Financial Reports Monitoring Pack - 31 October 2022
Argyll and Bute Council · 8 December 2022
Back to Policy and Resources Committee — 8 December 2022 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 8 DECEMBER 2022 FINANCIAL REPORTS MONITORING PACK – 31 OCTOBER 2022 1. INTRODUCTION 1.1 This report provides a summary of the financial monitoring reports as at the end of October 2022. There are five detailed reports, setting out the position as at 31 October 2022, which are summarised in this Executive Summary: • Revenue Budget Monitoring Report • Monitoring of Financial Risks • Capital Plan Monitoring Report • Treasury Monitoring Report • Reserves and Balances 2. DETAIL 2.1 Revenue Budget Monitoring Report 2.1.1 This report provides a summary of the current revenue budget monitoring position to ensure net expenditure is contained within budget. It provides corporate and departmental information with comparisons on a forecast outturn and a year to date basis. 2.1.2 There is a forecast overspend of £0.545m as at the end of October 2022. The key variances are: - £0.763m overspend from Roads and Infrastructure. The main reasons for this are an under-recovery of income in piers and harbours (£0.440m), an overspend in employee costs due to sickness absence cover and a back payment for an increased tonnage rate for waste disposal from one of our suppliers (£0.304m). These are partially offset by an over-recovery of income in crematoria. - £0.286m overspend due to a high demand for services and use of agency staff within Social Work - £0.026m overspend from the elected members pay award being greater than available budget. (The pay award is set nationally via Statutory Instrument and the forecast overspend is due to a 5.2% increase which is above the 2% previously built into the budget). - £0.493m over-recovery of Council Tax - £0.037m under-spend against Development and Economic Growth resulting from an over-recovery of income from private water supply appraisals 2.1.3 The forecast overspend does not include the potential impact of the 2022-23 pay settlement which has now concluded for Local Government staff (SJC conditions) with the application of the new pay scale and back pay during November. Please note that the negotiations for teaching staff and chief officers are ongoing. The
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Scottish Government has agreed to provide an additional £140m of recurring resource from 2022-23 to support the settlement and a further £120.6m of capital funding in 2022-23 and 2023-24 which will be baselined as General Revenue Grant from 2024-25 onwards. It has been advised that there is an expectation that a proportionate share of the additional funding is passed over to the Health and Social Care Partnership (HSCP), however, this is not a direction and is therefore at the discretion of the Council. There remains a budget pressure that both the Council and the HSCP will require to fund. It is recommended that Members give consideration as to what share of this funding should be passed to the HSCP. If a proportionate share is passed to the HSCP, this would result in a gap for the Council of around £2.1m and for the HSCP £0.5m. 2.1.4 There is a year to date underspend of £6.066m. More focus is on the forecast outturn position, hence why sometimes the year to date position is not updated. The year to date variances mainly relate to the timing of income and expenditure and recharging of costs to capital. 2.1.5 With regard to the ongoing financial impact of COVID-19, there are £8.965m 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. 2.1.6 Total policy savings relevant to 2022-23 financial year amount to £1.560m. The table below outlines their progress as at 31 October 2022. Category No. of Options 2022-23 £000 2022- 23 FTE 2023-24 £000 2023- 24 FTE Future Years £000 Future Years FTE Delivered 10 367.0 1.4 375.0 1.4 375.0 1.4 On Track to be Delivered 7 471.5 0.5 474.5 0.5 477.5 0.5 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 Potential Shortfall 4 402.5 0.0 402.5 0.0 402.5 0.0 Delayed 2 318.2 0.0 437.8 0.0 437.8 0.0 TOTAL 24 1,559.7 1.9 1,690.3 1.9 1,693.3 1.9 2.1.7 For those savings approved prior to February 2022, there are four savings categorised as having a shortfall and two currently delayed. Health and Social Care Partnership (HSCP) – Financial Update 2.1.8 The forecast outturn position at the end of October is an estimated overspend of £0.786m for 2022-23 (£0.286m for Social Work and £0.500m for Health). The Chief Financial Officer of the IJB is confident that the spend will be brought in line with budget by the end of the financial year using slippage from growth projects and anticipated additional funding allocations.
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2.2 Monitoring of Financial Risks 2.2.1 This report outlines the process and approach developed in carrying out a financial risks analysis and provides an update on the current assessment of financial risks. 2.2.2 There are 5 Council wide revenue risks identified for 2022-23 currently amounting to £2.323m. 2.2.3 There are currently 41 departmental risks totalling £5.090m. Of the 41 departmental risks, one is categorised as almost certain and 4 are categorised as likely. These will continue to be monitored and action taken to mitigate or manage these risks. 2.2.4 The 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 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. 5 500 Roads and Infrastructure Services Roads Materials - Bitumen Increased cost of asphalt material due to price of crude oil rising. Discussions emerging from the industry about possible rationing of bitumen which, if applied, will affect our programmes due to availability 3 400 2.2.5 There have been 3 changes to the departmental risks since the report as presented to the Policy and Resources Committee on 13 October 2022. These are outlined in paragraph 3.4.1 of the Financial Risks Report.
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2.3 Capital Plan Monitoring Report 2.3.1 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. 2.3.2 2.3.3 At the budget setting meeting on 25 February 2021, the Council agreed to provide a £2.5m provision for the increase in capital contract costs as a result of COVID-19 and following agreement at the Policy and Resources Committee on 14 October 2021, this, plus a further £0.146m, was added to the capital programme. At the budget meeting in February 2022 an additional £3.9m was set aside for further capital contract increases including up to £1.2m for Campbeltown Flood Scheme. There are likely to be further financial pressures facing the capital programme that are not able to be quantified at this stage largely relating to inflationary increases in the construction industry and supply chain issues. 2.3.4 Actual net expenditure to date is £15.685m compared to a budget for the year to date of £15.413m giving rise to an overspend for the year to date of £0.272m (1.76%). 2.3.5 The forecast outturn for 2022-23 is a forecast net expenditure of £35.549m compared to an annual budget of £45.971m giving rise to a forecast underspend for the year of £10.422m (22.67%). 2.3.6 The forecast total net projects costs on the capital plan are £180.363m compared to a total budget for all projects of £179.913m giving rise to a forecast overspend for the overall capital plan of £0.450m (0.25%). 2.3.7 In respect of total project performance, there are 160 projects within the capital plan, 151 are complete or on target, 6 are off target and recoverable and 3 projects are off track. 2.4 Treasury Monitoring Report 2.4.1 This report provides information on the current levels and recent transactions in relation to the capital financing limit, total borrowing, temporary borrowing and long term borrowing and investments. 2.4.2 The net movement in external borrowing for the period 1 September 2022 to 31 October 2022 was a decrease of £9.5m. 2.4.3 Borrowing is below the Capital Financing Requirement for the period to 31 October 2022. During the period the Council took advantage of the increase in the rate of borrowing to repay certain long term PWLB loans which generated a discount that can be used to reduce loan charges. The repayment was funded by utilising maturing investments and by taking some temporary borrowing which will be repaid when maturing investments become available. Due to the increase in borrowing
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rates it is unlikely that the Council will take out longer term loans in the short to medium term 2.4.4 The levels of investments were £116.2m at 31 October 2022. The average rate of return achieved was 2.508% which compares favourably with the SONIA (Sterling Overnight Index Average) for the same period of 2.186%. 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 £364.558m unusable reserves that are not backed with resources. They are required purely for accounting purposes. 2.5.3 At 31 March 2022, the Council had a total of £103.183m of usable reserves. Of this: • £2.682m relates to the Repairs and Renewals Fund • £4.414m relates to Capital Funds • £96.087m was held in the General Fund, with £88.990m of this balance earmarked for specific purposes. 2.5.4 Of the earmarked balance of £88.990m: • £46.239m is invested or committed for major initiatives/capital projects • £6.364m has already been drawn down • £29.934m is still to be drawn down in 2022-23 • £6.453m is planned to be spent in future years 2.5.5 The table below summarises the estimated Unallocated General Fund Balance as at the end of the financial year: Heading Detail £000 Unallocated General Fund as at 31 March 2022 This is the balance that is unallocated over and above the 2% contingency, which amounts to £5.256m 1,841 Budgeted allocation to General Fund for 2022-23 Budget Per the Budget Motion at Council on 24 February 22 2,482 Current Forecast Outturn for 2022-23 as at 31 October 2022 (545) Estimated Unallocated balance as at 31 March 2023 3,778
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2.5.6 It can be seen that, after taking into consideration the Budget Motion and the current forecast outturn for 2022-23, the Council is forecast to have a £3.778m surplus over contingency. The balance does not take into account the 2022-23 pay award now agreed and due to be paid in November. Should Members decide that a proportionate share of the funding is passed to the HSCP, the impact for the Council would be around £2.1m, resulting in a reduced unallocated balance of £1.678m by year end. 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 periods September and October, there are 2 virements requiring authorisation: - £0.219m harvested within Social Work against the vacancy savings target for September - £0.225m unidentified saving moved from Chief Officer Integration to Adult Services 3. RECOMMENDATIONS 3.1 It is recommended that the Policy and Resources Committee: a) Consider the revenue budget monitoring report as at 31 October 2022 b) Note the financial risks for 2022-23 c) Note the capital plan monitoring report as at 31 October 2022 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 October 2022 e) Consider the reserves and balances report as at 31 October 2022 f) Recommend to Council that the revenue virements over £0.200m during September and October 2022 are approved g) Recommend that Members give consideration as to what share of the additional £140m Revenue and £120.6m Capital funding relating to the pay award should be passed to the HSCP. If a proportionate share is passed to the HSCP in 2022-23 this equates to £0.490m and £0.422m respectively.
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4. IMPLICATIONS 4.1 Policy – None. 4.2 Financial - Outlines the revenue and capital monitoring for 2022-23 as at 31 October 2022 4.3 Legal - None. 4.4 HR - None. 4.5 Fairer Scotland Duty - None. 4.5.1 Equalities – protected characteristics - None. 4.5.2 Socio-economic Duty - None. 4.5.3 Islands - None. 4.6 Climate Change - None. 4.7 Risk - Risks are included in financial risks report. 4.8 Customer Service - None. Kirsty Flanagan Section 95 Officer 4 November 2022 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 OCTOBER 2022 POLICY AND RESCOURCES COMMITEE 8 DECEMBER 2022 2022-23 Overall Position: There is an overall forecast overspend of £0.545m as at the end of October 2022. Within Executive Director Kirsty Flanagan, there is a forecast overspend of £0.726m due to an under-recovery of income in Piers and Harbours (£0.440m); an overspend in Waste employee costs due to sickness absence cover and a back-payment for an increased tonnage rate for Waste Disposal from one of our suppliers (£0.304m). These are partially offset with additional income in Crematoria and Private Water Supply Appraisals. Within Social Work, there is a forecast overspend of £0.286m due to a high demand for services and agency staff costs. Central Budgets are projecting a £0.026m overspend resulting from the Elected Members pay award, which is set nationally via Statutory Instrument, being greater than the available budget. There is a projected over-recovery of Council tax of £0.493m It should be noted that the forecast overspend does not include the potential impact of the 2022-23 SJC pay settlement which will be paid to those employees during November. Note the negotiations for teaching staff and chief officers are ongoing. There is a year to date overspend of £6.066m. 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 October 2022: • The 2022-23 SJC pay award will be paid to employees in November period. Key Financial Successes: Performance against budget for 2021-22 was an overall net favourable position of £1.630m underspend after adjusting for year-end earmarking. This breaks down as: • £0.815m net underspend in relation to Council service departmental expenditure • £0.432m net overspend in relation to other central costs • £1.247m over-recovery of Council Tax income. Key Financial Challenges: Proposed Actions to address Financial Challenges: Ongoing consideration of the financial impact of COVID on the Council’s revenue position. Continue to identify additional costs as a consequence of COVID to ensure earmarked COVID funds are applied appropriately. Achieving a favourable year-end position and achieving savings targets in light of council wide risks to expenditure. Robust monitoring of the financial position and delivery of savings to ensure budget issues inform the budget monitoring process. Monitoring Social Work expenditure and more widely the IJB position as any overspend will transfer back to partner bodies in the first instance. Continue to work closely with the CFO of the IJB to ensure that early indication of any potential adverse financial outturn is known and
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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 2022-23 budget was agreed in February 2022 there are still budget gaps in future years. The Council will continue to progress savings options identified in 2021-22 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 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 as a result 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 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 reported through the budget monitoring and preparation processes.
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Forecast Outturn Position There is a forecast overspend of £0.545m for 2022-23 as at the end of October 2022 Department Annual Budget £'000 Forecast Outturn £'000 Current Forecast Variance £'000 Previous Forecast Variance £000 Change £000 Explanation Chief Executive's Unit 6,466 6,466 0 0 0 Executive Director (Douglas Hendry) 126,303 126,303 0 0 0 Executive Director (Kirsty Flanagan) 46,382 47,108 (726) (106) (620) Overspend is due to an under-recovery of income in Piers and Harbours; an overspend in Waste employee costs due to sickness absence and a back-payment for incraesed tonnage rate for Waste Disposal. These are partially offset with additional income in Crematoria and Private Water Supply Appraisals. Social Work 72,911 73,197 (286) (263) (23) Overspend due to high demand for services and agency staff Central Budgets 23,867 23,893 (26) (26) 0 Overspend due to Elected Members pay award being higher than available budget Financed By (275,929) (276,422) 493 0 493 Projected over-recovery of Council tax Total 0 545 (545) (395) (150) Current Forecast Outturn Variance with change from previous month
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Further information on the departmental forecast variances is included later on in the report. (750)(700)(650)(600)(550)(500)(450)(400)(350)(300)(250)(200)(150)(100)(50)050100150200250300350400450500 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 (Kirsty Flanagan) Executive Director (Douglas Hendry) 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 October 2022 is an underspend of £6.066m and the main variances are noted below. Department YTD Actual £'000 YTD Budget £'000 YTD Variance £'000 Explanation Chief Executive's Unit 5,122 5,122 0 Executive Director (Douglas Hendry) 64,372 65,281 909 The YTD underspend is mainly due to underspends in employee budgets within school and learning centres. Under the Scheme of Devolved School Management, schools are permitted flexibility at the end of the year so no forecast variance is required. The remaining variances are profile related and will be refined through November Executive Director (Kirsty Flanagan) 27,587 24,993 (2,594) The YTD overspend is mainly due to income behind profile in the Roads Operational Holding Account due to Capital project timing which is difficult to profile and also an under-recovery of income in Piers and Harbours Social Work 27,298 27,366 68 The YTD underspend is largely due to demand for services across Children and Families and timing of payments across Adult Services Central Budgets (225) 7,458 7,683 The YTD underspend can be attributed to timings of payments and profiling issues Funding (151,667) (151,667) 0 Total Net Expenditure (27,513) (21,447) 6,066
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-25% 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 Further information on the departmental year to date variances is included later on in the report.
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OBJECTIVE SUMMARY – OVERALL COUNCIL POSITION AS AT 31 OCTOBER 2022 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 5,122 5,122 0 0.0% 6,466 6,466 0 0.0% Executive Director (Kirsty Flanagan) 27,587 24,993 (2,594) (10.4%) 46,382 47,108 (726) (1.6%) Executive Director (Douglas Hendry) 64,372 65,281 909 1.4% 126,303 126,303 0 0.0% Social Work 27,298 27,366 68 0.3% 72,911 73,197 (286) (0.4%) Total Departmental Budgets 124,379 122,762 (1,617) (1.3%) 252,062 253,074 (1,012) (0.4%) Central Budgets Other Operating Income and Expenditure (385) 837 1,222 146.0% 2,019 2,045 (26) (1.3%) Joint Boards 626 872 246 28.2% 1,496 1,496 0 0.0% Non-Controllable Costs (466) 5,749 6,215 108.1% 20,352 20,352 0 0.0% Total Central Budgets (225) 7,458 7,683 103.0% 23,867 23,893 (26) (0.1%) TOTAL NET EXPENDITURE 124,154 130,220 6,066 4.7% 275,929 276,967 (1,038) (0.4%) Financed By Aggregate External Finance (115,301) (115,301) 0 0.0% (216,785) (216,785) 0 0.0% Local Tax Requirement (36,366) (36,366) 0 0.0% (55,262) (55,755) 493 (0.9%) Contributions to General Fund 0 0 0.0% 2,482 2,482 0 0.0% Earmarked Reserves 0 0 0.0% (6,364) (6,364) 0 0.0% Total Funding (151,667) (151,667) 0 0.0% (275,929) (276,422) 493 (0.2%) (Deficit)/Surplus for Period (27,513) (21,447) 6,066 0 545 (545) CURRENT PROJECTED FINAL OUTTURNYEAR TO DATE POSITION
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SUBJECTIVE SUMMARY – OVERALL COUNCIL POSITION AS AT 31 OCTOBER 2022 YTD Actual YTD Budget YTD Variance Variance Annual Budget Forecast Outturn Forecast Variance Variance £'000 £'000 £'000 % £'000 £'000 £'000 % Subjective Category Employee Expenses 90,582 91,540 958 1.1% 171,745 172,610 (865) (0.5%) Premises Related Expenditure 10,337 9,864 (473) (4.8%) 16,713 16,864 (151) (0.9%) Supplies and Services 15,174 14,331 (843) (5.9%) 25,687 26,078 (391) (1.5%) Transport Related Expenditure 7,944 6,940 (1,004) (14.5%) 17,271 17,421 (150) (0.9%) Third Party Payments 87,474 89,424 1,950 2.2% 169,143 170,059 (916) (0.5%) Capital Financing 2,708 0 (2,708) 14,039 14,039 0 0.0% TOTAL EXPENDITURE 214,219 212,099 (2,120) (1.0%) 414,598 417,071 (2,473) (0.6%) Income (241,732) (233,546) 8,186 (3.5%) (414,598) (416,526) 1,928 (0.5%) (Deficit)/Surplus for Period (27,513) (21,447) 6,066 0 545 (545) 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 OCTOBER 2022 The department is currently forecasting spend in line with budget. The department has a year to date spend in line with budget. Forecast Outturn Position Service Annual Budget £000 Forecast Outturn £000 Current Forecast Variance £000 Previous Forecast Variance £000 Change £000 Chief Executive 970 970 0 0 0 Head of Financial Services 5,496 5,496 0 0 0 Totals 6,466 6,466 0 0 0 Year to Date Position 0% 25% 50% 75% 100% Chief Executive Head of Financial Services Expenditure to date against the remaining budget for each Service YTD… Remaining Budget… Key Financial Successes: • All savings options have been delivered. • The department’s 2021-22 outturn position was an underspend of £0.018m. This resulted from an overall underspend of £2.013m offset by earmarking of £1.769m due to auto-carry forwards including unspent grants and COVID-19 funding and £0.226m of unspent budget earmarkings. Key Financial Challenges: Proposed Actions to address Financial Challenges: 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 high inflation and service demand caused by world events including the COVID-19 pandemic and the conflict in Ukraine. Ensure the team is operating as efficiently and effectively as possible to enable continued support to departments with reduced resources by building resilience through knowledge sharing across the team and maximising the benefits to the service from the implementation of the Oracle Fusion Financial Ledger System.
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Carry out a business process review of the Revenues and Benefits function to determine if there is scope to deliver the service in a more cost effective manner. Work collaboratively with other services of the Council to identify opportunities to improve the operational and financial efficiency of services and to support evidence based decision making.
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CHIEF EXECUTIVE’S UNIT – OBJECTIVE SUMMARY AS AT 31 OCTOBER 2022 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 194 194 0 0.0% 383 383 0 0.0% Outwith Reporting Criteria Community Planning & Development 275 296 21 7.1% 587 587 0 0.0% Outwith Reporting Criteria 469 490 21 4.3% 970 970 0 0.0% Accounting & Budgeting 1,361 1,364 3 0.2% 2,400 2,400 0 0.0% Outwith Reporting Criteria Internal Audit & Fraud 157 157 0 0.0% 225 225 0 0.0% Outwith Reporting Criteria Revenues & Benefits 2,476 2,505 29 1.2% 2,119 2,119 0 0.0% Outwith Reporting Criteria Scottish Welfare Fund 659 606 (53) (8.8%) 752 752 0 0.0% Earmarkings to be drawn down to offset the overspend 4,653 4,632 (21) (0.5%) 5,496 5,496 0 0.0% 5,122 5,122 0 0.0% 6,466 6,466 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 OCTOBER 2022 Subjective Category YTD Actual £000 YTD Budget £000 YTD Variance £000 % Variance Annual Budget £000 Forecast Outturn £000 Forecast Variance £000 % Variance Explanation Employee 2,821 2,797 (24) (0.9%) 5,300 5,300 0 0.0% Outwith reporting criteria. Supplies and Services 222 249 27 10.8% 678 678 0 0.0% Profiling ahead of spend for Printing and Stationery and numerous other accumulating variances Transport 7 19 12 63.2% 32 32 0 0.0% Underspend on staff travel budgets. Third Party 11,735 14,280 2,545 17.8% 25,270 25,270 0 0.0% An underspend of £2.598m on Housing benefits (offset against income) offset by numerous accumulating variances coming to an overspend of £0.053m Income (9,663) (12,223) (2,560) 20.9% (24,814) (24,814) 0 0.0% An overspend of £2.598m on Housing Benefits (offset against third party payments) offset by numerous accumulating variances coming to an underspend of £0.038m Totals 5,122 5,122 0 0.0% 6,466 6,466 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 OCTOBER 2022 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 OCTOBER 2022 The department is currently forecasting spend in line with budget. The department has a year to date (YTD) underspend of £0.909m (1.4%). The year to date underspend position is mainly due to underspends in employee budgets within schools and learning centres. Under the Scheme of Devolved School Management schools are permitted flexibility at the end of the year so no forecast variance is required. The remaining variances are mainly profile related and will be refined through November. Forecast Outturn Position Service Annual Budget £000 Forecast Outturn £000 Current Forecast Variance £000 Previous Forecast Variance £000 Change £000 Executive Director (Douglas Hendry) 274 274 0 0 0 Head of Commercial Services 9,703 9,703 0 0 0 Head of Education 97,222 97,222 0 0 0 Head of Legal and Regulatory Support 19,104 19,104 0 0 0 Totals 126,303 126,303 0 0 0 Year to Date Position Key Financial Successes: The 2021-22 year-end consolidated outturn position was an under spend of £0.223m after adjusting for earmarkings. This was due to the 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. The costs of COVID were contained and minimised where possible across departments, with staff from all areas of the service assisting in planning, implementing and delivering a wide range of additional services in schools and communities and helping businesses through the return from lockdown. 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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Key Financial Challenges: Proposed Actions to address Financial Challenges: The ongoing impact of COVID-19 Costs are being contained where possible. Impact of numbers/uptake in demand led service areas like catering, design services and licensing. Continually refine/develop systems to accurately calculate forecast outturns and the impact on the future financial outlook. Manage the impact of the Statutory Guidance supporting Nutritional Requirements for Food and Drink in Schools (Scotland) Regulations 2020, on the cost of producing school meals and also the uptake. Monitor and report on the impact on costs and on income as the year progresses. Support longer term service re-design project for Catering and Cleaning services to ensure efficiencies and financial savings are secured for the Council as well as delivery of free school meals for 1140 hours of Early Learning and Childcare and the phased universal free school meals expansion in Primary Schools. Effective working with partners and support with implementation of service delivery method. Continual monitoring and review of budgets. Legislative/policy requirements not fully funded by Scottish Government which may put additional burdens on the Council. For example, the introduction of free school meal payments for holidays. Analysis of new obligations and whether they incur additional costs not met through increased grant. The Council has a requirement to deliver 1140 hours of Early Learning and Childcare. The initial funding from Scottish Government was based on individual implementation plans with funding confirmed up to March 2022. The ring fenced grant has been reduced in 2022-23 and an exercise is required to ensure that the service can be delivered efficiently and effectively within this reduced funding allocation. Robust service costings, financial monitoring and timely reporting to ensure the service can continue to deliver the service within the financial resources available. 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 OCTOBER 2022 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 194 212 18 8.5% 274 274 0 0.0% Outwith Reporting Criteria 194 212 18 8.5% 274 274 0 0.0% Head of Commercial Services Catering 121 208 87 41.8% 957 957 0 0.0% YTD underspend due to timing of costs relating to school holidays partially offset by overspends elsewhere within catering. Head of Commercial Services Central/Management Costs 640 578 (62) (10.7%) 1,018 1,018 0 0.0% YTD overspend in Cleaning and Catering HQ due to staff costs - virements/journals to be processed in November in relation to staff movements which will offset the majority of this. Costs relating to Our Modern Workspace project to be transferred to capital. Head of Commercial Services CHORD 48 37 (11) (29.7%) 20 20 0 0.0% YTD overspend in CHORD due to income profiling. Head of Commercial Services Cleaning (23) 10 33 330.0% 375 375 0 0.0% YTD underspend mainly due to timing of income and an underspend within staff costs due a reduction in the use of casual cleaning staff. Head of Commercial Services Culture, Heritage, Recreation & Sport 3,447 3,398 (49) (1.4%) 5,814 5,814 0 0.0% Outwith Reporting Criteria Head of Commercial Services Events & Commercial Catering 97 48 (49) (102.1%) 113 113 0 0.0% The YTD overspend is due to an under recovery of income caused by the closure of the Civic Centre Café and reduced footfall within Kilmory Canteen. There is also an under recovery of income within Events as a result of the slow recovery from the pandemic.
