% 771 771 0 0.0% Outwith Reporting Criteria Head of Legal & Regulatory Support Governance, Risk & Safety 196 212 16 7.6% 577 577 0 0.0% Outwith Reporting Criteria Head of Legal & Regulatory Support Legal Services 186 195 9 4.6% 750 750 0 0.0% Outwith Reporting Criteria Head of Legal & Regulatory Support NPDO and Hub Schools 6,055 6,242 187 3.0% 11,517 11,517 0 0.0% The YTD underspend is due to receipt of historic water refunds and the timing of income and expenditure.
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Head of Legal & Regulatory Support Procurement, Commercial and Contract Management 393 447 54 12.1% 1,216 1,216 0 0.0% The YTD underspend is due to delays in recruitment of staff. Head of Legal & Regulatory Support Trading Standards & Advice Services 226 218 (8) (3.7%) 638 638 0 0.0% Outwith Reporting Criteria 7,407 7,690 283 3.7% 15,952 15,952 0 0.0% 50,209 51,536 1,327 2.6% 131,942 131,851 91 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 AUGUST 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 40,274 41,205 931 2.3% 105,418 105,018 400 0.4% Non Education: The YTD underspend of £347k is made up of a £116k underspend in Legal and Regulatory Support due to delays in recruitment and a £229k underspend in Commercial Services due to delays in recruitment and lower than anticipated use of bank budgets in catering and cleaning. This will reduce in September as vacancy savings are removed and budgets reduced. Education: £584k underspend is mainly within staffing budgets in schools and learning centres. Under the Scheme of Devolved School Management (DSM) schools are permitted flexibility at yearend, therefore no forecast variance has been processed in relation to this. Premises 3,161 3,186 25 0.8% 7,932 7,932 0 0.0% Outwith Reporting Criteria Supplies and Services 4,712 5,632 920 16.3% 13,299 13,299 0 0.0% Non Education: The YTD underspend of £155k is mainly within Catering Services and is due to the timing of income and expenditure. Education: £765k underspend is due to the timing of income and expenditure within Pupil Equity Funding. Transport 147 140 (7) (5.0%) 338 338 0 0.0% Outwith Reporting Criteria Third Party 19,729 19,775 46 0.2% 41,764 42,073 (309) (0.7%) Outwith Reporting Criteria Income (17,814) (18,402) (588) 3.2% (36,809) (36,809) 0 0.0% Non Education: The £178k under recovery of income is due to the profile of income from school meals, the under recovery of income from Commercial Catering and Events which is being closely monitored and the timing of income and expenditure within Renewable Energy. Education: The £410k under recovery of income is due to the timing of income within school meals. Totals 50,209 51,536 1,327 2.6% 131,942 131,851 91 0.1%
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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 (DOUGLAS HENDRY) – RED VARIANCES AS AT 31 AUGUST 2023 Service Area Annual Budget £000 Forecast Outturn £000 Forecast Variance £000 % Variance Explanation Education - Pupil Support 2,633 2,942 (309) (11.7%) Higher than budgeted demand for placements within Residential Schools. Education - Schools Central Services 2,341 1,941 400 17.1% Slippage in the use of 100 day promise funding for additional teachers and support staff that will be fully utilised in 2024-25. A Red variance is a forecast variance which is greater than +/- £50,000.
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EXECUTIVE DIRECTOR (KIRSTY FLANAGAN) – AS AT 31 AUGUST 2023 The department has a forecast overspend of £0.082m. This is due to an under-recovery of berthing income in Piers & Harbours, an under- recovery of income in Public Conveniences and an overspend in Pupil Transport driver/escort costs. These are partially offset with an over- recovery of vacancy saving and an underspend in Public Transport payments to operators. The department has a year to date underspend of £0.131m (0.6%). This is mainly due to the timing of income received in comparison to budget profile partially offset by expenditure funded from grant income that has not yet been received. Forecast Outturn Position Service Annual Budget £000 Forecast Outturn £000 Current Forecast Variance £000 Previous Forecast Variance £000 Change £000 Executive Director (Kirsty Flanagan) 110 (290) 400 0 400 Head of Customer Support Services 8,962 8,962 0 0 0 Head of Development and Economic Growth 7,960 7,960 0 0 0 Head of Financial Services 5,830 5,830 0 0 0 Head of Roads and Infrastructure Services 31,897 32,379 (482) 0 (482) Totals 54,759 54,841 (82) 0 (82) Year to Date Position 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 focusing on high level debts plus an over recovery of vacancy savings. 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 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 AUGUST 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 114 114 0 0.0% 110 (290) 400 363.6% 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. 114 114 0 0.0% 110 (290) 400 363.6% Head of Customer Support Services Central/Management Costs 56 58 2 3.5% 174 174 0 0.0% Outwith Reporting Criteria. Head of Customer Support Services Communications 102 119 17 14.3% 324 324 0 0.0% Underspend in employee costs due to vacancy which will be used to cover future consultancy costs. Head of Customer Support Services Customer Service Centres 507 500 (7) (1.4%) 1,484 1,484 0 0.0% Outwith Reporting Criteria. Head of Customer Support Services HR 916 1,027 111 10.8% 2,593 2,593 0 0.0% Underspend due to timing of income in comparison to profiling of budget which will be rectified over the financial year. Head of Customer Support Services ICT 1,740 1,738 (2) (0.1%) 4,331 4,331 0 0.0% Outwith Reporting Criteria. Head of Customer Support Services Registrars (43) 3 46 1533.3% 56 56 0 0.0% Underspend due to timing of income in comparison to profiling of budget and employee vacancies which will be rectified over the financial year. 3,278 3,445 167 4.9% 8,962 8,962 0 0.0% Head of Development & Economic Growth Airports 482 460 (22) (4.8%) 1,210 1,210 0 0.0% Outwith Reporting Criteria. Head of Development & Economic Growth Building Control (138) (106) 32 (30.2%) (103) (103) 0 0.0% Profile of income budget out of alignment with actual income received - will be kept under review and adjusted if the variance becomes material to
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the Department's overall position. Head of Development & Economic Growth Central/Management Costs 213 200 (13) (6.5%) 581 581 0 0.0% Outwith Reporting Criteria. Head of Development & Economic Growth Culture & Heritage 78 81 3 3.7% 228 228 0 0.0% Outwith Reporting Criteria. Head of Development & Economic Growth Development Management (154) (96) 58 (60.4%) (21) (21) 0 0.0% Variance is due to the timing of receipts for planning income received. Schedule of expected Planning Applications to be reviewed later in the year to determine any potential over- recovery. Head of Development & Economic Growth Development Policy 152 144 (8) (5.6%) 394 394 0 0.0% Outwith Reporting Criteria. Head of Development & Economic Growth Economic Development 264 713 449 63.0% 1,183 1,183 0 0.0% Grant income for Place Based Investment and Scottish Govt Islands Programme received in advance of expenditure. Head of Development & Economic Growth Environmental Health 390 407 17 4.2% 1,249 1,249 0 0.0% Outwith Reporting Criteria. Head of Development & Economic Growth Environmental Initiatives 44 44 0 0.0% 120 120 0 0.0% Outwith Reporting Criteria. Head of Development & Economic Growth Housing 1,905 1,761 (144) (8.2%) 2,883 2,883 0 0.0% Expenditure for HEEPS incurred in advance of grant claim. Head of Development & Economic Growth Private Landlords (151) 0 151 0.0% 0 0 0 0.0% Income from Short Term Lets received in advance with no budget allocation. Budget will be added for next reporting period. Head of Development & Economic Growth Transportation Policy 184 88 (96) (109.1%) 236 236 0 0.0% Expenditure for SUSTRANS and CWSS incurred in advance of grant claim.
