ITEM NO: 5 Report To: OVERVIEW (AUDIT) PANEL Date: 21 September 2015 Reporting Officer: Cllr J M Fitzpatrick - First Deputy (Performance and Finance) Ben Jay - Assistant Executive Director, (Finance) Subject: REVENUE MONITORING OUTTURN Report Summary: Recommendations: Links to Community Strategy: Policy Implications: Financial Implications: (Authorised by the Section 151 Officer) Legal Implications: (Authorised by the Borough Solicitor) This report shows that the overall net revenue expenditure in the financial year has exceeded the allocated budget by 2.506m, in line with previous forecasts. Strong budget management is required to ensure that the Council achieves its financial plans. This is set in the context of challenging savings targets: 13m for and a further 24m and 14.1m planned for 2015/16 and 2016/17 respectively. Detailed analysis on the achievement/non-achievement of savings targets in is included for each service area within the report. 1) That the revenue outturn position is noted; 2) That the detail for each service area is noted; 3) That the changes to the in-year and future year revenue budgets as outlined are approved Budget is allocated in accordance with the Community Strategy. Budget is allocated in accordance with Council Policy. These are the subject of the report. There is a statutory duty to ensure the Council sets a balanced budget and that it is monitored to ensure statutory commitments are met. Risk Management: Access to Information Failure to properly manage and monitor the Council s budgets will lead to service failure and a loss of public confidence. The background papers relating to this report can be inspected by contacting the report writer, Ben Jay, Assistant Executive Director of Finance by: Telephone:0161 342 3864 e-mail: ben.jay@tameside.gov.uk
REVENUE MONITORING QUARTER 4 1. INTRODUCTION 1.1 This is the final revenue monitoring report of the financial year. The report summarises the revenue outturn position of the Council at the 31 March 2015. 1.2 Details of the various sections and appendices within the report are shown below: Section 2: a summary of the revenue financial position of the Council. Section 3: updated performance position against the agreed savings proposals. Section 4: Business Rates and Council Tax collection performance. Section 5: Procurement monitoring. Section 6: the recommendations of this report. Appendix 1: the Council s budget and outturn revenue position for. Appendix 2: details for each directorate showing the revenue outturn position, and: o An explanation of significant variations to budget o Analysis of expenditure and income o A savings update Appendix 3: details the changes to the Council s in-year revenue budget since March 2014. Appendix 4: analysis of the Council Tax and Business Rates collection performance. Appendix 5: Council s future year s revenue budgets. 1.3 This report details Directorates revenue outturn position for against budgets for the year and shows the net of income and expenditure as a variation to budget. 1.4 Separate tables, which break down the budgets into elements of expenditure and income, are included in Appendix 2, to show how Directorates are utilising their allocated funding. 1.5 Since the Budget Report was approved at Full Council in March 2014 a number of changes to in-year budgets have been required. Details of the changes are summarised in Appendix 3. Changes to future year s budgets that have been required since the 2015/16 and 2016/17 Budget Report was approved at Full Council in February 2015 have been adjusted for and the future year s budget position is summarised at Appendix 5. 2. SUMMARY FINANCIAL POSITION 2.1 The Council s overall net revenue expenditure in the financial year has exceeded the allocated budget by 2.506m. Table 1 shows the revenue outturn position for. This is included at Appendix 1 in greater detail. 2.2 The outturn position has improved from the previously reported quarter 3 position ( 4.646m over budget). Some service positions have improved due to the timing of particular pieces of work falling in the new financial year, chiefly within Adult Social Care. 2.3 Brief explanations of the variations to budget are included in Table 1 below. The Council is actively developing ways to deliver services differently, but is also continuing to provide necessary services.