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Head of Commercial Services Property Portfolio (132) (137) (5) 3.7% (194) (194) 0 0.0% Outwith Reporting Criteria Head of Commercial Services Property Services 571 363 (208) (57.3%) 548 548 0 0.0% The YTD overspend is largely due to a £165k variance within Renewable Energy due to income profiling and the profiling of Property Services charges. Head of Commercial Services Shared Offices 571 615 44 7.2% 1,052 1,052 0 0.0% Outwith Reporting Criteria 5,340 5,120 (220) (4.3%) 9,703 9,703 0 0.0% Head of Education Additional Support for Learning 5,398 5,432 34 0.6% 9,900 9,900 0 0.0% Outwith Reporting Criteria Head of Education Central/Management Costs 1,103 1,032 (71) (6.9%) 1,893 1,893 0 0.0% YTD overspend due to recurring overspends in licencing costs and under-recovery of rental income. Earmarked reserve to be drawn down to cover additional staff costs which will reduce YTD overspend. Head of Education Community Learning & Development 3 3 0 0.0% 9 9 0 0.0% Outwith Reporting Criteria Head of Education COVID 589 590 1 0.2% 1,206 1,206 0 0.0% Outwith Reporting Criteria Head of Education Early Learning & Childcare 75 179 104 58.1% 8,638 8,638 0 0.0% The YTD underspend is due to the timing of receipt and processing of our ELC Partner Provider invoices and recharge for prepared meals. Head of Education Primary Education 19,844 19,941 97 0.5% 35,303 35,303 0 0.0% YTD underspend largely due to underspends within primary schools staffing budgets. 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. Head of Education Pupil Support 1,392 1,326 (66) (5.0%) 2,422 2,422 0 0.0% There is a YTD overspend of £73k in Schools Residential Placements, offset by other small YTD underspends. It is likely
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that this will continue to be a pressure in 2022/23 and a forecast projection is currently being developed. Head of Education Schools - Central Services 1,039 1,040 1 0.1% 2,827 2,827 0 0.0% Outwith Reporting Criteria Head of Education Secondary Education 19,426 20,164 738 3.7% 35,024 35,024 0 0.0% YTD underspend largely due to underspends within secondary schools staffing budgets. 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. 48,869 49,707 838 1.7% 97,222 97,222 0 0.0% Head of Legal & Regulatory Support Central/Management Costs 126 129 3 2.3% 256 256 0 0.0% Outwith Reporting Criteria Head of Legal & Regulatory Support Community Safety 93 97 4 4.1% 173 173 0 0.0% Outwith Reporting Criteria Head of Legal & Regulatory Support Elections 214 205 (9) (4.4%) 386 386 0 0.0% Outwith Reporting Criteria Head of Legal & Regulatory Support Governance 340 357 17 4.8% 773 773 0 0.0% Outwith Reporting Criteria Head of Legal & Regulatory Support Governance, Risk & Safety 285 287 2 0.7% 538 538 0 0.0% Outwith Reporting Criteria Head of Legal & Regulatory Support Legal Services 234 230 (4) (1.7%) 650 650 0 0.0% Outwith Reporting Criteria Head of Legal & Regulatory Support NPDO and Hub Schools 7,673 7,896 223 2.8% 14,474 14,474 0 0.0% YTD underspend due to profiling of Third Party Payments associated income from recharge to Education, as well as staff vacancies within Contract Management Team. Head of Legal & Regulatory Support Procurement, Commercial and 542 592 50 8.5% 1,132 1,132 0 0.0% Outwith Reporting Criteria
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Contract Management Head of Legal & Regulatory Support Trading Standards & Advice Services 462 449 (13) (2.9%) 722 722 0 0.0% Outwith Reporting Criteria 9,969 10,242 273 2.7% 19,104 19,104 0 0.0% 64,372 65,281 909 1.4% 126,303 126,303 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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EXECUTIVE DIRECTOR (DOUGLAS HENDRY) – SUBJECTIVE SUMMARY AS AT 31 OCTOBER 2022 Subjective Category YTD Actual £000 YTD Budget £000 YTD Variance £000 % Variance Annual Budget £000 Forecast Outturn £000 Forecast Variance £000 % Variance Explanation Employee 50,973 52,221 1,248 2.4% 96,642 96,642 0 0.0% Non-Education: The YTD underspend of £14k is due to an £88k overspend within Commercial Services Catering HQ to be offset by budget from Period Products and HPN Compliance, offset by an underspend of £102k within Legal and Regulatory Services caused by delays in recruitment in Procurement and Contract Management. Education: The YTD underspend of £1.234m is due to employee budgets within schools and learning centres. Under the Scheme of Devolved School Management schools are permitted flexibility at the end of the year so no forecast variance is required. Premises 4,092 3,583 (509) (14.2%) 7,217 7,217 0 0.0% Non-Education: YTD overspend of £88k largely due to profiling of refuse collection budgets and contractor costs for surplus properties. Education: YTD overspend of £421k is in part due to demolition costs for Hermitage PS and other school estate property adaptations not covered by CRA budgets. Overspend will be partially reduced by earmarked reserves to be drawn down for disability alterations at various locations and position will be monitored in relation to potential recovery of insurance monies in respect of Hermitage PS. Supplies and Services 6,389 6,823 434 6.4% 12,325 12,325 0 0.0% Non-Education: The YTD overspend of £45k is due to the profiling of catering purchases which will be refined through November and an overspend within tools and equipment offset by income from Live Argyll. Education: The YTD underspend of £479k is mainly due to the profiling of Pupil Equity Funding Expenditure Budget Allocations from Scottish Government which will be refined through November. This underspend is offset slightly by overspends in subscriptions and licensing budgets. Transport 202 174 (28) (16.1%) 338 338 0 0.0% Non-Education: Nil variance Education: The YTD overspend of £28k is due to staff travel costs including acting posts and additional costs of school to college transport/ASN support. Third Party 23,718 23,584 (134) (0.6%) 40,455 40,455 0 0.0% Non-Education: YTD overspend of £68k largely due Schools Residential Placements. It is likely that this will continue to be a pressure in 2022/23 and a forecast projection is currently being developed. Profiling of school meal vouchers also contributing to YTD overspend. Education: The YTD overspend of £66k is largely down to profiling of NPDO third party payments. Income (21,002) (21,104) (102) 0.5% (30,674) (30,674) 0 0.0% Non-Education: The £259k YTD over-recovery is mainly due to NPDO recharges to Education and income from Live Argyll offset by costs elsewhere. This is partially offset by YTD under recovery within Renewable Energy due to income profiling and accruals. Education: The £361k YTD under recovery of income is mainly due profiling of School Meals income and an accrued income claim for Developing Our Young Workforce which has been submitted but funding not received as yet. There is also an under recovery of schoolhouse rental income. Totals 64,372 65,281 909 1.4% 126,303 126,303 0 0.0%
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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 OCTOBER 2022 Service Area Annual Budget £000 Forecast Outturn £000 Forecast Variance £000 % Variance Explanation A Red variance is a forecast variance which is greater than +/- £50,000.
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EXECUTIVE DIRECTOR (KIRSTY FLANAGAN) – AS AT 31 OCTOBER 2022 The department is currently forecasting an overspend of £0.726m (1.6%) for the year. This is due to an under-recovery of income in Piers and Harbours (£0.440m); an overspend in Waste employee costs due to sickness absence cover and a back-payment for an increased tonnage rate for Waste Disposal from one of our suppliers (£0.304m). These are partially offset with additional income in Crematoria and Private Water Supply Appraisals. The department has a year to date overspend of £2.594m (10.4%). This is mainly due to income being behind profile in the Roads Operational Holding Account due to Capital project timing which is difficult to profile and under-recovery of income in Piers and Harbours. Forecast Outturn Position Service Annual Budget £000 Forecast Outturn £000 Current Forecast Variance £000 Previous Forecast Variance £000 Change £000 Executive Director (Kirsty Flanagan) 234 234 0 0 0 Head of Customer Support Services 7,842 7,842 0 0 0 Head of Development and Economic Growth 9,583 9,546 37 37 0 Head of Roads and Infrastructure Services 28,723 29,486 (763) (143) (620) Totals 46,382 47,108 (726) (106) (620) Year to Date Position Key Financial Successes: At the end of financial year 2021-22 the department showed an overall underspend of £0.574m after taking into account all earmarkings. The main underspends were due to the over-recovery of vacancy savings, additional income in Environmental Health from Private Water Supply Appraisals and additional Planning Fee income which was partially offset by the under-recovery of Building Warrant income. Overall there was a favourable net position. -95% -70% -45% -20% 5% 30% 55% 80% 105% Executive Director (Kirsty Flanagan) Head of Customer Support Services Head of Development and Economic Growth Head of Roads and Infrastructure Services 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: The impact of COVID-19 Costs are being monitored and contained where possible. 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. 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. 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). Winter Maintenance costs are difficult to estimate as they are very much dependant on the weather. Close monitoring of Winter Maintenance 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. Rising cost of materials across the service will result in a reduction in activity or overspends. Specifically there have been significant increases in the price of salt and bitumen in recent months. Costs are monitored regularly and contained as much as possible, with any unavoidable overspends highlighted as soon as known.
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EXECUTIVE DIRECTOR (KIRSTY FLANAGAN) – OBJECTIVE SUMMARY AS AT 31 OCTOBER 2022 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 147 136 (11) (8.1%) 234 234 0 0.0% Outwith Reporting Criteria. 147 136 (11) (8.1%) 234 234 0 0.0% Head of Customer Support Services Central/Management Costs 102 94 (8) (8.5%) 164 164 0 0.0% Outwith Reporting Criteria. Head of Customer Support Services Communications 124 166 42 25.3% 308 308 0 0.0% Bord na Gaidhlig income received in advance of expenditure against a zero budget. Head of Customer Support Services Customer Service Centres 753 668 (85) (12.7%) 1,305 1,305 0 0.0% Under-recovery of income in the Print Room. Head of Customer Support Services HR 1,182 1,147 (35) (3.1%) 2,099 2,099 0 0.0% Outwith Reporting Criteria. Head of Customer Support Services ICT 2,080 2,116 36 1.7% 3,935 3,935 0 0.0% Outwith Reporting Criteria. Head of Customer Support Services Registrars (31) (13) 18 (138.5%) 31 31 0 0.0% Income received ahead of profiled budget, this will be monitored closely in the coming months. 4,210 4,178 (32) (0.8%) 7,842 7,842 0 0.0% Head of Development & Economic Growth Airports 707 709 2 0.3% 1,162 1,162 0 0.0% Outwith Reporting Criteria. Head of Development Building Control (164) (67) 97 (144.8%) (110) (110) 0 0.0% Building warrant income received ahead
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& Economic Growth of profiled budget, this will be monitored closely in the coming months, plus vacancy savings. Head of Development & Economic Growth Central/Management Costs 259 320 61 19.1% 574 574 0 0.0% Delay in Ordnance Survey - One Scotland Mapping invoice being received. Head of Development & Economic Growth Culture & Heritage 111 62 (49) (79.0%) 216 216 0 0.0% Expenditure for Events and Festivals - earmarked reserve to be drawn down to cover. Head of Development & Economic Growth Development Management (482) 46 528 1147.8% 224 224 0 0.0% Additional Planning Fee income which is planned to be used to fund additional resources. Head of Development & Economic Growth Development Policy 229 191 (38) (19.9%) 366 366 0 0.0% Additional expenditure on Local Development Plan requires earmarked reserves to be drawn down to cover. Head of Development & Economic Growth Economic Development 1,261 2,229 968 43.4% 2,534 2,534 0 0.0% Income for Islands Infrastructure Fund and Place Based Investment received in advance of payments. Head of Development & Economic Growth Environmental Health 600 557 (43) (7.7%) 1,205 1,168 37 3.1% Additional income received for Appraisal of Water Supplies. Head of Development & Economic Growth Environmental Initiatives 82 60 (22) (36.7%) 113 113 0 0.0% Profile of third party payment. Head of Development & Economic Growth Housing 2,843 2,738 (105) (3.8%) 3,080 3,080 0 0.0% Expenditure payments for HEEPS incurred prior to grant income being received which is partially offset by an underspend in Private
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Sector Housing Grant payments. Head of Development & Economic Growth Private Landlords (8) 0 8 0.0% 0 0 0 0.0% Outwith Reporting Criteria. Head of Development & Economic Growth Transportation Policy 129 117 (12) (10.3%) 219 219 0 0.0% Profile of third party payments. 5,567 6,962 1,395 20.0% 9,583 9,546 37 0.4% Head of Roads & Infrastructure Services Amenity 2,295 2,127 (168) (7.9%) 2,819 2,838 (19) (0.7%) Forecast variance relates to an over- recovery if income in Crematoria offset with overspends in employee costs, under- recovery of income in Parks for Hire of Facilities income, Pest Control for external income and Public Convenience income. Head of Roads & Infrastructure Services Car Parking (418) (366) 52 (14.2%) (623) (623) 0 0.0% Underspend in Car Park Maintenance. Head of Roads & Infrastructure Services Central/Management Costs 1,724 1,657 (67) (4.0%) 2,803 2,803 0 0.0% Annual recharge in Marine Management profiled incorrectly - budget to be re- profiled. Head of Roads & Infrastructure Services Depots 205 181 (24) (13.3%) (469) (469) 0 0.0% Rental income slightly behind profiled budget, this should be rectified as we progress through the year. Head of Roads & Infrastructure Services Fleet & Transport 5,013 4,815 (198) (4.1%) 8,562 8,562 0 0.0% Delay in Fleet Hire recharge resulting in overspend, this will be rectified once recharges are fully processed.
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Head of Roads & Infrastructure Services Infrastructure 395 374 (21) (5.6%) 708 708 0 0.0% Outwith Reporting Criteria. Head of Roads & Infrastructure Services Marine (2,005) (3,713) (1,708) 46.0% (4,371) (3,931) (440) 10.1% Forecast variance relates to an under- recovery of income in Piers and Harbours. YTD variance also includes grant income budgeted for but not yet received in Ferries. Head of Roads & Infrastructure Services Network & Traffic Management 110 44 (66) (150.0%) 132 132 0 0.0% Under-recovery of income for Traffic Regulation Orders and New Roads and Street Works Act, this will be monitored closely in the coming months. Head of Roads & Infrastructure Services Road Safety 52 61 9 14.8% 143 143 0 0.0% Small supplies and Services budget has not yet been spent. Head of Roads & Infrastructure Services Roads & Lighting 4,816 2,950 (1,866) (63.3%) 6,178 6,178 0 0.0% Delays in recharges to capital budget resulting in a reduction in income in the Roads Operational Holding Account, this should be rectified as we continue through the year and the recharges are processed. Head of Roads & Infrastructure Services Waste 5,476 5,587 111 2.0% 12,841 13,145 (304) (2.4%) Forecast overspend relates to additional expenditure due to increased disposal fees, offset against additional income received for Commercial Refuse. 17,663 13,717 (3,946) (28.8%) 28,723 29,486 (763) (2.7%) 27,587 24,993 (2,594) (10.4%) 46,382 47,108 (726) (1.6%)
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YTD is year to date and represents the actual or budgeted expenditure and income for the financial year so far. Forecast Outturn is the estimate now of what expenditure or income will be for the whole of the financial year. The Variance is the difference between budget and actual or forecast outturn. A positive variance is when actual or forecast expenditure is less than budget or actual or forecast income is more than budget. A negative variance is shown in brackets and is when actual or forecast expenditure is more than budget or actual or forecast income is less than budget. An explanation is given for any variance which exceeds £50,000 or 10%.
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EXECUTIVE DIRECTOR (KIRSTY FLANAGAN) – SUBJECTIVE SUMMARY AS AT 31 OCTOBER 2022 Subjective Category YTD Actual £000 YTD Budget £000 YTD Variance £000 % Variance Annual Budget £000 Forecast Outturn £000 Forecast Variance £000 % Variance Explanation Employee 18,665 18,841 176 0.9% 35,512 35,575 (63) (0.2%) Vacancy savings being kept in Planning to cover Agency Staff costs and Building Control temporarily until staffing changes are developed and costed. Forecast variance relates to additional staffing costs in Waste to cover sickness absence. Premises 1,277 1,251 (26) (2.1%) 3,010 3,010 0 0.0% Outwith Reporting Criteria. Supplies and Services 6,844 5,798 (1,046) (18.0%) 10,149 10,152 (3) (0.0%) Material expenditure in the Roads Operational Holding Account higher than the profiled budget due to high level of capital expenditure, this will be offset with an increase in income as recharges are processed against capital throughout the year. Forecast variance relates to small overspend for Environmental Health for Sampling costs. Transport 7,390 6,349 (1,041) (16.4%) 16,019 16,270 (251) (1.6%) Overspend due to vehicle repairs and additional external leases. Forecast variance relates to Waste vehicle repairs and fuel costs. Third Party 22,244 21,860 (384) (1.8%) 39,297 39,719 (422) (1.1%) Various grant payments made in Economic Development and Housing which are offset against actual income received. Forecast variance relates to Waste Disposal payment regarding increased disposal fees and additional staffing recharges in Amenity and Waste to cover sickness absence. Capital Financing 0 0 0 0.0% 1,592 1,592 0 0.0% Outwith Reporting Criteria. Income (28,833) (29,106) (273) 0.9% (59,197) (59,210) 13 (0.0%) Forecast variance relates to an under-recovery of income in Piers and Harbours offset with an over- recovery of Commercial Refuse Income in Waste. YTD variance also includes a delay in recharges to capital resulting in a reduction in income in the Roads Operational Holding Account offset against income for Islands Infrastructure Fund and Place Based Investment received in advance of payments. Totals 27,587 24,993 (2,594) (10.4%) 46,382 47,108 (726) (1.6%) 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 OCTOBER 2022 Service Area Annual Budget £000 Forecast Outturn £000 Forecast Variance £000 % Variance Explanation Amenity (496) (581) 85 (17.1%) Additional income in Cardross Crematorium. Waste Collection 34 8 (50) (147.1%) Overspend in vehicle repairs. Waste Collection 467 55 (81) (17.3%) Overspend in fuel. Waste Collection (1,692) (211) 420 (24.8%) Additional income for Commercial Refuse. Waste Disposal 189 52 (334) (176.7%) Additional expenditure for increase in disposal fees. Marine (1,656) (122) (439) 26.5% Under-recovery of income. A red variance is a forecast variance which is greater than +/- £50,000.
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SOCIAL WORK – AS AT 31 OCTOBER 2022 The department is currently forecasting an overspend of £0.286m (0.4%) which is mainly 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 underspend of £0.068m (0.3%). This is largely due to demand for services across Children and Families and timing of payments across Adult Services. Forecast Outturn Position Service Annual Budget £000 Forecast Outturn £000 Current Forecast Variance £000 Previous Forecast Variance £000 Change £000 Chief Officer Integration 2,875 1,068 1,807 1,489 318 Head of Strategic Planning and Performance 436 441 (5) 8 (13) Head of Health and Community Care 37,466 38,262 (796) (480) (316) Head of Acute and Complex Care 17,052 18,770 (1,718) (1,637) (81) Head of Children and Families 15,082 14,656 426 357 69 Totals 72,911 73,197 (286) (263) (23) Year to Date Position -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… Key Financial Successes: Delivered an underspend at the end of 2021/22 after automatic earmarkings and full repayment of £2.759m of debt owed to the Council for prior year deficits. This should allow for future investment and transformation across Social Work with prior year deficits now fully repaid.
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Key Financial Challenges: Proposed Actions to address Financial Challenges: Deliver the outstanding savings total for 2022/23 of £425k (as at October 2022). Maintain a close working relationship with the HSCP Service Improvement Team in order 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 in the medium to long term. Support from finance to assist strategic managers to look beyond the short term to identify and plan the changes which will be needed to address the expected ongoing budget challenge over the next 3 to 5 years. Support the HSCP through the recovery from the COVID-19 pandemic. There have been additional costs and pressures across the HSCP as a direct result of the partnership’s response to COVID-19. These costs are captured and reported to the Scottish Government via Mobilisation Plans. Support from finance to assist the service in capturing details of all additional costs associated with the response to COVID-19 to ensure these are included in Scottish Government funding returns. Use of agency staff to support service delivery across Older People services due to recruitment and retention challenges within the service. Year to date spend £0.879m, with a forecast spend of £1.468m at October 2022. Close working relationship with the HSCP to support the costing of a recovery plan to stabilise the service and ensure it is operationally and financially sustainable.
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SOCIAL WORK – OBJECTIVE SUMMARY AS AT 31 OCTOBER 2022 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 166 236 70 29.7% 446 442 4 0.9% The YTD position is as a result of over-recovery of income for a post recharged to Scottish Government. The forecast variance is outwith reporting criteria. Chief Officer Integration Social Work Central Support (316) 532 848 159.4% 2,429 626 1,803 74.2% The YTD variance is due to underspends on centrally held funds (£691k) and YTD over-recovery on vacancy savings (£60k) combined with YTD underspends on central repairs (£23k) and over-recovery on income for Covid-19 income loss from charges to clients and general timing of income receipts in year (£61k). The forecast reflects underspends on centrally held funds (£1.185m) combined with forecast over-recovery on vacancy savings (£591k) and additional Covid-19 funding to adjust for lost income from clients (£33k). (150) 768 918 189.1% 2,875 1,068 1,807 75.1% Head of Strategic Planning & Performance Management & Central Costs 220 214 (6) (2.8%) 410 417 (7) (1.7%) Outwith reporting criteria Head of Strategic Planning & Performance Service Development 26 12 (14) (116.7%) 26 24 2 7.7% The YTD position is as a result of budget profiling on Charges to Health Boards. The forecast variance is outwith reporting criteria. 246 226 (20) (119.5%) 436 441 (5) 6.0% Head of Health and Community Care Management & Central Costs 216 287 71 24.7% 482 466 16 3.3% The YTD underspend is as a result of budget profiling on Charges to Other Bodies and Third Party Payments. The forecast variance is outwith reporting criteria.
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Head of Health and Community Care Older People 14,087 13,896 (191) (1.4%) 36,984 37,796 (812) (2.2%) The YTD overspend is a result of overspends on staffing in Homecare and Residential Units (agency), partially offset by timing of payments and income collected for Homecare and Care Home Placements. The forecast overspend reflects demand for Care Home Placements, Respite, Homecare and the use of agency staff. This is partially offset by forecast underspends on Carer's Respite which will be reallocated across respite services in adult care in the following months. 14,303 14,183 (120) (0.9%) 37,466 38,262 (796) (2.1%) Head of Acute and Complex Care Learning Disabilities 3,558 2,566 (992) (38.7%) 11,953 13,422 (1,469) (12.3%) The YTD overspend is due to demand for services within Supported Living combined with slippage against budget savings targets (£203k). This is partially offset by underspends on staff payroll costs in Day Services and YTD spend on Respite due to timing of demand for placements. The forecast overspend reflects higher than budgeted demand for services in Supported Living (£708k) and Joint Residential (£468k) combined with slippage in achievement of budget savings (£305k). Head of Acute and Complex Care Management & Central Costs 54 68 14 20.6% 124 119 5 4.0% The YTD underspend is as a result of budget profiling on Staff Training costs and Payments to Other Bodies. The forecast variance is outwith reporting criteria. Head of Acute and Complex Care Mental Health 533 512 (21) (4.1%) 2,348 2,461 (113) (4.8%) Outwith reporting criteria. The forecast overspend reflects higher than budgeted demand for services in Supported Living and Residential Placements. Head of Acute and Complex Care Physical Disability 1,269 1,167 (102) (8.7%) 2,627 2,768 (141) (5.4%) The YTD overspend is due to demand for services within Supported Living partly offset by underspends on Residential Placements as a result of timing of
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invoice payment. The forecast overspend reflects higher than budgeted demand for services in Supported Living, Residential Placements and Respite. 5,414 4,313 (1,101) (30.9%) 17,052 18,770 (1,718) (18.4%) Head of Children & Families Child Protection 1,540 1,540 0 0.0% 3,244 3,224 20 0.6% Outwith reporting criteria. Head of Children & Families Children with a Disability 452 496 44 8.9% 957 956 1 0.1% Outwith reporting criteria. Head of Children & Families Criminal Justice 77 137 60 43.8% 88 72 16 18.2% The YTD underspend is as a result of staff turnover and vacancies combined with underspends on staff travel and subsistence as a result and forecast underspends on payments to other bodies. The forecast underspend is on payments to other local authorities combined with staff travel and subsistence partially offset by a forecast overspend on payroll costs. Head of Children & Families Looked After Children 3,866 4,113 247 6.0% 7,623 7,203 420 5.5% The YTD underspend is due to underspends in Fostering and Adoption due to demand for these services combined with underspends on Residential Placements and over-recovery of income in Supporting Young People Leaving Care from the Home Office for UASC. The forecast underspend reflects demand for Fostering, Adoption and Residential Placements as well as over-recovery of income across Supporting Young People Leaving Care for UASC activity from the Home Office. This is partially offset by overspends in the Children's Houses on payroll costs. Head of Children & Families Management & Central Costs 1,550 1,590 40 2.5% 3,170 3,201 (31) (1.0%) Outwith reporting criteria.