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3,269 3,696 427 11.6% 7,960 7,960 0 0.0% Head of Financial Services Accounting & Budgeting 949 992 43 4.3% 2,674 2,674 0 0.0% Outwith Reporting Criteria. Head of Financial Services Internal Audit & Fraud 122 121 (1) (0.8%) 339 339 0 0.0% Outwith Reporting Criteria. Head of Financial Services Revenues & Benefits 1,784 1,811 27 1.5% 2,123 2,123 0 0.0% Outwith Reporting Criteria. Head of Financial Services Scottish Welfare Fund 223 192 (31) (16.2%) 694 694 0 0.0% Overspend within LACER - awaiting funds being returned to offset. 3,078 3,116 38 1.2% 5,830 5,830 0 0.0% Head of Roads & Infrastructure Services Amenity 1,781 1,529 (252) (16.5%) 3,147 3,187 (40) (1.3%) Income budget profile out of alignment with actual expected income for Cemeteries and Crematoria. Overspend in Parks due to CRA works and Earmarked Reserve to be drawndown to fund 3G pitch costs. Public Convenience income due to delay with fitting of door charging mechanisms - forecast variance entered for £40K under-recovery. Head of Roads & Infrastructure Services Car Parking (111) (271) (160) 59.0% (576) (576) 0 0.0% Electric Vehicle Charger electricity and maintenance costs paid in advance of income received from grant claim and charging income. Head of Roads & Infrastructure Services Central/Management Costs 1,234 1,217 (17) (1.4%) 3,040 3,040 0 0.0% Outwith Reporting Criteria. Head of Roads & Infrastructure Services Depots 145 117 (28) (23.9%) (429) (429) 0 0.0% Delay in rental income and timing of expenditure causing small variance which will be rectified over the financial year. Head of Roads & Infrastructure Services Fleet & Transport 3,570 3,512 (58) (1.7%) 8,682 8,724 (42) (0.5%) Forecast variance for overspend for additional Pupil Transport costs which is partially offset against an underspend in Public Transport due to reduction in payments to operators. Head of Roads & Infrastructure Services Infrastructure 181 268 87 32.5% 763 763 0 0.0% Underspend due to timing of Flood and Coastal Protection
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works which will be rectified over the financial year. Head of Roads & Infrastructure Services Marine (1,280) (2,088) (808) 38.7% (4,215) (3,815) (400) 9.5% Overspend due to under- recovery of income from Berthing charges. YTD variance higher than projection due to timing of cash flows in comparison to profiling of budget. Head of Roads & Infrastructure Services Network & Traffic Management 103 30 (73) (243.3%) 164 164 0 0.0% Overspend due to timing of income in comparison to profiling of budget and will be rectified over the financial year. Head of Roads & Infrastructure Services Road Safety 40 46 6 13.0% 111 111 0 0.0% Small underspend due to timing of PPE purchases. Head of Roads & Infrastructure Services Roads & Lighting 4,156 5,148 992 19.3% 7,089 7,089 0 0.0% Underspend due to timing of income in comparison to profiling of budget, mainly due to recharges made to capital jobs, which will be rectified over the financial year. Head of Roads & Infrastructure Services Waste 3,754 3,564 (190) (5.3%) 14,121 14,121 0 0.0% Overspend mainly due to timing of commercial refuse collection income, variance has dropped from last month, difficult to predict when income will be received if commercial customers are not paying by direct debit. Overspend also due to use of roads staff to undertake waste duties, currently being monitored. 13,573 13,072 (501) (3.8%) 31,897 32,379 (482) (1.5%) 23,312 23,443 131 0.6% 54,759 54,841 (82) (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 (KIRSTY FLANAGAN) – SUBJECTIVE SUMMARY AS AT 31 AUGUST 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 15,608 15,703 95 0.6% 43,543 43,333 210 0.5% Underspend due to vacant posts in HR, which will be used to offset overspends elsewhere in the service. Forecast variance relates to an over-recovery of vacancy savings which is partially offset with an overspend in Pupil Transport costs. Premises 1,055 1,132 77 6.8% 3,337 3,337 0 0.0% Underspend due to profile of Street Lighting Electricity and will be rectified over the financial year. Supplies and Services 4,436 4,242 (194) (4.6%) 8,886 8,886 0 0.0% Overspend within Economic Development for expenditure that is funded from grant income. Transport 4,995 4,644 (351) (7.6%) 16,229 16,229 0 0.0% Overspend for vehicle repairs in Fleet, which will be partially offset against additional income for recharges to the services, and external hires within Roads, which will be offset against additional income for recharges to capital. Third Party 24,703 23,194 (1,509) (6.5%) 63,391 63,243 148 0.2% Overspend within Economic Development and Housing for expenditure that is funded from grant income. Forecast variance relates to an underspend in Public Transport payments to bus Operators. Capital Financing 0 0 0 0.0% 2,398 2,398 0 0.0% Outwith Reporting Criteria. Income (27,485) (25,472) 2,013 (7.9%) (83,025) (82,585) (440) 0.5% Timing of income in comparison to profiling of budget in Roads, mainly due to recharges made to capital jobs, which will be rectified over the financial year and unbudgeted income in Economic Development and Housing, which will fund expenditure throughout the year. These are partially offset with under-recovery in Revenues & Benefits due to timing of cashflows and an under-recovery of income from Berthing charges in Piers and Harbours. Forecast variance relates to Piers and Harbour Berthing income under-recovery and under-recovery of Public Convenience income. Totals 23,312 23,443 131 0.6% 54,759 54,841 (82) (0.2%)
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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) – RED VARIANCES AS AT 31 AUGUST 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 (1,839) (1,439) (400) 21.8% Under-recovery of income from Berthing charges. A red variance is a forecast variance which is greater than +/- £50,000.
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SOCIAL WORK – AS AT 31 AUGUST 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 £163k (1.0%) which is mainly due to the use of agency staff across Homecare and Older People Residential Units. Forecast Outturn Position Service Annual Budget £000 Forecast Outturn £000 Current Forecast Variance £000 Previous Forecast Variance £000 Change £000 Chief Officer Integration (106) (581) 475 197 278 Head of Strategic Planning and Performance 491 481 10 9 1 Head of Health and Community Care 39,238 40,424 (1,186) (325) (861) Head of Acute and Complex Care 19,987 19,660 327 284 43 Head of Children and Families 16,508 16,134 374 211 163 Totals 76,118 76,118 0 376 (376) 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. -75% -50% -25% 0% 25% 50% 75% 100% 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… Remaining Budget…
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Key Financial Challenges: Proposed Actions to address Financial Challenges: Deliver the outstanding savings total for 2023/24 of £0.939m (as at August 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 August 2023 of £1.185m; with a forecast spend of £1.460m by the end of the year. 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 AUGUST 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 188 193 5 2.6% 569 582 (13) (2.3%) Outwith reporting criteria. Chief Officer Integration Social Work Central Support (1,066) (844) 222 (26.3%) (675) (1,163) 488 (72.3%) The YTD variance is due to over-recovery on vacancy savings (£203k) combined with underspends on centrally held funding partially offset by a YTD under-recovery on income due to budget profiling. The forecast underspend is due to an over-recovery on vacancy savings (£278k) combined with underspends on centrally held funds, printing & stationery and postages. (878) (651) 227 (23.7%) (106) (581) 475 (74.6%) Head of Strategic Planning & Performance Management & Central Costs 161 157 (4) (2.6%) 457 458 (1) (0.2%) Outwith reporting criteria. Head of Strategic Planning & Performance Service Development 12 16 4 25.0% 34 23 11 32.4% The YTD and forecast variance are due to staff vacancies giving both a payroll underspend and an under-recovery on Charges to Health Boards. 173 173 0 22.5% 491 481 10 32.1% Head of Health and Community Care Management & Central Costs 198 187 (11) (5.9%) 1,667 1,656 11 0.7% The YTD variance is a result of timing of payments to third parties. The forecast variance is outwith reporting criteria. Head of Health and Community Care Older People 9,796 8,944 (852) (9.5%) 37,571 38,768 (1,197) (3.2%) The YTD variance reflects demand within the care home placement budget and YTD overspends on employee costs due to use of agency staff in residential units and homecare. The forecast overspend reflects demand driven overspends within the care home placement budgets and homecare. High staff costs across HSCP residential units due to agency cover are also contributing to forecast overspend. 9,994 9,131 (863) (9.5%) 39,238 40,424 (1,186) (3.0%)
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Head of Acute and Complex Care Learning Disabilities 1,343 1,511 168 11.1% 14,292 13,770 522 3.7% 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 33 50 17 34.0% 130 122 8 6.2% The YTD variance is as a result of the timing of payments to third parties. The forecast variance is outwith reporting criteria. Head of Acute and Complex Care Mental Health 361 352 (9) (2.6%) 2,751 2,880 (129) (4.7%) The YTD variance is outwith reporting criteria. The forecast overspend reflects higher than budgeted demand for services in Supported Living and Residential Placements. These are partially offset by an underspend on addictions service due to staff vacancies. Head of Acute and Complex Care Physical Disability 763 687 (76) (11.1%) 2,814 2,888 (74) (2.6%) The YTD overspend is due to demand driven overspends in Supported Living and Respite and an overspend on equipment purchases within the Integrated Equipment Store. The forecast overspend reflects higher than budgeted demand for Supported Living, Respite and higher than budgeted equipment purchasing in the Integrated Equipment Service. These are offset slightly by a forecast underspends in the Residential Care and ACM Budgets. 2,500 2,600 100 31.5% 19,987 19,660 327 2.5% Head of Children & Families Child Protection 1,152 1,260 108 8.6% 3,680 3,541 139 3.8% The YTD variance is 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 reflects 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 303 312 9 2.9% 985 965 20 2.0% Outwith reporting criteria. Head of Children & Families Criminal Justice 106 169 63 37.3% 224 215 9 4.0% The YTD variance is as a result of payroll underspends due to vacancies combined with underspends on payments to other bodies.
