Committee Report: Budget monitoring 2006/07 2nd quarter

Report to:	Cabinet
Date:	16th November 2006
Subject:	Budget monitoring 2006/07 2nd quarter
Report of:	Director of Finance & IT
Contact officer:	Steve Clegg – 01942 827260
Purpose/summary:	To report progress on budgets against spending to the end of September 2006.
Alternative options considered and reason for selecting the one recommended:	No alternatives to reporting. This is essential best practice financial management.
Recommendation/decision:	To note the report and the action being taken to contain spending within the agreed budgets where possible.
Key Decision:	This report does not involve a key decision.
Implications:
Financial:	The report predicts a potential overspend against budget of £0.9 million by year end. This excludes the potential costs arising from equal pay. The prediction is based on 6 months income & expenditure trends and if steps are not taken to contain this degree of variation it would adversely affect the level of balances.
Staffing:	None identified within the report
Policy:	Budget Framework
Equal Opportunities - Has a Diversity Impact Assessment been conducted?	N/A
Wards affected:	All
Special Interest Members – Which have been consulted	N/A

Tracking/Process:

Panel	Overview & Scrutiny	Cabinet	Council
	Consultation	Ward Members	Partners
	Strategic Management Team 7th November 2006	-	-
-	-	16th November 2006	-

There are no Background Papers to this Report within the meaning of Section 100D of the Local Government Act 1972.

Proper Officer	D. J. Smith
Date	15 Nov. 06

1. Introduction

A report on the budget monitoring arrangements for 2006/07 was considered by Corporate Delivery Team (CDT) on 30th May and endorsed by Strategic Management Team (SMT) on the 6th June.

This report set out a number of best practice actions in line with the Use of Resources Assessment criteria

A reporting timetable to the Executive
A robust traffic light system to focus on key variances
The inclusion of non financial information
A predictive process
Focus on high risk budgets as per relevant risk assessments

It is important that any reports are based on fully validated Agresso financial system based information.

2. Background

In line with the required focus on high risk areas, periodical reports on Children and Adults have already been considered by Cabinet on 29 June 2006, 24th August and 21st September. In line with the arrangements the position for the end of September has been included in this aggregate report at a summary level.

A summary of the overall budget monitoring position is included at Appendix A. This is at the highest possible level and has deliberately been structured around the information held on the council’s corporate budget and accounting ledger database (Agresso) to meet best practice requirements. This process has highlighted a number of differences between information held centrally and at departmental level. It is vital that these separate records are brought into agreement for budget monitoring and forward planning.

The report now explains the information set out in Appendix A.

Column 1. Original Budget 2006/07- £211.294 million

For evidence purposes these figures are reconciled to the approved estimates in the published budget booklet. For the purposes of constructing a high level monitoring statement which can be extracted from Agresso with minimum manual adjustment the following activities are set to one side or otherwise adjusted in the subsequent columns:

The Individual Schools Budget (no net cost)

Standards Fund supported expenditure. (no net cost)

Housing benefits grant income and expenditure (no net cost)

DSO operating accounts – these budgets are monitored through the Contract Monitoring Groups – whilst there is a planned net surplus on these operations, this report only comments on areas of concern which may have emerged during the period under review. At this stage it does not systematically look at expenditure compared with expected income and the impact of resultant client charges. This is an area for further work and improvement.

Notional Asset Rentals and Capital Charges (no net costs)

Housing Revenue Account – No impact on the General Fund position. Nevertheless as part of the exercise a separate monitoring statement is provided given the risk attached to repairs & maintenance expenditure which emerged in the 2005/06 out turn.

Column 2. Adjustments to Budget

These adjustments reflect budget re-alignments and other changes which have been approved during the year.

The budget re-alignments shown here largely relate to the finalisation of “what belongs where” following the separation of Children and Adult Services and the reintegration of Positive Futures from the 1st April 2006. (Virement otherwise currently has to be approved by the Director of Finance below £50k and by Cabinet above that amount.)

