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REPORT TO: ECONOMIC DEVELOPMENT AND INFRASTRUCTURE SERVICES COMMITTEE ON 3 MAY 2016

SUBJECT: DIRECT SERVICES AND DEVELOPMENT SERVICES (ECONOMIC DEVELOPMENT) CAPITAL AND REVENUE BUDGET MONITORING TO 29 FEBRUARY 2016

BY: CORPORATE DIRECTOR (ECONOMIC DEVELOPMENT, PLANNING AND INFRASTRUCTURE)

1. REASON FOR REPORT

1.1 To inform the Committee of the current position regarding Direct Services and Development Services (Economic Development) Capital and Revenue Budgets.

1.2 This report is submitted to Committee in terms of Section III (E) (1) of the Council’s Scheme of Administration relating to the consideration of Capital and Revenue Budgets and long term financial plans.

2. RECOMMENDATION

2.1 It is recommended that Committee considers and notes the budget monitoring report for the period to 29 February 2016.

3. BACKGROUND

3.1 The Revised Performance Management Framework February 2013 agreed by The Moray Council on 22 May 2013 (paragraph 8 (iii) of the Minute refers) requires that progress against Capital and Revenue Expenditure and the Capital Plan is reported to the relevant Service Committee every Committee cycle. Expenditure is reported in the first instance to Policy and Resources Committee quarterly.

3.2 The Capital and Revenue Budget for 2015/16 was approved by the Council on 12 February 2015 (paragraph 2 of the Minute refers) and further noted by this Committee on 7 April 2015 (paragraphs 9, 10 and 11 of the Minute refers). Subsequent deferrals, reprofilling and carry forwards of project budget have been approved by Policy and Resources Committee on 17 February,14 April 2015, 9 June 2015, 4 August 2015, 24 November 2015, 16 ITEM:14

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February 2016 and by The Moray Council on 24 June 2015 and 11 November 2015.

3.3 The Capital Plan reflects the Council’s priorities and is developed adhering to the Council’s Capital Strategy and Prudential Code. The Council’s current 10- Year Plan (Moray 2023: A Plan for the Future) was agreed by The Moray Council on 17 January 2012 (paragraph 2 of the Minute refers).

4. DIRECT SERVICES REVENUE BUDGET

4.1 APPENDIX I details the Direct Services Revenue Budget position to 29 February 2016.

4.2 REVENUE BUDGET POSITION 29 FEBRUARY 2016

Annual Budget Actual Variance Budget Year to Date &Committed Year to Date Year to Date £000s £000s £000s £000s 25,931 20,832 20,496 336

4.3 Direct Services actual and committed budget was below the programmed budget for the period to 29 February 2016 with a total net underspend of £336,000 against projected budget year to date. The position is summarised in the table below and significant variances detailed further in paragraphs 4.4

Ref Overspend Under spend Net Under spend Para £000s £000s £000s Significant Variance

Building Cleaning & Catering 4.4 84 Waste Management 4.5 111 Direct Services Admin / Quality Assurance 4.6 (19) Lands and Parks/ Countryside Access 4.7 (104) Roads Management 4.8 45

Fleet Services 4.9 112 Traffic & Transportation Mgmt 4.10 103 Flood Alleviation Management - (10) 0 Staff Saving Targets 4.11 15 Direct Services Directorate - (1) Total 336

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4.4 Building Cleaning and Catering is below budget at the end of February 2016 with a total under spend of £84,000. The variance is mainly within the School Catering Service, where increased school meal uptake from Primary 1-3 free school meals has resulted in economies in scale and reduced food costs per meal.

4.5 Waste Management has a cumulative under spend of £111,000 at the end of February 2016. This is mainly due to a combination of £85,000 under spend on landfill tax; £21,000 under spend on recycling contracts, £34,000 additional income from trade waste and recycling and £26,000 overspend on Leachate.

4.6 Administration and Quality Assurance has an overspend of £19,000, £17,000 of this was due to software licences relating to 2016/17 and it is expected that this will be carried forward to 2016/17 at year end with no variance anticipated.

4.7 Lands and Parks / Countryside Amenities is showing a cumulative overspend of £104,000. This position is due to a number of factors - Burial Grounds income is £2,000 over budget. Flood scheme landscaping is £9,000 over budget to date. Flood scheme landscaping contracts which the service had budgeted for did not materialise leading to a projected over spend of £42,000 by the year end. Ground Maintenance Services are £93,000 over budget due to lower income on routine works than was budgeted for.

4.8 Roads Management has an under spend of £45,000, this is a small variance compared with overall budget with no major individual variances.