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The forecast variance is outwith reporting criteria. Head of Children & Families Looked After Children 2,815 2,955 140 4.7% 7,854 7,658 196 2.5% The YTD variance reflects 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 reflects 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 1,148 1,201 53 4.4% 3,765 3,755 10 0.3% The YTD variance is due to timing of receipt of grant income - in advance of anticipated expenditure - combined with budget profiling and timing of receipt of invoices for payments to health boards. The forecast variance is outwith reporting criteria. 5,524 5,897 373 6.3% 16,508 16,134 374 2.3% GRAND TOTAL 17,313 17,150 (163) (1.0%) 76,118 76,118 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 AUGUST 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 12,985 12,665 (320) (2.5%) 34,700 35,001 (301) (0.9%) The YTD and forecast overspend is due to the use of agency staff across the HSCP (£1.178m YTD variance; £1.452m forecast). This is partially offset by over-recovery on vacancy savings and payroll underspends due to vacancies. Premises 610 572 (38) (6.6%) 1,545 1,841 (296) (19.2%) The YTD overspend is outwith reporting criteria. 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 756 724 (32) (4.4%) 1,179 1,227 (48) (4.1%) The YTD and forecast underspends are outwith reporting criteria. Transport 221 248 27 10.9% 685 627 58 8.5% 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 21,009 20,643 (366) (1.8%) 62,335 63,338 (1,003) (1.6%) The YTD and forecast overspend reflects demand for purchased care services across Adult Services. This is partially offset by underspends in Fostering and Adoption as well as underspends on unallocated centrally held funds. Income (18,268) (17,702) 566 (3.2%) (24,326) (25,916) 1,590 (6.5%) The YTD and forecast over recovery of income is mainly due to increased income from fees, charges and recharges. Totals 17,313 17,150 (163) (1.0%) 76,118 76,118 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 AUGUST 2023 Service Area Annual Budget £000 Forecast Outturn £000 Forecast Variance £000 % Variance Explanation Social Work Central Support (675) (1,163) 488 (72.3%) The forecast underspend is due to an over-recovery on vacancy savings combined with underspends on centrally held funds. Older People 37,571 38,768 (1,197) (3.2%) The forecast overspend reflects demand driven overspends within the care home placement budgets and homecare. High staff costs across HSCP residential units due to agency cover are also contributing to forecast overspend. Learning Disability 14,292 13,770 522 3.7% The forecast underspend reflects known demand for Residential Placements partially offset by overspends on Supported Living and Respite due to demand. Mental Health 2,751 2,880 (129) (4.7%) The forecast overspend reflects higher than budgeted demand for services in Supported Living and Residential Placements combined with overspends on staff costs due to the use of agency staffing. These are partially offset by an underspend on addictions service due to staff vacancies. Physical Disability 2,814 2,888 (74) (2.6%) The forecast overspend reflects higher than budgeted demand for Supported Living, Respite and higher than budgeted equipment purchasing in the Integrated Equipment Service. These are offset slightly by a forecast underspends in the Residential Care and ACM Budgets. Child Protection 3,680 3,541 139 3.8% The forecast underspend reflects 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. Looked After Children 7,854 7,658 196 2.5% The forecast underspend reflects 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 AUGUST 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 from previous disposals and removing security costs. The remainder of the outstanding saving is based on removing the smallest depot budget from each town but we 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 a cost pressure has been put through for this for 2024-25. £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 September for installs. This delay has missed the busy summer months 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 On Track to be 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 8.4 On Track to be Delivered TOTAL 6,952.5 8.7 Template Ref Saving Agreed Service Savings Option Status of Implementation
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ARGYLL AND BUTE COUNCIL FINANCIAL SERVICES POLICY AND RESOURCES COMMITTEE 12 OCTOBER 2023 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 6 Council wide revenue risks identified for 2023-24 currently amounting to £3.661m. 1.4 There are currently 41 departmental risks totalling £5.550m. Of the 41 departmental risks, 5 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 12 OCTOBER 2023 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. 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 in utility costs amounts to £0.827m. 3.2.2 The SJC pay award for 2023-24 has still to be agreed and this may have an impact on the base budget if the pay award is greater than the total of what has been allowed for the in the budget. The Council has set aside budget equivalent to 3.5%, and the Scottish Government has agreed funding equivalent to 2.5%, which gives a total pay award budget equivalent to a 6% increase. This is a situation that will be kept under close review as the pay negotiations advance further. Each 1% costs an additional £0.826m (for SJC employees only). The financial risk is recognised at £0.826m at this stage. It should be noted that the Teachers pay award for 2023-24 is already settled and built into the budget. 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 August 2023, the net HSCP outturn in 2023-24 is estimated to be a £0.900m overspend (Social Work forecasting a breakeven position and an overspend of £0.900m 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. Inflation has begun to fall 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 Pay award exceeding available funding 3 826 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 3,661 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 3.2.11 3.2.12 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 COVID-19 pandemic, UK exit from the European Union, Russia’s invasion of Ukraine and sanctions on Russian owned entities, to name a few. 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. 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
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Reinforced Autoclaved Aerated Concrete (RAAC) with only 1 building confirmed as having it present. At this stage the impact of this cannot be quantified however this will require additional funding within the capital programme to rectify. 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 although around 10 require more intrusive survey work to be carried out in coming weeks. 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 9 720 3 430 0 0 20 1,730 Executive Director Kirsty Flanagan 5 335 2 230 12 2,790 2 465 0 0 21 3,820 Total 7 355 8 790 21 3,510 5 895 0 0 41 5,550 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) as a result of 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 Roads and Infrastructure Services Street Lighting Age of lighting stock requires greater maintenance as health and safety becomes a consideration. 4 100 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 3 changes to the departmental risks since the financial risks report was presented to the Policy and Resources Committee on 10 August 2023, as follows: - A new ‘Possible’ risk of £0.586m has been added for Waste PPP – Indexation, to recognise that historical payments based on indexation rates have been challenged by Renewi resulting in a potential cost to the Council. - A new ‘Possible’ risk of £0.164m has been added for Waste – Compost Like Output (CLO). This is an element of waste that has been heat treated and can only be used for landfill site restoration. We are currently producing more CLO than we need and it is building up in our landfill sites. This has been flagged as a concern by SEPA and will need to be removed. - The risk in relation to Winter Maintenance has been increased from ‘Possible’ to ‘Likely’ due to inflationary increases and a trend of increased treatment runs.
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3.5 Monitoring of Financial Risks 3.5.1 3.5.2 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. 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. 4 CONCLUSION 4.1 This report summarises the key financial risks facing the Council. There are 6 Council wide risks and 41 departmental risks identified with 5 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.
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Kirsty Flanagan Executive Director/Section 95 Officer 8 September 2023 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 AUGUST 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 As at 30 June 2023 As at 31 August 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 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 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. 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 built included in the staffing model funded by Scottish Government. 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. 3 75 3 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. 3 45 3 45 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 improved/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
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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 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 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 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 Executive Director Kirsty Flanagan Roads and Infrastructure Services Waste - Compost Like Output (CLO) Compost Like Output is a 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 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
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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 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. 3 365 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 Executive Director Kirsty Flanagan Roads and Infrastructure Services Ferry Services - income Changes to ferry services resulting in reduced berthing and passenger income. Closely monitor passenger number information coming from CalMac to identify any emerging trends with reducing passenger numbers. 3 200 3 200 Executive Director Kirsty Flanagan Roads and Infrastructure Services Street Lighting Age of lighting stock requires greater maintenance as health and safety becomes a consideration. Manage maintenance budgets to ensure that spend is prioritised to deal with safety defects. 4 100 4 100 39 4,800 41 5,550
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ARGYLL AND BUTE COUNCIL POLICY & RESOURCES COMMITTEE FINANCIAL SERVICES 12 OCTOBER 2023 CAPITAL BUDGET MONITORING REPORT – 31 AUGUST 2023 1.0 EXECUTIVE SUMMARY 1.1 This report provides an update on the position of the capital budget as at 31 August 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 £14,178k compared to a budget for the year to date of £14,135k resulting in an overspend for the year to date of £43k (0.30%). Forecast Outturn for 2023-24 – forecast net expenditure for the full financial year is £43,149k compared to an annual budget of £43,618k giving rise to a forecast underspend for the year of £469k (1.08%). Total Capital Plan – forecast total net project costs on the total capital plan are £215,191k compared to a total budget for all projects of £215,138k giving rise to a forecast overspend for the overall capital plan of £53k (0.02%). 1.3 Project Delivery: Asset Sustainability – Out of 84 projects there are 84 projects (100%) on track, 0 projects (0%) off track but recoverable and 0 projects off track (0%). Service Development - Out of 42 projects there are 40 projects (95%) on track, 2 project (5%) off track but recoverable and 0 projects (0%) 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 project (3%) off track. 1.4 1.5 The Capital Programme is funded by various income streams as detailed in Appendix 5. Additional funding allocated since the last report has come from revenue contributions for Oban Depot and STTS funding for Roads Reconstruction. Capital receipts of £160k have been received so far in 2023-24. 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 12 OCTOBER 2023 CAPITAL BUDGET MONITORING REPORT – 31 AUGUST 2023 2.0 INTRODUCTION 2.1 2.2 2.3 2.4 2.5 2.6 This report provides an update on the position of the capital budget as at 31 August 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 may result in an overspend within the project. These are currently being discussed with the consultant and cost saving approaches are being sought to bring the project in on budget therefore at this stage no forecast overspend has been included within the figures and the project is still marked as on track. The cost savings are hoped to mitigate these compensation events, though should sufficient savings fail to be identified, an overspend on the project is possible at which point it will be incorporated into the figures within this report. 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. At this stage the impact of this cannot be quantified however this will require additional funding within the capital programme to rectify. 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 although around 10 require more intrusive survey work to be carried out in coming weeks. 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. Work is ongoing in relation to the impact and costs of this new legislation but early estimates suggest the capital costs will be in the region of £110k. 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.