Other budget changes have also been approved

	£’m
Rolling Programmes – c/fwd from 2005/06	1.546
Bids to c/fwd approved 29th June	1.332
Audit Commission fees and County Records Office – additional approved costs on 27th April	0.128
Manchester Airport Dividend	-1.250
Total Column 2	1.756

Additionally there are budget adjustments outstanding for £0.2m for grants in Children Services due to late notifications by Government and the merger of different grants. The Director of Children Services has agreed to make every effort to mitigate the impact of these unexpected budget changes, but there may be some effect on the out turn. Other budget adjustments for the potential loss of car parking income and increased members allowances have yet to be made. The potential loss of car park income of £0.190m was reported and approved by Members in early October. An amount of £0.150m has been assessed as the part year cost in 2006/07 of the changes following the findings of the Independent Remuneration Panel. The impact of these budget changes has been taken into account or excluded as appropriate in the comparisons with expenditure.

Column 3. Restated Original Budget

This is the budget that departments should be using to compare expenditure against as the year progresses.

Column 4. Profiled Budget for Period 1 to 3 - £81.397 million

For comparative purposes budgets need to be profiled over time to match with expected expenditure patterns. This is mainly linear (e.g. payroll costs) but can be distorted by time lags, seasonal variations, year end recharges and other accounting arrangements.. Inevitably there will never be a perfect match because of the many variables but the use of profiles is recommended by the Audit Commission and is seen as good practice. For evidence purposes any profiled statement must agree with the profiles held in Agresso.

Column 5. Adjustments to Profile - £-2.525 million

The revised arrangements for budget monitoring introduced last quarter have highlighted some differences between the profiles held on Agresso and those being used by departments as evidenced by the amounts in this column. An exercise has been undertaken to eliminate these profiled differences and whilst differences are still shown a significant improvement has been made over the previous quarter. Further improvements to profiles will continue to be made over the coming months.

The main differences identified within the -£2.525m profile in Agresso are as follows:

The timing of income appearing in the ledger from departmental systems
Removal of deferred charges (part of the charging system for capital expenditure where no council asset is created for example expenditure on improvement grants to private housing) which are only actioned at year end
The profile for Benefits expenditure and subsidy require realignment

Column 6. Total Adjusted Profile for Period 1 to 6 - £78.872 million

This is now a better fit profile and is the total being used for the purposes of comparison.

Column 7. Spend as per Agresso for Period 1 to 6 - £40.958 million

This has been taken directly from Agresso as at the period end for 30th September 2006. The figures used here have been reconciled back to the figures used in Trial Balance which is the key cornerstone to demonstrate the integrity and completeness of all the financial transactions that have taken place in the Council over a given period. It is an absolute imperative that any budget monitoring figures can be tied back and matched to this centrally held record. If departments use amended figures then a full validated audit trail must exist.

Column 8. Adjustment for Other Items- £34.503 million

The recommendations within the Use of Resources is that accruals based figures should be used for budget monitoring purposes. Agresso holds a centrally controlled commitments system which is driven by purchase orders for goods and services ordered but not paid for. The roll out of the Purchasing module is continuing. Therefore reliance has to be placed on departmentally held information where records are maintained until this has been achieved. The achievement of the roll out should make the budget process more efficient in terms of extracting information and minimising the need for departmental systems.

Much more significant are the areas of the budget where ring fencing of expenditure and income applies such as the Dedicated Schools Grant and Standards Fund. At the moment the separation and ring fencing is not yet fully embedded in Agresso. This accounts for around £28 million of the total adjustment and action is being agreed to resolve this problem.

The significant ‘other items’ within the £34.503m are detailed below

Departmental commitments supplied for children young people’s services include adjustment for year end Service Level Agreements, timing of grant income, agency staff commitments and the removal of ISB grant income which should form part of the DSG ring fencing arrangements.
Committed expenditure in relation to the North West Improvement Network scheme where the Council holds money on behalf of the Network.
Contract payments to WRG in respect of Waste Disposal.
Works on Highway Maintenance
Contract payments to DSOs’
Housing benefits grants/administration timing differences

With improved profiling and alignment of budgets the values of this column should reduce significantly. It is unlikely to disappear however.

Column 9. Total Adjusted Spend for Period 1 to 6 - £75.461 million

This is simply the adjusted spend figures being used for budget comparison purposes.

Column 10. Adjusted Variation for Period 1 to 6 -£-3.411 million (underspend)

These are the amounts that emerge from the comparisons between the adjusted profiles and the adjusted spend. This process delivers more meaningful figures and the explanations have been provided by departmental and central based finance staff. These are set out below.

