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Item: 14 Page: 1 Report To: Economic Development And ITEM: 14 PAGE: 1 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 PAGE: 2 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 ITEM:14 PAGE: 3 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. ITEM:14 PAGE: 4 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 ITEM:14 PAGE: 5 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 PAGE: 6 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.
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