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2.7 2.8 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. Other general construction inflationary 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 £14,178k compared to a budget for the year to date of £14,135k resulting in an overspend for the year to date of £43k (0.30%). 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 5,493 5,493 0 Service Development 1,656 1,699 (43) Strategic Change 6,986 6,986 0 Total 14,135 14,178 (43) Service: ICT 353 353 0 Education 2,339 2,382 (43) Live Argyll 298 298 0 Health & Social Care Partnership 334 334 0 Shared Offices 191 191 0 Roads & Infrastructure 8,667 8,667 0 Development & Economic Growth 500 500 0 CHORD 1,453 1,453 0 Total 14,135 14,178 (43) 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 £43,149k compared to an annual budget of £43,618k giving rise to a forecast underspend for the year of £469k (1.08%). 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 25,478 25,478 0 Service Development 86 139 (53) Strategic Change 18,054 17,532 522 Total 43,618 43,149 469 Service: ICT 1,206 1,206 0 Education 6,911 6,954 (43) Live Argyll 1,291 1,291 0 Health & Social Care Partnership 2,201 2,201 0 Shared Offices 1,904 1,904 0 Roads & Infrastructure 24,834 24,834 0 Development & Economic Growth (941) (931) (10) CHORD 6,212 5,690 522 Total 43,618 43,149 469 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 £215,191k compared to a total budget for all projects of £215,138k giving rise to a forecast overspend for the overall capital plan of £53k (0.02%). 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 59,191 59,191 0 Service Development 22,144 22,197 (53) Strategic Change 133,803 133,803 0 Total 215,138 215,191 (53) Service: ICT 6,144 6,144 0 Education 45,630 45,673 (43) Live Argyll 2,970 2,970 0 Health & Social Care Partnership 4,752 4,752 0 Shared Offices 23,589 23,589 0 Roads & Infrastructure 59,075 59,075 0 Development & Economic Growth 4,779 4,789 (10) CHORD 68,199 68,199 0 Total 215,138 215,191 (53) 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 156 projects within the Capital Plan, 153 are Complete or On Target, 2 are Off Target and Recoverable and 1 is 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 84 0 0 84 Service Development 40 2 0 42 Strategic Change 29 0 1 30 Total 153 2 1 156 Service: ICT 7 0 0 7 Education 30 1 0 31 Live Argyll 19 0 0 19 Health & Social Care Partnership 17 0 0 17 Shared Offices 24 0 0 24 Roads & Infrastructure 35 0 0 35 Development & Economic Growth 16 1 0 17 CHORD 5 0 1 6 Total 153 2 1 156
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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: 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 Strategic Change Kilmory Business Park Phase 2AA Current year spend Delays in legal negotiations between the Council and contractor and delays in securing planning permission has led to slippage from 2023- 24 as part of project reprofile. 0 10 20 30 40 50 60 70 80 90 Asset Sustainability Service Development Strategic Change Number Off Target/ Problem Off Target/ Recoverable Complete/ On Target
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9.0 9.1 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. 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 (903) 0 0 0 0 0 Service Development (111) 0 0 0 0 0 Strategic Change (368) (522) 488 34 0 0 Total (1,382) (522) 488 34 0 0 Service: ICT (68) 0 0 0 0 0 Education (903) 0 0 0 0 0 Live Argyll 0 0 0 0 0 0 Health & Social Care Partnership 0 0 0 0 0 0 Shared Offices (366) 0 0 0 0 0 Roads & Infrastructure 0 0 0 0 0 0 Development & Economic Growth (45) 0 0 0 0 0 Major Projects 0 (522) 488 34 0 0 Total (1,382) (522) 488 34 0 0
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11.0 FUNDING 11.1 11.2 12.0 12.1 12.2 12.3 12.4 12.5 12.6 12.7 12.8 The Capital Programme is funded by various income streams as detailed in Appendix 5. Additional funding allocated since the last report has come from revenue contributions for Oban Depot and STTS funding for Roads Reconstruction. Capital receipts of £160k have been received so far in 2023-24. 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 assets. 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 11 September 2023 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 (43) Total value of non-material variances less than +/-£50k Total 14,135 14,178 (43)
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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 (Over)/ Under Forecast Variance COVID-19 Related £’000 (Over)/ Under Forecast Variance Non COVID-19 Related £’000 Total (Over)/ Under Forecast Variance £’000 Explanation Kilmory Business Park Phase 2AA 1,082 560 0 522 522 Slippage from 2023-24 to 2024-25. Delays in legal negotiations between the Council and contractor and delays in securing planning permission has led to slippage from 2023-24 as part of project reprofile. See variance report for details. Other variances under £50k 0 (53) (53) Total value of non-material variances less than +/- £50k. Total 0 469 469
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APPENDIX 3 – Total Project Finance Variances Listed below are the projects where the total project variance is +/- £50k. Project Capital Plan Budget £’000 Forecast Project Costs £’000 (Over)/ Under Forecast Variance COVID-19 Related £’000 (Over)/ Under Forecast Variance Non COVID-19 Related £’000 Total (Over)/ Under Forecast Variance £’000 Explanation Other variances under £50k (53) (53) 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 (53) (53)
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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 Total Cost Changes 0 0 0 0 0 SLIPPAGES AND ACCELERATIONS Project 2023- 24 £’000 2024- 25 £’000 2025-26 £’000 Future Years £’000 2023-24 Slippage Related to COVID-19 £’000 2023-24 Slippage Related to Non COVID- 19 £’000 Total 2023-24 £’000 Recommendation Explanation Kilmory Business Park Phase 2AA (522) 488 34 (522) (522) Slip budget from 2023-24 into 2024- 25 and 2025-26. Delays in legal negotiations between the Council and contractor and delays in securing planning permission has led to slippage from 2023-24 as part of project reprofile. See variance report for details. Total Slippages and Accelerations (522) 488 34 0 0 (522) (522) Net Impact of Changes (522) 488 34 0 0 (522) (522)
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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 0 0 0 11,900 9,851 0 0 0 9,851 10,007 0 0 0 10,007 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 0 0 0 1,195 350 0 0 0 350 400 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 0 0 5,800 304 0 323 400 1,027 0 0 -319 0 -319 Restricted Funding 1,613 0 -522 1,324 2,415 0 0 854 2,065 2,919 0 0 34 50 84 Funded by Reserves 11,909 8,871 0 243 21,023 9,518 289 0 0 9,807 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 0 0 9,200 27,025 -5,025 0 0 22,000 29,700 20,300 0 0 50,000 Prudential Borrowing 20,718 -6,345 -1,382 74 13,065 27 6,434 1,016 0 7,477 0 1,388 0 0 1,388 Loans Fund Review 0 131 0 0 131 0 0 0 0 0 0 0 0 0 0 COVID Funding 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 74,517 -10,378 -1,904 1,758 63,993 46,197 1,698 2,193 2,465 52,553 40,404 21,533 -285 50 61,702 BREAKDOWN OF ADDITIONAL FUNDING Additional Funding 2023-24 2024-25 2025-26 Source Reported Tobermory Top Flat - SHF 30 Revenue Funding Jan-23 Dunoon STEM Hub 50 Revenue Funding Jan-23 Dunoon STEM Hub 150 Grant Funding Jan-23 Dunoon Cycle Bothy 145 Grant Funding Jan-23 Gartbreck - Capping 118 Reserves Mar-23 Dunoon Cycle Bothy 74 Scottish Government Mar-23 Tigh Na Rhuda 400 50 Scottish Government Mar-23 Helensburgh and Rosneath Cycleways 290 SPT Jun-23 SPT - Bus Infrastructure 25 SPT Jun-23 Dunoon STEM Hub 1,750 Rural Growth Deal Jun-23 Rural Growth Deal planning stages 132 Rural Growth Deal Jun-23 Public Conveniences Upgrade - Coastal Communities Fund 200 Coasal Communities Fund Jul-23 Tobermory Harbour Wall and Railings, Phase 2 100 Coasal Communities Fund Jul-23 Tobermory Harbour Wall and Railings, Phase 2 250 Scottish Government Jul-23 Server Sustainability 95 Earmarked Reserves Jul-23 Oban Depot Development 67 Revenue Funding Aug-23 Roads Recon - STTS Funding 347 STTS Aug-23 Total 1,758 2,465 50 2025-262024-252023-24
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OFF TRACK PROJECT Appendix 6 Project Name: Kilmory Business Park Phase 2AA Project Manager: John Gordon Risk: High/Low Initial Start Date: 1-Apr-21 Proposed End Date: February 2026 How was this project initially funded? ABC (Crown Estates) £150,000 Please detail any additional funding. Scottish Government (RCGF) £829,000 M&K MacLeod Ltd £850,000 Highlands & Islands Enterprise £150,000 Previously Reported Committee and Date: P&R August 2023 as part of Capital Monitoring Next Reported Committee and Date: P&R October 2023 as part of Capital Monitoring Why is the project classified as off target? Capital Monitoring Report had expenditure forecast for FY23/24 of £1.082million. Actual expenditure in FY23/24 is likely to be closer to £0.560million. What has caused the issue outlined above? Due to delays in negotiating the various legal agreements between the Council and M&K Macleod Ltd, and securing Planning Permission the overall programme has slipped. The latest Project Programme estimates that construction works, and therefore major expenditure, will commence in P7 Oct-23 and carry on through until P11 Feb-26, with the final release of retentions in P10 Jan-27. In the absence of the detailed construction phase programme we have profiled expenditure at a flat rate, on basis of £112,000 per month from P8-P12 in FY23/24, £488,000 in FY24/25, and £34,000 in FY25/26 which is the release of retentions 12 months post Practical Completion of the construction Works. What action will be taken to rectify this issue? Upon completion of the various legal agreements, the Contractor will be in a position to submit their detailed construction programme and cashflow profile for the construction works. This will be updated with actuals and revised forecasts in line with the Council’s standard reporting cycle, which will provide us with greater certainty that the profiles are robust and deliverable. What are the implications of the action proposed? The project costs have not increased, this is simply a re-profiling of planned expenditure to reflect the most up to date forecasts and assumptions underpinning the implementation programme.
