BOROUGH OF POOLE CABINET 14 JUNE 2016 COUNCIL BUDGET MONITORING FINANCIAL OUTTURN (1 APRIL MARCH 2016)

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1 BOROUGH OF POOLE AGENDA ITEM 10 CABINET 14 JUNE 2016 COUNCIL BUDGET MONITORING FINANCIAL OUTTURN (1 APRIL MARCH 2016) PART OF THE PUBLISHED FORWARD PLAN: YES 1 PURPOSE OF THE REPORT 1.1 This report gives the Council s performance against budget for the period 1 April 2015 to 31 March 2016 and the financial outturn for the year. 1.2 The purpose of the Council Monitoring reporting process is to present summary information to identify when prompt management action is needed to avoid an adverse impact on service delivery or the achievement of corporate objectives. 1.3 All Service Units have confirmed their acknowledgement of the issues raised. 2 DECISION REQUIRED 2.1 It is recommended that Cabinet: a) Note the contents and recommended actions included within the report. b) Approve additions to earmarked reserves over 100,000 since the budget was set in February 2016 as set out in paragraph 5.3 and 6.8 c) Approve the transfer of the surplus for the year of 0.3m to an earmarked reserve to support the 2016/17 budget as mitigation should savings not be delivered to the level planned. d) Note the update on the use of consultants as set out in Appendix A3. e) Request the Chief Executive make an urgent decision on behalf of Council to approve a revenue contribution to capital (RCCO) of 1.1m to carry out the detailed works required to complete Phase 1 of the essential maintenance on the Dolphin Centre Car Park as detailed in paragraph 5.3 and Appendix E. 2.2 It is recommended that Council: a) Approve the balance of the RCCO of 1.2m (to a total of 2.3m) for Phases 2 and 3 of the scheme above at 2.1 (e) and as detailed in paragraph 5.4 and Appendix E. 1

2 3 EXECUTIVE SUMMARY 3.1 Revenue Position The Council s revenue financial outturn for the year is a small surplus of 0.3m after the recommended revenue contribution to capital of 2.3million to support essential and urgent repairs to the Dolphin Centre Multi Storey Car Park (MSCP). Individual Theme budgets are all in surplus for the year with significant additional income being received in the final quarter across a number of services units. This includes, for example, in Adult Social Care (ASC) income from deferred payments and the resolution of a high cost case with the NHS. In the Place Theme additional income has been received, for example, from work in support of the capital programme and from within the Planning Service from an increase in major planning applications. In addition, Service Units were encouraged to deliver savings assumed for 2016/17 during the current financial year to ensure they were achievable, in support of the Medium Term Financial Plan (MTFP). Vacancy management and a brake on expenditure were also applied. The evidence indicates services have generally delivered savings ahead of schedule, particularly within the Business Improvement Theme. This includes the Stour Valley and Poole Partnership (SVPP) shared service, which has supported the delivery of savings in Revenue and Benefits Services. In the final quarter, the long standing Ordinary Residence claim with Dorset was settled releasing 1.2m from the total provided at December This has been achieved through detailed financial and legal negotiations and provides the People Theme with the previously unexpected surplus for the year. There has been further growth in demand within Children s Social Care since the December report but this has been offset by additional savings across Education Services. The final position has reduced the net drawdown from earmarked reserves from 6.6million forecast at December to 5.4 million, a reduction of 1.2m. An element of reduced reserves usage is due to delayed expenditure, for example in projects in Public Health and slippage in the ICT desktop replacement programme and corporate maintenance. However, the additional income, savings and efficiencies have also provided the opportunity to recommend setting aside further resources for corporate upgrades and developments in ICT. Appendix A1 provides a summary of the full year variances of the outturn compared with budget. A further summary at Portfolio level is included at Appendix B. 3.2 Un-earmarked Reserves If the proposals in 2.1 and 2.2 are approved the Council s un-earmarked reserves will remain at 6.25m. This is wholly consistent with the 2016/17 budget as set out by Council in February 2016 and is also at the minimum point within the risk- assessed range considered appropriate. 3.3 Earmarked Reserves The balance on earmarked reserves, before the proposed transfer of the surplus for the year, is 18.8 million as detailed in Appendix A2 to this report. This is a 2