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7,485 7,876 391 5.0% 15,082 14,656 426 2.8% GRAND TOTAL 27,298 27,366 68 0.3% 72,911 73,197 (286) (0.4%) 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 OCTOBER 2022 Subjective Category YTD Actual £000 YTD Budget £000 YTD Variance £000 % Variance Annual Budget £000 Forecast Outturn £000 Forecast Variance £000 % Variance Explanation Employee 16,363 16,235 (128) (0.8%) 31,069 31,859 (790) (2.5%) Both the YTD overspend and forecast overspend is due to overspends in Residential Units (both children and adults) and across Homecare as a result of use of bank and agency staff. This is partially offset by the forecast over-recovery on vacancy savings (£591k). Premises 553 528 (25) (4.7%) 1,140 1,292 (152) (13.3%) The YTD variance is outwith reporting criteria. The forecast overspend is as a result of rental costs in Learning Disability Supported Living and utility costs at the Hostels. Supplies & Services 1,079 791 (288) (36.4%) 1,331 1,704 (373) (28.0%) The YTD overspend reflects slippage on the achievement of budget savings and YTD overspends on small tools and equipment due to timing of purchases at the Equipment Store. The forecast overspend is mainly due to forecast slippage on budget savings (£305k) combined with overspends on staff subsistence at Tigh a Rudha and across various other supplies and services at the Adult Services Residential Units. Transport 322 371 49 13.2% 631 530 101 16.0% The YTD underspend is due to various travel underspends across the service which is to be expected due to the changes to travel habits as a result of Covid-19 and the current level of staffing vacancies across the service. The forecast year end outturn reflects the continued reduction in travel costs across the service and an expectation that different ways of working will continue to reduce future spending on travel. Third Party 28,889 28,487 (402) (1.4%) 62,041 62,534 (493) (0.8%) The YTD and forecast overspend is as a result of demand for purchased care services across Adult Services. This is partially offset by underspends in Fostering, Adoption and Children's Residential Placements as well as underspends on unallocated centrally held funds. Income (19,908) (19,046) 862 (4.5%) (23,301) (24,722) 1,421 (6.1%) Both the YTD and forecast over recovery of income is mainly due to increased income from fees, charges and recharges. Totals 27,298 27,366 68 0.3% 72,911 73,197 (286) (0.4%)
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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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SOCIAL WORK – RED VARIANCES AS AT 31 OCTOBER 2022 Service Area Annual Budget £000 Forecast Outturn £000 Forecast Variance £000 % Variance Explanation Social Work Central Support 2,429 626 1,803 74.2% The forecast reflects underspends on centrally held funds (£1.185m) combined with forecast over-recovery on vacancy savings (£591k) and additional Covid-19 funding to adjust for lost income from clients (£33k). Looked After Children 7,623 7,203 420 5.5% The forecast underspend reflects demand for Fostering, Adoption and Residential Placements as well as over-recovery of income across Supporting Young People Leaving Care for UASC activity from the Home Office. This is partially offset by overspends in the Children's Houses on payroll costs. Older People 36,984 37,796 (812) (2.2%) The forecast overspend reflects demand for Care Home Placements, Respite, Homecare and the use of agency staff. This is partially offset by forecast underspends on Carer's Respite which will be reallocated across respite services in adult care in the following months. Physical Disability 2,627 2,768 (141) (5.4%) The forecast overspend reflects higher than budgeted demand for services in Supported Living, Residential Placements and Respite. Learning Disability 11,953 13,422 (1,469) (12.3%) The forecast overspend reflects higher than budgeted demand for services in Supported Living (£708k) and Joint Residential (£468k) combined with slippage in achievement of budget savings (£305k). Mental Health 2,348 2,461 (113) (4.8%) The forecast overspend reflects higher than budgeted demand for services in Supported Living and Residential Placements. A red variance is a forecast variance which is greater than +/- £50,000.
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MONITORING OF SAVINGS – AS AT 31 OCTOBER 2022 New policy savings were identified for the three year period 2022-23 to 2024-25 and these were agreed by Council in February 2022. Council agreed to policy savings of £0.280m in 2022-23 rising to £0.286m by 2024-25. The position of historical policy saving options is as follows: - 2021/22 – those not delivered or that have further increase in value in 2022-23 onwards total £0.732m - 2020/21 – those not delivered total £0.050m - 2019/20 – all delivered - 2018/19 - those not delivered total £0.498m The 2022-23 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 four savings categorised as having a potential shortfall and two currently delayed as summarised below: Saving Saving Agreed Status Detail Shortfall/ Delayed Value TB07 – Depots Feb-18 Potential Shortfall - there is a risk that the original saving will not be achieved in full. The achievement of this saving is being reviewed by officers over the coming weeks and an update will be reported to Members in due course. £107,500 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 £100,000 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. £30,000
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DEG05 – Building Standards Feb-20 Potential Shortfall - there is a risk that the original saving will not be achieved in full. Building market has slowed due to the increase in cost and availability of some materials. Reservations that the type of applications we receive may not realise sufficient additional income using the BCIS guide. £50,000 TB09 – Public Conveniences Feb-18 Delayed - The full saving will not be achieved in line with the original estimated timescale. Tender returns have been received significantly over the available budget and work is underway to profile different options to take this scheme forward in whole or in part. £24,000 PROP01 - Office Rationalisation Feb-21 Delayed - The full saving will not be achieved in line with the original estimated timescale The rationalisation programme has been delayed due to the volume of information required to determine the number of office spaces required for continued service delivery, consultations and change in third party demand for disposals than originally forecast. However, Our Modern Workspace is now well underway with a town by town approach. Savings will be made by a reduction in cleaning, NDR and utilities of mothballed, closed, leased or disposed of office buildings. 2 buildings have been closed and 2 buildings have been leased for other purposes, and all existing buildings except those identified as Hub buildings have not operated to full capacity since 2020 and therefore a reduction in utility consumption has been identified and is currently being costed. £250,000 All policy saving options previously agreed are noted in the table below for information.
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2022-23 2022-23 £000 FTE Chief Executive's Unit FS02 Feb-22 Financial Services Reduction of vacant 0.4FTE Local Tax Assistant role 10.0 0.40 Delivered Executive Director Douglas Hendry PROP01 Feb-21 Commercial Services Rationalisation of the Council's property estate over a three year programme to identify properties which can either be disposed of or used to generate commercial income 294.20 4.0 Delayed TB17 Feb-18 Commercial Services Identify opportunities for office rationalisation and raising income 121.50 0.0 On Track to be Delivered 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 On Track to be Delivered ED5 Feb-21 Education Review and reduce Clerical Support Entitlement using updated school rolls. 121.00 5.7 Delivered ED01 Feb-22 Education Removal of Community Learning Development Manager Post 66.5 1.00 Delivered Executive Director Kirsty Flanagan CSS03 Feb-22 Customer Support Services Restructure of CSP/Registration Team at Helensburgh Civic Centre 19.0 0.50 Delivered DEG01 Feb-22 Development and Economic Growth Crown Estate Administration Contribution to Project Delivery 101.0 0.00 On Track to be Delivered 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 Potential Shortfall DEG02 Feb-21 Development and Economic Growth Reduction to overtime budget in the provision of fire cover at the airports for weather delayed flights. Arrangements are in place that staff no longer remain at the airport and there is a cut-off period. 22.00 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 20.00 0.0 Delivered DEG10 Feb-21 Development and Economic Growth Maximise income through additional private water supplies income from risk assessments of supplies and introducing a new charge for the provision of shellfish movement documents 17.50 0.0 Delivered TB07 Feb-18 Roads and Infrastructure Services Create one main depot in key areas to reduce costs 172.50 0.0 Potential Shortfall TB13b Feb-18 Roads and Infrastructure Services Roads & Amenity Services charging (non- statutory services) 150.00 0.00 Potential Shortfall R&I17 Feb-21 Roads and Infrastructure Services Public transport fare scale increase 76.00 0.0 On Track to be Delivered R&I03 Feb-21 Roads and Infrastructure Services Administrative support - rationalise across service 50.00 2.0 Delivered 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 On Track to be 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 TB12b Feb-18 Roads and Infrastructure Services Review charges for stadiums to enable improvement work 30.00 0.0 Potential Shortfall R&I04 Feb-21 Roads and Infrastructure Services Fees and charges - commercial waste, TTROs, permits/licenses. Access to debt recovery systems will assist. One post created as a spend to save 25.00 -1.0 Delivered 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&I16 Feb-21 Roads and Infrastructure Services Introduce new fees for electric vehicle charging 16.00 0.0 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 TOTAL 1,559.7 11.6 Status of ImplementationTemplate Ref Saving Agreed Service Savings Option
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ARGYLL AND BUTE COUNCIL FINANCIAL SERVICES POLICY AND RESOURCES COMMITTEE 8 DECEMBER 2022 FINANCIAL RISKS ANALYSIS 2022-23 1 EXECUTIVE SUMMARY 1.1 The main purpose of this report is to provide a summary of the key financial risks facing the Council. 1.2 A number of Council wide risks, both revenue and capital have been identified along with risks for each department and service of the Council. For each departmental risk the financial impact has been quantified and the likelihood assessed based on the standard risk matrix. 1.3 There are 5 Council wide revenue risks identified for 2022-23 currently amounting to £2.323m. 1.4 There are currently 41 departmental risks totalling £5.090m. Of the 41 departmental risks, one is categorised as almost certain and 4 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 8 DECEMBER 2022 FINANCIAL RISKS ANALYSIS 2022-23 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 2022-23. 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 2021-22 was an underspend of £0.310m which was partly due to fixed price contracts that had
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been secured which have now expired. 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 £0.706m. 3.2.2 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 £0.553m. 3.2.3 At the budget meeting on 24 February 2022, the Council agreed 6 new policy savings options that would deliver savings over the period 2022-23 to 2024-25. The savings to be delivered in 2022-23 amount to £0.280m. Whilst the Council have a good track record in delivering savings, a 10% shortfall on this savings target would amount to £0.028m. 3.2.4 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 October 2022, the net HSCP outturn in 2022-23 is estimated to be a £0.786m overspend (£0.286m from Social Work and £0.500m from Health). 3.2.5 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. The Bank of England are currently forecasting that inflation will continue to rise until around Quarter 1 of 2023 where after they forecast that it will start to fall. We will continue to closely monitor the situation and update our financial forecasts using the best information available to us. 3.2.6 The Council wide risks are noted within the table below. Description Likelihood Assessed Financial Impact £000 Energy costs increase by 20% greater than anticipated 3 706 1% variation in Council Tax Income 2 553 10% shortfall on Savings Options 2 28 IJB refer to Council for additional funding to deliver social work services 3 286 1% variation of General Inflation Risk 4 750 Total 2,323
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Capital 3.2.7 The finance settlement announcement on 20 December 2021 provided details of the Local Government funding for 2022-23 and there is therefore certainty as to what our funding is in respect of General Capital Grant and the specific capital grants already distributed. 3.2.8 The capital plan for 2022-23 includes an estimate of £1.387m in respect of capital receipts. This is based on an assessment provided by the Special Projects Team in January 2022. A 10% variation equates to £0.139m and this would require to be managed across the capital programme. 3.2.9 3.2.10 3.2.11 General feedback from Scotland Excel and the Project Managers indicates that price increases and uncertainty are being 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, 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 include those projections within the capital monitoring report, for others it has been more difficult and an overspend has not been forecast at this stage but there are likely to be further significant financial impacts not yet reported within the following projects: - Rothesay Pavilion - Harbour Investment Programme - Helensburgh Waterfront Development - Universal Free School Meals 3.2.12 For those liabilities/risks to the capital programme that were known at the start of 2022-23 it was agreed at the budget meeting in February 2022 to use amounts from the Unallocated General Fund, the 2021-22 Revenue Surplus, COVID-19 specific funding and additional borrowing to mitigate these risks.
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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 1 125 0 0 2 115 0 0 1 500 4 740 Executive Director Douglas Hendry 2 20 7 545 9 870 4 380 0 0 22 1,815 Executive Director Kirsty Flanagan 3 160 3 240 9 2,135 0 0 0 0 15 2,535 Total 6 305 10 785 20 3,120 6 880 1 500 41 5,090 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 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. 5 500 Roads and Infrastructure Services Roads Materials - Bitumen Increased cost of asphalt material due to price of crude oil rising. Discussions emerging from the industry about possible rationing of bitumen which, if applied, will affect our programmes due to availability 3 400
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3.3.3 The other risks classified as likely are: SERVICE TITLE OF RISK DESCRIPTION OF RISK LIKELIHOOD FINANCIAL IMPACT £000 Commercial Services Catering Costs – Changes to Food and Drink in Schools Standards The Scottish Government reviewed the regulations that govern the food and drinks currently provided in schools. The proposed changes were published in June 2019 and were implemented from Easter 2021. The revised standards focus on reducing sugar, reducing red and red processed meat and increasing fibre. Thus far, there has been an increase in costs and a reduction in demand for school meals. 4 150 Commercial Services Catering Purchases Increased supplier charges. This estimate does not include the additional risk to food cost and uptake from the changes to food and drink standards in schools. 4 100 Legal and Regulatory Support Contract RPI for NPDO and Hub Schools Increase in RPI would result in higher costs. 4 100 Legal and Regulatory Support 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 13 October 2022, as follows: - The risk in relation to increased tipping fees has been removed as the risk has been realised. The forecast variance has been added to the ledger for overspends and cost pressure added for future years. - The risk in relation to street lighting has been reduced to possible as consideration is currently being given by officers to funding availability and the programme of works. Due to mitigations put in place the risk may not be as likely to materialise as previously expected. - The risk in relation to Roads Materials – Bitumen has been reduced to possible due to the mitigating actions in place meaning the risk may not be as likely to materialise. 3.5 Monitoring of Financial Risks 3.5.1 Financial risks will be reviewed and monitored on a two monthly basis and will be included in the pack of financial reports submitted to Policy and Resources Committee.
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3.6 Potential Future Risks 3.6.1 At the Policy and Resource meeting on 13th October 2022, it was discussed that the Dunbartonshire and Argyll and Bute Valuation Joint Board would be publishing new NDR rates for 2023-24 at the end of November. There is a risk of increased NDR costs across the Council’s buildings and schools in 2023-24 year. 3.6.2 Within Customer Support Services, there is a risk in relation to the cost of additional bandwidth required to deliver the Education Digital Strategy due to a more digitalised learning curriculum. It is uncertain when this risk will arise. 4 CONCLUSION 4.1 This report summarises the key financial risks facing the Council. There are a number of Council wide risks and 41 departmental risks identified; one is categorised as almost certain and 6 are categorised as likely. The financial risks are monitored routinely and actions put in place to continue to mitigate the risks. 5 IMPLICATIONS 5.1 Policy - None. 5.2 Financial - The financial value of each risk is included within the appendix. 5.3 Legal - None. 5.4 HR - None. 5.5 Fairer Scotland Duty - None. 5.5.1 Equalities – protected characteristics - None. 5.5.2 Socio-economic Duty - None. 5.5.3 Islands - None. 5.6 Climate Change - None. 5.7 Risk - Financial risks are detailed within the appendix. 5.8 Customer Service - None. Kirsty Flanagan Section 95 Officer 4 November 2022 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 OCTOBER 2022 DEPARTMENT SERVICE TITLE OF RISK DESCRIPTION OF RISK MITIGATING ACTIONS IN PLACE LIKELIHOOD FINANCIAL IMPACT £000 LIKELIHOOD FINANCIAL IMPACT £000 Chief Executive's Unit 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. 5 500 5 500 Chief Executive's Unit 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 Chief Executive's Unit Financial Services Sundry Debt Recovery Recovery of debt becomes more difficult to pursue in the current economic climate. Robust monitoring of arrangements with debt collection agency. Joint working with Legal Services to assist services with the recovery of aged debt. 3 85 3 85 Chief Executive's Unit Financial Services Non-Domestic Rates Relief Risk of demand changing due to legislative changes outwith our control or new charitable businesses. Outwith direct management control. 3 30 3 30 Executive Director Douglas Hendry Commercial Services Property - Central Repairs Increased demands on central repairs as a result of the decrease in capital funding available and increases in supplier/contractor charges. Joint strategy with procurement colleagues to reduce potential impact of supplier/contractor charges. Close monitoring of central repairs budgets and commitments and instructing only essential repairs. 3 300 3 300 Executive Director Douglas Hendry Commercial Services Catering Costs – Changes to Food and Drink in Schools Standards The Scottish Government reviewed the regulations that govern the food and drinks currently provided in schools. The proposed changes were published in June 2019 and were implemented from Easter 2021. The revised standards focus on reducing sugar, reducing red and red processed meat and increasing fibre. Thus far, there has been an increase in costs and a reduction in demand for school meals. There is a need to work with Education colleagues to ensure the maximum uptake of school meals in secondary schools is achieved. This is very challenging given the reduction in secondary school meal uptake due to COVID. 4 150 4 150 Executive Director Douglas Hendry Commercial Services Catering Costs - Provision of Meals to Early Years Children The Children and Young People (Scotland) Act places duties on Councils to provide meals in an Early Years setting to entitled children where sessions span over lunch time. The total quantum of funding of £1.2m 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 Education colleagues to implement requirements and closely monitor financial implications. Costs likely to be contained within overall early years funding allocation. 2 100 2 100 Executive Director Douglas Hendry Commercial Services Catering Purchases Increased supplier charges. This estimate does not include the additional risk to food cost and uptake from the changes to food and drink standards in schools. Joint strategy with procurement colleagues to reduce potential impact. Control food wastage/portion controls. 4 100 4 100 As at 31 August 2022 As at 31 October 2022
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APPENDIX 1 DEPARTMENT/SERVICE FINANCIAL RISKS AS AT 31 OCTOBER 2022 DEPARTMENT SERVICE TITLE OF RISK DESCRIPTION OF RISK MITIGATING ACTIONS IN PLACE LIKELIHOOD FINANCIAL IMPACT £000 LIKELIHOOD FINANCIAL IMPACT £000 As at 31 August 2022 As at 31 October 2022 Executive Director Douglas Hendry Commercial Services Catering - Implementation of Universal Free School Meals in Primary Schools The Scottish Government may not give the local authority adequate funds to support the policy Catering Manager sits on National Operational Delivery Group 2 100 2 100 Executive Director Douglas Hendry Commercial Services Surplus Properties Ongoing market difficulties lead to increased numbers of surplus properties, there are residual running costs associated with surplus properties. One Council property team now in place. 3 50 3 50 Executive Director Douglas Hendry Commercial Services Leisure Service Level Agreements Increase in RPI resulting in requests for additional funding. Monitoring annual alteration to contract RPI rate and mitigation through financial forecasting and review of existing budget. 2 25 2 25 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 20 2 20 Executive Director Douglas Hendry Education Central Repairs Increased demands on budget as a result of increase in statutory and emergency repairs and increases in supplier/contractor charges. Regular liaison with Property Services re prioritisation and commitment of in-year spend. 2 100 2 100 Executive Director Douglas Hendry Education ASN Support Demand for ASN support continues to increase, resulting in an additional resource requirement. The effect of COVID-19 has further increased demand on this service. Scottish Government has given additional funding for "additional support needs priority for learning" and this has been built into the budget, this will help reduce the demand risk 3 100 3 100 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 altered the implementation plan to align it to the Scottish Government 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 into the staffing model funded by Scottish Government. Continuous monitoring and review of the implementation plan, usage and resources. 3 100 3 100
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APPENDIX 1 DEPARTMENT/SERVICE FINANCIAL RISKS AS AT 31 OCTOBER 2022 DEPARTMENT SERVICE TITLE OF RISK DESCRIPTION OF RISK MITIGATING ACTIONS IN PLACE LIKELIHOOD FINANCIAL IMPACT £000 LIKELIHOOD FINANCIAL IMPACT £000 As at 31 August 2022 As at 31 October 2022 Executive Director Douglas Hendry Education Legislative Requirements - Education (Scotland) Act Education (Scotland) Act 2000 was enacted March 2016. This places additional requirements on Councils to carry out assessments of the need for the provision of Gaelic Medium Primary Education (GMPE) and the duty to support and promote Gaelic Education. May lead to additional staffing requirements. Monitoring developments of the implementation of the Act and statutory guidance produced and adhered too. 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 Executive Director Douglas Hendry Legal and Regulatory Support NPDO - Reduction in insurance savings within NPDO Schools Increase in insurance costs as a result of Covid-19 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 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
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APPENDIX 1 DEPARTMENT/SERVICE FINANCIAL RISKS AS AT 31 OCTOBER 2022 DEPARTMENT SERVICE TITLE OF RISK DESCRIPTION OF RISK MITIGATING ACTIONS IN PLACE LIKELIHOOD FINANCIAL IMPACT £000 LIKELIHOOD FINANCIAL IMPACT £000 As at 31 August 2022 As at 31 October 2022 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 Scottish Government reducing planning fees due to poor performance by the Planning Authority. Details of national Planning Performance Co- ordinator and Fee Reform still awaited. Maintain high levels of performance as articulated by performance markers detailed in Planning Performance Framework annual report. 1 100 1 100 Executive Director Kirsty Flanagan Development and Economic Growth Planning fee shortfalls Due to downturn in economic / building activity, in particular renewable energy development and other major developments could lead to planning fee income shortfalls leading to revenue budget pressures. Current income levels are looking more positive, however, we are dependent on some high value applications coming in which if 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. 3 100 3 100 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 Development and Economic Growth Airfields and Air Services - usage The PSO for the existing air service to Coll and Colonsay operating from Connel Airport is due for renewal in October 2023. Possibility that this will create a budget pressure for a new contract to be established to serve the needs of the island communities. Tenders have been received and are currently at the evaluation process with Procurement. Once this process is complete, a more definitive position will be known. 2 10 2 10 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. The recent storm damage to Bute Sea Wall is likely to cost in excess of £1m to repair so the value on this risk has been updated for 22-23 in recognition of the potential costs associated with this risk Routine inspections to deal with potential weak areas - based on a stitch in time repair regime. 3 750 3 750
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APPENDIX 1 DEPARTMENT/SERVICE FINANCIAL RISKS AS AT 31 OCTOBER 2022 DEPARTMENT SERVICE TITLE OF RISK DESCRIPTION OF RISK MITIGATING ACTIONS IN PLACE LIKELIHOOD FINANCIAL IMPACT £000 LIKELIHOOD FINANCIAL IMPACT £000 As at 31 August 2022 As at 31 October 2022 Executive Director Kirsty Flanagan Roads and Infrastructure Services Residual Waste H&L and Tiree There is a potential increase to tipping fees and haulage costs for H&L residual waste. The Council’s supplier Barr Environmental (contract to end of 2023) lost a tribunal relating to the underpayment of landfill tax, which may have led to the Council having to source alternatives at a higher cost. Barr appealed the decision which was heard in the Spring and they won the case which should have reduced or eliminated this financial risk. However, the Scottish Government laid an Amendment Order on Friday 1 July 2022 which came into force at 1700 on 1 July which indicates that Landfill tax will be due on materials previously not chargeable and we have now received notification of an increase in the cost which officers are currently assessing Officers currently assessing the potential impact on the Council. 4 655 Executive Director Kirsty Flanagan Roads and Infrastructure Services Roads Materials - Bitumen Increased cost of asphalt material due to price of crude oil rising. Discussions emerging from the industry about possible rationing of bitumen which, if applied, will affect our programmes due to availability Increased costs are currently being managed but with further increases likely, this is being closely monitored by managers to evaluate the impact. 4 400 3 400 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 3 365 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 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 3 100 Executive Director Kirsty Flanagan Roads and Infrastructure Services Ferry Services - income Changes to ferry services resulting in reduced passenger income. Closely monitor passenger number information coming from CalMac to identify any emerging trends with reducing passenger numbers. 3 40 3 40 42 5,745 41 5,090
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ARGYLL AND BUTE COUNCIL POLICY AND RESOURCES COMMITTEE FINANCIAL SERVICES 8 DECEMBER 2022 CAPITAL BUDGET MONITORING REPORT – 31 OCTOBER 2022 1.0 EXECUTIVE SUMMARY 1.1 This report provides an update on the position of the capital budget as at 31 October 2022. The report provides information on the financial position in respect of the capital plan and also the performance in terms of delivery of capital plan projects. 1.2 Financial Position: Current Year to Date – actual net expenditure to date is £15,685k compared to a budget for the year to date of £15,413k giving rise to an overspend for the year to date of £272k (1.76%). Forecast Outturn for 2022-23 – forecast net expenditure for the full financial year is £35,549k compared to an annual budget of £45,971k giving rise to a forecast underspend for the year of 10,422k (22.67%). Total Capital Plan – forecast total net project costs on the total capital plan are £180,363k compared to a total budget for all projects of £179,913k giving rise to a forecast overspend for the overall capital plan of £450k (0.25%). 1.3 Project Delivery: Asset Sustainability – Out of 93 projects there are 92 projects (99%) on track, 1 project (1%) off track but recoverable and no projects off track (0%). Service Development - Out of 41 projects there are 37 projects (90%) on track, 3 projects (7.5%) off track but recoverable and 1 projects (2.5%) off track. Strategic Change – Out of 26 projects there are 22 projects (85%) on track, 2 projects (7.5%) are off track but recoverable and 2 projects (7.5%) off track. 1.4 1.5 The Capital Programme is funded by various income streams as detailed in Appendix 5. Additional funding since the last report is for Kilmory Business Park Phase 2AA from HIE and Rural Community Growth Fund. The Council is projecting £1,387k of capital receipts this financial year. To date, no receipts have been received and we are anticipating that we will not receive the full amount budgeted for 2022-23, however, this appears to be a delay rather than a permanent reduction and over the life of the entire capital programme there is no overall impact. This will be closely monitored throughout the year.