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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 Helensburgh Waterfront Development 23,415 977 24,392 24,392 01/04/2017 31/03/2024 Green Physically complete, retentions outstanding Campbeltown Flood Scheme 4,992 9,860 15,215 15,215 01/08/2016 31/03/2024 Green Contractor's updated programming of work moved Public Utility works from 22/23 to 23/24 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 66 574 640 640 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 9,200 9,243 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. Street Lighting LED Replacement 3,226 674 3,900 3,900 01/08/2016 31/12/2022 Green Tender for final package of works still to be awarded. 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 01/09/2023 Green Development Agreement still to be concluded. Carbon Management Business Cases 201 0 201 201 01/02/2014 31/12/2022 Green Budget to be reprofiled pending development of new projects. Carbon Management - Group Heating Conversion Project 1,938 0 1,938 1,938 01/02/2016 31/12/2022 Green Complete. Carbon Management - Non Education 29 21 50 50 01/04/2015 31/12/2022 Green Projects being determined. NPDO Schools Solar PV Panel Installations 761 0 761 761 26/06/2014 31/12/2022 Green Budget to be reprofiled pending development of new projects. Non NPDO Schools Solar PV Panel Installations 400 0 400 400 20/03/2014 31/12/2022 Green Budget to be reprofiled pending development of new projects. Carbon Management Capital Property Works 2016/17 19 0 19 19 01/02/2016 31/12/2022 Green Budget to be reprofiled pending development of new projects. Oil to Gas Heating Conversions 182 0 182 182 01/02/2012 31/12/2022 Green Budget to be reprofiled pending development of new projects. 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 31/12/2022 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 1,381 1,381 tbc 31/03/2024 Green Clean Energy - NDEEF2 0 50 1,140 1,140 tbc tbc Green Strategic Change Total 131,542 30,671 239,362 239,362 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 2,840 2,840 0 10,602 10,602 0 23,036 23,036 0 Executive Director Kirsty Flanagan 3,083 3,083 0 16,061 16,061 0 37,790 37,790 0 Asset Sustainability Total 5,923 5,923 0 26,663 26,663 0 60,826 60,826 0 Service Development Projects Executive Director Douglas Hendry 320 363 (43) 525 568 (43) 16,437 16,480 (43) Executive Director Kirsty Flanagan 1,391 1,391 0 6,100 6,110 (10) 38,111 38,121 (10) Service Development Total 1,711 1,754 (43) 6,625 6,678 (53) 54,548 54,601 (53) 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 - 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 5,529 5,529 0 9,860 9,860 0 15,215 15,215 0 Street Lighting LED Replacement 1 1 0 674 674 0 3,900 3,900 0 Harbour Investment Programme 294 294 0 9,243 9,243 0 91,335 91,335 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 0 574 574 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 1,424 1,424 0 6,737 6,737 0 24,012 24,012 0 Helensburgh Waterfront Development 29 29 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 1,082 560 522 1,129 1,129 0 Dunoon Pier OBC 0 0 0 0 0 0 2,844 2,844 0 Strategic Change Total 7,280 7,280 0 31,227 30,705 522 240,078 240,078 0 Total Expenditure 14,914 14,957 (43) 64,515 64,046 469 355,452 355,505 (53) INCOME Asset Sustainability Executive Director Douglas Hendry 0 0 0 (128) (128) 0 (578) (578) 0 Executive Director Kirsty Flanagan (430) (430) 0 (1,057) (1,057) 0 (1,057) (1,057) 0 Asset Sustainability Total (430) (430) 0 (1,185) (1,185) 0 (1,635) (1,635) 0 Service Development Projects Executive Director Douglas Hendry 0 0 0 0 0 0 (7,771) (7,771) 0 Executive Director Kirsty Flanagan (55) (55) 0 (6,539) (6,539) 0 (24,633) (24,633) 0 Service Development Total (55) (55) 0 (6,539) (6,539) 0 (32,404) (32,404) 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 (294) (294) 0 (9,243) (9,243) 0 (91,335) (91,335) 0 01 TIF - Lorn/Kirk Road 0 0 0 (631) (631) 0 (2,672) (2,672) 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 (294) (294) 0 (13,173) (13,173) 0 (106,275) (106,275) 0 Total Income (779) (779) 0 (20,897) (20,897) 0 (140,314) (140,314) 0 Net Total 14,135 14,178 (43) 43,618 43,149 469 215,138 215,191 (53) Full Year This Financial Year Total Project Costs 31 August 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 2,017 2,017 0 5,853 5,853 0 13,403 13,403 0 Live Argyll 298 298 0 1,270 1,270 0 2,125 2,125 0 Health and Social Care Partnership 334 334 0 2,147 2,147 0 3,452 3,452 0 Shared Offices 191 191 0 1,332 1,332 0 4,056 4,056 0 Asset Sustainability Total 2,840 2,840 0 10,602 10,602 0 23,036 23,036 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 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 320 363 (43) 320 363 (43) 7,774 7,817 (43) 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 Riverside Leisure Centre Refurbishment 0 0 0 0 0 0 1,245 1,245 0 Dunclutha Childrens Home 0 0 0 54 54 0 1,300 1,300 0 Service Development Total 320 363 (43) 525 568 (43) 16,437 16,480 (43) 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 0 0 0 224 224 0 1,381 1,381 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 1,424 1,424 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 29 29 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 1,082 560 522 1,129 1,129 0 Dunoon Pier OBC 0 0 0 0 0 0 2,844 2,844 0 Strategic Change Total 1,455 1,455 0 10,819 10,297 522 126,014 126,014 0 Total Expenditure 4,615 4,658 (43) 21,946 21,467 479 165,487 165,530 (43) 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 4,615 4,658 (43) 18,519 18,040 479 145,140 145,183 (43) 31 August 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 29 29 0 807 807 0 1,305 1,305 0 Coastal Protection 2 2 0 99 99 0 199 199 0 Coastal Change Adaptation 9 9 0 158 158 0 158 158 0 Bute Sea Wall Repairs 46 46 0 100 100 0 680 680 0 Helensburgh Flood Mitigation 1 1 0 428 428 0 428 428 0 Bridge Strengthening 161 161 0 1,336 1,336 0 1,686 1,686 0 Local Bridge Maintenance Fund 66 66 0 1,000 1,000 0 5,203 5,203 0 Roads Reconstruction 2,064 2,064 0 7,379 7,379 0 15,379 15,379 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 0 890 890 0 1,040 1,040 0 Environmental Projects 191 191 0 650 650 0 1,021 1,021 0 Play Park Refurbishment 0 0 0 312 312 0 938 938 0 Public Convenience Upgrades 54 54 0 282 282 0 282 282 0 Footway Improvements 178 178 0 750 750 0 750 750 0 Glengorm - Capping 0 0 0 0 0 0 0 0 0 Glengorm - Cell and Transfer Station (PB) 36 36 0 85 85 0 85 85 0 Gartbreck - Capping 6 6 0 200 200 0 200 200 0 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 0 389 389 0 389 389 0 Block Allocation - RIS 0 0 0 0 0 0 4,268 4,268 0 Server Sustainability 0 0 0 392 392 0 1,563 1,563 0 PC Replacement 153 153 0 330 330 0 1,686 1,686 0 Telecomms Network 87 87 0 256 256 0 312 312 0 Asset Sustainability Total 3,083 3,083 0 16,061 16,061 0 37,790 37,790 0 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 747 747 0 2,187 2,187 0 4,861 4,861 0 Fleet Management 0 0 0 325 325 0 4,538 4,538 0 Lismore Ferry 0 0 0 15 15 0 672 672 0 Oban Depot Development Project 4 4 0 4 4 0 2,184 2,184 0 Lochgilphead Depot Rationalisation 0 0 0 8 8 0 37 37 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) 0 0 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 199 199 0 708 718 (10) 4,319 4,329 (10) Rural Growth Deal 74 74 0 132 132 0 182 182 0 Dunoon Cycle Bothy 179 179 0 292 292 0 563 563 0 Dunoon STEM Hub 4 4 0 713 713 0 2,558 2,558 0 Ardrishaig North Active Travel 71 71 0 112 112 0 880 880 0 Nature Restoration Fund 0 0 0 346 346 0 346 346 0 Gibraltar Street Public Realm Improvements 0 0 0 222 222 0 250 250 0 Hermitage Park 0 0 0 26 26 0 3,388 3,388 0 Service Development Total 1,391 1,391 0 6,100 6,110 (10) 38,111 38,121 (10) Strategic Change Projects Campbeltown Flood Scheme 5,529 5,529 0 9,860 9,860 0 15,215 15,215 0 Street Lighting LED Replacement 1 1 0 674 674 0 3,900 3,900 0 Harbour Investment Programme 294 294 0 9,243 9,243 0 91,335 91,335 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 0 574 574 0 640 640 0 Strategic Change Total 5,825 5,825 0 20,408 20,408 0 114,064 114,064 0 Total Expenditure 10,299 10,299 0 42,569 42,579 (10) 189,965 189,975 (10) INCOME Asset Sustainability EV Quick Chargers 0 0 0 (27) (27) 0 (27) (27) 0 Roads Reconstruction (430) (430) 0 (430) (430) 0 (430) (430) 0 Tobermory Car Park 0 0 0 (400) (400) 0 (400) (400) 0 Asset Sustainability Total (430) (430) 0 (1,057) (1,057) 0 (1,057) (1,057) 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 (28) (28) 0 (152) (152) 0 (182) (182) 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 (55) (55) 0 (6,539) (6,539) 0 (24,633) (24,633) 0 Strategic Change Projects Campbeltown Flood 0 0 0 0 0 0 (270) (270) 0 Harbour PB (294) (294) 0 (9,243) (9,243) 0 (91,335) (91,335) 0 01 TIF - Lorn/Kirk Road 0 0 0 (631) (631) 0 (2,672) (2,672) 0 Strategic Change Total (294) (294) 0 (9,874) (9,874) 0 (94,277) (94,277) 0 Total Income (779) (779) 0 (17,470) (17,470) 0 (119,967) (119,967) 0 Net Departmental Total 9,520 9,520 0 25,099 25,109 (10) 69,998 70,008 (10) 31 August 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 7,014 4,029 3,521 0 0 53,641 Shared Offices 17,661 1,907 3,396 977 0 0 23,941 ICT 2,529 1,252 1,633 1,167 0 0 6,581 RIS 26,197 37,415 37,643 55,028 2,733 0 159,016 DEG 18,331 3,902 2,135 0 0 0 24,368 HSCP 1,246 2,223 828 477 0 0 4,774 Live Argyll 1,274 1,291 428 427 0 0 3,420 CHORD 68,156 8,989 2,461 105 0 0 79,711 Overall Total 174,471 63,993 52,553 61,702 2,733 0 355,452
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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 1,408 166 520 0 0 2,094 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 0 637 543 226 0 0 1,406 Asset Sustainability Total 0 5,831 4,029 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 7,014 4,029 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 0 110 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 1,332 2,297 427 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 964 224 193 0 0 0 1,381 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 1,099 550 0 0 19,885 Overall Total 17,661 1,907 3,396 977 0 0 23,941
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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 0 0 0 0 0 PC Replacement 0 330 784 572 0 0 1,686 Server Sustainability 0 392 595 576 0 0 1,563 Telecomms Network 0 256 37 19 0 0 312 Asset Sustainability Total 0 978 1,416 1,167 0 0 3,561 Service Development ICT Applications Projects 2,529 274 217 0 0 0 3,020 Service Development Total 2,529 274 217 0 0 0 3,020 Overall Total 2,529 1,252 1,633 1,167 0 0 6,581
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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 1,336 350 0 0 0 1,686 Bute Sea Wall Repairs 0 100 580 0 0 0 680 Coastal Change Adaptation 0 158 0 0 0 0 158 Coastal Protection 0 99 100 0 0 0 199 Environmental Projects 0 650 371 0 0 0 1,021 EV Quick Chargers 0 62 0 0 0 0 62 Flood Prevention 0 807 305 155 38 0 1,305 Footway Improvements 0 750 0 0 0 0 750 Glengorm - Capping 0 0 0 0 0 0 0 Glengorm - Cell and Transfer Station (PB) 0 85 0 0 0 0 85 Helensburgh CHORD - Signage etc 0 10 0 0 0 0 10 Helensburgh Flood Mitigation 0 428 0 0 0 0 428 Investment in Active Travel 0 389 0 0 0 0 389 Lighting 0 890 150 0 0 0 1,040 Local Bridge Maintenance Fund 0 1,000 4,000 203 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 7,379 8,000 0 0 0 15,379 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 14,883 14,091 5,017 38 0 34,029 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 2,187 0 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 8 0 0 0 0 37 Oban Depot Development 2,180 4 0 0 0 0 2,184 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 2,555 1,200 0 0 0 14,337 Strategic Change RIS Campbeltown Flood Scheme 4,992 9,860 352 11 0 0 15,215 Harbour Investment Programme PB 7,397 9,243 22,000 50,000 2,695 0 91,335 Street Lighting LED Replacement 3,226 674 0 0 0 0 3,900 Strategic Change Total 15,615 19,777 22,352 50,011 2,695 0 110,450 Overall Total 26,197 37,215 37,643 55,028 2,733 0 158,816
