PAPER NO: 04-528 BOROUGH COUNCIL

EDUCATION OVERVIEW AND SCRUTINY COMMITTEE – 6TH JULY 2004

EXECUTIVE –12TH JULY 2004

Report by the Director of Finance on the Financial Results for the year 2003/04

SUMMARY OF REPORT

Actual capital and revenue spending for 2003/04 is shown compared with the revised estimates for services within this Committee’s terms of reference:

Revised Actual Estimate Varianc e £000 £000 £000

Capital 13,188 12,675 + 513 Revenue 116,300 116,960 - 660

Capital spending overall was 104% of the approved level. This over achievement will be offset by the approved cashflow in 2004/05.

Included in the revenue underspend is £502,000 for centrally retained Standards Fund Schemes, which can be spent or allocated to schools over a seventeen month period, i.e. to 31st August 2004. To accommodate this change in approvals, it will be necessary to cover the net cost, representing the Council’s contribution equivalent to £502,000 by requesting a budget variation for the financial year 2004/05 from the Executive. This leaves an underlying small underspend of £158,000. The outturn figure includes £6.862 m in respect of school balances, including devolved specific grant such as standards fund. This does not represent actual expenditure incurred during 2003/04, but is available for application in 2004/05. This can be compared to £7.34 m carried forward at the beginning of this year, including devolved specific grants for all schools including nursery schools.

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RECOMMENDATIONS

1. The Education Overview and Scrutiny Committee are asked to support the recommendation in paragraph 3 below.

2. If the Overview and Scrutiny Committee approve any views, comments or additional recommendations on this report, these will be reported to the Executive.

3. The Executive are recommended to approve the proposed revenue budget variation in respect of the Council’s contribution to Standard Fund Schemes of £502,000 for 2004/05.

INTRODUCTION

4. This report sets out provisional financial results, subject to audit, for the services within this Committee’s terms of reference for 2003/04. A summary of capital spending for 2003/04 is set out in paragraph 5 below and is followed by explanations of the main variances from the capital programme. A summary of the revenue outturn for 2003/04 is shown in paragraph 6, which analyses total expenditure both over the services involved and the resources used. The summary is followed by a more detailed analysis of the revenue spending on each service with explanations of the main variances from the revised budget. Paragraph 9 details the position on grant related services and, in particular, requests a revenue budget variation in 2004/05 for the Council’s contribution underspent in 2003/04 which, under Standards Fund approvals, can be spent over a seventeen month period, i.e. to 31st August 2004.The prospects for revenue spending in 2004/05 are outlined in paragraph 10.

CAPITAL SPENDING

5. Table 1 summarises the Committee’s capital expenditure for 2003/04. Details of individual schemes are shown in the Appendix to this report and explanations of the major variances are given in the following paragraphs:-

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TABLE 1 CAPITAL PROGRAMME

CAPITAL VARIANC SPENDING PROGRAMME E (+)/(-) £’000 £’000 £’000

SECONDARY EDUCATION 4,211 3,972 + 239

PRIMARY EDUCATION Rewire/Boilers 1,064 1,042 + 22 Roofs/Cladding 1,207 1,625 - 418 Main Schemes 1,700 1,863 - 163

Total Primary 3,971 4,530 - 559

SPECIAL SCHOOLS AND OTHER SCHEMES 1,805 1,805 -

Schools Access Initiative 205 280 - 75 Single Regeneration Budget 492 489 + 3 Devolved Capital and Sure Start 2,504 1, 599 + 905

TOTAL EDUCATION OVERVIEW AND 13,188 12,675 + 513 SCRUTINY COMMITTEE

As shown in the summary above and in detail in the Appendix , the capital expenditure in 2003/04 of £13.188 million produced a variance of + £0.513 million when compared to the approved programme of £12.675 million. The over achievement of the total expenditure against the estimated payment profile will be offset by the approved cashflow in 2004/05.

The main variances are outlined below:

Secondary Education (+ £0.239 million) Total expenditure on all Secondary Schools was £4.211 million compared to the approved programme of £3.972 million. The main variance related to St.Cecilia’s School, SW18 (West Hill) new school scheme (+ £0.508 m) which results from greater progress than planned on works and procurement of furniture and equipment. For Technology College, SW11 (Latchmere) targeted capital scheme a delay in the consultant requesting payment for fees resulted in a variance of - £0.134 million; this scheme is now out to tender.