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ARGYLL AND BUTE COUNCIL POLICY AND RESOURCES COMMITTEE FINANCIAL SERVICES 8 DECEMBER 2022 CAPITAL BUDGET MONITORING REPORT – 31 OCTOBER 2022 2.0 INTRODUCTION 2.1 2.2 2.3 2.4 2.5 This report provides an update on the position of the capital budget as at 31 October 2022. The report provides information on the financial position in respect of the capital plan and also 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 is on pause whilst potential funding options are being considered. The financial information included within this report therefore excludes amounts relating to Rothesay Pavilion. 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. It was agreed at Environment, Development and Infrastructure Committee on 2 June 2022 that the Chair would approach the Scottish Government with a view to securing additional resources to support the scheme. Project Managers were asked to identify specific Covid-19 impacts on the capital programme. At the budget meeting on 25 February 2021, the Council agreed to provide £2.5m of funding and following agreement at the Policy and Resources Committee on 14 October 2021, this, plus a further £0.146m, was added to the capital programme. Furthermore, at the budget meeting on 24 February 2022, an additional £3.9m was set aside for future capital contract increases. This includes up to £1.2m for Campbeltown Flood Scheme, the final costs of which are estimated to be £15.215m. The Scottish Government will fund 80% of scheme costs with the Council expected to contribute an estimated £3.043m. 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 – project currently paused due to increased costs as a result of the main contractor being placed into administration in March 2020.
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4.0 CURRENT YEAR TO DATE FINANCIAL POSITION 4.1 4.2 Overall Position Actual net expenditure to date is £15,685k compared to a budget for the year to date of £15,413k giving rise to an overspend for the year to date of £272k (1.76%). 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 9,304 9,233 71 Service Development 2,035 2,045 (10) Strategic Change 4,074 4,407 (333) Total 15,413 15,685 (272) Service: ICT 620 641 (21) Education 3,233 3,158 75 Live Argyll 181 167 14 Health & Social Care Partnership 136 146 (10) Shared Offices 119 75 44 Roads & Infrastructure 6,941 7,040 (99) Development & Economic Growth 922 868 54 CHORD 3,261 3,590 (329) Total 15,413 15,685 (272) Material variances are explained in Appendix 1 and there are a number of small variances contributing to the year to date underspend. Harbour Investment Programme – likely to be contractual cost increases in future years (expected to be funded from increased fees and charges). Helensburgh Waterfront Development – commercial negotiations are ongoing with the main contractor to determine the financial impact. Universal Free School Meals – delayed roll out to P6 and P7 and uncertain capital funding levels available from Scottish Government (delay not mentioned as part of Resource Spending Review). Other general construction inflationary increases. 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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5.0 FORECAST OUTTURN 2022-23 5.1 Overall Position Forecast net expenditure for the full financial year is £35,549k compared to an annual budget of £45,971k giving rise to a forecast underspend for the year of £10,422k (22.67%). 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 COVID-19 Related £'000 Forecast Variance Non COVID-19 Related £'000 Forecast Variance £'000 Asset Sustainability 25,172 25,172 0 0 0 Service Development 4,627 3,746 0 881 881 Strategic Change 16,172 6,631 0 9,541 9,541 Total 45,971 35,549 0 10,422 10,422 Service: ICT 1,299 1,299 0 0 0 Education 6,240 6,252 0 (12) (12) Live Argyll 554 567 0 (13) (13) Health & Social Care Partnership 570 570 0 0 0 Shared Offices 4,197 4,213 0 (16) (16) Roads & Infrastructure 26,632 15,760 0 10,872 10,872 Development & Economic Growth 2,560 2,602 0 (42) (42) CHORD 3,919 4,286 0 (367) (367) Total 45,971 35,549 0 10,422 10,422 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 £180,363k compared to a total budget for all projects of £179,913k giving rise to a forecast overspend for the overall capital plan of £450k (0.25%). 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 Capital Plan Variance COVID-19 Related £'000 Capital Plan Variance Non COVID- 19 Related £'000 Total Capital Plan Variance £'000 Asset Sustainability 52,010 52,010 0 0 0 Service Development 19,248 19,315 0 (67) (67) Strategic Change 108,655 109,038 0 (383) (383) Total 179,913 180,363 0 (450) (450) Service: ICT 5,007 4,997 0 10 10 Education 41,976 41,988 0 (12) (12) Live Argyll 3,368 3,381 0 (13) (13) Health & Social Care Partnership 4,222 4,222 0 0 0 Shared Offices 21,507 21,523 0 (16) (16) Roads & Infrastructure 54,711 54,763 0 (52) (52) Development & Economic Growth 5,284 5,284 0 0 0 CHORD 43,838 44,205 0 (367) (367) Total 179,913 180,363 0 (450) (450) 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 160 projects within the Capital Plan, 151 are Complete or On Target, 6 are Off Target and Recoverable and 3 are Off Track. 7.2 Project Position The table below shows the Performance Status of the Projects in the Capital Plan. Project Type: Complete / On Target Off Target/ Recoverable Off Target/ Problem Total Asset Sustainability 92 1 0 93 Service Development 37 3 1 41 Strategic Change 22 2 2 26 Total 151 6 3 160 Service: ICT 7 0 0 7 Education 29 1 0 30 Live Argyll 27 1 0 28 Health & Social Care Partnership 18 1 0 19 Shared Offices 21 0 0 21 Roads & Infrastructure 32 1 2 35 Development & Economic Growth 15 1 0 16 CHORD 2 1 1 4 Total 151 6 3 160
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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:
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8.0 OFF TRACK PROJECTS 8.1 9.0 9.1 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 Major Projects Helensburgh Waterfront Development Current Year and total project expenditure Overspend due to multiple global issues as well as delays in connection to mains electricity supply which led to temporary power supplies to maintain the timeliness of the program. Elements relating to COVID-19 currently being projected and will be updated for next update. Service Development Fleet Management Current year expenditure Supplier shortages has caused expected 22-23 expenditure to slip into 23-24. Strategic Change Harbour Investment Program Current year expenditure Project tenders fell through for a number of projects in the program which were anticipated to be underway in 22-23. Budget to slip into future years. STRATEGIC CHANGE PROJECTS Appendix 7 gives detailed information in respect of the Strategic Change Projects within the Capital Plan. The appendix gives details of the forecast cost of each project against the approved budget, the start and anticipated completion date of the project and an assessment of the risks of the project and, if these are not green, gives an explanation of the problem.
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10.0 10.1 CHANGES TO CAPITAL PLAN The table below shows proposed changes to the Capital Plan at summary level which include slippages, accelerations and virements. Explanations relating to the specific projects involved can be seen in Appendix 4. The updated capital plan incorporating these proposed changes can be found in Appendix 9. Department Prev. Agreed Changes 2022-23 2022-23 2023- 24 2024- 25 Future Years Total Capital Plan £’000 £’000 £’000 £’000 £’000 £’000 Asset Sustainability (497) 0 0 0 0 0 Service Development 127 (958) 958 0 0 0 Strategic Change (18,941) (9,924) (790) (1,175) 11,889 0 Total (19,311) (10,882) 168 (1,175) 11,889 0 Service: ICT (219) 0 0 0 0 0 Education 143 0 0 0 0 0 Live Argyll (681) 0 0 0 0 0 Health & Social Care Partnership (1,537) 0 0 0 0 0 Shared Offices 0 0 0 0 0 Roads & Infrastructure (17,236) (10,924) 210 (1,175) 11,889 0 Development & Economic Growth (760) 42 (42) 0 0 0 Major Projects 979 0 0 0 0 0 Total (19,311) (10,882) 168 (1,175) 11,889 0 11.0 FUNDING 11.1 11.2 The Capital Programme is funded by various income streams as detailed in Appendix 5. Additional funding since the last report is for Kilmory Business Park Phase 2AA from HIE and Rural Community Growth Fund. The Council is projecting £1,387k of capital receipts this financial year. To date, no receipts have been received and we are anticipating that we will not receive the full amount budgeted for 2022-23, however, this appears to be a delay rather than a permanent reduction and over the life of the entire capital programme there is no overall impact. This will be closely monitored throughout the year.
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12.0 12.1 12.2 12.3 12.4 12.5 12.6 12.7 12.8 IMPLICATIONS Policy – Monitors progress against the capital plan. Financial – Monitors funding and commitments of the capital plan. Legal – Available funding may not address all Statutory and Regulatory requirements in relation to Health and Safety. HR – Available funding may have an impact on the sustainability of the Property Design Team and Infrastructure Design Team. Fairer Scotland Duty – None. 12.5.1 Equalities – protected characteristics – None. 12.5.2 Socio-economic Duty – None. 12.5.3 Islands – None. Climate Change – The Council is committed to addressing climate change via projects within the capital plan. Risk – There are risks around increasing capital contract costs and the level and timing of capital receipts. Customer Service – None. Kirsty Flanagan Executive Director / Section 95 Officer 7 Novemeber 2022 Policy Policy Lead for Finance and Commercial Services – Councillor Gary Mulvaney For further information contact: Anne Blue, Head of Financial Services 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
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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 Helensburgh Waterfront Development 2,895 3,255 (360) Overspend on project, details provided in Variance report. Other variances under £50k 88 Total value of non-material variances less than +/-£50k Total (272)
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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 Harbour Investment Program 15,550 5,626 0 9,924 9,924 Tenders for projects have fallen through and lead to a delay in project progress in 22-23. Slipped into 23-24 Fleet Management 2,187 1,187 0 1,000 1,000 Supplier shortages have caused delays to when purchases can be fulfilled. Slipped into 23-24 Helensburgh Waterfront Development 2,895 3,262 0 (367) (367) Overspend on project, details provided in Variance Report Other variances under £50k 0 135 135 Total value of non-material variances less than +/- £50k. Total 0 10,422 10,422
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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 Helensburgh Waterfront Development 22,924 22,557 0 (367) (367) Overspend on project, details provided in Variance Report Other variances under £50k (83) (83) 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 (450) (450)
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APPENDIX 4 – Changes to Capital Plan and Financial Impact OVERALL COST CHANGES Project 2022- 23 £’000 2023- 24 £’000 2024- 25 £’000 Future Years £’000 Total Capital Plan £’000 Recommendation Explanation No overall cost changes this reporting period. Total Cost Changes 0 0 0 0 0 SLIPPAGES AND ACCELERATIONS Project 2022-23 £’000 2023-24 £’000 2024-25 £’000 Future Years £’000 2022-23 Slippage Related to COVID-19 £’000 2022-23 Slippage Related to Non COVID- 19 £’000 Total 2022-23 £’000 Recommendation Explanation Fleet Management (1,000) 1,000 0 0 0 (1,000) (1,000) Slip budget into future years. Supplier lead times causing delays. Expenditure has slipped from 2022-23 into 2023-24 Harbour Investment Program (9,924) (790) (1,175) 11,889 0 (9,924) (9,924) Slip budget into future years. Project timescale delays due to tenders falling through. Expenditure has slipped from 2022-23 into 2023-24 Ardrishaig North Active Travel 42 (42) 0 0 0 42 (42) Accelerate budget from future years. Project forecasted expenditure ahead of initial schedule. Budget accelerated from 23-24 into 22-23. Total Slippages and Accelerations (10,822) 168 (1,175) 11,889 0 (10,822) (10,822) Net Impact of Changes (10,822) 168 (1,175) 11,889 0 (10,822) (10,822)
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CAPITAL PROGRAMME FUNDING Appendix 5 Estimated Capital Funding Carry Forwards from 21-22 Slippage / Acceleration Additional Funding Updated Capital Funding Available Estimated Capital Funding Carry Forwards from 21-22 Slippage / Acceleration Additional Funding Updated Capital Funding Available Estimated Capital Funding Carry Forwards from 21-22 Slippage / Acceleration Additional Funding Updated Capital Funding Available General Capital Grant 9,569 0 0 0 9,569 9,569 0 0 157 9,726 9,569 0 0 235 9,804 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 1,387 0 0 0 1,387 1,095 0 0 0 1,095 0 0 0 0 0 Flooding Allocation 155 0 0 0 155 155 0 0 0 155 155 0 0 0 155 Ring Fenced Capital Grant 4,656 2,722 0 268 7,646 0 5,728 0 0 5,728 0 0 0 0 0 Restricted Funding 1,486 609 -210 2,693 4,578 1,150 0 210 0 1,360 0 0 0 0 0 Funded by Reserves 3,145 4,388 -1,256 1,289 7,566 36 172 -75 0 133 0 0 1,331 0 1,331 Additional Funding from Revenue 0 0 0 12 12 0 0 0 25 25 0 0 0 0 0 Insurance 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Harbour Investment Programme 31,180 2,484 -28,038 0 5,626 16,900 0 5,335 0 22,235 31,600 0 -4,575 0 27,025 Prudential Borrowing 15,528 3,352 -3,845 25 15,060 5,006 -1,429 3,845 -25 7,397 27 0 0 0 27 Loans Fund Review 0 4,025 0 0 4,025 0 0 0 0 0 0 0 0 0 0 COVID Funding 1,640 2,167 0 0 3,807 0 0 0 0 0 0 0 0 0 0 67,713 19,747 -33,349 4,287 58,398 32,878 4,471 9,315 157 46,821 40,318 0 -3,244 235 37,309 BREAKDOWN OF ADDITIONAL FUNDING Additional Funding 2022-23 2023-24 Reported C'town Museum LA income 40 Live Argyll Jun-22 H&L/Rosneath Cycleways 140 Jun-22 Nature Restoration Fund 238 Jun-22 Rothesay Pontoons 315 Grant Funding Jun-22 Ardrishaig North 280 Grant Funding Jun-22 Lismore Ferry 7 External Income Jun-22 Lochgilphead PS Demolition 11 Reserves Jun-22 Fleet Management 499 Reserves Jul-22 Roads Reconstruction 958 STTS Jul-22 Gartrecfk Landfill 640 Reserves Aug-22 Lochgilphead Primary School Demolition 143 Reserves Sep-22 Lochgilphead Depot 37 Revenue Funding Oct-22 Kilmory Business Park 979 Grant Funding Oct-22 Total 4,287 0 2024-252023-24 Source 2022-23 SPT Scottish Government
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OFF TRACK PROJECT Appendix 6 Project Name: Harbour Investment Programme Project Manager: Scott Reid Risk: Low Initial Start Date: 2017 Proposed End Date: - How was this project initially funded? Prudential Borrowing Please detail any additional funding. n/a Previously Reported Committee and Date: Harbour Board Next Reported Committee and Date: n/a Why is the project classified as off target? Expenditure for 2022-23 has slipped into future years. What has caused the issue outlined above? Various individual project changes/delays, as per below. Campbeltown ‘Wall A’: Reassessment of business plan outlook and scope of project. The original Asset Management Plan contained £1.0+m of Capital dredging to form a deep vessel channel to the wall replacement although it is not clear if the port would benefit more from larger vessels. Design team are working on a possible alternative for comparison which includes a drying out location for fishing and smaller vessels to make repairs etc. Update: Argyll & Bute Council Infrastructure Design team are presently working on the revised plans. Craignure: Extension to initial phase OBC and consultation. The STAG for this project produced a preferred option which received a very negative response from residents of Craignure who were concerned about the scale and location of the proposed option within Craignure. In order to forestall any future planning objections the planning scope has been looking at alternative locations closer to the existing infrastructure and assessing with CMAL and CFL as to likely disruptions to services during works. Also the Harbour Board made an official request to Transport Scotland for a limited vessel size to operate on the route so that the existing road network infrastructure would not be overwhelmed by a larger vessel discharging capacity numbers of vehicles at peak times. This gave the project some scope to readdress and reduce the size of the required terminal infrastructure at Craignure. The public and contentious nature of the debate has required consideration to ensure Argyll & Bute Council has the correct option with the maximum chance for agreement across the communities and stakeholders. Update: Consultation meeting with all of the stakeholders is presently being arranged by the Policy Lead / Harbour Board Chair. Craignure PAS: Consultancy and changes to planning scope. The existing Passenger Access System (PAS) at Craignure was out of service in February 2021 due to safety concerns and while the necessary risk assessments and modifications were completed. CMAL has been clear that the PAS is now close to the end of its operational lifespan and that the modifications are merely a stay regarding decommissioning. Royal Haskoning has been engaged by Argyll & Bute Council to develop tender documentation and design specs for a compliant replacement PAS at the existing terminal location. CFL / CalMac provided an extensive list of potential in scope vessels which
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included short, long term and contingency options which means estimates for the cost of a replacement Passenger Access System are significant. The equipment should therefore be incorporated into the long term plans for the terminal to justify and spread the cost over the longer period. Update: Original design engineer had left the post this year and the replacement recently appointed. Consultants are finalising tender documentation after reviewing the design with the aim of maximising options as to the potential future use of the PAS when the Long-Term Option for Craignure has been completed. Dunoon & Kilcreggan: Pause to larger programme of works from Transport Scotland / CMAL. Extension to pre-consultation period and elections. Transport Scotland is still working on delivery of the Islands Connectivity Plan and the Needs Based Assessment which are necessary for the funding of vital aspects of this project. The Dunoon and Kilcreggan OBC is one part of three work streams along with ‘Gourock Infrastructure’ and ‘Replacement Vessels’ both of which require funding approval dependant on the delivery of the Transport Scotland reports. Also and parallel to this during the earlier part of the year, the upcoming local elections gave good reason to pause on our own consultation until new Members were available to sit on the various Reference Groups and take part in the very emotive discussions around these projects. Update: The Transport Scotland work is expected in the New Year, however the vessel and Gourock works have been given approval to proceed. Ground Investigation works are now progressing in Gourock and the vessel design is expected to be finalised by the end of the year, with IDM Stage 2 approval (OBC) / Ministerial approval in February 2023. The press release to announce our own consultation period for Dunoon is with Policy Lead for approval following which the consultation will commence on line. The consultation content for Kilcreggan is in final draft and will be with Exec’ Officers for sighting and approval very soon. The consultation for Kilcreggan will open shortly afterwards and in the meantime Officers and consultants will meet with the newly formed Kilcreggan Community Council to discuss options. Tender documentation is currently being prepared for our own Ground Investigations at both Dunoon and Kilcreggan locations. Iona & Fionnphort: Planning and licencing due to EIA findings and revision of design specifications. Environmental Impact Assessment (EIA) was expected in October 2021 but was delayed by lack of response by Marine Scotland and an unexpected discovery of (protected) sea grass within the proposed breakwater’s location. Update: Infrastructure Design are continuing designs and detailed drawings for the overnight berthing options at Fionnphort, with works anticipated to commence subject to planning and Marine Scotland approval. Possible in scope vessel design information with electrical charging and crew access requirements from CMAL / CFL have aided in the design process. Progress to date includes: 1. Contact Marine Scotland (including EIA) 2. Receive comments from Marine Scotland on methodology and plans Ongoing actions: 3. Mitigate and confirm points with Marine Scotland on plans & outline methodology 4. Final approval from Marine Scotland (on plans)
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The Sea Grass issue, which was raised previously was not mentioned in the recent responses from Marine Scotland. Next steps: There are 4 x licenses to apply for (early next year is estimated) 2 x Crown Estates Scotland – 1 for Temporary moorings for barges etc. and 1 for the permanent structures. 2 x Marine Scotland – 1 for construction and 1 for dredging. At the same time as we are waiting for the licences to be processed, we will be preparing the tender documentation for the works. The same process will count for Fionnphort but will lag behind somewhat because of the more complex design and works required for the overnight berth and safe crew access. For that reason we will take both parts of the project separately to ensure that Iona is not delayed further. Port Askaig: Revision of planning due to land acquisition issues. The Islay Project Coordination Group has been established with Argyll and Bute Council, Transport Scotland, CFL / CalMac and CMAL to coordinate projects with planned works at Port Ellen, vessel requirements and enabling works. Update: A new area adjacent to the approach road has been investigated, however due to landowner rejecting the sale of land and excessive letting cost, further plans will be now be developed with the aim of Port Askaig being ready for the new Islay vessel’s arrival. Rothesay Harbour: Piling and Grouting tender failure – revision of methodology and work scope. Following a review of design and construction methods by AECOM, re-tendering for these phase two works was issued in September 2021 without success. A further review is currently underway to determine the best way forward to ensure the works can take place safely and efficiently with minimal disruption to the CFL / CalMac ferry service. Update: Revised methodology and scope of works is in the final stages. Preparation of tender for works will follow. What action will be taken to rectify this issue? Delayed projects will proceed with the revised schedule. What are the implications of the action proposed? Projects will be fulfilled future financials years.
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OFF TRACK PROJECT Appendix 6 Project Name: Helensburgh Waterfront Development Project Manager: Andrew Collins Risk: Med Initial Start Date: Construction Phase commenced 31 August 2020 Proposed End Date: Practical Completion of Section 2 of the Construction Phase is on programme for 6 February 2023 How was this project initially funded? Prudential Borrowing - £16.255 million S75 Funding - £0.195 million Capital Receipt (Retail Development) - £1.000 million Please detail any additional funding: UKG LIBOR Funding - £5.000 million SportScotland - £0.100 million Place Based Investment - £0.163 million Live Argyll (FF&E) - £0.344 million Previously Reported Committee and Date: Helensburgh & Lomond Area Committee – 20 September 2022 Next Reported Committee and Date: TBC – subject to conclusion of commercial claim negotiations as between Contractor and Employer Why is the project classified as off target? Reporting an overspend against approved budget of £0.367M. What has caused the issue outlined above? A combination of factors including: delays in achieving permanent connection to mains electrical supply, which required the provision of temporary power supplies and heating to maintain overall contract programme; conformance by the Contractor with the Scottish Government COVID Regulations pertaining to construction sites; impact of a number of external international/global factors e.g. COVID-19, BREXIT, Russian Invasion of Ukraine on the availability and cost of essential construction sector materials, resources, plant and equipment. What action will be taken to rectify this issue? We are currently awaiting the formal assessment of the Contractors contractual claim by our appointed Cost Consultants, which will enable us to undertake and conclude the commercial negotiations with them as to the final contract sum. Additionally we are assessing all commercial/legal options to address issues of underperformance on the delivery of services etc., and which have had a detrimental impact upon the project costs e.g. the delay in achieving the permanent connection to the mains electrical supply
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What are the implications of the action proposed? We have previously reported to Committees of the Council that, whilst the value of the Construction Contract, at Award Stage was £19,971,918.51, given the global health pandemic and other economic impacts which have emerged since the Contract Award, the Anticipated Final Cost for the Contract and therefore the project was likely to increase. We are working with the Contractor, Heron Bros Ltd, to ensure that any claims for Extensions of Time, and/or Loss and Expense, are properly and fully substantiated and assessed in accordance with the requirements of the Contract. This work stream is on-going and its’ outcome will be reported to the relevant committees of the Council in due course. It is therefore likely that we may require to secure additional budget support, and which could include funds from the COVID specific additional funding that the Council has been in receipt of.