4.9 Fleet Services combined budget has a cumulative under spend of £112,000. An overspend of £85,478 or 1.2% of income is due to over and under spends within the workshop including staffing and internal parts issues being under budget. This overspend is partly due to the being subcontracted at additional cost and subsequent budget overspend. It is calculated that for every hour jobs are subcontracted it costs the council £25 per hour more than the work being done in-house. We are currently taking on apprentices to fill the gaps recognising that this only partially mitigates against sub contracting.

4.10 Traffic & Transportation have an under spend of £103,000. £30,000 additional income was fuel duty rebates for minibuses. £75,000 of this budget was additional income achieved by Roads Maintenance - Roads Construction Consents (RCC) and Road Closures.

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5. DEVELOPMENT SERVICES (ECONOMIC DEVELOPMENT) REVENUE BUDGET

5.1 REVENUE BUDGET POSITION 29 FEBRUARY 2016

Annual Budget Actual &Comm Variance Budget Year to Date Year to Date Year to Date

£000s £000s £000s £000s 1,186 1,100 1,100 0

5.2 Development Services - Economic Development, actual budget to date has a zero variance.

6. DIRECT SERVICES CAPITAL BUDGET TO 29 FEBRUARY 2016

6.1 APPENDIX II details the Direct Services Capital Budget position to 29 February 2016. The total Capital Plan budget of £22,744 million has an actual spend of £17,581 million at the end of this period and a projected spend of £22,088.

6.2 APPENDIX III shows the projects within the Capital Budget with a summary of the ratings estimated by budget managers.

6.2.1 Projects are marked red / amber / green. This column represents an assessment of projected expenditure at end of year - with green being a high confidence level of expenditure close to projected expenditure.

6.2.2 At 29 February 2016, the majority of Capital Projects (26/36) were rated as green, six projects were rated as amber and four as red. A summary of the ratings is given in the table below.

Risk Status RAG No.of Projected projects expenditure 2015-16 £000s

High confidence of spend to G 26 17,072 estimate Medium confidence A 6 2,999 Low confidence of spend to R 4 2,017 estimate 36 22,088

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6.3 The following projects are rated as Amber:

Project Reason Para Total Actual Total for rating ref Capital expenditure Projected Plan As at 29 expenditure £000s February 2015-16 2016 £000s £000s Vehicles,&Plant Timescale 6.5.1 2,361 1,160 2,117 replacement programme Cycling walking Land 6.7.1 139 119 139 safer streets Issues Footways Resource 6.7.3 511 337 420 resurfacing & issues reconstruction Seatown Timescale 6.7.4 95 26 95 Bridge Cullen Minor Flood no capital 0 0 0 Alleviation budget at Schemes present Harbours 6.7.8 418 218 228 Economic Development

6.4 The following projects are rated as Red:

Project Reason for Para Total Actual Total Projected rating ref Capital expenditure expenditure Plan As at 29 2015-16 £000s February £000s 2016 £000s Roads 6.7.5 529 167 437 Improvements – Bridges Strengthening and Replacement Development Pending 6.7.6 464 581 581 of Western Committee Link Road decision Street Lighting Staff 6.7.7 300 176 260 – Replace Absence SOX and SON street lights with LED lights ITEM:14

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Street Lighting Staff 6.7.7 739 538 739 – Absence Replacement columns and lights

Vehicles, Plant and Equipment

6.5 Expenditure to 29 February totals £2,253,000 with all of the projects within this budget except one, (refer to 6.5.1) projected to spend in full by the end of the year.

6.5.1 The Vehicle & Plant Replacement Programme has an actual spend of £1,277,000 with committed orders to date of £2,178,000. Although orders were placed in September 2015 suppliers are now unable to deliver three vehicles from committed orders by year end resulting in an projected under spend of £2,117,000 at year end.. The vehicles will be delivered in April 2016.

6.5.2 The Dredger expenditure to date reflects the planned profile of spend and the budget for the year is projected to be £1,231,000 with the dredger not now being launched until April/May.

Lands and Buildings

6.6 Expenditure on Lands and Buildings projects totals £294,000, with all four projects are rated as green for projected expenditure.

Infrastructure Assets

6.7 Expenditure at the end of February 2016 totals £7.224 million. The majority of infrastructure projects are estimated to be fully spent in 2015/16, however the following projects are rated as amber or red for confidence of achieving projected expenditure.

6.7.1 Expenditure on Cycling, Walking and Safer Streets is ahead of projection with an actual spend of £119,000. Individual projects are progressing well but overall the project is rated as amber. This is due to the deferral of the Maltkiln Bridge scheme to a future year because land required to progress the project is not currently available to purchase. Other projects within this budget heading should ensure that the budget will be fully utilised by the end of the financial year.

6.7.2 A total of £1.955 million has been spent on carriageway resurfacing/ reconstruction this year and the programme is almost complete.