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Primary Education (- £0.559 million)/Special Education (£ NIL million) The total expenditure on all pimary schemes was £3.971 million as compared to the approved programme of £4.53 million. The major variances on Primary schemes were Alderbrook School, SW12 (Balham)– boilers and heating (+ £76,000) asbestos discovered that required removal prior to commencement of the contract. Belleville School, SW11 (Northcote) – flat roof and windows (- £341,000) delays due to initial poor performance of the contractor. The major variances on secial schemes and other schemes are , SW19 (West Hill) – Targeted Capital (+ £329,000) more progress than anticipated on works and Hillbrook School,SW17 (Graveney) new build Nursery (- £219,000) delays by contractor.

The over achievement of approved cashflow in 2003/04 will be offset by the approved cashflow in 2004/05.

Schools devolved capital (+ £966,000) Schools progressing more projects using this resource following a streamlining of procedures by Education Department, additional spending will be met by DfES grant.

SUMMARY OF REVENUE OUTTURN

6. Overall budgets have underspent by £0.660 million on the approved budget of £116.960 million, which equates to –0.56%. The main variances are summarised below and dealt with in more detail in paragraphs 7 to 9. However, taking into account the Standards Fund under spending of £502,000, there was an underlying underspend of £158,000.

TABLE 2

2002/03 2003/04 REVISED ACTUAL ACTUAL BUDGET VARIANC % E £’000 £’000 £’000 £’000

97,628 Employees 108,965 114,410 - 5,445 - 4.8 57,418 Running Expenses 60,733 54,507 + 6,226 + 11.4 234 Capital Financing 159 73 + 86 + 117.8

155,280 169,857 168,990 + 868 + 0.5 - 46,903 Income - 53,557 - 52,030 - 1,527 - 2.9

108,377 116,300 116,960 - 660 - 0.6

REVENUE EXPENDITURE

101,028 Schools 107,370 107,179 + 191 + 0.2 6,424 Non Schools 8,099 8,825 - 726 - 8.2 925 Grant Related 831 956 - 125 - 13.1

108,377 116,300 116,960 - 660 - 0.6

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All primary, secondary and special schools operated with full delegation under the Council’s scheme for financing schools for 2003/04, and included within the Committee totals are the surplus balances on school delegated budgets of £6.862 million, which are to be carried forward for possible application in 2004/05. This is compared to £7.129 million in 2002/03.

SCHOOLS

7. The budget for this service was overspent by £191,000.

TABLE 3

2002/03 2003/04 REVISED ACTUAL ACTUAL BUDGET VARIANC % E £’000 £’000 £’000 £’000

93,968 Employees 104,453 110,605 - 6,151 - 5.6 43,331 Running Expenses 46,457 37,002 + 9,455 + 25.6 192 Capital Financing 148 73 + 75 + 102.7

137,491 151,058 147,680 + 3,379 + 2.3 -36,463 Income - 43,689 - 40,501 - 3,188 - 7.9

101,028 107,369 107,179 + 191 + 0.2

APPLIED TO

47,590 Primary Education 46,153 47,297 - 1,143 - 2.4 38,812 Secondary Education 44,278 43,607 + 671 + 1.5 11,577 Special Education 12,820 12,204 + 616 + 5.0 3,049 Other Special Education 4,118 4,071 + 47 + 1.2

101,028 107,369 107,179 + 191 + 0.2

The main areas of variance were Recoupment (+ £118,000); Independent Special Schools (+ £304,872) and Care staff vacancies – Bradstow School, Broadstairs, Kent (- £150,000); SEN guides/Bus Attendants (- £99,000) and SEN Statement Support (- £92,000).

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NON SCHOOL SERVICES

8. The budget for this service was underspent by £726,000.

TABLE 4

2002/03 2003/04 REVISED ACTUAL ACTUAL BUDGET VARIANC % E £’000 £’000 £’000 £’000

1,025 Employees 1,320 1,602 - 282 - 17.6 10,104 Running Expenses 9,573 10,135 - 562 - 5.5 42 Capital Financing - - - -

11,171 10,893 11,737 - 844 - 7.2 -4,747 Income - 2,794 - 2,912 + 118 + 4.1

6,424 8,099 8,825 - 726 - 8.2

APPLIED TO

2,996 Pre-Primary Education 4,756 4,918 - 162 - 3.3 551 Support for Students 608 648 - 40 - 6.2 2,461 Other Non School Expenses 2,406 2,885 - 479 - 16.6 135 Community Education 109 155 - 46 - 29.7 281 Adult Education 220 219 1 + 0.5

6,424 8,099 8,825 - 726 - 8.2

The main variances related an underspend in the Support for Students (Travel Passes - £53,000) Capitalised Pension Costs (- £349,000).