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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 50 132 0 0 0 0 182 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 3,611 708 0 0 0 0 4,319 Service Development Total 15,393 3,271 2,090 0 0 0 20,754 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 66 574 0 0 0 0 640 Strategic Change Total 2,938 631 45 0 0 0 3,614 Overall Total 18,331 3,902 2,135 0 0 0 24,368
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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 23 0 0 0 0 23 Block Allocation 0 784 292 184 0 0 1,260 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 0 142 0 0 0 0 142 Thomson Home Rothesay 0 0 0 0 0 0 0 Tigh An Rudha HFE 0 600 500 150 0 0 1,250 Tobermory Top Flat 0 22 0 0 0 0 22 Asset Sustainability Total 0 2,169 828 477 0 0 3,474 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 2,223 828 477 0 0 4,774
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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 0 368 20 40 0 0 428 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 1,270 428 427 0 0 2,125 Service Development Live Argyll Riverside Leisure Centre Refurbishment 1,245 0 0 0 0 0 1,245 Service Development Total 1,245 0 0 0 0 0 1,245 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 1,291 428 427 0 0 3,420
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ARGYLL AND BUTE COUNCIL POLICY AND RESOURCES COMMITTEE FINANCIAL SERVICES 12 OCTOBER 2023 TREASURY MANAGEMENT MONITORING REPORT – 31 AUGUST 2023 1. EXECUTIVE SUMMARY 1.1. This report sets out the Council’s treasury management position for the period 1 July 2023 to 31 August 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 August 2023, at this stage in the financial year capital expenditure is below target. Capital expenditure continued to be lower than anticipated over the last twelve months however there is an expectation this will increase back up again over 2023-24 which will continue to be monitored closely. 1.3. The net movement in external borrowing in the period 1 July 2023 to 31 August 2023 was a decrease of £7m. 1.4. The levels of investments were £96.750m at 31 August 2023. The rate of return achieved was 4.991% compared to the target SONIA rate which was 5.168%. 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 12 OCTOBER 2023 TREASURY MANAGEMENT MONITORING REPORT – 31 AUGUST 2023 2. INTRODUCTION 2.1. This report sets out the Council’s treasury management position for the period 1 July 2023 to 31 August 2023 and includes information on: Overall borrowing position Borrowing activity Investment activity Economic background Interest rate forecast Prudential Indicators 3. 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 291,782 302,317 319,602 Net Capital Expenditure 22,265 29,477 51,388 Less Loans Fund Principal Repayments (5,950) (6,254) (6,573) Less: NPDO Repayment (5,780) (5,938) (6,235) Estimated CFR 31 March 302,317 319,602 358,182 Less Funded by NPDO (111,564) (111,784) (106,846) Estimated Net CFR 31 March 190,753 207,818 251,336 Estimated External Borrowing at 31 March 176,532 221,513 261,510 Gap 14,221 (13,695) (10,174)
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3.2. Borrowing is below the Capital Financing Requirement for the period to 31 August 2023. Whilst borrowing rates are still comparatively low 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. 3.4. The Council’s estimated net capital financing requirement at 31 August 2023 is £190.753m. The table below shows how this has been financed. £125.440m is funded by loans and there are substantial internal balances of £162.063m of which £96.750m are currently invested, as detailed in section 3.7, leaving a net internal balance of £65.313m. Position at 30/06/23 Position at 31/08/23 £000 £000 Loans 132,464 125,440 Net Internal Balances 39,965 65,313 Total CFR 172,429 190,753 3.5. During the period from 1 July 2023 to 31 August 2023, £7m of loans were repaid and no new borrowing was taken. The analysis of the movement in borrowing is shown in the table below: Actual £m External Loans Repaid 1st July 2023 to 31st August 2023 (7) Borrowing undertaken 1st July 2023 to 31st August 2023 0 Net Movement in External Borrowing (7) 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 30th June 2023 308 3.40% Temp borrowing at 31st August 2023 283 4.40%
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Investment Activity 3.7 The average rate of return achieved in the Council’s investments to 31 August 2023 was 4.991% compared to the SONIA (Sterling Overnight Index Average) rate for the same period of 5.168%. 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 August 2023 the Council had £96,750m of short term investments at an average rate of 4.991%. 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. 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. Counterparty Maturity Amount £000 Interest Rate Rating S&P Clydesdale Bank Instant 350 5.15% Short Term A-2, Long Australia and New Zealand Banking Group 06/10/2023 5,000 4.99% Short Term A-1+, Toronto Dominion Bank 13/10/2023 5,000 5.25% Short Term A-1+, Cambridgeshire County Council 22/07/2024 5,000 1.00% AA Thurrock Borough Council 19/09/2023 5,000 3.50% 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+, National Bank of Kuwait 10/11/2023 2,500 5.00% Short Term A-1, Long Goldman Sachs 10/11/2023 2,500 4.91% Short Term A-1, Long London Borough of Croydon 10/06/2024 5,000 5.30% AA Australia and New Zealand Banking Group 13/09/2023 5,000 5.04% Short Term A-1+, DBS Bank 13/09/2023 5,000 4.98% Short Term A-1+, 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 16/02/2021 5,000 5.92% Short Term A-1+, Money Market Fund - BNP Paribas Call 14,800 5.26% AAA MMF - Invesco AIM Call 1,600 5.27% AAA Total 96,750
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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. 4. CONCLUSION 4.1 In the period from 1 July 2023 to 31 August 2023, the Council’s borrowing decreased by £7m, and is currently below the Capital Financing Requirement. There are substantial internal balances, of which £96,750m is currently invested. The investment returns were 4.991% 5. 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 – 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 – None. 5.8 Customer Service – None. Kirsty Flanagan Section 95 Officer 3 October 2023 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 (report expected from Link Group mid October 2023 at which point this appendix will be updated) The first quarter of 2023/24 saw: - A 0.2% m/m rise in real GDP in April, partly due to fewer strikes; - CPI inflation falling from 10.1% to 8.7% in April, before remaining at 8.7% in May. This was the highest reading in the G7; - Core CPI inflation rise in both April and May, reaching a new 31-year high of 7.1%; - A tighter labour market in April, as the 3myy growth of average earnings rose from 6.1% to 6.5%; - Interest rates rise by a further 75bps over the quarter, taking Bank Rate from 4.25% to 5.00%; - 10-year gilt yields nearing the “mini-Budget” peaks, as inflation surprised to the upside. The economy has weathered the drag from higher inflation better than was widely expected. The 0.2% m/m rise in real GDP in April, following March’s 0.3% m/m contraction will further raise hopes that the economy will escape a recession this year. Some of the strength in April was due to fewer strikes by train workers and teachers in that month. Moreover, some of the falls in activity in other areas in April were probably temporary too. Strikes by junior doctors and civil servants contributed to the fall in health output (0.9% m/m) and the meagre 0.1% m/m increase in public administration. The fall in the composite Purchasing Managers Index (PMI) from 54.0 in May to a three-month low of 52.8 in June (>50 points to expansion in the economy, <50 points to contraction) was worse than the consensus forecast of 53.6. Both the services and manufacturing PMIs fell. The decline in the services PMI was bigger (from 55.2 to 53.7), but it remains consistent with services activity expanding by an annualised 2%. The fall in the manufacturing PMI was smaller (from 47.1 to 46.2), but it is consistent with the annual rate of manufacturing output falling from -0.8% in April to around -5.0%. At face value, the composite PMI points to the 0.1% q/q rise in GDP in Q1 2023 being followed by a 0.2% q/q gain in Q2 2023. Meanwhile, the 0.3% m/m rise in retail sales volumes in May was far better than the consensus forecast of a 0.2% m/m decline and followed the robust 0.5% m/m rise in April. Some of the rise was due to the warmer weather. Indeed, the largest move was a 2.7% m/m jump in non-store sales, due to people stocking up on outdoor-related goods. But department stores also managed to squeeze out a 0.6% m/m rise in sales and the household goods sub-sector enjoyed a reasonable performance too. Overall, the figures were far better than analysts had expected. In addition, the GfK measure of consumer confidence rebounded from -27 to a 17-month high of -24 in June. The recent resilience of the economy has been due to a confluence of factors including the continued rebound in activity after the pandemic, households spending some of their pandemic savings, and the tight labour market and government handouts both supporting household incomes. That said, as government support fades, real household incomes are unlikely to grow rapidly. Furthermore, higher interest rates will mean GDP is likely to contract later this year. Our central assumption is that inflation will drop to the 2.0% target only if the Bank triggers a recession by raising rates from 5.00% now to at least 5.5% and keeps rates there until at least mid-2024. Our colleagues at Capital Economics estimate that around 60% of the drag on real activity from the rise in rates has yet to bite, and the drag on the quarterly rate of real GDP growth over the next year may be about 0.2ppts bigger than over the past year. The labour market became tighter over the quarter and wage growth reaccelerated. Labour demand was stronger than the consensus had expected. The three-month change in employment rose from +182,000 in March to +250,000 in April. Meanwhile, labour supply continued to recover as the size of the labour force grew by 303,000 in the three months to April. That was supported by a further 140,000 decline in inactivity as people returned to work from retirement and caring responsibilities (while inactivity due to long-term sick continued to rise). But it was not enough to offset the big rise in employment, which meant the unemployment rate fell from 3.9% to 3.8% The tighter labour market supported wage growth in April, although the 9.7% rise in the National Living Wage on 1st April (compared to the 6.6% increase in April last year) probably had a lot to do with it too. The 3myy rate of average earnings growth reaccelerated from 6.1% to 6.5% (consensus 6.1%) and UK wage growth