6.7.3 Footway resurfacing & reconstruction expenditure amounts to £337,000 to date. The potential to under spend for this budget was recognised in a report to Policy & Resources Committee on the 9 June 2015 (paragraph 8 of the ITEM:14

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Minute refers). This budget is also affected by street lighting resource shortages as some footway schemes are planned in conjunction with street lighting works. Therefore, this budget is ranked as amber for projected expenditure.

6.7.4 Seatown Bridge Cullen - Seatown Footbridge replacement Cullen is rated as amber for projected expenditure to reflect some uncertainty in the timescales for construction. Projected expenditure for 2015-16 is £95,000 which includes fabrication and delivery of the bridge deck to Buckie Depot for temporary storage. A start on site is expected during April with a projected spend of £95,000 this financial year. The Green/Amber /Red classification indicates the ability to meet current projected expenditure, not the original capital plan amount The capital plan has been revised to £95,000 and the projected spend is £95,000.

6.7.5 Bridges Strengthening & Replacement - This project is rated as red as there has been some slippage in the programme which is affected by weather, with current projected expenditure expected of £437,000. Projects at Bush Bridge, Tomliath Bridge and masonry arches programme are anticipated to be completed in the next financial year. Policy & Resources Committee on 16 February 2016 deferred £136,000 to enable projects to be completed in the next financial year. Other projects including Bridge of Avon, Drybridge Training Wall and Glenlivet Bridge parapets have cost less than originally anticipated. As a result, an estimated saving of £92,000 is forecast in this financial year.

6.7.6 Western Link Road - This project was ranked as red at 29 February 2016 to reflect the uncertainty pending the financial planning decision of The Moray Council on 30 March 2016. Part of the original Capital Plan buget was deferred to 2016/17 leaving a total Capital Plan figure of £464,000 for 2015/16. This project had an actual spend of £581,000 at the end of February. Following a decision by The Moray Council this project has been removed from the Capital Plan. Additional spend has occurred since 29 February 2016 relating to the early completion of a house purchase taking the actual spend to the end of March 2015/16 to £888,000.

6.7.7 Street Lighting – LED lighting project is rated as red and Street Column replacement rated as red to reflect significant temporary technical staff absences (maternity leave and sickness absence) which will have impacted on design and preparation of schemes, thus delaying order of lanterns. It is anticipated that the replacement of columns project will not be fully spent by the end of the year due despite the efforts of the rest of the street lighting team. Actual spend at end of February is £176,000 on LED project and £538,000 on replacement of columns and lights.

6.7.8 It is not likely that Harbours Economic Development Capital Plan figure of £418,000 will be fully spent in this financial year. Part of this budget is allocated to progressing the development of the O&M base which is subject to being awarded preferred port status. Buckie Harbour was not successful in ITEM:14

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securing either the construction or operations and maintenance phases for BOWL windfarm however discussions are ongoing as to its use as a contingency port. The decision on MORL wind farm is deferred, pending project award for Contract for Difference expected at the end of 2016. To date, actual expenditure on this project is £218,000.

6.8 Flood Alleviation Schemes

6.8.1 Expenditure on Flood Alleviation Schemes to 29 February 2016 totals £7,89,566.

6.8.2 Minor Flood Schemes – At this stage it is forecast that no capital expenditure will be incurred in 2015/16.

6.8.3 Newmill Phase 2 Flood Protection Scheme - this project remains on target to spend £52,000 in the current financial year.

7. SUMMARY OF IMPLICATIONS

(a) Moray 2023 A Plan for the Future/ Service Plan

Effective budget management is an essential component of delivery of Council priorities. This report was informed by Moray 2023 - A Plan for the Future and Council priorities and provides support to enable the priorities of healthier citizens, adults living sustainable independent lives safeguarded from harm and a growing and diverse economy to be delivered.

(b) Policy and Legal

There are no policy or legal implications arising directly from this report.

(c) Financial implications

The financial implications are highlighted within the report and detailed in APPENDICES I – III.

(d) Risk Implications

Budget managers are aware of their responsibilities for managing budget allocations and approval for variance will be sought from Committee in line with the Financial Regulations.

(e) Staffing Implications

There are no staffing implications arising from this report.

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(f) Property

There are no Property implications arising from this report.

(g) Equalities

There are no equalities implications arising from this report because the report informs the Committee on budget monitoring.

(h) Consultations

This report has been prepared in consultation with L Paisey, Principal Accountant, Head of Direct Services, Head of Development Services, D Westmacott, Committee Services Officer and Direct Services Management Team and Budget Managers. Any comments have been taken into consideration.

8. CONCLUSION

8.1 This report sets out the budget monitoring position and comments on variances for the Direct Services and Development Services (Economic Development) Capital and Revenue Budget for the period to 29 February 2016.