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OFF TRACK PROJECT Appendix 6 Project Name: Fleet Management Project Manager: John Blake Risk: Low Initial Start Date: 2018-19 Proposed End Date: 2023-24 How was this project initially funded? Prudential Borrowing Please detail any additional funding. Previously Reported Committee and Date: n/a Next Reported Committee and Date: n/a Why is the project classified as off target? Underspend in 2022-23 resulting in budget being slipped to 2023-24. What has caused the issue outlined above? Supplier shortages in vehicles has resulted in delays in receiving orders resulting in delays in incurring expenditure. What action will be taken to rectify this issue? Vehicles on order, awaiting delivery. Expenditure will be incurred once vehicles are received. What are the implications of the action proposed? Budget slipped from 2022-23 to 2023-24.
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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 Harbour Investment Programme 1,802 5,626 91,292 91,292 01/04/2017 31/03/2028 Red Budget slipped into future years. Helensburgh Waterfront Development 1,387 3,262 22,924 22,557 01/04/2017 31/03/2024 Red Current overspend being investigated by Project Manager with Contractor. CHORD Oban 7,129 651 7,905 7,905 27/10/2016 31/03/2022 Amber Issues with contract close out impacting on timescales. TIF - Halfway House Roundabout 0 47 640 640 tbc tbc Amber Scope of project still to be determined - budget to be reprofiled. Campbeltown Flood Scheme 181 9,098 15,215 15,215 01/08/2016 31/03/2023 Green Dunoon Primary 7,170 304 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 9,878 99 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 2,496 136 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 2,700 791 3,900 3,900 01/08/2016 31/12/2022 Green Tender for final package of works still to be awarded. Helensburgh Office Rationalisation 11,500 310 11,838 11,838 25/04/2013 31/12/2022 Green Project subject to legal dispute. CHORD Dunoon 12,238 55 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 0 1,120 1,129 1,129 01/02/2022 01/09/2023 Green Development Agreement still to be concluded. Carbon Management Business Cases 201 60 261 261 01/02/2014 31/12/2022 Green Budget to be reprofiled pending development of new projects. Carbon Management - Group Heating Conversion Project 1,938 10 1,948 1,948 01/02/2016 31/12/2022 Green Complete. Carbon Management - Non Education 14 21 50 50 01/04/2015 31/12/2022 Green Projects being determined. NPDO Schools Solar PV Panel Installations 761 183 944 944 26/06/2014 31/12/2022 Green Budget to be reprofiled pending development of new projects. Non NPDO Schools Solar PV Panel Installations 400 88 488 488 20/03/2014 31/12/2022 Green Budget to be reprofiled pending development of new projects. Carbon Management Capital Property Works 2016/17 19 20 39 39 01/02/2016 31/12/2022 Green Budget to be reprofiled pending development of new projects. Oil to Gas Heating Conversions 182 5 187 187 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 447 101 590 590 22/01/2015 31/12/2022 Green Campbeltown Schools Redevelopment 1,649 76 2,130 2,130 16/02/2012 30/11/2018 Green Physically complete - negotiations with contractor delaying payment of financial sums outstanding. CHORD - Helensburgh 6,483 28 6,557 6,557 29/09/2011 30/04/2015 Green Main contract complete. Art project originally proposed for 21-22 now slipped into 22-23. TIF - North Pier Extension 214 0 214 214 06/12/2017 06/12/2021 Green Complete. TIF - Lorn/Kirk Road 1,959 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. Strategic Change Total 75,250 22,093 211,684 211,317 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 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 2,411 2,291 120 7,955 7,955 0 19,175 19,175 0 Executive Director Kirsty Flanagan 6,893 6,942 (49) 19,607 19,607 0 35,225 35,225 0 Asset Sustainability Total 9,304 9,233 71 27,562 27,562 0 54,400 54,400 0 Service Development Projects Executive Director Douglas Hendry 792 823 (31) 1,242 1,267 (25) 15,144 15,169 (25) Executive Director Kirsty Flanagan 1,312 1,329 (17) 7,431 6,525 906 33,010 33,052 (42) Service Development Total 2,104 2,152 (48) 8,673 7,792 881 48,154 48,221 (67) Strategic Change Projects Campbeltown Schools Redevelopment 38 38 0 76 76 0 2,130 2,130 0 Dunoon Primary 257 257 0 304 304 0 10,869 10,869 0 Replacement of Oban High 96 100 (4) 136 136 0 3,250 3,250 0 Kirn Primary School 65 65 0 99 99 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 60 60 0 261 261 0 NPDO Schools Solar PV Panel Installations 0 0 0 183 183 0 944 944 0 Non NPDO Schools Solar PV Panel Installations 0 0 0 88 88 0 488 488 0 Carbon Management Fuel Conversions 0 0 0 0 0 0 107 107 0 Carbon Management Capital Property Works 2016/17 0 0 0 20 20 0 39 39 0 Carbon Management - Group Heating Conversion Project 0 0 0 10 10 0 1,948 1,948 0 Kilmory Biomass Carbon Management 0 0 0 0 0 0 956 956 0 Oil to Gas Heating Conversions 0 0 0 5 5 0 187 187 0 Campbeltown Office Rationalisation 0 0 0 1 1 0 596 596 0 Helensburgh Office Rationalisation 10 10 0 310 310 0 11,838 11,838 0 Clean Energy 0 0 0 551 567 (16) 729 745 (16) Clean Energy 2022-23 0 0 0 500 500 0 500 500 0 Campbeltown Flood Scheme 260 260 0 9,098 9,098 0 15,215 15,215 0 Street Lighting LED Replacement 87 87 0 791 791 0 3,900 3,900 0 Harbour Investment Programme 241 241 0 15,550 5,626 9,924 91,292 91,292 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 0 0 0 101 101 0 590 590 0 TIF - Halfway House Roundabout 0 0 0 47 47 0 640 640 0 CHORD - Helensburgh 0 0 0 28 28 0 6,557 6,557 0 CHORD Dunoon 4 7 (3) 55 55 0 12,522 12,522 0 CHORD Oban 0 0 0 651 651 0 7,905 7,905 0 Helensburgh Waterfront Development 2,895 3,255 (360) 2,895 3,262 (367) 22,557 22,924 (367) HWD - FFE (Funded by LA) 344 305 39 344 344 0 350 350 0 Kilmory Business Park Phase 2AA 18 18 0 1,120 1,120 0 1,129 1,129 0 Dunoon Pier OBC 0 0 0 0 0 0 2,844 2,844 0 Strategic Change Total 4,315 4,643 (328) 33,045 23,504 9,541 212,896 213,279 (383) Total Expenditure 15,723 16,028 (305) 69,280 58,858 10,422 315,450 315,900 (450) INCOME Asset Sustainability Executive Director Douglas Hendry 0 0 0 0 0 0 0 0 0 Executive Director Kirsty Flanagan 0 0 0 (2,390) (2,390) 0 (2,390) (2,390) 0 Asset Sustainability Total 0 0 0 (2,390) (2,390) 0 (2,390) (2,390) 0 Service Development Projects Executive Director Douglas Hendry 0 (38) 38 0 0 0 (7,771) (7,771) 0 Executive Director Kirsty Flanagan (69) (69) 0 (4,046) (4,046) 0 (21,135) (21,135) 0 Service Development Total (69) (107) 38 (4,046) (4,046) 0 (28,906) (28,906) 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 (241) (241) 0 (15,550) (15,550) 0 (91,292) (91,292) 0 01 TIF - Lorn/Kirk Road 0 0 0 (149) (149) 0 (2,167) (2,167) 0 H'burgh CHORD Public Realm Imprv 0 0 0 0 0 0 (570) (570) 0 Helensburgh Waterfront Development 0 0 0 (195) (195) 0 (6,493) (6,493) 0 HWD - FFE (Funded by LA) 0 5 (5) 0 0 0 (350) (350) 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 (241) (236) (5) (16,873) (16,873) 0 (104,241) (104,241) 0 Total Income (310) (343) 33 (23,309) (23,309) 0 (135,537) (135,537) 0 Net Total 15,413 15,685 (272) 45,971 35,549 10,422 179,913 180,363 (450) Appendix 8 Full Year This Financial Year Total Project Costs 31 October 2022
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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 6 4 2 474 474 0 1,084 1,084 0 Coastal Protection 0 0 0 20 20 0 200 200 0 Coastal Change Adaptation 0 0 0 159 159 0 159 159 0 Bute Sea Wall Repairs 49 49 0 750 750 0 750 750 0 Helensburgh Flood Mitigation 0 0 0 432 432 0 432 432 0 Bridge Strengthening 107 132 (25) 1,349 1,349 0 2,049 2,049 0 Local Bridge Maintenance Fund 66 66 0 1,237 1,237 0 5,447 5,447 0 Roads Reconstruction 5,155 5,155 0 9,433 9,433 0 16,294 16,294 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 0 740 740 0 1,040 1,040 0 Environmental Projects 0 0 0 734 734 0 934 934 0 Play Park Refurbishment 0 0 0 155 155 0 938 938 0 Public Convenience Upgrades 0 0 0 82 82 0 82 82 0 Footway Improvements 147 147 0 269 269 0 269 269 0 Glengorm - Capping 0 0 0 82 82 0 82 82 0 Glengorm - Cell and Transfer Station (PB) 840 840 0 1,200 1,200 0 1,200 1,200 0 EV Quick Chargers 0 0 0 93 93 0 93 93 0 Tobermory Car Park 56 64 (8) 951 951 0 951 951 0 Active Travel 0 0 0 500 500 0 500 500 0 Bin Replacement Programme 0 0 0 100 100 0 100 100 0 Server Sustainability 4 4 0 187 187 0 251 251 0 PC Replacement 461 463 (2) 522 522 0 522 522 0 Telecomms Network 2 18 (16) 78 78 0 98 98 0 Block Allocation - ICT 0 0 0 0 0 0 1,690 1,690 0 Asset Sustainability Total 6,893 6,942 (49) 19,607 19,607 0 35,225 35,225 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 43 43 0 1,424 1,424 0 Fleet Management - Prudential Borrowing 0 0 0 2,187 1,187 1,000 4,861 4,861 0 Fleet Management 174 174 0 499 499 0 3,358 3,358 0 Lismore Ferry 13 19 (6) 13 19 (6) 666 672 (6) Oban Depot Development Project 0 62 (62) 17 62 (45) 2,117 2,162 (45) 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 (1) 0 (1) 157 158 (1) Safe Streets, Walking and Cycling (CWSS) 0 0 0 544 544 0 2,878 2,878 0 SPT - bus infrastructure 0 0 0 0 0 0 1,405 1,405 0 Cycleways - H&L (FSPT) 0 0 0 240 240 0 3,112 3,112 0 Helensburgh Public Realm - Arts Strategy Fund 0 0 0 51 51 0 53 53 0 Town Centre Funds 579 578 1 1,054 1,054 0 3,876 3,876 0 Dunoon Cycle Bothy 212 166 46 266 266 0 279 279 0 Dunoon STEM Hub 11 11 0 603 603 0 608 608 0 Ardrishaig North Active Travel 161 150 11 670 712 (42) 880 880 0 Nature Restoration Fund 0 0 0 346 346 0 346 346 0 Gibraltar Street Public Realm Improvements 9 13 (4) 248 248 0 250 250 0 Hermitage Park 0 0 0 69 69 0 3,314 3,314 0 West Coast UAV Innovation Logistics and Training Hub 0 0 0 0 0 0 0 0 0 Applications Projects 153 156 (3) 558 558 0 2,883 2,873 10 Service Development Total 1,312 1,329 (17) 7,431 6,525 906 33,010 33,052 (42) Strategic Change Projects Campbeltown Flood Scheme 260 260 0 9,098 9,098 0 15,215 15,215 0 Street Lighting LED Replacement 87 87 0 791 791 0 3,900 3,900 0 Harbour Investment Programme 241 241 0 15,550 5,626 9,924 91,292 91,292 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 0 0 0 101 101 0 590 590 0 TIF - Halfway House Roundabout 0 0 0 47 47 0 640 640 0 Strategic Change Total 588 588 0 25,588 15,664 9,924 114,021 114,021 0 Total Expenditure 8,793 8,859 (66) 52,626 41,796 10,830 182,256 182,298 (42) INCOME Asset Sustainability EV Quick Chargers 0 0 0 (97) (97) 0 (97) (97) 0 Glengorm Capping/New Cell - Prudential Borrowing 0 0 0 (560) (560) 0 (560) (560) 0 Tobermory Car Park 0 0 0 (775) (775) 0 (775) (775) 0 Asset Sustainability Total 0 0 0 (2,390) (2,390) 0 (2,390) (2,390) 0 Service Development Projects Applications Projects 0 0 0 (46) (46) 0 (437) (437) 0 Safe Streets, Walking and Cycling 0 0 0 (550) (550) 0 (2,483) (2,483) 0 SPfT 0 0 0 0 0 0 (1,243) (1,243) 0 Cycleways - H&L (FSPT) 0 0 0 (240) (240) 0 (3,212) (3,212) 0 Town Centre Funds 0 0 0 (382) (382) 0 (1,794) (1,794) 0 Dunoon STEM Hub 0 0 0 (100) (100) 0 (608) (608) 0 Ardrishaig North Active Travel (50) (50) 0 (50) (50) 0 (50) (50) 0 Dunoon Cycle Bothy 0 0 0 (209) (209) 0 (279) (279) 0 Gibraltar Street Public Realm Improvements 0 0 0 0 0 0 (250) (250) 0 Hermitage Park 0 0 0 0 0 0 (3,245) (3,245) 0 Fleet Management - PB 0 0 0 (2,187) (2,187) 0 (4,861) (4,861) 0 Fleet Management (8) (8) 0 0 0 0 0 0 0 Lochgilphead Depot Rationalisation 0 0 0 (1) (1) 0 (1) (1) 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 (150) (150) 0 (150) (150) 0 Lismore Ferry (11) (11) 0 (131) (131) 0 (631) (631) 0 Witchburn Road Demolition 0 0 0 0 0 0 (157) (157) 0 Service Development Total (69) (69) 0 (4,046) (4,046) 0 (21,135) (21,135) 0 Strategic Change Projects Campbeltown Flood 0 0 0 0 0 0 (270) (270) 0 Harbour PB (241) (241) 0 (15,550) (15,550) 0 (91,292) (91,292) 0 01 TIF - Lorn/Kirk Road 0 0 0 (149) (149) 0 (2,167) (2,167) 0 Strategic Change Total (241) (241) 0 (15,699) (15,699) 0 (93,729) (93,729) 0 Total Income (310) (310) 0 (22,135) (22,135) 0 (117,254) (117,254) 0 Net Departmental Total 8,483 8,549 (66) 30,491 19,661 10,830 65,002 65,044 (42) 31 October 2022 Full Year This Financial Year Total Project Costs FINANCIAL SUMMARY NET EXPENDITURE - EXECUTIVE DIRECTOR KIRSTY FLANAGAN Appendix 8
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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 1,985 1,913 72 4,424 4,424 0 10,904 10,904 0 Live Argyll 181 167 14 546 546 0 2,086 2,086 0 Health and Social Care Partnership 136 146 (10) 516 516 0 2,922 2,922 0 Shared Offices 109 65 44 2,469 2,469 0 3,263 3,263 0 Asset Sustainability Total 2,411 2,291 120 7,955 7,955 0 19,175 19,175 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 23 23 0 579 579 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 (12) 0 (12) 707 719 (12) 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 789 820 (31) 1,036 1,036 0 7,751 7,751 0 CO2 Monitoring - Covid Mitigation in Schools 3 3 0 116 116 0 192 192 0 Early Learning and Childcare - 1140 Hours - CFCR 0 0 0 0 0 0 111 111 0 Bowmore Primary School - Gaelic Medium Grant 0 0 0 38 38 0 38 38 0 Riverside Leisure Centre Refurbishment 0 0 0 (13) 0 (13) 1,232 1,245 (13) Dunclutha Childrens Home 0 0 0 54 54 0 1,300 1,300 0 Service Development Total 792 823 (31) 1,242 1,267 (25) 15,144 15,169 (25) Strategic Change Projects Campbeltown Schools Redevelopment 38 38 0 76 76 0 2,130 2,130 0 Dunoon Primary 257 257 0 304 304 0 10,869 10,869 0 Replacement of Oban High 96 100 (4) 136 136 0 3,250 3,250 0 Kirn Primary School 65 65 0 99 99 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 60 60 0 261 261 0 NPDO Schools Solar PV Panel Installations 0 0 0 183 183 0 944 944 0 Non NPDO Schools Solar PV Panel Installations 0 0 0 88 88 0 488 488 0 Carbon Management Fuel Conversions 0 0 0 0 0 0 107 107 0 Carbon Management Capital Property Works 2016/17 0 0 0 20 20 0 39 39 0 Carbon Management - Group Heating Conversion Project 0 0 0 10 10 0 1,948 1,948 0 Kilmory Biomass Carbon Management 0 0 0 0 0 0 956 956 0 Oil to Gas Heating Conversions 0 0 0 5 5 0 187 187 0 Campbeltown Office Rationalisation 0 0 0 1 1 0 596 596 0 Helensburgh Office Rationalisation 10 10 0 310 310 0 11,838 11,838 0 Clean Energy 0 0 0 551 567 (16) 729 745 (16) Clean Energy 2022-23 0 0 0 500 500 0 500 500 0 CHORD Oban 0 0 0 651 651 0 7,905 7,905 0 CHORD - Helensburgh 0 0 0 28 28 0 6,557 6,557 0 CHORD Dunoon 4 7 (3) 55 55 0 12,522 12,522 0 Helensburgh Waterfront Deveopment 2,895 3,255 (360) 2,895 3,262 (367) 22,557 22,924 (367) HWD - FFE (Funded by LA) 344 305 39 344 344 0 350 350 0 Kilmory Business Park Phase 2AA 18 18 0 1,120 1,120 0 1,129 1,129 0 Dunoon Pier OBC 0 0 0 0 0 0 2,844 2,844 0 Strategic Change Total 3,727 4,055 (328) 7,457 7,840 (383) 98,875 99,258 (383) Total Expenditure 6,930 7,169 (239) 16,654 17,062 (408) 133,194 133,602 (408) INCOME Asset Sustainability Education 0 0 0 0 0 0 0 0 0 Live Argyll 0 0 0 0 0 0 0 0 0 Asset Sustainability Total 0 0 0 0 0 0 0 0 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 CO2 Monitoring - Covid Mitigation in Schools 0 (38) 38 0 0 0 0 0 0 Bowmore Primary School - Gaelic Medium Grant 0 0 0 0 0 0 (38) (38) 0 Service Development Total 0 (38) 38 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 (195) (195) 0 (6,493) (6,493) 0 HWD - FFE (Funded by LA) 0 5 (5) 0 0 0 (350) (350) 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 Kilmory Business Park Phase 2AA 0 0 0 (979) (979) 0 (979) (979) 0 Strategic Change Total 0 5 (5) (1,174) (1,174) 0 (10,512) (10,512) 0 Total Income 0 (33) 33 (1,174) (1,174) 0 (18,283) (18,283) 0 Net Departmental Total 6,930 7,136 (206) 15,480 15,888 (408) 114,911 115,319 (408) 31 October 2022 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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CAPITAL PLAN 2022-23 APPENDIX 9 Overall Summary Service Previous Years £000's 2022-23 £000s 2023-24 £000s 2024-25 £000s 2025-26 £000s 2026-27 £000s Total £000s Education 36,575 6,240 4,843 2,226 0 0 49,884 Shared Offices 16,687 4,197 544 428 0 0 21,856 ICT 2,126 1,345 1,202 771 0 0 5,444 RIS 21,002 36,117 35,959 33,028 30,091 0 156,197 DEG 15,435 4,282 898 0 0 0 20,615 HSCP 1,246 570 1,978 428 0 0 4,222 Live Argyll 1,274 554 1,112 428 0 0 3,368 CHORD 48,486 5,093 285 0 0 0 53,864 Overall Total 142,831 58,398 46,821 37,309 30,091 0 315,450
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CAPITAL PLAN 2022-23 APPENDIX 9 Education Category Service Project Previous Years £000's 2022-23 £000s 2023-24 £000s 2024-25 £000s 2025-26 £000s 2026-27 £000s Total £000s Asset Sustainability Education Asbestos Control/Removal Works 0 7 0 0 0 0 7 Block Allocation - Education 0 12 4,231 2,226 0 0 6,469 Digital Inclusion 20-21 0 9 0 0 0 0 9 Free School Meals 0 14 0 0 0 0 14 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 0 150 0 0 0 0 150 Pre-5's/Nurseries 0 1 0 0 0 0 1 Primary Schools 0 3,354 23 0 0 0 3,377 School Houses - Housing Quality Standard 0 26 0 0 0 0 26 Secondary Schools 0 843 0 0 0 0 843 Asset Sustainability Total 0 4,424 4,254 2,226 0 0 10,904 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 23 0 0 0 0 579 CO2 Monitoring - Covid Mitigation in Schools 76 116 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 6,696 1,036 19 0 0 0 7,751 Early Learning and Childcare - 1140 Hours - CFCR 111 0 0 0 0 0 111 Iona Primary School - Pre Five Unit (600 hours funding) 490 0 0 0 0 0 490 Islay High & Rosneath PS Pitches 719 -12 0 0 0 0 707 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 11,392 1,201 19 0 0 0 12,612 Strategic Change Education Campbeltown Schools Redevelopment 2,054 76 0 0 0 0 2,130 Dunoon Primary School 10,365 304 200 0 0 0 10,869 Kirn Primary School 10,020 99 0 0 0 0 10,119 Replacement of Oban High School 2,744 136 370 0 0 0 3,250 Strategic Change Total 25,183 615 570 0 0 0 26,368 Overall Total 36,575 6,240 4,843 2,226 0 0 49,884
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CAPITAL PLAN 2022-23 APPENDIX 9 Shared Office Category Service Project Previous Years £000's 2022-23 £000s 2023-24 £000s 2024-25 £000s 2025-26 £000s 2026-27 £000s Total £000s Asset Sustainability Shared Offices Argyll House, Dunoon 0 12 0 0 0 0 12 Asbestos Capital Property Works 0 51 0 0 0 0 51 Block Allocation 0 0 236 398 0 0 634 Bowmore Area Office 0 76 0 0 0 0 76 Burnett Building 0 110 0 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 Hill Street Dunoon Rewire 0 33 0 0 0 0 33 Kilmory Castle 0 1,368 43 0 0 0 1,411 Legionella Control Works 0 215 0 0 0 0 215 Manse Brae District Office 0 1 0 0 0 0 1 Manse Brae Roads Office 0 2 0 0 0 0 2 Our Modern Workspace 0 549 87 30 0 0 666 Asset Sustainability Total 0 2,469 366 428 0 0 3,263 Strategic Change Shared Offices Campbeltown Office Rationalisation 595 1 0 0 0 0 596 Carbon Management - Group Heating Conversion Project (Prudential Borrowing)1,938 10 0 0 0 0 1,948 Carbon Management Business Cases (FPB) 201 60 0 0 0 0 261 Carbon Management Capital Property Works 16/17 19 20 0 0 0 0 39 Carbon Management Fuel Conversions (FPB) 107 0 0 0 0 0 107 Cleaner Energy 0 551 178 0 0 0 729 Cleaner Energy 2022-23 0 500 0 0 0 0 500 Helensburgh Office Rationalisation (FPB,REC) 11,528 310 0 0 0 0 11,838 Kilmory Biomass Project OBC (FPB,REV) 956 0 0 0 0 0 956 Non-NPDO Schools PV Panel Installations 400 88 0 0 0 0 488 NPDO Schools Solar PV Panel Installations 761 183 0 0 0 0 944 Oil to Gas Heating Conversions (FPB) 182 5 0 0 0 0 187 Strategic Change Total 16,687 1,728 178 0 0 0 18,593 Overall Total 16,687 4,197 544 428 0 0 21,856
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CAPITAL PLAN 2022-23 APPENDIX 9 Major Projects Category Service Project Previous Years £000's 2022-23 £000s 2023-24 £000s 2024-25 £000s 2025-26 £000s 2026-27 £000s Total £000s Strategic Change CHORD CHORD - Dunoon 12,467 55 0 0 0 0 12,522 CHORD - Helensburgh -Public Realm Imprv 6,529 28 0 0 0 0 6,557 CHORD - Oban 7,254 651 0 0 0 0 7,905 Helensburgh Waterfront Development 19,377 2,895 285 0 0 0 22,557 HWD - FFE 6 344 0 0 0 0 350 Kilmory Business Park Phase 2AA 9 1,120 0 0 0 0 1,129 OBC for Dunoon Pier 2,844 0 0 0 0 0 2,844 Strategic Change Total 48,486 5,093 285 0 0 0 53,864 Overall Total 48,486 5,093 285 0 0 0 53,864
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CAPITAL PLAN 2022-23 APPENDIX 9 ICT Category Service Project Previous Years £000's 2022-23 £000s 2023-24 £000s 2024-25 £000s 2025-26 £000s 2026-27 £000s Total £000s Asset Sustainability ICT Block Allocation - ICT 0 0 919 771 0 0 1,690 PC Replacement 0 522 0 0 0 0 522 Server Sustainability 0 187 64 0 0 0 251 Telecomms Network 0 78 20 0 0 0 98 Asset Sustainability Total 0 787 1,003 771 0 0 2,561 Service Development ICT Applications Projects 2,126 558 199 0 0 0 2,883 Service Development Total 2,126 558 199 0 0 0 2,883 Overall Total 2,126 1,345 1,202 771 0 0 5,444
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CAPITAL PLAN 2022-23 APPENDIX 9 Roads and Infrastructure Services Category Service Project Previous Years £000's 2022-23 £000s 2023-24 £000s 2024-25 £000s 2025-26 £000s 2026-27 £000s Total £000s Asset Sustainability RIS Bin Replacement Programme 0 100 0 0 0 0 100 Bridge Strengthening 0 1,349 350 350 0 0 2,049 Bute Sea Wall Repairs 0 750 0 0 0 0 750 Coastal Change Adaptation 0 159 0 0 0 0 159 Coastal Protection 0 20 80 100 0 0 200 Environmental Projects 0 734 100 100 0 0 934 EV Quick Chargers 0 93 0 0 0 0 93 Flood Prevention 0 474 305 305 0 0 1,084 Footway Improvements 0 269 0 0 0 0 269 Glengorm - Capping 0 82 0 0 0 0 82 Glengorm - Cell and Transfer Station (PB) 0 1,200 0 0 0 0 1,200 Helensburgh CHORD - Signage etc 0 10 0 0 0 0 10 Helensburgh Flood Mitigation 0 432 0 0 0 0 432 Investment in Active Travel 0 500 0 0 0 0 500 Lighting 0 740 150 150 0 0 1,040 Local Bridge Maintenance Fund 0 1,237 4,210 0 0 0 5,447 Play Park Renewal 0 155 157 235 391 0 938 Public Convenience Upgrades 0 82 0 0 0 0 82 Roads Reconstruction 0 9,433 3,449 3,412 0 0 16,294 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 0 951 0 0 0 0 951 Asset Sustainability Total 0 18,820 8,801 4,652 391 0 32,664 Service Development RIS Campbeltown Old Quay 1,381 43 0 0 0 0 1,424 Fleet Management 2,859 499 0 0 0 0 3,358 Fleet Management - Prudential Borrowing 2,674 1,187 1,000 0 0 0 4,861 Jackson's Quarry Refurbishment 285 0 0 0 0 0 285 Lismore Ferry Replacement 618 13 15 20 0 0 666 Lochgilphead Depot Rationalisation 29 8 0 0 0 0 37 Oban Depot Development 2,100 17 0 0 0 0 2,117 Preliminary design for Regional Transport projects (tif) 205 16 0 0 0 0 221 Witchburn Road Demolition 158 -1 0 0 0 0 157 Service Development Total 10,309 1,782 1,015 20 0 0 13,126 Strategic Change RIS Campbeltown Flood Scheme 878 9,098 3,908 1,331 0 0 15,215 Harbour Investment Programme PB 6,706 5,626 22,235 27,025 29,700 0 91,292 Street Lighting LED Replacement 3,109 791 0 0 0 0 3,900 Strategic Change Total 10,693 15,515 26,143 28,356 29,700 0 110,407 Overall Total 21,002 36,117 35,959 33,028 30,091 0 156,197