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remains much faster than in the US and the Euro-zone. In addition, regular private sector wage growth increased from 7.1% 3myy to 7.6%, which left it well above the Bank’s forecast for it to fall below 7.0%. Overall, the loosening in the labour market appears to have stalled in April and regular private sector wage growth was well above the Bank’s forecast. CPI inflation stayed at 8.7% in May (consensus 8.4%) and, perhaps more worryingly, core CPI inflation rose again, from 6.8% to a new 31-year high of 7.1%. The rise in core inflation built on the leap from 6.2% in March to 6.8% and means it is accelerating in the UK while it is slowing in the US and the Euro-zone (both fell to 5.3%). A further decline in fuel inflation, from -8.9% to -13.1%, and the second fall in food inflation in as many months, from 19.3% to 18.7%, explained why overall CPI inflation didn’t rise. And the scheduled fall in the average annual utility price from £2,500 to £2,074 on 1st July means overall CPI inflation will probably ease in the coming months. But the problem is that the recent surge in core inflation and the reacceleration in wage growth shows that domestic inflationary pressures are still strengthening. This suggests the Bank may have more work to do than the Fed or ECB. Indeed, the Bank of England sounded somewhat hawkish in the June meeting. This came through most in the MPC’s decision to step up the pace of hiking from the 25bps at the previous two meetings. The 7-2 vote, with only two members voting to leave rates unchanged at 4.50%, revealed support for stepping up the fight against high inflation. That said, the Bank has not committed to raising rates again or suggested that 50bps rises are now the norm. What it did say was that “the scale of the recent upside surprises in official estimates of wage growth and services CPI inflation suggested a 0.5 percentage point increase in interest rates was required at this particular meeting”. Moreover, the Committee did not strengthen its forward guidance that any further rate hikes would be conditional on the data. However, it looks highly probable, given the on-going strength of inflation and employment data, that the Bank will need to raise rates to at least 5.5% and to keep rates at their peak until the mid-point of 2024. We still think it is only a matter of time before the rise in rates weakens the economy sufficiently to push it into recession. That is why instead of rising to between 6.00%-6.25%, as is currently priced in by markets, we think rates are more likely to peak between 5.50-6.00%. Our forecast is also for rates to be cut in the second half of 2024, and we expect rates to then fall further than markets are pricing in. Growing evidence that UK price pressures are becoming increasingly domestically generated has driven up market interest rate expectations and at one point pushed the 10-year gilt yield up to 4.49% in late June, very close to its peak seen after the “mini-budget”. Yields have since fallen slightly back to 4.38%. But growing expectations that rates in the UK will remain higher for longer than in the US mean they are still more than 70 bps above US yields. While higher interest rates are priced into the markets, the likely dent to the real economy from the high level of interest rates is not. That’s why we think there is scope for market rate expectations to fall back in 2024 and why we expect the 10-year PWLB Certainty Rate to drop back from c5.20% to 5.00% by the end of this year and to 4.20% by the end of 2024. The pound strengthened from $1.24 at the start of April to a one-year high at $1.26 in early May, which was partly due to the risks from the global banking issues being seen as a bigger problem for the US than the UK. The pound then fell back to $1.23 at the end of May, before rising again to $1.28 in the middle of June as the strong core CPI inflation data released in June suggested the Bank of England was going to have to raise rates more than the Fed or ECB in order to tame domestic inflation. However, sterling’s strong run may falter because more hikes in the near term to combat high inflation are likely to weaken growth (and, hopefully, at some point inflation too) to such a degree that the policy rate will probably be brought back down, potentially quite quickly, as the economic cycle trends downwards decisively. This suggests that additional rate hikes are unlikely to do much to boost the pound. In early April, investors turned more optimistic about global GDP growth, pushing up UK equity prices. But this period of optimism appears to have been short-lived. The FTSE 100 has fallen by 4.8% since 21st April, from around 7,914 to 7,553, reversing part of the 7.9% rise since 17th March. Despite the recent resilience of economic activity, expectations for equity earnings have become a bit more downbeat. Nonetheless, further down the track, more rate cuts than markets anticipate should help the FTSE 100 rally. MPC meetings 11th May and 22nd June 2023 On 11th May, the Bank of England’s Monetary Policy Committee (MPC) increased Bank Rate by 25 basis points to 4.50%, and on 22nd June moved rates up a further 50 basis points to 5.00%. Both increases reflected a split vote – seven members voting for an increase and two for none.
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Nonetheless, with UK inflation significantly higher than in other G7 countries, the MPC will have a difficult task in convincing investors that they will be able to dampen inflation pressures anytime soon. Talk of the Bank’s inflation models being “broken” is perhaps another reason why gilt investors are demanding a premium relative to US and Euro-zone bonds, for example. Of course, what happens outside of the UK is also critical to movement in gilt yields. The US FOMC has already hiked short-term rates to a range of 5.00%-5.25%, but a further increase is pencilled in for July, whilst the ECB looks likely to raise its Deposit rate at least once more to a peak of 3.75%, with upside risk of higher to come.
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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. The latest forecast, made on 25th September, sets out a view that interest rates have more than likely peaked at 5.25% although there remains an outside chance of one more increase, with the pace of any future decreases determined by wage and inflation data. Our current and previous PWLB rate forecasts below are based on the Certainty Rate. LIBOR and LIBID rates ceased at the end of 2021. In a continuation of previous views, money market yield forecasts are based on expected average earnings by local authorities for 3 to 12 months. 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. A SUMMARY OVERVIEW OF THE FUTURE PATH OF BANK RATE Our central forecast for interest rates was previously updated on 26 June and reflected a view that the MPC would be keen to further demonstrate its anti-inflation credentials by delivering a succession of rate increases. Since then, rates have indeed increased to 5.25% but with data suggesting inflation is dipping, albeit slowly, and that the economy is heading for a shallow recession, further monetary policy tightening above 5.25% is not required, at least for now. Accordingly, although we anticipate rates staying on hold for the best part of a year, we also still anticipate the Bank of England will be keen to loosen monetary policy when the worst of the inflationary pressures are behind us – but timing on this 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.
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On the positive side, consumers are still estimated 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 somewhat better at this stage of the economic cycle than may have been expected. However, most of those excess savings are held by more affluent people whereas lower income families already spend nearly all their income on essentials such as food, energy and rent/mortgage payments. PWLB RATES Gilt yield curve movements have narrowed, with the short part of the curve seeing yields fall through recent weeks whilst the longer-end continues to reflect inflation concerns. At the time of writing there is <30 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 to the downside. 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. UK / EU trade arrangements – if there was a major impact on trade flows and financial services due to complications or lack of co-operation in sorting out significant remaining issues. Geopolitical risks, for example in Ukraine/Russia, China/Taiwan/US, Iran, North Korea and Middle Eastern countries, which could lead to increasing safe-haven flows. A re-emergence of banking sector fragilities, which have been successfully addressed in the near-term by central banks and the market generally, but which may require further intervention if short-term interest rates stay elevated for longer than is anticipated. Upside risks to current forecasts for UK gilt yields and PWLB rates: - Despite the recent tightening to 5.25%, the Bank of England proves too timid in its pace and strength of increases in Bank Rate and, therefore, allows inflationary pressures to remain elevated for a longer 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. Longer-term US treasury yields rise strongly if inflation remains more stubborn there than the market currently anticipates, consequently pulling gilt yields up higher. Projected gilt issuance, inclusive of natural maturities and QT, could be too much for the markets to comfortably digest without higher yields compensating.
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Appendix 3 – Prudential Indicators (1). EXTRACT FROM BUDGET Forecast Outturn Original Estimate Forecast Outturn Forecast Outturn Capital Expenditure £'000 £'000 £'000 £'000 Non - HRA 23,281 43,110 28,461 51,388 TOTAL 23,281 43,110 28,461 51,388 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 * 291,782 304,498 372,359 319,602 carried forward 31 March * 303,333 372,359 319,602 358,182 in year borrowing requirement 11,551 67,861 (52,757) 38,580 In year Capital Financing Requirement Non - HRA 11,551 67,861 (52,757) 38,580 TOTAL 11,551 67,861 (52,757) 38,580 Capital Financing Requirement as at 31 March Non - HRA 303,333 372,359 319,602 358,182 TOTAL 303,333 372,359 319,602 358,182
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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 2023/24 under 12 months 12 months and within 24 months 24 months and within 5 years 5 years and within 10 years 10 years and above 30% 0% 40% 0% 100% 0% upper limit lower limit 30% 0% 30% 0%
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ARGYLL AND BUTE COUNCIL POLICY AND RESOURCES COMMITTEE FINANCIAL SERVICES 12 OCTOBER 2023 RESERVES AND BALANCES – UPDATE AS AT 31 AUGUST 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 Of the earmarked balance of £79.466m: • £37.047m is invested or committed for major initiatives/capital projects • £3.411m has already been drawn down • £25.559m is still to be drawn down in 2023-24 • £13.449m is planned to be spent in future years 1.5 During 2023-24, the amount of £2.619m 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 £82.085m with the amount invested or committed for major initiatives/capital projects as at August increasing to £39.666m. 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 current forecast outturn position for 2023-24 and the proposed allocation for floral displays, the Council is forecast to have a £1.272m surplus over contingency.