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GRANT RELATED

9. The budget for this service was underspent by £125,000.

TABLE 5

2002/03 2003/04 REVISED ACTUAL ACTUAL BUDGET VARIANC % E £’000 £’000 £’000 £’000

2,635 Employees 3,192 2,202 + 990 + 45.0 3,983 Running Expenses 4,702 7,370 - 2,668 - 36.2 - Capital Financing 11 - + 11

6,618 7,905 9,572 - 1,667 - 17.4 -5,693 Income - 7,074 - 8,616 + 1,542 + 17.9

925 831 956 - 125 - 13.1

APPLIED TO

925 Grants 831 956 - 125 - 13.1

925 831 956 - 125 - 13.1

This area was underspent by - £125,000. This mainly arises from an underspend of £158,000 on the Council’s contribution to Standard Fund Schemes managed centrally by the Council. There is a further underspend of £344,000 on the Council’s contribution to schemes awaiting delegation to schools. This is included within the variances for Schools in Table 3.

Under DfES approvals Standards Fund expenditure can be incurred over a seventeen month period, i.e. to 31st August 2004. For the financial year 2003/04 an underspend of - £502,000 accrued on centrally retained initiatives, equivalent to the Council’s contribution. In order to apply this funding in 2004/05, it will be necessary to request a revenue budget variation of £502,000 from the Executive.

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CONCLUSION AND PROSPECTS FOR 2004/05

10. The revenue outturn for 2003/04 for the Committee, subject to audit, shows a net underspend excluding Standards Fund of £158,000. Underspending variances were within controllable limits and did not affect the ability to deliver approved programmes. Financial management and accounting systems continued to be developed at Council and school level during the year.

11. The challenges for 2004/05 will be to maintain and develop effective financial management arrangements within the service, and to ensure that new financial management and accounting systems enable data to be held and linked to users in the most efficient and cost-effective way. The resources going through the Standards Fund and other external funding require effective financial controls to be maintained to ensure that all grant monies due to the Council are received and contained within approved allocations.

The Town Hall, H.J.S. HEYWOOD Wandsworth, Director of Finance SW18 2PU.

28th June 2004

Background Papers

The following background papers were used in the preparation of this report:

1. The Council’s Management Accounts 2. The Council’s Budget Book

If you wish to inspect any of these documents, please contact initially the Committee Secretary on 020-8871 7857.

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APPENDIX

MAINSTREAM CAPITAL PROGRAMME SCHEMES

ACTUAL VARIANC SPENDING PROGRAMME E (+)/(-) £’000 £’000 £’000 SECONDARY EDUCATION

Battersea Technology College - Refurbishment Works to Gyms, Pool and 85 107 - 22 Changing Area - Targeted Capital Scheme - 134 - 134 , - Asbestos Removal - 10 - 10 - Block 2 Electrical 292 200 + 92 - Block 2 Heating Renewal 233 315 - 82 - Boiler Renewal Phase 1 7 8 - 1 - Science Project - 50 - 50 Chestnut Grove School - Improvements to Ventilation and Heating 145 150 - 5 - Refurbish Changing Rooms 315 310 + 5 - Remodelling and Refurbishment 4 20 - 16 Elliott School - Major Remodelling 29 50 - 21 - Security Fencing Works 17 20 - 3 - Sports Development/Sixth Form Block 114 50 + 64 - Roof Renewal/Windows and Asbestos Removal - 20 - 20 - Structural Repairs Phase 2 137 100 + 37 - Heating Service Renewal 2 20 - 18 Southfields Community College - Boiler Renewal - 5 - 5 - Changing Rooms 56 54 + 2 - City Learning IT Equipment 148 201 - 53 - Sports College Development 67 70 - 3 St Cecilia’s – New Building 2,508 2,000 + 508 Various Final Accounts 52 78 - 26

TOTAL SECONDARY EDUCATION 4,211 3,972 + 239

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ACTUAL VARIANC SPENDING PROGRAMME E (+)/(-) £’000 £’000 £’000 PRIMARY EDUCATION

Rewires/Boilers

Albemarle School–Renewal of Electrical Services 135 106 + 29 Alderbrook School, SW12 (Balham) – Boilers and 416 340 + 76 Heating Allfarthing School– Renewal of Electrical Services 147 142 + 5 Beatrix Potter School - Renewal of Electrical Services 88 82 + 6 Belleville School – Boiler Renewal - 5 - 5 Earlsfield School – Boiler Renewal 83 89 - 6 Franciscan School – Rewire 79 110 - 31 Furzedown School - Renewal of Electrical Services 57 70 - 13 High View School - Boiler Renewal 58 67 - 9 John Burns School– Boiler Renewal 1 10 - 9 Sellincourt School– Boiler Renewal - 9 - 9 Shaftesbury Park School – Boiler Renewal - 8 - 8 Westbridge School – Boiler Renewal - 4 - 4