3 reduction of 5.4 million compared with March It should be noted that the total funds held in earmarked reserves includes; 10.2m Financial Planning Reserve providing mitigation against the pressures within the Council s MTFP delivery over the next 3 years with 4.5m allocated to 2016/ m of reserves held by the Authority in support of partnerships with the National Health Service, schools and other stakeholders who will generally stipulate how such resources should be applied. 1.3m by way of numerous Government grants already received which relate to future year expenditure. For example the resources provided up front to support the Troubled Families Initiative, Special Educational Needs reforms, and projects underway in Public Health. These reserves will continue to be subject to review as part of the ongoing development of the Council s Medium Term Financial Plan. 3.4 Capital The Council invested 22.7m in its General Fund capital infrastructure during 2015/16 which represents an 89% spend of the final approved resources. This continues to demonstrate the Council s success over recent years in maintaining a high rate of delivery. A summary of the Capital Programme is included at Appendix C. 3.5 Housing Revenue Account (HRA) Landlord Account The Housing Revenue Account as prepared by Poole Housing Partnership (PHP) is summarised in Paragraph 8. There is ongoing work to finalise the position although it is believed that all material adjustments have now been included. The revenue account shows a balanced position after the net surplus of 0.3m is transferred to the capital account. The surplus is mainly due to higher rental income, reduced bad debts and savings on utilities, these being partly offset by an increase in overheads. The capital programme outturn of 11m compares with the December budget of 13.5m (82%) and a latest forecast of 10.8m (102%). The approved programme was adjusted to 12.7m at February Cabinet, reducing the outturn to 87% of the final approved capital programme. 3.6 Consultants Report - Annual Summary The report at Appendix A3 provides a summary for the year of expenditure on consultants needed to progress a range of projects, including capital. The report includes a level of spend of 1.9 million in 2015/16, continuing the small upward trend in recent years. This is largely due to the breadth and scale of projects within the capital programme, which accounts for 57% of the total spend on consultants in 2015/16. 3

4 4 REVENUE BUDGET MONITORING - 1 JANUARY TO 31 MARCH Appendix A1 to this report summarises the issues within the 2015/16 financial year end outturn. It should however be noted from the outset that there have been a number of changes that reflect some of the accounting entries required to be incorporated within the Council s formal statutory accounts. These book-keeping adjustments have been included to keep any changes between this report and the statutory accounts to an absolute minimum and to speed up the production of the statutory accounts. These adjustments do not impact on the general fund balance or the taxpayer, and include; International Accounting Standard 19 (IAS19) for pension accounting. Initial Capital Charges (Depreciation and Impairment). These have been processed but are subject to final refinements. 4.2 In summary, there has been an improvement in the Council s in-year operational position between the forecast at December and the financial outturn for the year. This has allowed resources to be transferred to capital to fund the essential repairs to the Dolphin Centre MSCP and an amount set aside as mitigation against any non-delivery of savings assumed in the 2016/ Significant variances at Theme level in the final quarter are set out in the table below: Exhibit 1 Movements in Revenue Variances greater than 100,000 between 31 December 2015 and 31 March 2016 People Theme Variance Movement 128 (259) 498 Children in Need & Independent Living Children with Health & Disabilities ASC Home Care Higher than expected spend on bed & breakfast accommodation for families in need. Reduced costs from the unexpected temporary closure of a residential short breaks/respite provider without an alternative available. There were also lower than anticipated costs within the residential budget and the contingency remained unused. Furthermore, there was a reduction in the number of direct payments as well as repayment of unused balances. Claim from the termination of a provider contract. 4

5 Variance Movement (248) (392) (1,236) ASC - Deferred Payments ASC Residential and Home Care for clients aged ASC Ordinary Resident Provision An additional 20 people took up the new deferred payments scheme with a greater number of existing users staying in the scheme for longer. Resolution of one high cost Mental Health case with provision for back pay released ( 212k) plus others savings on residential and community services across all client groups. Claim from DCC settled in the final quarter with the provision made earlier in the year reduced. The report from the Strategic Director People in Appendix D provides further detail on the cost pressures in Children s Social Care Services and how these have been managed across the Theme. Place Theme Variance Movement (103) (116) 157 (246) Transportation Additional Income Transportation Parking Services Fee income Planning & Regeneration Earmarked Reserves Planning & Regeneration Planning fee income Additional engineering income from the capital programme in the 4th quarter. Additional fee income from beaches, on-street, town centre and districts, due to tariffs changes and the early Easter plus additional season tickets income when a competitor withdrew from the market. Contributions to reserves to mitigate future pressures: 24k - Local Development Framework 28k - Planning, hearings and enforcements 69K Community Infrastructure Levy (CIL) to complete work should the Government abandon the tax. Members are reminded that 4.9m of the forward funding for the Twin Sails Bridge remains to be repaid from CIL receipts at March Continued increase in major applications over the 4 th quarter contributing significant fee income. 5