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CAPITAL PLAN 2022-23 APPENDIX 9 Development and Economic Growth Category Service Project Previous Years £000's 2022-23 £000s 2023-24 £000s 2024-25 £000s 2025-26 £000s 2026-27 £000s Total £000s Service Development DEG Ardrishaig North Active Travel 0 712 168 0 0 0 880 Cycleways - H&L (FSPT) 2,722 240 150 0 0 0 3,112 Dunoon Cycle Bothy 13 266 0 0 0 0 279 Dunoon STEM Hub 5 603 0 0 0 0 608 Gibraltar Street Public Realm Improvements 2 248 0 0 0 0 250 Helensburgh Public Realm - Arts Strategy Fund 2 51 0 0 0 0 53 Hermitage Park 3,245 69 0 0 0 0 3,314 Nature Restoration Fund 0 346 0 0 0 0 346 Safe Streets, Walking and Cycling (CWSS) 2,334 544 0 0 0 0 2,878 SPT - bus infrastructure 1,405 0 0 0 0 0 1,405 Town Centre Funds 2,792 1,054 30 0 0 0 3,876 West Coast UAV Innovation Logistics and Training Hub 0 0 0 0 0 0 0 Service Development Total 12,520 4,133 348 0 0 0 17,001 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 489 101 0 0 0 0 590 TIF - Halfway House Roundabout 43 47 550 0 0 0 640 Strategic Change Total 2,915 149 550 0 0 0 3,614 Overall Total 15,435 4,282 898 0 0 0 20,615
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CAPITAL PLAN 2022-23 APPENDIX 9 Health & Social Care Partnership Category Service Project Previous Years £000's 2022-23 £000s 2023-24 £000s 2024-25 £000s 2025-26 £000s 2026-27 £000s Total £000s Asset Sustainability HSCP Ardfenaig 0 38 87 0 0 0 125 Block Allocation 0 0 577 428 0 0 1,005 Capital Property Works 0 0 139 0 0 0 139 Digitalising telecare 0 0 100 0 0 0 100 Dunoon Hostel 0 33 0 0 0 0 33 Eadar Glinn 0 0 196 0 0 0 196 East King Street Childrens Hospital 0 65 0 0 0 0 65 Glencruitten Hostel 0 115 0 0 0 0 115 Gortonvogie 0 0 80 0 0 0 80 Greenwood/Woodlands 0 90 134 0 0 0 224 Rothesay Community Education Centre 0 0 0 0 0 0 0 Shellach View 0 65 0 0 0 0 65 Struan Lodge Boiler 0 30 222 0 0 0 252 Thomson Home Rothesay 0 0 125 0 0 0 125 Tigh An Rudha HFE 0 80 302 0 0 0 382 Asset Sustainability Total 0 516 1,978 428 0 0 2,922 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 1,246 570 1,978 428 0 0 4,222
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CAPITAL PLAN 2022-23 APPENDIX 9 Live Argyll Category Service Project Previous Years £000's 2022-23 £000s 2023-24 £000s 2024-25 £000s 2025-26 £000s 2026-27 £000s Total £000s Asset Sustainability Live Argyll Aqualibrium 0 47 0 0 0 0 47 Campbeltown Museum - Burnet Bldg 0 0 38 0 0 0 38 Capital Property Works 0 0 1,002 428 0 0 1,430 Inveraray CARS 0 21 0 0 0 0 21 Kintyre Community Education Centre - Lift Shaft Refurbishment 0 30 0 0 0 0 30 Lochgilphead Library Relocation 0 52 0 0 0 0 52 Riverside Leisure Centre - Cladding Upgrade 0 1 45 0 0 0 46 Riverside Leisure Centre - Spa Pool Upgrade 0 80 0 0 0 0 80 Rothesay Swimming Pool 0 0 27 0 0 0 27 The Moat Centre - Gym Store 0 35 0 0 0 0 35 Victoria Halls, Helensburgh 0 100 0 0 0 0 100 Asset Sustainability Total 0 546 1,112 428 0 0 2,086 Service Development Live Argyll Riverside Leisure Centre Refurbishment 1,245 -13 0 0 0 0 1,232 Service Development Total 1,245 -13 0 0 0 0 1,232 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 1,274 554 1,112 428 0 0 3,368
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ARGYLL AND BUTE COUNCIL POLICY AND RESOURCES COMMITTEE FINANCIAL SERVICES 8 DECEMBER 2022 TREASURY MANAGEMENT MONITORING REPORT – 31 OCTOBER 2022 1. EXECUTIVE SUMMARY 1.1. This report sets out the Council’s treasury management position for the period 1 September 2022 to 31 October 2022 and includes information on: • Overall borrowing position • Borrowing activity • Investment activity • Economic background • Interest rate forecast • Prudential Indicators 1.2. Borrowing is below the Capital Financing Requirement for the period to 31 October 2022. During the period the Council took advantage of the increase in the rate of borrowing to repay certain long term PWLB loans which generated a discount that can be used to reduce loan charges. The repayment was funded by utilising maturing investments and by taking some temporary borrowing which will be repaid when maturing investments become available. Due to the increase in borrowing rates it is unlikely that the Council will take out longer term loans in the short to medium term. An update of the impact of these transactions will be provided to Members in a subsequent report. 1.3. The net movement in external borrowing in the period 1 September 2022 to 31 October 2022 was a decrease of £9.5m. This is mainly due to repayment of long term borrowing of £29.5m offset by temporary borrowing taken of £20m 1.4. The levels of investments were £116.2m at 31 October 2022. The rate of return achieved was 2.508% which compares favourably with the target SONIA rate which was 2.186%.
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ARGYLL AND BUTE COUNCIL POLICY AND RESOURCES COMMITTEE FINANCIAL SERVICES 8 DECEMBER 2022 TREASURY MANAGEMENT MONITORING REPORT – 31 OCTOBER 2022 2. INTRODUCTION 2.1. This report sets out the Council’s treasury management position for the period 1 September 2022 to 31 October 2022 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 2022. The CFR represents the underlying need for the Council to borrow to fund its fixed assets and accumulated capital expenditure. Forecast Forecast Forecast 2022/23 2023/24 2024/25 £000 £000 £000 CFR at 1 April 309,092 319,610 337,855 Net Capital Expenditure 20,686 29,632 27,052 Less Loans Fund Principal Repayments (5,353) (5,507) (5,788) Less: NPDO Repayment (4,815) (5,880) (6,038) Estimated CFR 31 March 319,610 337,855 353,081 Less Funded by NPDO (116,681) (117,064) (112,184) Estimated Net CFR 31 March 202,929 220,791 240,897 Estimated External Borrowing at 31 March 142,931 167,154 187,150 Gap 59,998 53,637 53,747
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3.2. Borrowing is below the Capital Financing Requirement for the period to 31 October 2022. During the period the Council took advantage of the increase in the rate of borrowing to repay certain long term PWLB loans which generated a discount that can be used to reduce loan charges. The repayment was funded by utilising maturing investments and by taking some temporary borrowing which will be repaid when maturing investments become available. The gap that the Council is under borrowed by is due to the decision to repay long term debt and potentially not take any new borrowing due to high borrowing rates at present 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 October 2022 is £202.9m. The table below shows how this has been financed. £154.1m is funded by loans and there are substantial internal balances of £165m of which £116.1m are currently invested, leaving a net internal balance of £48.9m. Position at 31/08/22 Position at 31/10/22 £000 £000 Loans 163,576 154,069 Net Internal Balances 8,853 48,860 Total CFR 172,429 202,929 3.5. During the period from 1 September to 31 October 2022, £29.527m of loans were repaid and new borrowing of £20.019m was taken. This was mainly made up of the early repayment of long term borrowing of £29.5m, partly funded by new temporary borrowing of £20m. the balance relates to the renewal of local bonds and some new temporary borrowing, the analysis of the movement in borrowing is shown in the table below: Actual £000 (29,527) 20,019 Net Movement in External Borrowing (9,508) External Loans Repaid 1st September 2022 to 31st October 2022 Borrowing undertaken 1st September 2022 to 31st October 2022 3.6. The external long term borrowing of the Council was reduced by £29.5m during the period from 1 September 2022 to 31 October 2022. 3.7. The table below summarises the movement in the level and rate of temporary borrowing at the start and end of the period. £000 % Rate Temp borrowing at 31st August 2022 521 0.55% Temp borrowing at 31st October 2022 20,515 1.26%
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Investment Activity 3.8 The average rate of return achieved in the Council’s investments to 31 October 2022 was 2.508% compared to the Sterling Overnight Index Average (SONIA) rate for the same period of 2.186% which demonstrates that the Council continues to achieve a reasonable rate of return on its cash investments in spite of the challenging investment market. At 31 October 2022 the Council had £116.2m of short term investments at an average rate of 2.508%. The table below details the counterparties that the investments were placed with, the maturity date, the interest rate and the credit rating applicable for each counterparty. Counterparty Maturity Amount £000 Interest Rate Rating S&P Clydesdale Bank Instant Access 251 2.15% Short Term A-2, Long Term A- AL Ryan Bank 07/12/2022 5,000 1.70% Short Term A-1, Long Term A+ National Bank of Kuwait 11/04/2023 7,500 2.08% Short Term A-1, Long Term A National Bank of Kuwait 17/11/2022 5,000 1.70% Short Term A-1, Long Term A Qatar National Bank 13/12/2022 5,000 1.94% Short Term A-1, Long Term A Qatar National Bank 10/11/2022 5,000 1.67% Short Term A-1, Long Term A AL Ryan Bank 07/12/2022 5,000 1.70% Short Term A-1, Long Term A+ AL Ryan Bank 02/02/2023 5,000 2.45% Short Term A-1, Long Term A+ First Abu Dhabi bank 10/05/2023 5,000 2.11% Short Term A-1+, Long Term AA- First Abu Dhabi bank 10/08/2023 5,000 3.12% Short Term A-1+, Long Term AA- Australia and New Zealand Banking Group 23/02/2023 5,000 3.01% Short Term A-1+, Long Term AA- Australia and New Zealand Banking Group 06/10/2023 5,000 4.99% Short Term A-1+, Long Term AA- Close Bros 31/02/2023 2,500 2.00% Short Term A-1, Long Term A+ Toronto Dominion Bank 13/10/2023 5,000 5.25% Short Term A-1+, Long Term AA- Development Bank of Singapore 07/11/2022 5,000 2.25% Short Term A-1+, Long Term AA- Cheshire West & Chester Council 12/01/2023 2,500 0.90% AA Cambridgeshire County Council 22/07/2024 5,000 1.00% AA Slough Borough Council 26/05/2023 5,000 2.10% AA Slough Borough Council 29/06/2023 5,000 2.10% AA Thurrock Borough Council 31/07/2023 5,000 3.00% AA Thurrock Borough Council 19/09/2023 5,000 3.50% AA Spelthorn Borough Council 03/04/2023 5,000 3.00% AA London Borough of Croydon 10/10/2024 5,000 4.10% AA Money Market Fund - BNP Paribas Call 8,325 2.14% AAA Money Market Fund - Aberdeen Standard Call 75 2.30% AAA Total 116,151 3.9 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
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constructed based on assessments by leading credit reference agencies adjusted for additional market information available in respect of counterparties. 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 2022-23 are attached in Appendix 3. 4. CONCLUSION 4.1 In the period from 1 September 2022 to 31 October 2022, the Council’s borrowing decreased by £9.5m, it is currently below the Capital Financing Requirement. There are substantial internal balances, of which £116.2m is currently invested. The investment returns were 2.508% which is above the target of 2.186%. 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 November 2022 Policy Lead for Finance and Commercial Services - Councillor Gary Mulvaney Appendix 1 – Economic Background Appendix 2 – Interest Rate Forecast Appendix 3 – Prudential Indicators
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Appendix 1 – Economics Update (at 30-09-22) This section has been provided by Link Asset Services and therefore includes their views and opinions of future trends and events. • The second quarter of 2022/23 saw: - GDP in Q1 2022/23 revised upwards to 0.2% q/q from -0.1%, which means the UK economy has avoided recession for the time being; - Signs of economic activity losing momentum as production fell due to rising energy prices; - CPI inflation ease to 9.9% y/y in August but domestic price pressures showing little sign of abating in the near-term; - The unemployment rate fall to a 48-year low of 3.6% due to a large shortfall in labour supply; - Bank Rate rise by 100bps over the quarter, taking Bank Rate to 2.25% with further rises to come; - Gilt yields surge and sterling fall following the “fiscal event” of the new Prime Minister and Chancellor on 23rd September. • The UK economy grew by 0.2% in July following an upward revision to Q1’s GDP data (+0.2% q/q), though revisions to historic data left it below pre-pandemic levels. • There are signs of higher energy prices creating more persistent downward effects in economic activity. Both industrial production (-0.3% m/m) and construction output (- 0.8% m/m) fell in July 2022 for a second month in a row. Although some of this was probably due to the heat wave at the time, manufacturing output fell in some of the most energy intensive sectors (e.g., chemicals), pointing to signs of higher energy prices weighing on production. With the drag on real activity from high inflation having grown in recent months, GDP is at risk of contracting through the autumn and winter months. • The fall in the composite PMI from 49.6 in August to a 20-month low of 48.4 in September points to a fall in GDP of around 0.2% q/q in Q3 and consumer confidence is at a record low. Retail sales volumes fell by 1.6% m/m in August, which was the ninth fall in 10 months. That left sales volumes in August just 0.5% above their pre-Covid level and 3.3% below their level at the start of the year. There are also signs that households are spending their excess savings in response to high prices. Indeed, cash in households’ bank accounts rose by £3.2bn in August, which was below the £3.9bn rise in July and much smaller than the 2019 average monthly rise of £4.6bn. • The labour market remained exceptionally tight. Data for July and August provided further evidence that the weaker economy is leading to a cooling in labour demand. Labour Force Survey (LFS) employment rose by 40,000 in the three months to July (the smallest rise since February). But a renewed rise in inactivity of 154,000 over the same period meant that the unemployment rate fell from 3.8% in June to a new 48- year low of 3.6%. The single-month data showed that inactivity rose by 354,000 in July itself and there are now 904,000 more inactive people aged 16+ compared to before the pandemic in February 2020. The number of vacancies has started to level off from recent record highs but there have been few signs of a slowing in the upward
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momentum on wage growth. Indeed, in July, the 3my/y rate of average earnings growth rose from 5.2% in June to 5.5%. • CPI inflation eased from 10.1% in July to 9.9% in August, though inflation has not peaked yet. The easing in August was mainly due to a decline in fuel prices reducing fuel inflation from 43.7% to 32.1%. And with the oil price now just below $90pb, we would expect to see fuel prices fall further in the coming months. • However, utility price inflation is expected to add 0.7ppts to CPI inflation in October when the Ofgem unit price cap increases, typically, to £2,500 per household (prior to any benefit payments). But, as the government has frozen utility prices at that level for two years, energy price inflation will fall sharply after October and have a big downward influence on CPI inflation. • Nonetheless, the rise in services CPI inflation from 5.7% y/y in July to a 30-year high of 5.9% y/y in August suggests that domestic price pressures are showing little sign of abating. A lot of that is being driven by the tight labour market and strong wage growth. CPI inflation is expected to peak close to 10.4% in November and, with the supply of workers set to remain unusually low, the tight labour market will keep underlying inflationary pressures strong until early next year. • The new Prime Minister and Chancellor have appeared to make a step change in government policy. The government’s huge fiscal loosening from its significant tax cuts will add to these domestic inflationary pressures and will leave a legacy of higher interest rates and public debt. Whilst the government’s utility price freeze, which could cost up to £150bn (5.7% of GDP) over 2 years, will reduce peak inflation from 14.5% in January next year to 10.4% in November this year, the long list of tax measures announced at the “fiscal event” adds up to a loosening in fiscal policy relative to the previous government’s plans of £44.8bn (1.8% of GDP) by 2026/27. These included the reversal of April’s national insurance tax on 6th November, the cut in the basic rate of income tax from 20p to 19p in April 2023, the cancellation of next April’s corporation tax rise, the cut to stamp duty and the removal of the 45p tax rate, although the 45p tax rate cut announcement has already been reversed. • Fears that the government has no fiscal anchor on the back of these announcements has meant that the pound has weakened, adding further upward pressure to interest rates. Whilst the pound fell to a record low of $1.035 on the Monday following the government’s “fiscal event”, it has since recovered to around $1.12. That is due to hopes that the Bank of England will deliver a very big rise in interest rates at the policy meeting on 3rd November and the government will lay out a credible medium-term plan in the fiscal statement on 23rd November. Nevertheless, with concerns over a global recession growing, there are downside risks to the pound. • Since the fiscal event, we now expect the Monetary Policy Committee (MPC) to increase interest rates further and faster, from 2.25% currently to a peak of 5.00% in February 2023 (up from our previous forecast peak of 2.75%). The combination of the government’s fiscal loosening, the tight labour market and sticky inflation expectations means we expect the MPC to raise interest rates by 100bps at the policy meetings in November (to 3.25%) and 75 basis points in December (to 4%) followed by further 50 basis point hikes in February and March (to 5.00%). Market expectations for what the MPC will do are volatile. If Bank Rate climbs to these levels the housing market looks very vulnerable, which is one reason why the peak in our forecast is lower than the peak of 5.50% priced into the financial markets at present.
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• Gilt yields rose sharply at the end of September as investors demanded a higher risk premium and expected faster and higher interest rate rises to offset the government’s extraordinary fiscal stimulus plans. The 30-year gilt yield rose from 3.60% to 5.10% following the “fiscal event”, which threatened financial stability by forcing pension funds to sell assets into a falling market to meet cash collateral requirements. In response, the Bank did two things. First, it postponed its plans to start selling some of its quantitative easing (QE) gilt holdings until 31st October. Second, it committed to buy up to £65bn of long-term gilts to “restore orderly market conditions” until 14th October. In other words, the Bank is restarting QE, although for financial stability reasons rather than monetary policy reasons. • Since the Bank’s announcement on 28th September, the 30-year gilt yield has fallen back from 5.10% to 3.83%. The 2-year gilt yield dropped from 4.70% to 4.30% and the 10-year yield fell back from 4.55% to 4.09%. • There is a possibility that the Bank continues with QE at the long-end beyond 14th October or it decides to delay quantitative tightening beyond 31st October, even as it raises interest rates. So far at least, investors seem to have taken the Bank at its word that this is not a change in the direction of monetary policy nor a step towards monetary financing of the government’s deficit. But instead, that it is a temporary intervention with financial stability in mind. • The S&P 500 and FTSE 100 climbed in the first half of Q2 2022/23 before falling to their lowest levels since November 2020 and July 2021 respectively. The S&P 500 is 7.2% below its level at the start of the quarter, whilst the FTSE 100 is 5.2% below it as the fall in the pound has boosted the value of overseas earnings in the index. The decline has, in part, been driven by the rise in global real yields and the resulting downward pressure on equity valuations as well as concerns over economic growth leading to a deterioration in investor risk appetite
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MPC meetings 4th August and 22nd September 2022 • In August, the Bank of England’s Monetary Policy Committee (MPC) increased Bank Rate to 1.75%, and on 22nd September moved rates up a further 50 basis points to 2.25%. The increase reflected a split vote – five members voting for a 50 basis points increase, three for 75 basis points and one for 25 basis points. The MPC continues to grapple with getting inflation back on track over a three-year horizon. • Moreover, the UK now has a new Prime Minister, a new Chancellor and new economic policies that seek to grow the UK economy faster than at any time since the 1980s. The central planks to the government’s new policies are tax cuts and regulatory simplification. It is too early to say whether such policies will boost growth in the ways intended, but what is clear at this juncture is that the lack of scrutiny of the various projections, ideally by the Office of Budget Responsibility (OBR), and an emphasis upon borrowing to fund the significant cost of the proposals scared the markets. • Subsequently, the Government has announced that the OBR will scrutinise their spending plans on 23rd November, after the MPC next meets on 3rd November. Naturally, the Bank Rate forecast set out below will be dependent on a more joined-up set of communications from the Bank of England and the government than that which we have seen or heard so far. In addition, the fiscal governance aspects referred to in the OBR’s upcoming review in November will need to be suitably couched in reassuring language and analysis to persuade the markets that fiscal rectitude has not been abandoned. • Of course, what happens outside of the UK is also critical to movement in gilt yields. The US FOMC has led with increases of 300 basis points in the year to date and is expected to increase rates further before the end of the year. Similarly, the ECB has also started to tighten monetary policy, albeit from an ultra-low starting point, as have all the major central banks apart from Japan. Arguably, though, it is US monetary policies that are having the greatest impact on global bond markets. • What happens in Ukraine will also impact the global economy, but particularly in Europe. The search for alternative providers of energy, other than Russia, will take both time and effort. The weather will also play a large part in how high energy prices stay and for how long.