3. Analysis of Significant Variations to September 30th

Adult Services £ 1.271 million

Status – June 30th Red
Status - September 30th Red

Transition £0.350m – Transition costs refer to the costs associated with the transfer of service users from Childrens Services to Adult Services when a young person reaches 18.

Other commissioning £0.564m – there are a number of areas that make up this variation the most notable being Day and Domiciliary care for Physical and Learning Disability Clients and Elderly EMI placements.

Pay Budgets £0.306m – this represents in the main the difficulties that have been encountered in delivering the expected savings from changes in the eligibility criteria of FACS. It is estimated that the targeted savings for the year will not be achievable.

Other minor overspends £0.051m

Children and Young People’s Services -£0.351million

Status – June 30th Amber
Status – September 30th Amber

(Social Care) £0.131m

In the main the overspend is as a result of increased costs of Children Looked After in particular third party payments in respect of Residential Fostering and After Care arrangements

(Education)-£0.482m

Current underspends on Home to School transport and Strategic Management are due to staff slippage and timing differences. However it is expected that by the end of the year the spend will be in line with the budget.

Community Protection Panel -£ 0.231million

Status – June 30th Green
Status - September 30th Amber

(Community Safety) -£0.174m

Security Services is currently reporting an underspend on salaries which is in the main as a result of the externalisation of the service.
Pooled Drugs Budgets is currently underspent but commitments of £1.2m has been identified. Any year end savings on this scheme have no impact on the general fund

(Environmental Health & Consumer Protection) – -£0.123m

General underspend on Equipment, Furniture, Materials and Computer Software
Savings in salaries as a result of staff slippage

(Housing General Fund) £0.067m

Asylum Seeker contract – The current contract relating to Asylum Seekers ceased at the end of September 2006. Additional costs of £0.083m have been incurred which will be met by the Housing General Fund. It should be noted that surpluses generated in previous years have been transferred into general fund balances.

Environment Panel -£-0.364 million

Status – June 30th Green
Status - September 30th Green

(Engineering Services) -£0.117m

Waste Disposal – The current underspend -£0.107m is mainly attributable to reduced tonnages at civic amenity sites due to the continued success of the permit scheme. However a potential £0.050m additional expenditure representing the costs of taking materials to other sites is not currently included in the saving shown above. This sum may be recovered from the Insurers of WRG but no claim has yet been settled.
Waste Collection - -£0.100m. As a result of the later than anticipated roll out of the garden waste scheme. The scheme is now fully operational and accordingly any savings will level out.
Rechargeable Works – The current overspend £0.164m represents an increase in accident incidents whereby the monies may not be reclaimed from the responsible individuals.
Other efficiencies across various budget heads -£0.047m

(Planning & Regeneration) -£0.382m

Slippage in salary costs -£0.186m as a result of a high level of staff turnover, delays in recruiting and difficulty in recruiting to certain posts.
General underspends on equipment and miscellaneous expenses -£0.100m
Increase fee income from planning application fees and reduced costs on professional fees -£0.096m

(Wigan Engineering and Design Services) £0.027m

(Car Parking) £0.108m

During the April – September period, car parking net income was £0.108m less than budgeted. The Director of Legal and Property Services presented a report to Cabinet on 5th October 2006 which explained that this reduction is largely due to lower than anticipated usage of Wigan Town Centre and Sovereign Road / Pepper Mill Lane car parks. The report went on to estimate that by the year end car parking income is likely to be £0.190m less than budget.

Performance Panel -£2.429 million

Status – June 30th Green
Status – September 30th Green

(Legal & Property Services)

Central Repairs & Maintenance Fund – after six months activity expenditure on is £0.879m less than the budget profile, this follows the experience of previous years and is largely the result of difficulties in accurately profiling a £6 million fund made up of many thousands of small jobs. The Director of Legal & Property Services closely manages the level of commitments and expenditure against the fund and at this stage in the financial year the full budget has been committed and a moratorium placed on all non-critical works. The implementation of this strategy means that by 31 March the central repairs and maintenance fund expenditure should equate to the available budget.
Grand Arcade Shopping Centre – a budget exists for miscellaneous expenditure associated with this development and is funded by rental income received by Modus. During the first six months no miscellaneous expenditure was incurred, resulting in a £0.113m saving against the budget profile. Current indications are that the saving in expenditure incurred during the first six months of the year will not be expended during the remainder of the year, resulting in a projected saving of £0.113m by the year end. Although the scheme is not yet complete.