6 Variance Movement (137) 110 Planning & Regeneration CIL Administration Place Theme Other net variances Administration fees from the take up of historic and current year planning applications. Main movement over the quarter is the street lighting electricity budget saving forecast of 92k did not materialise. Additional charges were billed over the final quarter and are being investigated. There is likely to be an ongoing budget pressure for 2016/17. Business Improvement Theme Variance Movement 189 (159) (149) (103) 153 (153) (174) ICT Reserves Revenue and Benefits Services - SVPP Revenue and Benefit Services - Other Benefit Payments IT Services Desktop replacement Other Business Improvement Virement recommended in paragraph 5.3 as a contribution to the ICT Investment Reserves (Microsoft Licenses) using employee savings across the unit to allow for the costs of upgrading Microsoft office over the period to Service efficiencies being driven by the Council s involvement in the Partnership. Adjustments, savings and efficiencies, (including from non-recurring funding allocated for Poole support services) 205k, with reserves set aside of 56k to allow for IT and accommodation developments in 16/17. Continues efficiency of the Service in recovering 50m paid out to clients. Reduced spend in 2015/16 with work slipping into 2016/17 for the routine replacement and maintenance of IT equipment. A virement is proposed in paragraph 5.3 to add the annual budget surplus to an earmarked reserve to fund the work needed over 2016/17. Net savings across the theme in the final quarter in response to MTFP pressures. 6

7 Central Items Variance Movement 2,308 (261) (131) 5 VIREMENTS Revenue Contribution to Capital Investment income Funding Virements to be agreed (paragraphs 5.3 and 5.4) for emergency repair works to the Dolphin Centre Car Park as detailed in the report in Appendix E: Phase 1 (urgent works) of 1.1m Phases 2 and 3 works of 1.2m Main item relates to the reduced provision for back pay on leases following negotiations. Revised estimate of business rates income reflecting changes over the final quarter. 5.1 A revenue virement is a transfer of resources between or within approved budgets. 5.2 In accordance with the Council s Financial Regulations the following rules associated with revenue virements apply;- Senior Responsible Officers can approve virements up to 100,000. Virements over 100,000 and up to 500,000 require prior Cabinet approval. Virements over 500,000 require prior Council approval. 5.3 In accordance with these regulations the transfers (virements) to earmarked reserves or the capital programme in Exhibit 1 above require the approval of Cabinet: 189,000 transfer to the ICT Investment Plan (Service Unit specific) earmarked reserve for the upgrade needed for Microsoft Licenses. The funding is provided by employee savings across IT Services to allow for implementation over the period to ,000 transfer to a Corporate ICT Investment Plan earmarked reserve the reduced spend in 2015/16 for the routine replacement and maintenance of IT equipment as work has slipped into 2016/ ,000 surplus for the year transferred to the MTFP Reserve to support delivery of the savings planned in the 2016/17 budget 1,100,000 RCCO to be approved by the Chief Executive as an urgent decision on behalf of Council for the works required to complete Phase 1 of the essential maintenance on the Dolphin Centre Car Park as detailed in Appendix E. 5.4 In accordance with these regulations the proposed transfers (virements) below require the approval of Council: 1,200,000 RCCO for Phases 2 and 3 of the Dolphin Centre Car Park maintenance scheme as detailed in Appendix E. 7