TOTAL REWIRE/BOILERS 1,064 1,042 + 22

Roofs/Cladding and Windows

Belleville School - Flat Roofs, Structural Repairs and Windows 59 400 - 341 Chesterton School – Roof Renewal 6 15 - 9 Furzedown School – Windows 117 150 - 33 Hillbrook School – Roof/Window Renewal 415 419 - 4 Ravenstone School – Window Replacement 160 141 + 19 Smallwood School – Window Renewal - 10 - 10 Wix School – Roof Renewal/Windows 450 490 - 40

TOTAL ROOFS/CLADDING AND WINDOWS 1,207 1,625 - 418

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ACTUAL VARIANC SPENDING PROGRAMME E (+)/(-) £’000 £’000 £’000 PRIMARY SCHOOLS (Cont’d)

Other Schemes

All Saints School – Environmental Imps. 40 44 - 4 Beatrix Potter School - Play Area 158 150 + 8 - Rationalisation 25 28 - 3 Belleville School – Modernisation of Teaching 17 17 - Areas and Remodelling of Toilets Brandlehow School - Development 208 210 - 2 - Refurbish Kitchen - 15 - 15 - New Classroom 9 - + 9 Chesterton School – New Nursery 2 20 - 18 Eardley School - New Library, ICT Facilities and Modernisation 3 14 - 11 Earlsfield/Franciscan Schools - Building Application 3 - + 3 Falconbrook School – Infant Playground 59 73 - 14 Granard School – Playground Resurfacing - 5 - 5 Highview School – Environmental Improvements 41 85 - 44 Project Management Costs for NDS Condition 91 57 + 34 Ravenstone School - Learning Through Landscapes 15 15 - Riversdale School – Refurbish Kitchen 1 11 - 10 Schools Security Works – Various Sites 20 20 - Sellincourt School – New Kitchen 2 6 - 4 Sir James Barrie School – New Build Nursery 23 15 + 8 Smallwood School - Remodelling of Toilets 119 150 - 34 Southmead School – ASD/WC Provision 341 351 - 9 Westbridge School - Environmental Improvements 73 77 - 5 Various – Environmental Improvements - 40 - Various Final Accounts 450 460 - 10

TOTAL OTHER PRIMARY SCHEMES 1,700 1,863 - 163

TOTAL PRIMARY SCHEMES 3,971 4,530 - 559

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ACTUAL VARIANC SPENDING PROGRAMME E (+)/(-) £’000 £’000 £’000 SPECIAL SCHOOLS AND OTHER SCHEMES

Bradstow School - Targeted Capital 44 73 - 29 Chartfield School – Modifications 46 48 - 2 Eastwood Nursery - Renewal of Electrical Services 35 43 - 8 Garratt Park School - Fenestration 92 95 - 3 Greenmead School - Fenestration and Disabled Access Improvements 9 10 - 4 Linden Lodge School/Bradstow School– Targeted 682 353 + 329 Capital Nightingale School – Boiler Renewal 125 131 - 6 - Electrical/Fire Alarm Services 221 200 + 21 Professional Centre – Lift 106 118 - 12 Wandsworth Primary Play Association - Relocation 195 250 - 55 - Ravenstone School Balance 3 30 - 27 Early Years Neighbourhood Nurseries 15 10 + 4 Hillbrook School New Build Nursery 124 344 - 219 Various Final Accounts 108 100 + 8

TOTAL SPECIAL SCHOOLS AND OTHER SCHEMES 1,805 1,805 -

Schools Access Initiative 2003/04

Various Schemes 205 280 - 75

TOTAL SCHOOLS ACCESS INITIATIVE 205 280 - 75

SINGLE REGENERATION BUDGET

The Learning Matrix (SRB6) 476 476 - Overspend on Base Refit SRB 6 - + 6 Literacy for All (SRB4) 2 3 - 1 Islamic Centre Base Satellite (SRB4) 8 10 - 2

TOTAL SINGLE REGENERATION BUDGET 492 489 + 3

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ACTUAL VARIANC SPENDING PROGRAMME E (+)/(-) £’000 £’000 £’000 OTHER EDUCATION FUNDED SCHEMES

First Stop Shop (Roehampton) – Final Accounts 123 151 - 28 Schools Devolved Capital 1,499 533 + 966 Seed Challenge Funding 400 300 + 100 Sure Start - Katherine Low Settlement 441 470 - 29 - Roehampton 31 45 - 14 Various LEA Liability 10 100 - 90

TOTAL OTHER EDUCATION FUNDED SCHEMES 2,504 1,599 + 905

TOTAL EDUCATION OVERVIEW AND 13,188 12,675 + 513 SCRUTINY COMMITTEE

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