Author of Report: Nichola Smith, Quality Management Systems Officer

Background Papers:

Ref:

APPENDIX I DIRECT SERVICES REVENUE BUDGET PROGRESS – PERIOD TO 29 FEBRUARY 2016

Actual & Service Annual Budget Budget YTD Variance Committed YTD £000s £000s £000s £000s Building Cleaning & Catering 4,658 4,301 4,217 84 Waste Management 8,054 7,081 6,970 111 Direct Services Admin /Quality Assurance 337 308 327 -19 Lands and Parks/Countryside Amenities/Access 1,365 1,148 1,252 -104 Roads Management 4,818 4,275 4,230 45 Fleet Services 276 -1,459 -1,571 112 Traffic & Transportation Mgmt 5,076 4,223 4,120 103 Flood Risk Management 909 793 803 -10 Staff Saving Targets 276 15 0 15 Direct Services Directorate 162 147 148 -1 Total Direct Services 25,931 20,832 20,496 336 A PPENDIX

I

APPENDIX II DIRECT SERVICES CAPITAL BUDGET PROGRESS – PERIOD TO 29 FEBRUARY 2016

Actual & Total Capital Projected Expenditure Committed to Total Projected Total Number Plan Service Description 29 February of Projects 2015 - 2016 2016 £000s £000s £000s £000s

Q1 Q2 Q3 Q4

Vehicle Plant and Equipment 6 4,849 2,253 559 1,272 405 2,369 4,605

Lands and Buildings (Direct Services Only) 4 677 294 23 156 51 447 677

Infrastructure 21 9,206 7,224 1,248 2,513 2,986 2,049 8,796

Flood Alleviation Schemes 5 8,012 7,810 3,199 2,153 1,961 697 8,010

Total 36 22,744 17,581 5,029 6,094 5,403 5,562 22,088

A PPENDIX

II

Direct Services Capital Revised Total R/A/G * Service Programme 2015 / 2016 Total Projected Capital £000 Plan APPENDIX III £000

Vehicle Plant and Equipment Vehicles Vehicle & plant 2,361 2,117 A Roads Maintenance replacement programme Dredger 2,341 2,341 G Transportation Equipment Children’s Play Areas 72 72 G Environmental Protection (Parkland) Facilities Management 15 15 G Environmental Protection Development of Waste 20 20 G Environmental Protection Strategy – containers upgrade Moycroft, vehicles Domestic & Trade Waste 40 40 G Environmental Protection Bins Lands and Buildings Waste Management New landfill cells, capping 449* 449 G Environmental Protection and reinstatement Upgrade of waste facilities 135* 135 G Environmental Protection Waste management 80 80 G Environmental Protection Moycroft Grounds maintenance / Public Areas Speyside Way Bridges & 13 13 G Environmental Protection other works (funded from receipt) Infrastructure Road Safety Measures Road Safety Barrier 83 83 G Consultancy Provision Road Safety Provision 130 130 G Transportation New Road Signs & 40 40 G Transportation RoadMarkings Cycling, Walking, Safer 139 139 A Transportation Streets Passing Places 50 40 G Roads Maintenance Road Improvements Carriageway resurfacing & 1,996 2,056 G Roads Maintenance reconstruction /surface dressing Footways resurfacing & 511 420 A Roads Maintenance reconstruction Bridges Strengthening and 529 437 R Consultancy Replacement Remote footbridges 40 40 G Drainage and other works 682 682 G Roads Maintenance (Developer Contributions) 83 83 G Transportation Direct Services Revised Total R/A/G* Service Capital Programme Total Capital Projected 2015 / 2016 Plan £000 £000 Infrastructure Bridges Seatown footbridge 95 95 A Consultancy replacement Cullen Strategic Route Action Plans B9016 Buckie - Keith 8 8 G Consultancy

Elgin Traffic Management Development of 464 581 R Consultancy Western Link Route etc Access Road to Elgin 1,229 1,229 G Transportation High School

River Lossie Cycleway 1,149 1,149 G Consultancy Elgin Disability Adaptions Disabled persons 57 57 G Transportation parking places, dropped kerbs

Street Lighting Replace SOX And SON 300 260 R Roads Maintenance street lights with LED lights Replacement columns 739 739 R Roads Maintenance and lights

Harbours Replacement of life 464 300 G Transportation expired elements and upgrade Harbours Economic 418 228 A Transportation Development

Flood Alleviation Schemes and Coastal Protection

Flood Alleviation Schemes Elgin 6,895 6,895 G Consultancy Forres (Findhorn and 1,055 1,053 G Consultancy Pilmuir) Rothes 10 10 G Consultancy Flood Alleviation Schemes Minor Flood Alleviation and Coastal Protection Schemes requiring 0 0 A Consultancy further investigation Newmill Phase 2 52 52 G Consultancy

NOTE: *Projects are marked red / amber / green. This column represents an assessment of projected expenditure at end of year - with green being a high confidence level of expenditure close to projected expenditure (not capital plan amount)