8 6 RESERVES 6.1 The Council s unearmarked revenue reserves (General Fund) at the end of the 2015/16 financial year are unchanged at 6.252m. 6.2 The Council s 2016/17 and Council Tax setting process included a risk assessment which supports a range of 6.25m to 10.9m for the Council s unearmarked reserves. This range was established by having due regard to assessed operational risks of approximately 24.6m. Members approved a strategy that unearmarked reserves should be maintained at the lower end of this range. This took into account the current level of earmarked reserves. 6.3 This proposed position means that unearmarked reserves will remain lower than the 8.26m at April 2010 prior to the introduction of the Government s austerity measures. 6.4 Earmarked Reserves total 18.8 million at March 2016m before adding the surplus for the year of 0.3 million as recommended in the report. 6.5 A summary of Earmarked Reserves at 31 March 2016 is included at Appendix A2. Members are reminded that the earmarked reserves include the amounts set aside to support the budget for 2016/17 and delivery of the profiled savings plan in development for the MTFP up to March The table below summarises the main movements on earmarked reserves during the year and since December with further detail in paragraph 6.7. Exhibit /16 Earmarked Reserves Movements Greater than 100,000 Earmarked Reserve Forecast Movements Ref Dec 15 Mar 16 Change Reserves to support 15/16 3,602 3,602 0 Grant Related (287) Reserves Supporting the MTFP Corporate Re-organisation (45) Preventing Homelessness Accommodation Strategy Street Scene Culture and Community (54) ASC Reserve NHS Partnership (104) ICT Desktop Replacement (196) Dedicated Schools Grant see (92) Corporate Maintenance (134) European Maritime Day (225) (224) 1 ICT Investment Plans (services) 6 53 (235) (288) Other Movements individually< 100k (345) Total Use of Reserves in 2015/16 6,653 5,426 (1,227) Reserves to support 15/16 (3,602) (3,602) 0 Virements to capital (Appendix 2) 7 (380) (494) (114) Theme Net Drawdown of Reserves 2,671 1,330 (1,341) 8

9 6.7 The reasons for significant changes Since December 2015 are as follows: 1. Grant Related ( 287k) reduced drawdown Grants Dec 15 Mar 16 Change Flood & Water Management (54) Troubled Families (13) Adoption Reform Public Health note below (174) Waste Strategy vired to capital Annual movements less than 100, (131) Total Grant Related (287) The significant movement is for Public Health with a reduced reserves drawdown mainly due the planned spend on the Moving On Moving Up Project supporting school transition 9-13 years in priority neighbourhoods being delayed ( 100k). In addition, the surplus in the Drug and Alcohol budget ( 64k) in the final quarter has been vired to increase reserves plus other small movements. 2. Accommodation Strategy - 141k increased drawdown in the 4 th quarter to progress accommodation savings included in the MTFP (moving out of Crown buildings) and to relocate Creditors earlier than expected when the basement became unsuitable for occupation when the full impact became apparent of the flooding earlier in the year. 3. NHS Partnership ( 104k) reduced drawdown. The main element of the movement relates to the ASC previously forecast drawdown for the reablement service. The drawdown to cover staff costs has been reduced over the final quarter ( 76k) due to employee vacancies with funding retained in the reserve for pump priming MTFP savings initiatives. 4. ICT Desktop Replacement ( 196k) reduced drawdown. This movement includes the virement recommended in Paragraph 5.3 ( 153k) to allow the central programme to be phased over the period up to It also includes a reserve set aside for the printing strategy ( 43k) for the replacement central printers at the end of the 3-year contract. 5. Corporate Maintenance ( 134k) reduced drawdown. Works undertaken for the capital programme (Trinidad scheme) and Adult Education (Oakdale Centre) and an insurance claim (annex flooding) re-prioritised workload. Funding is to be kept within the reserve to support the ongoing maintenance programme. 6. ICT Investment Plan (Services) ( 288k) reduced drawdown. The total includes the ICT Services virement proposed for approval in paragraph 5.3 ( 189k) plus reserves set aside by other units collectively ( 99k). 7. ECPS Reserves (Waste and Street Scene) - 114k new drawdown to transfer earmarked reserve to the capital programme (Grant Funded Waste Strategy Reserve 85k and Council Priority Street Scene Reserve 29k). 9