Table 1: Outturn revenue position for 2.4 It should be noted that in some service areas the reported position is not sustainable as it is supported by the use of one-off monies, such as reserves or savings brought forward from previous years. This is a short term solution to cover, for example, any delays delivering savings targets. 2.5 The 2015/16 and 2016/17 Budget Report was approved at Full Council in February 2015. It included the Council s Medium Term Financial Strategy (MTFS), which sets out the Council s
future year s budget allocations by service area. The impact of the outturn position ( 2.506m over budget), broken down by service area in Table 1, will be considered in the context of the Council s multiyear rolling budget plan, with subsequent decisions on future year budget allocations being taken in due course. 2.6 Below is a summary taken from the MTFS, which shows what the expected position was. The targets for 2015/16 and 2016/17 are the current estimated position before any mitigating actions for the outturn position are put into place. It takes account of known future funding reductions and anticipated demand and cost increases. These assumptions will be kept under review. Table2: Summary Medium Term Financial Strategy 3. SAVINGS 3.1 Savings targets were allocated in line with consideration of the Council s core purpose, policy priorities, and assessed risks. The Council agreed a savings target of 13m for as part of a two year budget plan. Detailed savings proposals were drawn up for and details of performance against these targets are included within the relevant sections of Appendix 2. Below is a summary setting out which of the agreed savings targets were delivered in. Table 3: Savings Summary
4. COUNCIL TAX AND BUSINESS RATES 4.1 The Business Rates Retention Scheme means that a reduction in the level of Business Rates income collected has a direct impact on Council resources. The level of Council Tax income collected remains an important area for the Council as any shortfall in the level of Council Tax income also has a direct impact on Council resources. 4.2 At the end of March 2015 the Council Tax collection rate is slightly below target by -0.26%. The Business Rates collection rate has exceeded the target by +0.61%, this margin has shown significant improvement during the period between January 2015 and March 2015. 4.3 Both the level of Business Rates and Council Tax income have been closely monitored during the financial year. Appendix 4 includes two tables that show how the Council is performing against target collection rates in both Business Rates and Council Tax. 5. PROCUREMENT MONITORING 5.1 Alongside monitoring the Council s level of expenditure and income, we also monitor procurement activity across the Council and that our approach to procurement is in line with the wider policies of the Council, especially Growing Tameside. This ensures opportunities for further spending reduction and purchasing efficiencies continue to be made. Performance against key measures are reported to service areas alongside financial performance information. At 31 March 2015 55% of procurement spend occurred within the Tameside borough. The calculation of local spend is based on the billing postcode data and as such it is a measure of performance which can be compared year on year as appose to an accurate calculation. The current position represents an improvement overall from last year. Further it is possible to analyse performance between different council areas, which shows a wide range of levels of local spending. In some cases, simple restrictions exist which prevent higher levels of local spend. The emphasis should always be to seek to spend locally where possible. The following table provides a breakdown by directorate at 31 March 2015: Directorate Total Third Party Spend Third Party Spend within Tameside % Local Spend Director of People 72,613,326 48,165,943 66% Director of Public Health 13,142,099 7,513,980 57% Director of Place 42,841,002 21,492,496 50% Other Corporate expenditure 15,388,895 2,192,655 14% Grand Total 143,985,322 79,365,074 55% 6. RECOMMENDATIONS 6.1 The recommendations of this report are: (i) That the revenue outturn position is noted; (ii) That the detail for each service area is noted; (iii) That savings achieved by each area are noted. (iv) That the changes to the in-year and future year revenue budgets as outlined are approved.
APPENDIX 1 Budget Outturn Variation to Budget DIRECTOR OF PEOPLE Childrens Childrens Social Care 14,482 23,217 8,735 Strategy and Early Intervention 2,623 2,623 0 Education 5,603 5,599 (4) 22,708 31,439 8,731 Adult and Early Intervention Services Adult Social Care 52,719 50,530 (2,189) Adults and Early Intervention 1,381 1,349 (32) 54,100 51,879 (2,221) Stronger Communities 9,154 9,234 80 TOTAL DIRECTOR OF PEOPLE 85,962 92,552 6,590 DIRECTOR OF PUBLIC HEALTH 15,105 14,318 (787) DIRECTOR OF PLACE Asset and Investment Partnership Management 3,721 3,744 23 Environmental Services 42,393 42,138 (255) Development Growth and Investment 1,749 1,520 (229) Digital Tameside 1,857 1,865 8 TOTAL DIRECTOR OF PLACE 49,720 49,267 (453) RESOURCES Director of Governance 6,523 6,073 (450) Director of Finance Finance 2,069 1,897 (172) Audit and Risk Management 412 385 (27) Exchequer 2,579 2,498 (81) 5,060 4,780 (280) Corporate Costs 6,391 5,626 (765) TOTAL RESOURCES 17,974 16,479 (1,495) Capital and Financing 21,290 19,941 (1,349) TOTAL 190,051 192,557 2,506