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ARGYLL AND BUTE COUNCIL POLICY AND RESOURCES COMMITTEE FINANCIAL SERVICES 12 OCTOBER 2023 RESERVES AND BALANCES - UPDATE AS AT 31 AUGUST 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. 3.4 Unallocated General Fund Balance 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 of £0.019m, the current 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 31/08/23 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 7,087 160 Investment in Affordable Housing 3,163 3,163 Capital Projects 16,059 2,619 18,678 Lochgilphead and Tarbert Regeneration 1,460 1,460 Support for Rural Growth Deal 756 756 Asset Management Investment 2,098 2,098 Piers and Harbours Investment Fund 2,789 2,789 Scottish Government Initiatives 2,834 190 1,724 920 CHORD 378 150 228 DMR Schools 1,394 564 797 33 Energy Efficiency Fund 218 218 Existing Legal Commitments 476 476 Unspent Grant 13,179 489 1,429 9,326 1,935 Unspent Third Party Contribution 265 251 14 Previous Council Decision - Other 3,808 1,749 172 1,427 460 Redundancy Provision 1,578 500 1,078 Supporting Organisational Change 1,426 87 113 1,226 One Council Property Team 566 189 377 Fleet - Timing Delay 658 658 Hermitage Park 19 19 Electric Vehicle Chargers 17 17 COVID-19 5,512 257 393 4,265 597 Unspent Budget 13,566 1,140 416 5,446 6,564 Totals 79,466 2,619 39,666 3,411 25,559 13,449 0
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forecast outturn position for 2023-24 and the proposed allocation for floral displays the Council is forecast to have a £1.272m surplus over contingency. 3.4.2 The revenue budget position as at 31 August 2023 was estimated to be a £0.009m underspend. 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 August, 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 Current Forecast Outturn for 2023-24 as at 31 August 2023 Per paragraph 3.4.2. 9 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 1,272 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.
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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 Completed Projects 5,280 (5,280) 0 20,561 (8,136) (2,619) 9,806 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 August 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 £1.272m 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 general fund. This has been subject to a risk assessment. 5.8 Customer Service - None.
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Kirsty Flanagan Executive Director/Section 95 Officer 8 September 2023 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 August 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 8,855 0 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. 8,855 0 002 Executive Director (Douglas Hendry) Across Services / Education Digital Projects (Supply Staff Booking System) 25,100 0 25,100 9,900 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 53,495 900,380 60,380 840,000 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 will allow 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. 113,875 840,000 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 0 84,688 84,688 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 Mid Argyll Community Pool 30,000 0 30,000 30,000 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 30,000 0 008 Executive Director (Douglas Hendry) Commercial Services MacTaggart Leisure Islay 30,000 0 30,000 30,000 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 30,000 0 009 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 0 010 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 0 011 Executive Director (Douglas Hendry) Commercial Services (2023 Contract Inflation Adjustments) MAKI/Islay Pools SLA - inflationary increase 9,523 0 9,523 9,523 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 0 012 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. 0 1,255,000 0 013 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 0 014 Executive Director (Douglas Hendry) Education (2023 Digital Projects) School Wi- Fi Upgrades 200,000 10,091 189,909 139,909 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 015 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 0 016 Executive Director (Douglas Hendry) Education MCR Pathways Pilot 80,000 0 80,000 50,000 30,000 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. 50,000 30,000 0 017 Executive Director (Douglas Hendry) Education Gaelic Specific Grant 30,000 0 30,000 30,000 0 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. 30,000 0 0 018 Executive Director (Douglas Hendry) Education (2023 Digital Projects) Cashless Catering 30,000 0 30,000 30,000 0 To support the ongoing implementation of the new cashless catering system during the testing and roll out phase. 30,000 0 0 019 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 0 020 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 0 021 Executive Director (Douglas Hendry) Legal and Regulatory Services Education Purchasing Officers 210,000 0 210,000 105,000 105,000 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. 105,000 105,000 022 Non Departmental / Executive Director (Douglas Hendry) Across Services / Legal and Regulatory Services Information Management (Digitalisation of Title Deeds) 92,000 0 92,000 92,000 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 (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 92,000 0 023 Executive Director (Douglas Hendry) Legal and Regulatory Services Councillor IT Equipment 44,557 0 44,557 29,557 15,000 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. 29,557 15,000 024 Executive Director (Douglas Hendry) Legal and Regulatory Services Digital Projects: Hybrid Council meetings 43,302 0 43,302 43,302 0 The funding will be used to maintain the ICT equipment used to support the provision of on-line and hybrid Council meetings. 43,302 0 025 Executive Director (Douglas Hendry) Legal and Regulatory Services Debt Counselling & Welfare Rights 21,452 0 21,452 5,965 15,487 To meet the cost of a Debt Counselling and Welfare Rights Management System. 5,965 15,487 026 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 0 027 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 0 028 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 0 029 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 60,000 030 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 13,360 031 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
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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 032 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. 60,000 0 0 033 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 0 034 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 0 035 Executive Director (Kirsty Flanagan) Customer Support Services (2023 Digital Projects) Digital Engagement Services Developer 28,000 0 28,000 28,000 0 To fund 50% of a new temporary LGE10 post. The post is a Digital Engagement Services Developer that will be 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. 28,000 0 0 036 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 0 037 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 0 038 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 0 039 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 0 040 Executive Director (Kirsty Flanagan) Development & Economic Growth Planning Income (Saving 23-24) 340,000 0 340,000 340,000 0 To fund one off operational saving MGT5 agreed for the 2023/24 budget 340,000 0 0 041 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 0 042 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. 116,000 269,193 043 Executive Director (Kirsty Flanagan) Development and Economic Growth Strategic Events & Festivals 80,664 0 80,664 80,664 0 At the Council meeting on 25 February 2021, 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 2022, 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. 80,664 0 044 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 0 045 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 21,177 0 046 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 0 047 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 0 048 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 14,000 049 Executive Director (Kirsty Flanagan) Financial Services CIPFA 24,040 0 24,040 6,000 18,040 CIPFA Training - To fund the professional training costs for staff undertaking the CIPFA professional accountancy qualification. 6,000 18,040 050 Executive Director (Kirsty Flanagan) Roads & Infrastructure Waste Variation Monies 1,967,056 0 1,967,056 1,329,999 637,057 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). 1,329,999 637,057 051 Executive Director (Kirsty Flanagan) Roads & Infrastructure 3G pitches / Tarbert Sports Pitches 375,022 0 375,022 87,736 287,286 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. 87,736 287,286 052 Executive Director (Kirsty Flanagan) Roads & Infrastructure Green Transport Initiatives 140,000 0 140,000 140,000 0 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 will be spent in 22/23 and drawn down in 23/24. 140,000 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 053 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 0 054 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 28,099 055 Executive Director (Kirsty Flanagan) Roads & Infrastructure Services (2023 Contract Inflation Adjustments) Waste PPP 255,000 0 255,000 255,000 0 Adjustment to inflation included in the budget based on updated RPIX figures at February 2023. 255,000 0 0 056 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 1,000,000 057 Non Departmental Non Departmental Oban TIF (Tax Incremental Financing - Excess NDR) 875,651 0 875,651 291,884 583,767 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. 291,884 291,884 291,883 058 Non Departmental Non Departmental Loans Fund 385,279 0 385,279 385,279 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 0 059 Non Departmental Non Departmental Loans Fund 300,000 0 300,000 300,000 0 To fund one off operational saving MGT3 agreed for the 2023/24 budget 300,000 0 0 060 Non Departmental Non Departmental Information Management (Balance of Funding) 209,844 0 209,844 0 209,844 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 0 209,844 061 Non Departmental Non Departmental Spend to Save Route Optimisation Software 100,000 0 100,000 100,000 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 0 062 Non Departmental Non Departmental Engagement with Hub North re provision of services for older adults and vulnerable people across Argyll and Bute 100,000 0 100,000 100,000 0 At the Council budget meeting February 2023, 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 0 063 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 80,000 064 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 13,565,615 415,816 0 13,149,799 5,585,619 7,564,180 6,001,435 7,272,297 291,883
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APPENDIX 2 COVID As at 31 August 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 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. 55,000 0 002 Chief Executive's Unit Community Planning Covid impacts – support to communities’ 49,147 18,336 30,811 30,811 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 0 699,036 699,036 0 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. 699,036 0 004 Executive Director (Douglas Hendry) Education Additional Teaching/Support in Schools/Digital Devices/Family Home Learning Support Fund - 421,198 37,352 383,846 372,922 10,924 Continuation of funding for additional staffing, teachers, support staff, additional devices for pupils and additional family/home learning programmes. 410,274 10,924 005 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 0 51,371 51,371 0 Fund additional teachers and support staff. 51,371 0 007 Executive Director (Douglas Hendry) Legal and Regulatory Services Welfare Rights Support 131,634 0 131,634 80,184 51,450 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. 80,184 51,450 008 Executive Director (Kirsty Flanagan) Customer Support Services Self Isolated Support / Self Isolated Support Grant (HR) 65,250 0 65,250 65,250 0 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. 65,250 0 009 Executive Director (Kirsty Flanagan) Development and Economic Growth Staycation and Marketing Argyll and Bute 389,992 0 389,992 389,992 0 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. 389,992 0 010 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 Business support via Business Gateway and £35,000 for Shop fronts 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
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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 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 0 017 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 194,156 137,445 56,711 -29,445 86,156 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. 108,000 86,156 019 Executive Director (Kirsty Flanagan) Financial Services Flexible Funding for Supporting People while at Tier 4 COVID 76,357 3,069 73,288 73,288 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 5,316 0 Unspent admin funding for processing Self isolation Support Grants. 5,316 0 021 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 0 257,000 257,000 0 Pressure identified on the 20/21 COSLA COVID costs spreadsheets - requires to be earmarked to be drawn down when required against the Capital Plan 257,000 0 024 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 5,512,073 392,402 0 0 5,119,671 4,522,322 597,349 4,914,724 179,012 418,337