10 Additional resources are needed for the existing salt barn scheme as tenders for the works have come in higher than initial estimates. The virement proposed is scheduled below in paragraph Those movements since the budget was set in February not related to Partnerships and grants and greater than 100,000 require the agreement of Cabinet: ECPS reserves transfer to capital 114,000 to provide additional resources for the salt barn where tenders came in above the budget allowance. 6.9 Dedicated School Grant (DSG) Monitoring and Earmarked Reserve Movement The DSG for schools and central pupil expenditure of 92m is ring-fenced with unspent grant required to be carried forward in an earmarked reserve. The table below summarises the outturn to be reported to Schools Forum in June. Exhibit 3 - Dedicated Schools Grant (DSG) Monitoring and Reserves Movement DSG Variances Dec 15 Mar 16 Change Reserves to support 2015/16 budget Early Intervention Project Provision for 2 year olds (210) (213) (3) Growth Fund (234) (229) 5 Other underspends each < 100k (136) (219) (83) Estimated funding changes from census: - 3&4 year olds at Jan 16 (151) (189) (38) - 2 year olds at Nov 15 & Jan Total (92) 6.10 As part of the process for constructing the Council s Statutory Accounts the direct operational balances of the Schools will be consolidated with those of the Council. These reserves total 3.9 million, representing 10% of their formula funding from the DSG. 7 CAPITAL 7.1 The Council s original capital programme budget for 2015/2016 was 21.9m. 7.2 As a consequence of the re-profiling of capital schemes as reported and approved in the previous Council budget monitoring reports throughout the financial year to date, the approved capital programme had been amended to 23.7m by December This re-profiling is the net combination of slippage from previous years, re-profiling to and from future years and various additions to the programme funded by capital grants and other sources. Significant additions to the programme included 0.4m to improve the Council s leisure centres, 10

11 0.9m anticipated investment in the Corporate Solar Panel programme, and the need to bring forward planned spend on the Council s Fleet Replacement programme ( 0.4m). 7.3 Total adjustments over the final quarter further increased the approved programme to 25.6m by 31 March The majority of this increase related to further acceleration of the Council s approved Fleet Replacement programme. Approved spend of 1.4m was brought forward from 2016/17 for the purchase of 10 Refuse Collection Vehicles. These vehicles were originally planned to be replaced in September 2016 but mechanical issues emerged in the existing fleet. Spend was brought forward to avoid significant extra revenue costs from short term hire and repairs & maintenance. The re-profiled spend is included in the Council s rolling medium term Fleet Replacement Strategy as approved by the Council as part of the 2016/17 setting process. A technical virement will be processed in 2016/17 to reduce the 2016/17 capital programme. 7.4 A further accelerated programme from 2016/17 is the Poole Approach Project (Poole Lifting Bridge) for 122,000, with the scheme progressing over the final quarter to deliver a start date on site of September Also in the final quarter, the programme was increased by 189,000 to take account of ongoing skip and bin replacement activity funded from the annual revenue budget set aside within ECPS. 7.5 The final outturn for the capital programme for the year was 22.7m which is 96% spend against the approved programme at December This performance compares favourably with recent years but is in part due to the schemes brought forward from 2016/17 as noted above. Exhibit 4: Capital spend against December approved programme each year 2011/ / / / /16 December approved Programme m Spend m % Spend against Programme 95% 80% 88% 87% 96% 7.6 A summary of Portfolio performance is attached at Appendix C. The majority of schemes are being delivered on schedule. Exhibit 5 below provides a summary of projects with programme slippage over 100,000 compared with the final approved resource. Exhibit 5: Capital Projects with slippage in planned spend > 100,000 Schemes 000 New Beach Huts 103 Leisure Centre Improvements 105 Coastal Protection - Central Poole Study 121 Corporate Solar Panel Programme

12 People Theme The New Beach Huts programme is being redesigned in light of structural issues identified from detailed ground surveys, with the business plan being updated to ensure the scheme is still viable. Planned improvements to Leisure Centres works were completed in April 2016 with only minor slippage from March There were no significant variations in individual schemes within the Children s Services or Adult Social Care elements of the Capital Programmes. Place Theme Delays in the installation of Flow Monitors for the Central Poole Study has resulted in some slippage. Installation is now planned for May Business Improvement - Phase 1 of the Corporate Solar Panel Programme is nearing completion. Of the 13 sites originally identified, only 9 or 10 are now expected to be progressed. Other energy efficiency and carbon reduction projects are being explored for implementation in 2016/17, with a report expected to come forward to Members later in the year. 8 HOUSING REVENUE ACCOUNT (HRA) 8.1 The Housing Revenue Account for the period between 1 April 2015 and the 31 March 2016 is prepared by Poole Housing Partnership (PHP). 8.2 HRA Revenue Account The position at March remains balanced according to the local policy with a 4.9m revenue contribution to capital for the year compared with a budget of 4.5m, the 0.4 million representing a net surplus on other revenue budgets. A summary of the Revenue Account is detailed below with reasons for variances greater than 100,000 provided. Exhibit 6 HRA Revenue Account at 31 March 2016 Forecast at Dec 15 Revenue Position at 31 March 2016 Note Actual March 16 Variance (20,218) Dwelling rents 1 (20,124) (20,223) (99) (2,912) Other income (2,922) (2,913) 9 (23,130) Total Income (23,046) (23,136) (90) 197 Bad debt provision (112) 1,284 Overheads & Other 3 1,234 1, ,445 RCCO 4 4,546 4, ,672 Depreciation 5 4,672 4,523 (149) 12,532 Other expenditure 6 12,397 12,296 (101) 23,130 Total Expenditure 23,046 23, (Surplus)/Deficit Note 1 - Rental dwellings small over recovery as void levels remain low. 12