APPENDIX 2 DIRECTOR OF PEOPLE 1. CHILDRENS a. Overview Childrens has exceeded its overall budget by 8.731m in. Although plans are in place to deliver the specific savings proposals in future years, remaining within the annual budget has proved more difficult due to a combination of more demand for the service and greater complexity of the cases presented. The service is committed to reducing placement costs, for example through renegotiating prices and a specialist fostering scheme. Due to delays in the implementation of this scheme, the full year effect of savings allocated against this scheme has not been achieved. Reasons for the significant variations to budget: Childrens Social Care Due to staff turnover within Safeguarding teams posts are remaining vacant for longer than anticipated which has resulted in spend less than budget. A combination of more demand for the service and greater complexity of the cases presented, has led to additional in year budget pressure. Planned savings have proved more difficult to realise than anticipated. The service is committed to reducing placement costs, for example through renegotiating prices and a specialist fostering scheme. Due to delays in the implementation of this scheme, the full year effect of savings allocated has not be achieved. (294) 2,985 4,429 Other minor variations. 264 Overspend brought forward from 2013/14. 1,351 Children s Social Care Total 8,735 Education Other minor variations. (4) b. Budget Analysis An analysis of expenditure and income for each service within Children s is detailed below:
Childrens Social Care Strategy and Early Intervention Education Core Services Education - DSG Specific Services
c. Savings Update Planned Savings Savings Achieved Under/ (Over) Achievement Description De-escalation from Social Care 200 200 0 Reduction in External Placements 2,100 0 2,100 Reduction in existing LAC Placements 200 0 200 Commissioning Review of Contracts 524 442 82 Staying put payments 160 0 160 Income Generation from Health Grant 50 50 0 Review of Admin & IT 200 200 0 Review of short breaks 200 0 200 Additional Adoption Income 108 108 0 Children's Centres 250 250 0 Therapy Continuing Health Care (CHC) 300 0 300 Leaving Care 453 0 453 Reduced Legal Fees 130 23 107 Young Carers 25 25 0 Income generation from the formation of an arms length 150 0 150 Community Interest Organisation Contracting against Public Health 68 75 (7) Out of Hours Rationalisation 20 0 20 Whole Life Disability Pathway 100 0 100 Non Continuation CAMHS contribution 212 212 0 Participation Officer 34 37 (3) Review of Boyds Walk 200 0 200 Service Review 684 684 0 Savings planned to be achieved in advance (312) (312) TOTAL 6,056 2,306 3,750
2. ADULT AND EARLY INTERVENTION SERVICES a. Overview The savings target has been achieved and Adult and Early Intervention Services has been delivered within its allocated budget, with an outturn level of spending below budget of 2.221m. This is entirely due to one-off reduction in costs as detailed below. Adults Social Care As part of service rationalisation, vacant posts have not been filled throughout the year which has resulted in spend less than budget. Work has been ongoing throughout the financial year to reduce costs on Residential and Nursing placements with a view to bringing clients back in Borough from high cost Out of Borough placements. The move towards integrated working continues to progress, however, due to timing issues additional monies received in year will not be needed until after April 2015. (306) (1,931) Increases in the hourly rate charged by Homecare providers with effect from January 2015. 160 Other minor variations below 0.050m. (112) Adults Social Care Total (2,189) Adults and Early Intervention Other minor variations below 0.050m. (32) b. Budget Analysis An analysis of expenditure and income for each service within Adult and Early Intervention Services is detailed below:
Adult Social Care Adults and Early Intervention c. Savings Update Description Planned Savings Savings Achieved Under/ (Over) Achievement Development of accommodation options and sheltered 300 300 0 housing Transport 388 0 388 Mental Health Review 240 240 0 Commissioning Framework 350 350 0 Use of NHS Social Care funding 110 110 0 Staffing Savings due to vacant posts 0 388 (388) TOTAL 1,388 1,388 0
3. STRONGER COMMUNITIES a. Overview Stronger Communities has exceeded its budget by 0.080m. The service will continue to be closely monitored in future years as budget pressures increase. The reasons for the service being over budget are: Savings to be identified within Stronger Communities. 1,618 Savings planned from the implementation of Go To Centres have not yet materialised as implementation has been delayed. Due to the holding of vacant posts and a reduction in agency staff, spend is projected to be less than budget. 800 (213) One off monies and other general moratorium savings. (986) One-off use of savings b/fwd from previous years. (1,427) Loss of funding streams and one-off monies. 288 Total 80 b. Budget Analysis