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Appendix 2 – updated Interest Rate Forecast (8-11-22) 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. • Since our last update at the end of September, the Bank of England’s Monetary Policy Committee (MPC) has increased Bank Rate to 3.00% from 2.25%. The increase was made last Thursday and reflected a split vote – seven members voting for a 75 basis points increase, one for 50 basis points and one for 25 basis points. The MPC continues to grapple with getting inflation back on track over a three-year horizon. • Moreover, the UK has a new Prime Minister, Rishi Sunak, a new Chancellor, Jeremy Hunt, and new fiscal policies – to be firmed up on the 17th of November Autumn Statement - that seek to ensure that the public finances are kept on a sound footing and that any projected gaps (possibly £50bn to £60bn) are fully funded from services efficiencies and/or net tax increases. • In the interim period, since the end of September, the Government scrapped the reduction in the basic rate of income tax by 1p in the £; maintained the higher band 45p in the £ income tax rate; did not reduce Corporation Tax to 19% from 25%; only put in place support for businesses and households for 6 months (October to March) regarding caps on the unit costs of gas and electricity. • In addition, the Bank of England has had to intervene in the longer part of the gilt market to ensure that pension funds did not have to undertake a “fire sale” of assets to raise cash to pay for margin calls, arising from the sell-off of long-dated gilts (yields rising) in the wake of the former Chancellor’s policy to seek to boost growth with unfunded tax cuts. • In recent days, calm has returned to the markets, the £ has risen from a historic low of $1.03 to $1.14, and the cumulative movement in gilt yields since the turn of the year is now broadly in line with that seen in the US and Euro-zone bond markets. • Turning back to Thursday, the Bank’s Quarterly Monetary Policy Report detailed that the UK economy is headed for eight quarters of negative growth based on the market’s expectation for Bank Rate to increase to 5.25%. Since then, market expectations have been recalibrated, and now view a peak in Bank Rate of between 4.5% and 4.75%. These views are similar to those held by Link Group’s Interest Rate Strategy Group (IRSG). IRSG has reduced its view on the peak of Bank Rate from 5% to 4.5%. However, although we see rates peaking in May of 2023, we now also believe there are several challenges to the Bank that could see them leave rates at this level until early 2024. • The first of those challenges is the tight labour market (unemployment is at
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a 48 year low 3.5%), which shows no signs of dissipating, and that could mean wage increases continue to be north of 5% well into 2023 (the Bank would broadly want wages to be in the range of 3% - 3.5%). There is also the prospect that unless the workforce participation rate increases and/or immigration policies are relaxed, there is no clear route that would give rise to sustainable increases in economic growth. And, of course, inflation could be somewhat “sticky” if the Russian invasion of Ukraine remains unresolved and puts continued pressure on global energy prices and staple foods (e.g., wheat), among the many areas negatively impacted. • Against this backdrop, we believe the MPC will have to tread carefully. It will need to evidence to the markets that it sees the reduction in inflation as a primary objective, but also that it remains alert to the fact that it does not want any recession to be deeper and more prolonged than it needs to be. On that basis our forecast sees Bank Rate increasing 50 basis points in both December and February before the MPC scales down the rate of increase to just 25 basis points in both March and May 2023. Regarding our forecast for PWLB rates, as already stated, the impact of the Truss/Kwarteng fiscal experiment has faded in the past month but we think investors will still remain a little nervous over the UK’s future fiscal policy and therefore we have reduced our forecast for near-term PWLB rates across the curve, compared to September’s forecast, but have left the longer end of the curve slightly higher to reflect the potential demand by foreign investors for a “confidence premium” in the light of recent market volatility. • As for the housing market, the most recent survey by Nationwide Building Society showed house prices starting to fall and the MPC will be very cognisant that affordability could be stretched now that fixed rate mortgages are somewhat higher than they were a few weeks ago. Historically, the MPC has appeared reluctant to tighten monetary policy in a falling housing market, but it may be willing to leave rates less high than the market had been pricing in prior to the 3rd of November Quarterly Monetary Policy Report but keep them there for longer as a compromise of sorts. • Of course, what happens outside of the UK is also critical to movement in gilt yields. The US FOMC has led with increases of 375 basis points in the year to date and is expected to increase rates further before the end of the year, and possibly into 2023. Similarly, the ECB has also started to tighten monetary policy, albeit from an ultra-low starting point, as have all the major central banks apart from Japan. Arguably, though, it is US monetary policies that will have the greatest impact on global bond markets. • Geo-political events continue to lead to frequent whipsawing in equity, bond, commodity and currency markets. And the weather will also play a large part in how high energy prices stay and for how long. Not forgetting developments in Iran, North Korea, Taiwan and China. • From a practical standpoint those clients looking to borrow will, most probably, need to continue to focus on optimising their cashflow forecasts, and given the (still) relatively elevated level of rates right across the curve at present, seek to fund either temporarily from local authorities or with
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short-dated loans from the PWLB. You will see from our forecast that we expect both short- and longer-term rates to be somewhat lower over the duration of the forecast. Nonetheless, if certainty is paramount within your debt management strategy, we will help you to optimise any longer dated borrowing requirements you may have. • On the flipside, if you are an authority that is fully funded or wishes to reduce its exposure to long- dated debt, there may be scope to repay loans prematurely (both market and PWLB) whilst the high discount rates prevail. Your Client Relationship Manager should be contacted if this is something you wish to look at. • In terms of our forecast, our money market yield forecasts are based on expected average earnings by local authorities for 3 to 12 months. Our forecasts 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. Our current and previous PWLB rate forecasts below are based on the Certainty Rate (the standard rate minus 20 bps) which has been accessible to most authorities since 1st November 2012. Link Group Interest Rate View 08.11.22 Dec-22 Mar-23 Jun-23 Sep-23 Dec-23 Mar-24 Jun-24 Sep-24 Dec-24 Mar-25 Jun-25 Sep-25 Dec-25 BANK RATE 3.50 4.25 4.50 4.50 4.50 4.00 3.75 3.50 3.25 3.00 2.75 2.50 2.50 3 month ave earnings 3.60 4.30 4.50 4.50 4.50 4.00 3.80 3.30 3.00 3.00 2.80 2.50 2.50 6 month ave earnings 4.20 4.50 4.60 4.50 4.20 4.10 3.90 3.40 3.10 3.00 2.90 2.60 2.60 12 month ave earnings 4.70 4.70 4.70 4.50 4.30 4.20 4.00 3.50 3.20 3.10 3.00 2.70 2.70 5 yr PWLB 4.30 4.30 4.20 4.10 4.00 3.90 3.80 3.60 3.50 3.40 3.30 3.20 3.10 10 yr PWLB 4.50 4.50 4.40 4.30 4.20 4.00 3.90 3.70 3.60 3.50 3.40 3.30 3.20 25 yr PWLB 4.70 4.70 4.60 4.50 4.40 4.30 4.10 4.00 3.90 3.70 3.60 3.50 3.50 50 yr PWLB 4.30 4.40 4.30 4.20 4.10 4.00 3.80 3.70 3.60 3.40 3.30 3.20 3.20
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Link Group Interest Rate View 27.09.22 Dec-22 Mar-23 Jun-23 Sep-23 Dec-23 Mar-24 Jun-24 Sep-24 Dec-24 Mar-25 Jun-25 Sep-25 BANK RATE 3 month ave earnings 6 month ave earnings 12 month ave earnings 5 yr PWLB 10 yr PWLB 25 yr PWLB 50 yr PWLB 4.00 5.00 5.00 5.00 4.50 4.00 3.75 3.25 3.00 2.75 2.75 2.50 4.50 5.00 5.00 5.00 4.50 4.00 3.80 3.30 3.00 2.80 2.80 2.50 4.70 5.20 5.10 5.00 4.60 4.10 3.90 3.40 3.10 3.00 2.90 2.60 5.30 5.30 5.20 5.00 4.70 4.20 4.00 3.50 3.20 3.10 3.00 2.70 5.00 4.90 4.70 4.50 4.20 3.90 3.70 3.50 3.40 3.30 3.20 3.20 4.90 4.70 4.60 4.30 4.10 3.80 3.60 3.50 3.40 3.30 3.20 3.20 5.10 4.90 4.80 4.50 4.30 4.10 3.90 3.70 3.60 3.60 3.50 3.40 4.80 4.60 4.50 4.20 4.00 3.80 3.60 3.40 3.30 3.30 3.20 3.10 A SUMMARY OVERVIEW OF THE FUTURE PATH OF BANK RATE • Our central forecast for interest rates was previously updated on 9th August and reflected a view that the MPC would be keen to further demonstrate its anti-inflation credentials by delivering a succession of rate increases. This has happened but the “fiscal event” has complicated the picture for the MPC, who will now need to double-down on counteracting inflationary pressures stemming from the government’s widespread fiscal loosening. • Further down the road, we anticipate the Bank of England will be keen to loosen monetary policy when the worst of the inflationary pressures are behind us – but that timing will be 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. • The CPI measure of inflation will peak at close to 10.4% in November 2022. Despite the cost- of-living squeeze that is still taking shape, the Bank will want to see evidence that wages are not spiralling upwards in what is evidently a very tight labour market. • Regarding the “provisional” plan to sell £10bn of gilts back into the market each quarter, this is still timetabled to take place but not until October at earliest. • 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 the on-going conflict between Russia and Ukraine. (More recently, the heightened tensions between China/Taiwan/US also have the potential to have a wider and negative economic impact.) • On the positive side, consumers are still estimated to be sitting on over £160bn of excess savings left over from the pandemic so that will cushion some of the impact of the above challenges. However, most of those are held by more affluent households whereas lower income families already spend nearly all their income on essentials such as food, energy and rent/mortgage payments. PWLB RATES • The yield curve has shifted upwards since our August update and PWLB 5 to 50 years Certainty Rates are, generally, in the range of 4.25% to 5.75%. The yield curve is currently inverted. • We view the markets as having built in, already, nearly all the effects on gilt yields of the likely increases in Bank Rate and the poor inflation outlook but markets are volatile and further whipsawing of gilt yields across the whole spectrum of the curve is possible. 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, rising gilt yields).
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• The Bank of England acts too quickly, or too far, over the next two years to raise Bank Rate and causes UK economic growth, and increases in inflation, to be weaker 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. Upside risks to current forecasts for UK gilt yields and PWLB rates: - • The Bank of England is too slow in its pace and strength of increases in Bank Rate and, therefore, allows inflationary pressures to build up too strongly and for a longer period within the UK economy, which then necessitates an even more rapid series of increases in Bank Rate faster than we currently expect. • The Government acts too quickly to cut taxes and/or increases expenditure in the light of the cost- of-living squeeze. • The pound weakens because of the UK’s growing borrowing requirement resulting in investors pricing in a risk premium for holding UK sovereign debt. • Longer term US treasury yields continue to rise strongly and pull gilt yields up even higher than currently forecast. LINK GROUP FORECASTS We now expect the MPC to swiftly increase Bank Rate during the remainder of 2022 and into Q2 2023 to combat the sharp increase in inflationary pressures. We do not think that the MPC will embark on a series of increases in Bank Rate that would take it to more than 4.5%, but it is possible. Gilt yields and PWLB rates The general situation is for volatility in bond yields to endure as investor fears for inflation and/or recession ebb and flow. The overall longer-run trend is for gilt yields and PWLB rates to remain high in the near-term, given the extent to which market expectations are already priced in and then to fall back once inflation starts to fall through 2023. Our target borrowing rates and the current PWLB (certainty) borrowing rates are set out below: - PWLB debt Current borrowing rate as at 07.11.22 p.m. Target borrowing rate now (end of Q4 2022) Target borrowing rate previous (end of Q4 2022) 5 years 4.20% 4.30% 5.00% 10 years 4.46% 4.50% 4.90% 25 years 4.72% 4.70% 5.10% 50 years 4.26% 4.30% 4.80%
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Borrowing advice: Our long-term (beyond 10 years) forecast for Bank Rate stands at 2.5%. As all PWLB certainty rates are now above this level, borrowing strategies will need to be reviewed in that context. Better value can generally be obtained at the shorter end of the curve and short-dated fixed LA to LA monies should be considered. Temporary borrowing rates are likely, however, to remain near Bank Rate and may also prove attractive whilst the market waits for inflation, and therein gilt yields, to drop back later in 2023. Our suggested budgeted earnings rates for investments up to about three months’ duration in each financial year are as follows: - Average earnings in each year Now Previously 2022/23 (remainder) 3.95% 4.80% 2023/24 4.40% 4.60% 2024/25 3.30% 3.20% 2025/26 2.60% 2.80% 2026/27 2.50% 2.80% Years 6 to 10 2.80% 2.80% Years 10+ 2.80% 2.80% As there are so many variables at this time, caution must be exercised in respect of all interest rate forecasts. Our interest rate forecast for Bank Rate is in steps of 25 bps, whereas PWLB forecasts have been rounded to the nearest 10 bps and are central forecasts within bands of + / - 25 bps. Naturally, we continue to monitor events and will update our forecasts as and when appropriate. Interest Rate Strategy Group
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Appendix 3 – Prudential Indicators PRUDENTIAL INDICATOR 2022-23 2022-23 2023-24 2024-25 (1). EXTRACT FROM BUDGET Forecast Outturn Original Estimate Forecast Outturn Forecast Outturn Capital Expenditure £'000 £'000 £'000 £'000 Non - HRA 20,686 51,699 29,632 27,052 TOTAL 20,686 51,699 29,632 27,052 Ratio of financing costs to net revenue stream Non - HRA 2.70% 2.70% 4.56% 4.57% Net borrowing requirement brought forward 1 April * 309,092 292,303 333,145 337,855 carried forward 31 March * 319,610 333,145 337,855 353,081 in year borrowing requirement 10,518 40,842 4,710 15,226 In year Capital Financing Requirement Non - HRA 10,518 40,842 4,710 15,226 TOTAL 10,518 40,842 4,710 15,226 Capital Financing Requirement as at 31 March Non - HRA 319,610 333,145 337,855 353,081 TOTAL 319,610 333,145 337,855 353,081
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PRUDENTIAL INDICATOR 2022-23 2023-24 2024-25 (2). TREASURY MANAGEMENT PRUDENTIAL INDICATORS £'M £'M £'M Authorised limit for external debt - borrowing 228 252 272 other long term liabilities 120 121 116 TOTAL 348 373 388 Operational boundary for external debt - borrowing 223 247 267 other long term liabilities 117 118 113 TOTAL 340 365 380 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 2022/23 upper limit lower limit under 12 months 30% 0% 12 months and within 24 months 30% 0% 24 months and within 5 years 30% 0% 5 years and within 10 years 40% 0% 10 years and above 100% 0%
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ARGYLL AND BUTE COUNCIL POLICY AND RESOURCES COMMITTEE FINANCIAL SERVICES 8 DECEMBER 2022 RESERVES AND BALANCES – UPDATE AS AT 31 OCTOBER 2022 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 £364.558m unusable reserves that are not backed with resources. They are required purely for accounting purposes. 1.3 At 31 March 2022 the Council had a total of £103.183m of usable reserves. Of this: • £2.682m relates to the Repairs and Renewals Fund • £4.414m relates to Capital Funds • £96.087m was held in the General Fund, with £88.990m of this balance earmarked for specific purposes. 1.4 Of the earmarked balance of £88.990m: • £46.239m is invested or committed for major initiatives/capital projects • £6.364m has already been drawn down • £29.934m is still to be drawn down in 2022-23 • £6.453m is planned to be spent in future years Appendix 1 provides further information on the unspent budget earmarkings and Appendix 2 provides further information on the COVID earmarkings. 1.5 The Council’s General Fund contingency level is set at 2% of net expenditure for 2022-23 which equates to £5.256m. At the beginning of the financial year there was £1.398m of unallocated General Fund Balance (over and above contingency). At the Council meeting on 24 February 2022 it was agreed that the budgeted revenue surplus of £2.482m would be transferred into the general fund. After taking this into consideration and the current forecast outturn for 2022-23, the Council is estimated to have a £3.778m surplus over contingency.
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ARGYLL AND BUTE COUNCIL POLICY AND RESOURCES COMMITTEE FINANCIAL SERVICES 8 DECEMBER 2022 RESERVES AND BALANCES - UPDATE AS AT 31 OCTOBER 2022 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 2022 3.2.1 The balances on each type of reserve at 31 March 2022 are set out in the two tables below, per the Audited Accounts for 2021-22. Unusable Reserves £000 Revaluation Reserve 157,645 Capital Adjustment Account 241,327 Financial Instruments Adjustment Account (2,198) Pensions Reserve 4,634 Accumulated Absences Account (6,928) Total Unusable Reserves 394,480 Usable Reserves £000 Repairs and Renewals Fund 2,682 Capital Fund and Usable Capital Receipts Reserve 4,414 General Fund 96,087 Total Usable Reserves 103,183 Total Reserves 497,663
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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 2022 can be analysed as follows: Balance 31/03/22 £000 Balance on General Fund as at 31 March 2021 78,245 Increase to General Fund balance at end of 2021-22 17,842 Earmarked Balances (88,990) Contingency allowance at 2% of net expenditure (5,256) Unallocated balance as at 31 March 2022 1,841 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 2022, 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.
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Officers have 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 2022-23 and amounts to £5.256m. At the beginning of the financial year there was £1.841m of unallocated General Fund Balance (over and above contingency). After taking into consideration the budgeted allocation to the General Fund agreed by Council on 24 February 22 and the current forecast outturn position for 2022-23, the Council is forecast to have a £3.778m surplus over contingency. Earmarking Category Balance 31/03/2022 - per year end published report Transfers between categories Invested or committed for major initiatives /capital projects Drawn- down to 2022-23 Budget as at 31/10/22 Still to be drawn- down in 2022-23 Planned Spend Future Years Balance no Longer Required £000 £000 £000 £000 £000 £000 £000 Strategic Housing Fund 6,590 6,126 464 0 0 Investment in Affordable Housing 3,300 3,300 Capital Projects 24,722 24,722 Lochgilphead and Tarbert Regeneration 2,271 2,271 Support for Rural Growth Deal 1,058 894 164 0 0 Asset Management Investment 2,607 2,607 Piers and Harbours Investment Fund 1,643 1,643 Scottish Government Initiatives 3,141 1,241 1,513 387 CHORD 349 150 199 DMR Schools 1,982 416 1,566 Energy Efficiency Fund 218 218 Existing Legal Commitments 475 15 460 Unspent Grant 12,834 950 1,329 10,103 452 Unspent Third Party Contribution 166 10 156 Previous Council Decision - Other 4,343 -55 2,069 60 2,159 0 Redundancy Provision 1,732 500 1,232 Supporting Organisational Change 1,588 106 394 1,088 Spend to Save Route Optimisation 100 100 Timing Delay 499 499 Hermitage Park 4 4 COVID-19 8,964 257 1,827 6,821 59 Unspent Budget 10,404 55 1,400 732 5,291 3,036 Totals 88,990 0 46,239 6,364 29,934 6,453 0
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Heading Detail £000 Unallocated General Fund as at 31 March 2022 This is the balance that is unallocated over and above the 2% contingency, which amounts to £5.256m 1,841 Budgeted allocation to General Fund for 2022-23 Budget Per the Budget Motion at Council on 24 February 2022 2,482 Current Forecast Outturn for 2022-23 as at 31 October 2022 (545) Estimated Unallocated balance as at 31 March 2023 3,778 3.4.2 Note that the unallocated balance of £3.778m does not take into account the 2022-23 pay award now agreed and which will be implemented in November for SJC employees. Should Members decide that a proportionate share of the funding is passed to the HSCP, the impact for the Council would be around £2.1m, resulting in a reduced unallocated balance of £1.678m by year end. 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 the known liabilities/cost pressures. The table below shows what has been drawn down against the one-off gain and the remaining balance. Agreed Allocation Transferred to Earmarked Reserves / 20-21 / 21-22 Budget Transferred to Earmarked Reserves / 22-23 Budget Balance Remaining £000 £000 £000 £000 Provision for the increasing principal repayments 7,649 7,649 Provision to Support Organisational Change 500 (500) 0 Estimated Cost of 2020-21 redundancies that are part of budget savings proposals 600 (600) 0 Future Redundancies Provision 1,500 (1,500) 0 Spend to Save Route Optimisation 100 (100) 0 Funding Gap in Capital Programme 2,619 2,619 Capital Programme Intolerable Red Risks 574 (574) 0 Campbeltown Flood Prevention Scheme 1,406 (1,406) 0
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Significant Strategic Change Projects 5,013 (2,856) 2,157 2020-21 Revenue Budget Contribution 600 (600) 0 20,561 (6,730) (1,406) 12,425 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 October 2022 the estimated unallocated General Fund, after taking into consideration the budget motion and forecast outturn for 2022-23 is £3.778m. 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 £5.256m (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. Kirsty Flanagan Section 95 Officer 4 November 2022 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 October 2022 Ref Department Service Description Opening Balance Budget Drawdown New earmarking during 22-23 Remaining Balance Still to be drawn down in 22-23 Planned to spend in future years Plans for Use Amount Planned to be Spent in 2022- 23 Amount Planned to be Spent in 2023- 24 Amount Planned to be Spent from 2023-24 onwards 001 Chief Executive's Unit Community Planning Communities and Partnership Team 8,855 8,004 851 851 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 0 002 Chief Executive's Unit Community Planning Gaelic Development 8,235 8,235 8,235 0 To fund Gaelic specific work and project work of the Community Planning Partnership including the development of the new 10 year Outcome Improvement Plan 8,235 0 0 003 Chief Executive's Unit Financial Services Financial Systems 114,000 80,252 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. 114,000 0 0 004 Chief Executive's Unit Financial Services Accounting and Budgeting Team Resilience 95,000 64,336 30,664 11,664 19,000 To fund the implementation of a new staffing structure in 2022/23 as agreed at ELT on 12 April 2022. This will provide funding to cover the additional staffing costs in 2022/23 and the training costs over the period 2022/23 to 2026/27 76,000 5,000 14,000 005 Chief Executive's Unit Financial Services CIPFA 32,530 760 31,770 31,770 0 CIPFA Training - To fund the professional training costs for staff undertaking the CIPFA professional accountancy qualification. 32,530 0 0 006 Chief Executive's Unit Financial Services Scottish Government Funding - Welfare Reform/Discretionary Housing Payments (agreed at Council February 2014) 18,595 18,595 0 18,595 The Council was allocated additional funding of £550k from the Scottish Government late in 2013-14. This money was allocated to support the Community Learning and Development Team to provide courses to support Universal Credit claimants 2019/2020 to support the recruitment of casual tutors and the purchase and upgrade of laptops. The monies were not utilised however it will now be required to top up the Scottish Welfare Fund and DHP monies for 2022/23 as it is likely that given the current cost of living crisis that more people will be in need of support through these funds 0 18,595 0 007 Executive Director (Douglas Hendry) Across Services / Education Digital Projects (Supply Staff Booking System) 35,000 35,000 9,900 25,100 To deliver a number of Digital Service Transformation Projects, specifically in Education and Customer Support Services, but also to reserve a further amount to support priority digital transformation projects identified in Departmental ICT programmes, that have not yet started due to resource constraints. The specific projects include: Supply Staff Booking System £0.035m, Skype for Business (for Education) £0.030m, Enhancing Curriculum Choice and Equity of Provision £0.080m, Digital Customer Engagement Developments £0.073m, Replacement of Learning Management System £0.030m, Increase in Schools Bandwidth £0.063m and a general provision still to be allocated £0.189m 9,900 9,900 15,200 008 Executive Director (Douglas Hendry) Commercial Services Rothesay Pavilion Charity 750,000 750,000 375,000 375,000 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. 375,000 375,000 0 009 Executive Director (Douglas Hendry) Commercial Services Demolition of former Lochgilphead Primary and Rothesay Secondary School 320,000 320,000 320,000 0 To fund the demolition of the former Lochgilphead Primary School and former Rothesay Academy (subject to the removal of the listing). 320,000 0 0 010 Executive Director (Douglas Hendry) Commercial Services Rothesay Pavilion Essential repairs 306,400 306,400 306,400 0 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. 306,400 0 0 011 Executive Director (Douglas Hendry) Commercial Services Estates - NDR Revaluation Appeals 84,688 84,688 84,688 0 The Council agreed to make provision to meet the cost of appealing Non Domestic Rates (NDR) revaluations which will be imposed from 1st April 2017. It was agreed that £150,000 be earmarked from the favourable 2016-17 outturn position to fund these appeals. The balance of £84,688 is still required as NDR valuation appeals have been lodged but have not been heard yet. We will not know the level of savings, and in turn the corresponding charge to us, until the appeals are concluded which should be later on this year. Ryden are awaiting outcome of further citations which will incur fees. 84,688 0 0 012 Executive Director (Douglas Hendry) Commercial Services Site Investigation Works 21,013 21,013 21,013 0 For Site Investigation works in relation to Tweeddale Street Car Park, Oban and Oban Airport Business Park to explore commercial opportunities to develop the sites and gain revenue income for Argyll and Bute Council. HUB North were instructed to procure contractors to undertake the site investigations and work commenced in March 2020. This is still ongoing. 21,013 0 0 013 Executive Director (Douglas Hendry) Commercial Services Catering and Cleaning Restructure Costs 17,000 17,000 0 0 0 To support the catering and cleaning team restructure 17,000 0 0 014 Executive Director (Douglas Hendry) Education Education Transformation Fund 187,526 24,677 162,849 162,849 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 and 21/22, 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 2022/23. 187,526 0 015 Executive Director (Douglas Hendry) Education Education Learning Estate Condition Surveys 77,440 33,479 43,961 43,961 0 To fund the delivery of School Core Facts (SCF) compliant Condition Surveys for prioritised School Buildings. 77,440 0 0 016 Executive Director (Douglas Hendry) Education Skype for Business for Education / Digital Projects (Skype for Business) 10,000 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 has been released back to the general fund because the rollout project is almost complete with only £0.01m expected spend in 22/23. 10,000 0 0 017 Executive Director (Douglas Hendry) Legal and Regulatory Services Education Purchasing Officers 210,000 210,000 90,000 120,000 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. 90,000 120,000 0 018 Executive Director (Douglas Hendry) Legal and Regulatory Services NDR - One off contribution to 22/23 Budget 200,000 200,000 0 0 0 To fund one off operational saving CS04 agreed for the 2022/23 budget. 200,000 0 0 019 Executive Director (Douglas Hendry) Legal and Regulatory Services NPDO Schools Contract 166,000 166,000 0 0 0 To fund one off operational saving LRS01 agreed for the 2022/23 budget 166,000 0 0