13 Note 2 Bad debt provision - high collection rate on income of 99% with write offs below the budgeted level. Note 3 - Overheads and Other increased costs from three main areas. These are the change in the distribution of recharges for the Dorset landlord advertising system (Locata), new Housing Ombudsman registration requirement for the Council as well as PHP and provision for an increase in insurance costs. Note 4 RCCO - the expected contribution has been increased to reflect the net surplus for the year across all revenue budgets. Note 5 Depreciation - variation in expected asset movements over the year. Note 6 Other expenditure the main item being the reduced cost of utilities from contract negotiations. 8.3 HRA Capital Programme The February 2015 report to council agreed a 11.7m capital programme for the HRA in 2015/16. This has now been supplemented with carry forwards from 2014/15 totalling 1.8m, and virements over the year making the final total capital programme in 2015/ m. Exhibit 7 HRA Capital Account at 31 March 2016 Forecast at Dec 15 Capital Account 31 December 2015 Revised * Actual at Mar 15 Variance Proportion Spent % 5,270 Decent Homes 5,570 4,602 (968) 83% 300 Technical Projects (130) 57% 1,320 Housing Projects 1, (428) 68% 510 Sterte Court (42) 92% 396 New Build * % 2,826 Extra Care * 4,418 4,066 (352) 92% 170 Montacute * (9) 95% 10,792 Total 12,710 11,017 (1,693) 87% *Variances are reported against the revised programme agreed at February 16 Cabinet where net virements of 0.7 million of expenditure were re-profiled into 2016/17. This comprised bringing forward 1.6million for the Extra Care Scheme but with programme slippage in New Builds and the Montacute scheme of 2.3million. The reasons for significant variances from the final programme of 12.7 million are as follows: Decent Homes Planned Maintenance Programme ( 968,000). This slippage is due to: o low void numbers reducing kitchen and bathroom replacements o reduced maintenance as the estate grading programme has developed o new procurement procedures for work to windows and external decoration (such as roofs) but this has resulted in lower unit costs 13

14 Technical Projects ( 130,000). Technical issues emerged to delay the installation of the photo voltaic panels. The overall programme will now reduce as fewer schemes will be viable following the reduction in the feed-in tariff after 31 March Housing Projects ( 428,000). This includes slippage in a range of projects with most being continued in the 2016/17 programme. New Builds 236,000 additional spending after programmed slippage of 1.5m was agreed at Cabinet in February The acquisition of new properties was completed in March, earlier than expected. Extra Care ( 232,000). This is a shortfall against the 1.4million expected to be delivered early at Cabinet in February The project is well advanced, with the construction phase expected to finish in October The slippage will be added back to the 2016/17 programme. In comparison with the capital programme at December 2015, the final outturn of 11.0million represents 82% the approved plan of 13.5million. 9 STATUTORY ACCOUNTS 9.1 To comply with the Accounts and Audit (England) Regulations 2011 the Chief Finance Officer is required to certify that the Council s 2015/16 Statement of Accounts present a true and fair view of the Authority s financial position by 30 June At this stage the accounts will then be passed over for external audit prior to their consideration and approval, supported by the findings of the audit process, by Audit Committee in September In order to adhere to these deadlines the revenue and capital accounts for 2015/16 were closed in early May. Given the nature of the closedown process and the reporting difference between management and statutory accounting it is likely that there will be some adjustments made to the Council s final year end position for 2015/16. These are likely to include the following; Central support cost re-apportionments in line with the Service Reporting Code of Practice for Local Authorities (SeRCOP). Adjustments to the surplus/deficit on the Building Regulation Account. Adjustments resulting from the periodic review of the balance sheet. Adjustments as a consequence of consolidating the accounts of Poole Housing Partnership with those of the Authority s Housing Revenue Account (HRA). Schools final outturn position including any consequential impact on the Council s reserve position or classification. Compensated Absences for approved leave carried forward to 2016/ The Statement of Annual Accounts 2015/16 will include an audit trail of how the financial outturn presented in Appendix A2 links with the position as finally recorded in the annual accounts. 14