c. Savings Update Planned Savings Savings Achieved Under/ (Over) Achievement Description Supporting People - reduction in supporting people 750 673 77 contract Reduction in Sports Trust Contract 197 197 0 Reduction in Operational from line services, Including 437 0 437 street cleansing, weed spray, nursery etc. Development of Go to Centres 800 0 800 Savings to be identified from Community Services 1,793 0 1,793 Efficiencies Board TOTAL 3,977 870 3,107
4. DIRECTOR OF PUBLIC HEALTH a. Overview The year-end position reflects the consolidation of expenditure and commitments against the budget. A comprehensive service redesign and transformation programme has been in progress during the year, outcomes from which will shape future commissioning, supported by a Public Health investment framework, for early intervention and prevention programmes that will deliver sustainable improvement to health and wellbeing as part of the Care Together and wider public sector reform programme. Expenditure below budget on employee costs as a result of appointments being made later than anticipated. Expenditure below budget on prescribing costs and enhanced services. An indicative budget is set for prescribing and GP enhanced services based on previous activity. Prescribing activity, provision of services and patterns of claims by individual practices have affected this expenditure throughout the year, resulting in spend less than budget. (38) (444) One off investments planned for were delayed due to unforeseen circumstances. (305) Total (787) b. Budget Analysis
DIRECTOR OF PLACE 5. ASSET AND INVESTMENT PARTNERSHIP MANAGEMENT a. Overview The service has exceeded its budget by 0.023m. The service will continue to be closely monitored in future years as budget pressures increase. The reasons for the service being over budget are: Under-achievement of income targets mainly resulting from ongoing vacant units within a number of industrial estates and a shortfall in shop rental income. 317 Expenditure less than budget on employee costs, professional services and legal fees. (294) Total 23 b. Budget Analysis
c. Savings Update Description Planned Savings Savings Achieved Under/ (Over) Achievement Corporate Landlord Savings 1,000 1,000 0 TOTAL 1,000 1,000 0 6. ENVIRONMENTAL SERVICES a. Overview Structure changes and budget realignments arising from the transfer of operational services have resulted in the service spending less than budget by 0.255m In addition the service continues to scrutinise all spending with a view to identifying further savings for future years. Savings relating to employee costs across the service arising as a result of vacant posts not being filled. (275) Lower than anticipated expenditure on the purchase of plastic sacks (caddy liners). (140) Lower than anticipated expenditure on Core Hire specialist fleet items as a result of delayed replacement. (94) Increased street lighting energy charges. 137 Lower than anticipated income from Trade Waste mainly as a result of reduced external contracts. 125 Contribution received from Public Health to tackle illicit tobacco. (71) Overspend B/fwd from 2013/14. 67 Other minor variations. (4) Total (255)
b. Budget Analysis c. Savings Update Planned Savings Savings Achieved Under/ (Over) Achievement Description Waste Levy - Maximise Savings from Landfill 1,000 1,000 0 Waste Services / Fleet Management 846 0 846 Highway Maintenance / Bridges / Structures 200 200 0 Savings to be identified (770) (770) 0 Increased Fees & Charges - Env Health 300 230 70 Car Parking Income Remove Free Parking 0 90 (90) Traffic Flow Management 190 190 0 Options for reducing street lighting energy 400 0 400 Lean Review of Environmental Services 500 0 500 Explore joint working and synergies with Public Health 880 0 880 TOTAL AS PER ORIGINAL SAVINGS PLAN 3,546 940 2,606 Other savings identified across Environmental Services following detailed review 0 2,943 (2,943) TOTAL 3,546 3,883 (337)
DEVELOPMENT GROWTH AND INVESTMENT a. Overview The outturn position is detailed below: Savings relating to employee costs across the service arising as a result of vacant posts not being filled. Expenditure in excess of budget for professional consultancy services within Planning Development Control. (185) 73 Savings identified in advance to be retained for future years pressures. (113) Other minor variations below 0.050m. (4) Total (229) b. Budget Analysis
c. Savings Update Planned Savings Savings Achieved Under/ (Over) Achievement Description Transport Savings 10 10 0 TOTAL 10 10 0 7. DIGITAL TAMESIDE a. Overview The outturn position of expenditure over budget of 0.008m is due to planned savings achieved through reviewing the service structure, and delays in recruiting to posts. b. Budget Analysis
RESOURCES 8. DIRECTOR OF GOVERNANCE a. Overview The outturn position of expenditure under budget of 0.450m is due to several factors, including planned savings achieved through reviewing service structure, delays in recruiting to posts and reviewing lots of very small contracts and the way of working. b. Budget Analysis 9. DIRECTOR OF FINANCE a. Overview Planned savings as a result of service redesigns and the consequent reductions in expenditure, as well as the holding of vacant posts have resulted in the Directorate spending less than budget by 0.280m. This balance will contribute towards future years savings and specific projects in 2015/16.