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Ref Department Service Description Opening Balance Budget Drawdown New earmarking during 22-23 Remaining Balance Still to be drawn down in 22-23 Planned to spend in future years Plans for Use Amount Planned to be Spent in 2022- 23 Amount Planned to be Spent in 2023- 24 Amount Planned to be Spent from 2023-24 onwards 020 Executive Director (Douglas Hendry) Legal and Regulatory Services Transformation Agenda QIO 100,259 74,274 25,985 -4,015 30,000 Ongoing funding for the QIO post to lead the implementation of the service transformation programme. The QIO will assist the Executive Director to deliver the Council’s transformation agenda by developing, analysing and monitoring initiatives and projects which deliver the vision, values and strategic objectives of the Council. 70,259 30,000 0 021 Executive Director (Douglas Hendry) Legal and Regulatory Services Digital Projects: Hybrid Council meetings 55,000 55,000 30,000 25,000 Per paper agreed at SMT October 2021 - allocation from Digital Projects (General Provision to be allocated). To fund the costs of livestreaming of Council meetings. 30,000 25,000 0 022 Executive Director (Douglas Hendry) Legal and Regulatory Services Councillor IT Equipment 65,000 65,000 65,000 0 To meet the cost of provision of IT equipment for all new Elected Members as a result of the Local Government Election in May 2022. 65,000 0 0 023 Executive Director (Douglas Hendry) Legal and Regulatory Services Debt Counselling & Welfare Rights 27,025 27,025 27,025 0 To meet the cost of a Debt Counselling and Welfare Rights Management System. 27,025 0 0 024 Executive Director (Douglas Hendry) Legal and Regulatory Services Community Safety Partnership 16,000 16,000 16,000 0 To earmark the Community Safety Partnership funding received for 2021/22 to be used for Community Safety Partnership purposes. 16,000 0 0 025 Executive Director (Kirsty Flanagan) Customer Support Services Microsoft 365 300,000 300,000 166,930 133,070 To be added to existing earmarked reserves to meet increasing MS365 licensing costs from 2022/23 onwards 166,930 133,070 0 026 Executive Director (Kirsty Flanagan) Customer Support Services Growing our Own and Modern Apprentices 109,150 109,150 109,150 0 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 22/23 and £13,360 to be spent in 23/24 to fund a graduate trainee and 3 apprentices to deliver trainee development and modern apprenticeship opportunities 109,150 0 0 027 Executive Director (Kirsty Flanagan) Customer Support Services Security Operations Centre Subscription 76,455 76,455 0 76,455 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 created at 2020/21 year end for 'Digital Projects', so the earmarking request for 2021/22 year end is the balance of £76,455 16,455 60,000 028 Executive Director (Kirsty Flanagan) Customer Support Services Learning and Development 36,508 36,508 36,508 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. 36,508 0 0 029 Executive Director (Kirsty Flanagan) Customer Support Services Implementation of Gaelic Language Plan 30,000 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 0 030 Executive Director (Kirsty Flanagan) Customer Support Services Establishing HR Service Centre 30,000 30,000 18,000 12,000 To facilitate the implementation of technical efficiency improvements and new processes 18,000 12,000 0 031 Executive Director (Kirsty Flanagan) Customer Support Services Business Development Training 27,601 27,601 27,601 0 This budget is funding ongoing leadership development, coaching, action learning sets and commissioned training including Priority Management. 27,601 0 0 032 Executive Director (Kirsty Flanagan) Development and Economic Growth Oban TIF (Tax Incremental Financing) 709,700 709,700 116,000 593,700 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. 116,000 116,000 477,700 033 Executive Director (Kirsty Flanagan) Development and Economic Growth Strategic Events & Festivals 115,764 115,764 115,764 0 At the Council meeting on 25 February 21, a decision was taken to agree £90k funding for Events and Festivals for 22-23, in order that the application process can commence during 21-22 and that this agreed figure be augmented by any underspend remaining from the 20-21 financial year. At 24 February 22, decision made to agree £90k for 23-24, in order that the application process can commence during 22-23 and that this agreed figure be augmented by any underspend remaining from the 21-22 financial year 115,764 0 034 Executive Director (Kirsty Flanagan) Development and Economic Growth Island Post 50,461 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 0 035 Executive Director (Kirsty Flanagan) Development and Economic Growth Royal National Mod 40,000 40,000 20,000 20,000 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 20,000 0 036 Executive Director (Kirsty Flanagan) Roads & Infrastructure Waste Variation Monies 1,492,997 1,492,997 640,000 852,997 This would 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, including the development of landfill cell construction works at Gartbreck. 640,000 426,000 426,997 037 Executive Director (Kirsty Flanagan) Roads & Infrastructure Climate Change 500,000 500,000 500,000 0 At the Council meeting on 27 February 20, 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 are on order and expected to be delivered in early 2022-23. 500,000 0 038 Executive Director (Kirsty Flanagan) Roads & Infrastructure 3G pitches / Tarbert Sports Pitches 427,286 427,286 89,373 337,913 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. 89,373 337,913 0 039 Executive Director (Kirsty Flanagan) Roads & Infrastructure Green Transport Initiatives 400,000 400,000 400,000 0 At the Council meeting on 27 February 20, 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 21-22. £260k Footways Reconstruction programme now agreed across the four areas, £140k Ardrishaig North Project. 400,000 0 040 Executive Director (Kirsty Flanagan) Roads & Infrastructure Waste Strategy 363,000 4,500 358,500 120,500 238,000 To fund/part-fund various waste projects that will support the council's compliance with the 2025 ban on the Landfill of Biodegradable Municipal Waste. 125,000 119,000 119,000 041 Executive Director (Kirsty Flanagan) Roads & Infrastructure Waste Management 256,753 10,040 246,713 118,960 127,753 Will be used towards long term waste management strategy/model, including but not limited to scoping work for the creating of a waste transfer station at Helensburgh. 129,000 127,753 0 042 Executive Director (Kirsty Flanagan) Roads & Infrastructure Replacement Signage and Bins 135,366 135,366 135,366 0 Replacing key road signage. This will help to reduce future budget pressures for replacement of signs and would also help to enhance the streetscape and general appearance of the area. The bulk of Road signs have been delivered and installation is now in progress and will be completed during 2022-23. 135,366 0 0 043 Executive Director (Kirsty Flanagan) Roads & Infrastructure Kintyre Recycling Redundancy Costs 36,000 12,643 23,357 23,357 0 To fund redundancy costs associated with Kintyre Recycling. 36,000 0 0 044 Executive Director (Kirsty Flanagan) Roads & Infrastructure Amenity Services introduction of management information system 28,099 28,099 28,099 0 Delay with introduction of amenity time recording system, spend unlikely to be incurred until 2022-23 for handheld devices and software. 28,099 0 0 045 Non Departmental Non Departmental Underwriting development of Rothesay Pavilion 1,000,000 1,000,000 1,000,000 0 Funding to meet additional costs identified as necessary for the refurbishment of Rothesay Pavilion. 1,000,000 0 0 046 Non Departmental Non Departmental Loans Fund 385,279 385,279 385,279 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 has to be earmarked to help offset the saving. 385,279 0 0
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Ref Department Service Description Opening Balance Budget Drawdown New earmarking during 22-23 Remaining Balance Still to be drawn down in 22-23 Planned to spend in future years Plans for Use Amount Planned to be Spent in 2022- 23 Amount Planned to be Spent in 2023- 24 Amount Planned to be Spent from 2023-24 onwards 047 Non Departmental Non Departmental Utilities 283,000 283,000 283,000 0 To contribute towards the expected adverse impact on the 2022/23 budget of utility costs inflation as per Budget Pack 283,000 0 0 048 Non Departmental Non Departmental Digital Projects (General Provision to be allocated) 103,545 103,545 103,545 0 To deliver a number of Digital Service Transformation Projects, specifically in Education and Customer Support Services, but also to reserve a further amount to support priority digital transformation projects identified in Departmental ICT programmes, that have not yet started due to resource constraints. The specific projects include: Supply Staff Booking System £0.035m, Skype for Business (for Education) £0.030m, Enhancing Curriculum Choice and Equity of Provision £0.080m, Digital Customer Engagement Developments £0.073m, Replacement of Learning Management System £0.030m, Increase in Schools Bandwidth £0.063mand a general provision still to be allocated £0.189m. Further allocation to Hybrid Council Meetings agreed October 2021 (£0.085m). There is a proposal for 2021-22 year end to use the balance of this earmarking towards the Security Operations Centre Subscription unspent budget request - per Appendix 2.1l 103,545 0 0 049 Non Departmental Non Departmental Community Resilience Fund 76,447 76,447 76,447 0 Fund established in 2012/13 to be spent over more than one year. Fund reduced at the Council meeting on 11 February 2016 76,447 0 0 050 Non Departmental / Chief Executive's Unit Across Services / Chief Executive's Unit Information Management (Balance of Funding) 209,844 209,844 209,844 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 209,844 0 0 051 Non Departmental / Executive Director (Douglas Hendry) Across Services / Commercial Services Information Management (Estates Survey Work) 12,697 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 0 052 Non Departmental / Executive Director (Douglas Hendry) Across Services / Legal and Regulatory Services Information Management (Digitalisation of Title Deeds) 92,000 92,000 61,000 31,000 To support a number of initiatives in respect of improving the Council's information management in line with the transformation agenda and increasing the pace of change as outlined in the BV Review. The planned initiatives include: Estates Survey work £122k, Digitalisation of Title Deeds £92k (delay on spending due to COVID-19), document management and workflow system for Planning, Building Standards and Environmental Health £77k and a balance of funding to explore information management solutions in a strategic and coherent way £209k 61,000 31,000 0 053 Non Departmental / Executive Director (Kirsty Flanagan) Across Services / Customer Support Services Digital Projects (Digital Customer Engagement Projects) 73,000 73,000 73,000 0 To deliver a number of Digital Service Transformation Projects, specifically in Education and Customer Support Services, but also to reserve a further amount to support priority digital transformation projects identified in Departmental ICT programmes, that have not yet started due to resource constraints. The specific projects include: Supply Staff Booking System £0.035m, Skype for Business (for Education) £0.030m, Enhancing Curriculum Choice and Equity of Provision £0.080m, Digital Customer Engagement Developments £0.073m, Replacement of Learning Management System £0.030m, Increase in Schools Bandwidth £0.063m and a general provision still to be allocated £0.189m 73,000 0 0 054 Non Departmental / Executive Director (Kirsty Flanagan) Across Services / Customer Support Services Digital Projects (Increase in Schools Bandwidth) 63,455 63,455 63,455 0 To deliver a number of Digital Service Transformation Projects, specifically in Education and Customer Support Services, but also to reserve a further amount to support priority digital transformation projects identified in Departmental ICT programmes, that have not yet started due to resource constraints. The specific projects include: Supply Staff Booking System £0.035m, Skype for Business (for Education) £0.030m, Enhancing Curriculum Choice and Equity of Provision £0.080m, Digital Customer Engagement Developments £0.073m, Replacement of Learning Management System £0.030m, Increase in Schools Bandwidth £0.063m and a general provision still to be allocated £0.189m 63,455 0 0 055 Non Departmental / Executive Director (Kirsty Flanagan) Across Services / Customer Support Services Digital Projects (Replacement Learning Management System) 11,470 11,470 11,470 0 To deliver a number of Digital Service Transformation Projects, specifically in Education and Customer Support Services, but also to reserve a further amount to support priority digital transformation projects identified in Departmental ICT programmes, that have not yet started due to resource constraints. The specific projects include: Supply Staff Booking System £0.035m, Skype for Business (for Education) £0.030m, Enhancing Curriculum Choice and Equity of Provision £0.080m, Digital Customer Engagement Developments £0.073m, Replacement of Learning Management System £0.030m, Increase in Schools Bandwidth £0.063m and a general provision still to be allocated £0.189m 11,470 0 0 056 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) 57,491 36,314 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 57,491 0 0 10,458,934 732,279 0 9,726,655 6,691,072 3,035,583 7,423,351 1,922,686 1,112,897
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APPENDIX 2 COVID Earmarkings As at 31 October 2022 Ref Department Service Description Opening Balance Budget Drawdown Released back to General Fund New earmarking during 22-23 Remaining Balance Still to be drawndown in 22- 23 Planned to spend in future years Plans for Use Amount Planned to be Spent in 2022- 23 Amount Planned to be Spent in 2023- 24 Amount Planned to be Spent from 2023-24 onwards 001 Chief Executive's Unit Community Planning Community Planning - temp post to support communities 55,000 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 0 002 Chief Executive's Unit Community Planning COVID-19 - Test and Protect Support 44,047 10,000 34,047 34,047 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 COVID-19 impacts 44,047 0 0 003 Chief Executive's Unit Financial Services LACER Fund 797,720 797,720 797,720 0 The Council meeting on 28 April 2022, it was agreed that Local Authority Covid Economic Recovery (LACER) Funding is to be used to distribute Scotland Loves Local cards to CTR recipients. This will take place in June 2022 giving Economic Development time to encourage the Co-op to sign up to accept the cards. 797,720 0 0 004 Chief Executive's Unit Financial Services Housing Benefits Private 231,027 231,027 231,027 0 Specific funding allocation for DHP to support tenants financially affected by the COVID-19 outbreak to sustain their tenancies. It is expected there will continue to be pressure on this budget going into 22- 23 231,027 0 0 005 Chief Executive's Unit Financial Services Flexible Food Fund 510,573 144,620 365,953 365,953 0 Financial Insecurity funding from Scottish Government routed into the Argyll and Bute Flexible Food Fund (ABFFF) is aimed at tackling financial insecurity for adults and families across Argyll and Bute. ABFFF offers financial support and wider confidential professional help to anyone suffering hardship. 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 will help support daily living expenses. If the claimant engages with these services, a second payment will be made to contribute to a further months daily living expenses. In the period from 10 January 2021 to 30 April 2022 client gain in extra benefits income for families was £1.45 million with 1,090 families had been supported. The project has been extended to 31 March 2023 and this money will be used to support it. 510,573 0 0 006 Chief Executive's Unit Financial Services Flexible Funding for Supporting People while at Tier 4 COVID 167,983 47,711 120,272 120,272 0 Funding 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, particularly those at risk through health and social inequalities; this support could cover the same types of support currently delivered including information and advice, access to food and medicines, and practical and emotional support; and, administration costs to support delivery (e.g. strengthening the National Assistance Helpline) and liaison and co-ordination with 3rd sector. It will be for Local Government to use this funding flexibly for this purpose. 167,983 0 0 007 Chief Executive's Unit Financial Services Self Isolated Support Grant 16,000 16,000 16,000 0 Unspent admin funding for processing Self isolation Support Grants. Monies will be fully utilised in 2022/2023 to support the further administration of the grant until 31 March 2023. 16,000 0 0 008 Chief Executive's Unit Financial Services Test and Protect Extension 9,929 9,929 9,929 0 Funding provided in relation to the Local Self-Isolation Assistance Service. This will be used to support the recruitment of 0.5FTE LGE6 temp post to assist with call volumes in the Scottish Welfare Fund team in 2022/23 9,929 0 0 009 Executive Director (Douglas Hendry) Education Logistics Funding - Safe Opening of Schools 940,605 89,536 851,069 851,069 0 SG Funding to ensure the safe opening and operation of schools. Includes transport, PPE, Cleaning and expansion of estate. 940,605 0 0 010 Executive Director (Douglas Hendry) Education Additional Teaching/Support in Schools/Digital Devices/Family Home Learning Support Fund - £45m Grant - £45m 488,310 488,310 0 0 0 Continuation of funding for additional staffing, teachers, support staff, additional devices for pupils and additional family /home learning programmes. 488,310 0 0 011 Executive Director (Douglas Hendry) Education COVID 19 - Education Recovery - Additional Staff in School and ELC settings 373,346 373,346 0 0 0 To employ a variety of school staff to meet the needs of children and young people in their local areas and ensure that levels of teaching and support staff in schools can be maintained in the 2021-22 academic year. Funding will also be used to support the transition from ELC to primary school. 373,346 0 0 012 Executive Director (Douglas Hendry) Education Education to Support Young People 321,816 243,124 78,692 19,452 59,240 As agreed at the Council Meeting on 25 February 2021 with an original allocation of £0.600m. Agrees 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. 262,576 59,240 0 013 Executive Director (Douglas Hendry) Education Recruitment of Additional Teachers and Support Staff in Schools 136,715 136,715 0 0 0 Fund additional teachers and support staff. 136,715 0 0 014 Executive Director (Douglas Hendry) Education EDU - Community Mental Health and Wellbeing Support to Children and Young People - Pandemic Funding 49,756 49,756 49,756 0 Scottish Government/COSLA Initiative to support the work under the Children and Young People's Mental Health and Wellbeing Programme grant split in 2020-21 with £183,750 of the fund utilised by local collaborative partnerships for supporting children, families and carers through the pandemic. The Scottish Government has agreed for the balance to be spent in 2022/23. 49,756 0 0 015 Executive Director (Douglas Hendry) Legal and Regulatory Services Welfare Rights Support 172,000 172,000 172,000 0 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. 172,000 0 0 016 Executive Director (Douglas Hendry) Legal and Regulatory Services LACER Funding - Advice Services 130,000 130,000 0 0 0 Local Authority COVID Economic Recovery (LACER) Funding for Welfare Rights - ALI Energy, Bute Advice, Citizens Advice 130,000 0 0 017 Executive Director (Kirsty Flanagan) Customer Support Services Self Isolated Support / Self Isolated Support Grant (HR) 115,000 115,000 115,000 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, however low infection rates and therefore demand in A&B meant that this was not required in 2020/21 or 2021-22. The 2021-22 funding of £43,000 will be be used for Recovery related activities including the recruitment of a Temporary Additional Web Developer to implement the improvements identified by customers in the Customer Engagement Consultation and to mainstream the Coronavirus page content back in to Business as usual. Another portion will be used to fund the Digital Receptionist solution as part of safe re-opening of offices. The 2021-22 funding of £72,000 will be used to fund consultancy and development of RPA (robotic process automation) software which will build automation within HR workflows and processes. This will improve efficiency and accuracy. 115,000 0 0 018 Executive Director (Kirsty Flanagan) Development and Economic Growth Staycation and Marketing Argyll and Bute 592,013 106,368 485,645 485,645 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. 592,013 0 0
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Ref Department Service Description Opening Balance Budget Drawdown Released back to General Fund New earmarking during 22-23 Remaining Balance Still to be drawndown in 22- 23 Planned to spend in future years Plans for Use Amount Planned to be Spent in 2022- 23 Amount Planned to be Spent in 2023- 24 Amount Planned to be Spent from 2023-24 onwards 019 Executive Director (Kirsty Flanagan) Development and Economic Growth Tackling Digital Exclusion Top-Up Fund 250,000 250,000 250,000 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. 250,000 0 0 020 Executive Director (Kirsty Flanagan) Development and Economic Growth LACER Funding (Small Business Development Grant) 200,000 200,000 200,000 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. 200,000 0 0 021 Executive Director (Kirsty Flanagan) Development and Economic Growth LACER Funding (Sector Support Grant) 150,000 150,000 150,000 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. 150,000 0 0 022 Executive Director (Kirsty Flanagan) Development and Economic Growth LACER Funding (New Enterprise Support Grant) 120,000 120,000 120,000 0 Local Authority COVID Economic Recovery Fund grant. This funding would provide £3,000 grants to help new businesses start up and establish. 120,000 0 0 023 Executive Director (Kirsty Flanagan) Development and Economic Growth Staycation Investment per budget pack February 22 100,000 100,000 100,000 0 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 season. 100,000 0 0 024 Executive Director (Kirsty Flanagan) Development and Economic Growth Economic Development - temp post to support economic recovery 55,000 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 0 025 Executive Director (Kirsty Flanagan) Development and Economic Growth EH Covid Posts 41,145 41,145 41,145 0 Funding for 2 posts for 2 years and not recruited until late 20-21 41,145 0 0 026 Executive Director (Kirsty Flanagan) Development and Economic Growth LACER Funding (Shop Local) 40,000 40,000 40,000 0 Local Authority COVID Economic Recovery Fund grant. This funding would provide funding to continue the Shop Local scheme into 2022-23 and 2023-14, buying additional cards and allow the cards to gather momentum and support local businesses. 40,000 0 0 027 Executive Director (Kirsty Flanagan) Development and Economic Growth Tenant Hardship Fund 30,000 30,000 30,000 0 Grant received from Scottish Government to support tenants suffering hardship due to COVID-19. Claims have been made and Housing are in the process of paying these out and all claims will be settled during 2022-23. 30,000 0 0 028 Executive Director (Kirsty Flanagan) Development and Economic Growth LACER Funding (Gypsy Travellers) 10,000 10,000 10,000 0 Local Authority COVID Economic Recovery Fund grant. This funding would pay for MECOPP (Minority Ethnic Carers of People Project) to engage with the Gypsy Travellers community on the important subject of the cost of living increases, fuel poverty and the impact of factors such as their remote rural locations and the facilities available to them for everyday living have on their livelihoods 10,000 0 0 029 Non Departmental Across Departments COVID Cost Pressures Beyond 2021/22 370,000 370,000 370,000 0 As agreed at the Council Meeting on 25 February 2021 (£2.5m) with the value reduced to £0.370m based on more up to date projections at year end 2021-22. Allocation of COVID funding to projected 22/23 Revenue Cost Pressures 370,000 0 0 030 Non Departmental Non Departmental Recovery and Renewal Fund 1,547,000 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. Proposals for use of this fund to be brought forward by officers to the Policy and Resources Committee. To include in the first instance options for maximising Argyll and Bute’s potential as a green, connected staycation destination of choice, requesting that officers bring to the Environment, Development and Infrastructure Committee a report on use of external funding sources and other opportunities for improving the electric vehicle charging network. 1,547,000 0 0 031 Non Departmental Non Departmental Unallocated Admin Support Grant 411,285 411,285 411,285 0 Funding to support the delivery of the Business Grants to local businesses, partially used during 20/21 and 21/22 but a balance remains to be carried forward and used in future years 411,285 0 0 032 Non Departmental Non Departmental Capital pressure 257,000 257,000 257,000 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 0 033 Non Departmental Non Departmental Levelling up Fund bids per P&R February 22 150,000 150,000 150,000 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 0 034 Non Departmental Non Departmental CHARTS per budget pack February 22 75,000 50,000 25,000 25,000 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. 75,000 0 0 035 Non Departmental Non Departmental CHARTS 7,000 7,000 0 0 0 As agreed at the Council Meeting on 25 February 2021. Allocation of COVID funding to CHARTS £0.067m, with the balance of £0.007m being carried to 2022/23. The allocation is to ensure that Argyll and Bute’s culture, heritage and arts sector can make a contribution to our overall recovery and renewal. 7,000 0 0 8,965,270 1,826,730 0 0 7,138,540 7,079,300 59,240 0 8,906,030 59,240 0