15 10 PROPOSED ACTIONS - REVENUE 10.1 Monitoring reports will continue to be presented quarterly throughout 2016/17 for the end of June, September, December and March The Children s Social Care will be monitored closely again during 2016/17 with reports provided quarterly, if necessary, by the Strategic Director People The Head of Culture & Community Learning Services to report to Members on the progress and reasons for delay in the Corporate Solar Panel Programme. 11 FINANCIAL IMPLICATIONS 11.1 Financial implications are as outlined within the report. 12 LEGAL IMPLICATIONS 12.1 It is a legal requirement of the Council to monitor its budgets during the financial year and to take remedial action if necessary. 13 RISK MANAGEMENT IMPLICATIONS 13.1 This report and the outlined actions will form part of the mitigation strategy associated with the following risks which appear on the Council s Corporate Risk Register: Long term resources and pressures. Adult Social Care and Health. Children & Young People Social Care. Regenerating Poole. Long-term pupil capacity in Schools. Organisational Transformation. Information Governance & ICT. Welfare Reform. Affordable Housing. Safeguarding and Domestic Violence. Risk and Resilience. Educational Standards. 14 EQUALITY IMPLICATIONS 14.1 Any variations to budgets require the responsible officers to be mindful of the equality implications within the Borough. Individual Holders will consider and address these implications in line with their service specific equality impact assessments. 15 CONCLUSION 15.1 The positive financial outturn for 2015/16 has enabled recommendations to be made to transfer additional resources to the capital programme for urgent car park maintenance and to set aside additional earmarked reserves to support the 15

16 2016/17 budget. This is due to a significant one off positive event and additional income in the final quarter together with the drive to deliver savings early. However, the financial outlook remains challenging with a significant gap to close to balance the current MTFP over the next three years. A RICHENS CHIEF FINANCE OFFICER & HEAD OF FINANCIAL SERVICES Contact Details Adam Richens Chief Finance Officer and Head of Financial Services Telephone: a.richens@poole.gov.uk Nicola Webb Head of Accountancy Telephone: nicola.webb@poole.gov.uk Background Papers: Nil Date: June

17 Appendix A1 Annual Variances at 31 March 2016 Greater than 100,000 People Theme Summary People Theme Areas Forecast at Dec Actual at Mar Change Total Children 1,031 1, Total Adults (288) (1,614) (1,326) Total Other People Services (Culture ( 89k), Housing & Community (balanced) & Public Health ( 50k) Total People Theme Variances 818 (427) (1,245) People Theme Children Looked After Children Children in Need & Independent Living Adoption Services Other Social Care Pressures Commissioning & Safeguarding Education Staff Vacancies Education ESG Education CHAD Education Other Variances Higher than budget increase in residential care & fostering placements. Increase in number of care leavers requiring support and bed & breakfast accommodation for families in need. A number of children requiring greater support plus cost increases from national changes. Additional employee and running costs. Sundry variances across the unit (additional staffing, fostering and early help reviews, software) Vacancies mainly in Capital Team and other employee changes. No further schools converted to academy status in 2015/16 Children with Health and Disabilities Reduction in respite care, residential placements and direct payments. Other net pressures, including school transport of 75k. Forecast at Dec Actual at Mar Change 1, (49) (122) (171) (49) (185) (189) (4) (170) (429) (259) Total Children s Variances 1,031 1,

18 People Theme Adults ASC Residential & Community Services ASC Residential & Community Services ASC DOLS cases ASC Deferred Payments ASC - Additional Income ASC Residential & Community Services ASC Ordinary Resident (OR) Claims ASC - Care Act Implementation and related specific Grant ASC Employee Costs ASC Other expenditure Claim from the termination of a provider contract. Forecast at Dec Actual at Mar Change Care services for older people (70) Late Grant (68k) announced for Deprivation of Liberty Safeguarding (DOLS) with expenditure lower ( 137k). Higher level of contributions than expected with 20 people taking up the new scheme and existing users remaining on the scheme for longer. Fairer contributions and other income, including catering, health funding for shared posts, other income. (128) (205) (77) 0 (248) (248) (404) (358) 46 Care services for younger age groups 34 (358) (392) Claim settled without back pay (provision released). Lower costs of packages than budgeted. Care Act part 2 delayed to Savings on Part 1 and Part 2 spend with Government agreeing Grant can be retained to support pressures. Vacancies within social work and commissioning teams. (415) (415) 0 (869) (882) (13) (120) (37) 83 Various net savings (63) Total before new Dorset OR Claim (1,650) (1,740) (90) ASC Ordinary Resident (OR) Provision. Disputed claim with Dorset County Council now settled. 1, (1,236) Total ASC (288) (1,614) (1,326) 18