b. Budget Analysis An analysis of expenditure and income for each service within Director of Finance is detailed below: 10. CORPORATE COSTS a. Overview Corporate Costs include a range of central functions including AGMA and Coroners costs and the cost of Democracy. The achievement of efficiencies and the receipt of additional income have resulted in an outturn position of spending below budget of 0.765m, as detailed below: Efficiencies achieved as a result of the insurance review. (367) Lower than anticipated external Audit fees and other minor variations. (69) Additional income within Other Services. (127) Efficiencies in the cost of Democracy. (202) Total (765)
b. Budget Analysis
APPENDIX 3 AMENDMENTS TO THE APPROVED BUDGET Since the Budget Report was approved at Full Council in March 2014 a number of changes to budgets have been required. Details of the changes are summarised below: Original Budget 207,405 Budget Report March 2014 Allocation of balances brought forward 713 Council tax freeze grant 803 Council tax increased base 118 Grant additional allocations: - SEN, DEFRA, Electoral registration & Community Safety 521 Grant reduction: - Care and support funding (15) 2,140 Revised Budget at Quarter 1 209,545 Bus Subsidy Grant 12 Care Bill Grant 125 Local Services Support Grant 33 Highway Flood Recovery Grant 138 Community Safety 127 435 Revised Budget at Quarter 2 209,980 New Burdens Grant 71 71 Revised Budget at Quarter 3 210,051 Business Rates Admin Grant 16 Transparency Code set up 8 New Burdens Grant 16 SBRR & S31 additional income 525 Individual Authority Business Rates Baseline 151 Service area budget realignments 37 753 Revised Budget at Quarter 4 210,804 APPENDIX 4
The tables below detail how the Council is performing against target collection rates in both Business Rates and Council Tax. The aim is to collect 100% of all income due. Arrears are pursued and recovery of current year arrears will continue in future years in the same way that previous year s arrears continue to be recovered. APPENDIX 5
BUDGET REALIGNMENT Since the 2015/16 and 2016/17 Budget Report was approved at Full Council in February 2015 a number of amendments to future year s budgets have been required. A summary of the future year s budgets is detailed below: 2015/16 Budget 2016/17 Budget 2017/18 Budget Director of People Childrens Social Care 14,264 13,471 13,471 Strategy and Early Intervention 2,623 2,623 2,623 Education 5,513 4,699 3,659 Adult Social Care 47,853 39,620 39,620 Adults and Early Intervention 1,287 1,287 1,287 Stronger Communities 6,589 6,327 6,327 78,129 68,027 66,987 Director of Public Health Public Health 17,155 15,034 15,034 Director of Place Asset and Investment Partnership Management 5,270 4,770 4,770 Environmental Services 43,130 45,957 45,957 Development Growth and Investment 1,362 1,320 1,268 Digital Tameside 1,714 1,714 1,714 51,476 53,761 53,709 Director of Governance and Resources Governance 5,980 5,980 5,980 Resources 5,383 3,776 3,776 Corporate Costs 6,404 6,404 6,404 17,767 16,160 16,160 Total Services 164,527 152,982 151,890 Capital and Financing 18,320 19,406 19,406 Other Cost Pressures and Funding 25,793 23,230 25,621 TOTAL 208,640 195,618 196,917