19 Place Theme Transportation Maintenance Transportation - Concessionary Fares Transportation Real Time Information Contract Transportation Parking Services Transportation Services ECPS Waste Disposal Contract ECPS Street Scene Bridges and Structures 82k,Street lighting 40k, Engineering matched by additional income 32k Forecast at Dec Actual at Mar Change Reduction in journey numbers (223) (227) (4) Contract negotiations provided for first year as maintenance free. Additional fee income due to tariff changes and the early Easter plus additional season tickets income from following a competitor withdrawal from the market. Additional income main items: capital programme income ( 189k) and highways projects ( 46k). Sustained reduced tonnage over the year. Additional works drainage, carriageways & footways repairs (100) (98) 2 7 (109) (116) (145) (248) (103) (230) (181) ECPS Staffing Staff vacancies (148) (182) (34) Planning & Regeneration Reserve for EMD Planning & Regeneration Contribution to Reserves Planning & Regeneration Planning fee income. Planning & Regeneration- Community Infrastructure Levy (CIL) Reserve established to underwrite match funding required for European Maritime Day (EMD) in May 2017 agreed at Cabinet in January Contributions to Reserves: Local Development Framework - 24K, Planning Hearing and Enforcements - 28k, CIL - 69k (mitigation against the government potentially abandoning the tax). Increase in major applications. (3% of all applications but contribute almost 50% of fees). Administration fees from the take up of historic and current year planning applications ( 2.5m in CIL in 2015/16 from residential developments) (36) (75) (321) (246) 0 (137) (137) 19

20 Other net variances Other net pressures in Transportation 51k, Planning of 6k, in ECPS of 135k, Town Centre & Tourism 75k. Forecast at Dec Actual at Mar Change Total Place Theme Variances (308) (508) (200) Business Improvement Theme IT Services Employees IT Services Reserves Legal & Democratic Services Income Revenues & Benefits Services Revenues & Benefits Services Human Resources Financial Services Housing Benefits Corporate Management Other net variances Employee savings vacant posts Contribution to ICT Investment Reserves (Microsoft Licenses) Sustained increase in activity in the crematorium ( 367k) and cemeteries ( 35k). (Business case to come forward in 2016/17 for capital to upgrade and undertake essential maintenance due to increased usage of cremators) SVPP service efficiencies being driven by the Council s involvement in the Partnership. Adjustments, savings and efficiencies, (including from non-recurring funding allocated for Poole support services). The main variance is additional income ( 162k) mainly for recruitment & advertising with net pressures of 64k. Continues efficiency of the Service in recovering 50m paid out to clients. Forecast at Dec Actual at Mar Change (88) (177) (89) (343) (402) (59) 0 (159) (159) 0 (149) (149) (78) (110) (32) 0 (103) (103) Employee savings (129) (156) (27) Other net (savings)/pressures across the Themes - Legal ( 22k), Finance ( 71k), Corporate Strategy ( 37k), and IT of 19k. 63 (111) (174) Total Business Improvement Theme Variances (575) (1,178) (603) 20

21 Corporate s, Funding and Other Financial Items RCCO Prudential Borrowing and Twin Sails Funding Investment Income Funding Revenue Contribution to Capital (RCCO) to support MTFP savings and Dolphin Centre MSCP repairs Application of Community Infrastructure Levy replacing the forward funding previously charged to the General Fund. Investment income main variance is reduced provision for back pay on leases. Revised estimate of business rates income 154k and other adjustments. Forecast at Dec Actual at Mar Change 552 2,860 2,308 (498) (498) 0 30 (231) (261) (19) (150) (131) Central items Individual items less than 100k 0 (203) (203) Total Central Items Variances 65 1,778 1,713 Total Variances 0 (335) (335) 21