(Finance & IT)

Benefits Administration – currently net expenditure is £0.600m less than the budget profile largely due to additional grant income received not being expended at the rate envisaged. This amount is therefore available to be transferred to the IT Investment Account to assist in financing the cost of a new Benefits processing system and contribute to the anticipated cost of a Customer Relationship Management (CRM) as part of the Joint Service Centre initiative.
IT Investment Account – expenditure is £0.475m lower than the budget profile after six months activity. There are a number of larger projects planned where costs will not arise until later or may slip into the following year. The largest of these is the earmarking of £0.720m for the CRM System which is currently being specified and is not yet out to tender. Any underspending remaining at the year end will be carried forward in accordance with the arrangements previously agreed by Members.
Finance Department Business Units – staffing vacancies across the Accountancy, Internal Audit and Payroll sections of the Department have resulted in a saving of £0.180m during the first six months of 2006/07. Some of this is committed to funding the additional financial consultancy required for the major projects.

(Other Performance Panel Budget Heads)

Brighter Borough – after six months activity expenditure is £0.367m less than the budget profile, largely due to unspent funds from 2005/06 which have been carried forward into 2006/07 not being expended at the rate envisaged. Any underspending remaining at the year end will be carried forward in accordance with the arrangements previously agreed by Members.
Members – currently net expenditure on this activity is around £0.030m more than the budget profile due to the recent implementation of the revised allowances which were considered by Cabinet on 10th August 2006. The impact of the new scheme of allowances over the remainder of the financial year is difficult to accurately project as it is dependent upon the number of Members opting to join the Local Government Pension Scheme. However from the information available to me currently, I anticipate that actual expenditure on allowance related costs will be around £0.150m greater than the budget provision by the year end.

Regeneration Panel -£1.307 million

Status – June 30th Green
Status - September 30th Green

Neighbourhood Renewal expenditure is currently lower than anticipated at this point in the year.

4. Projected Variation to Year End Column 11 £0.939million

This is another best practice requirement. Clearly a judgemental approach is required which encourages budget holders to think through the implications of the current variations so that time exists for any remedial action and also to ensure there are no year end surprises to adversely affect the budget strategy and Council Tax setting process for the forthcoming year. The explanations and figures have been provided by departmental and central staff as appropriate and these are set out below.

5. Analysis of Significant Variations Projected to year end. £0.939m

Adult Services £1.825 million

Status – June 30th Red
Status – September 30th Red

Costs of Transition: The cost of care for young adults going through transition was estimated at £1.3m. Some of this has been covered in the growth bids process and some by retained underspends. Further savings have been generated by Phase 2 of the Young Friends Together project, which combined with some redirection of budgets reduces the potential overspend to around £0.700m

FACS : Savings arising from the tightening of access criteria continue to be slow in delivery. A consultancy report has been commissioned to try to address the reasons for this. The current projection however, would suggest a potential overspend of £0.900m

Metrolite : Income for Metrolite is down 23% on the expected position at the end of the quarter. Reduced cost of sales helps to offset this to an extent, but the current position would suggest an overspend of £0.070m at the end of the year

Care Costs : The Department has seen significant increases in spend over the last three years within client groups for Adults under 65 with additional needs as more individuals aspire to live independently rather than in a Residential home and as life expectancy increases. In the current year we are seeing a continuation of the trend, and are seeing significant pressure in the budgets funding non-Residential care, resulting in a projected overspend of £0.455m

Savings due to efficiencies in staffing and running costs will in part offset the above projections as it is anticipated that overall a £0.300m underspend will be achieved.

The financial pressures on Adult Services are possibly the area of greatest risk to the Council. As a result in early 2006 Deloitte MCS were invited to conduct an independent ‘high spot improvement’ review and Cabinet were presented with the outcome and proposed actions to tackle the budget imbalance on the 21st September 2006.

Children and Young People’s Services £0.460m

Status – June 30th Green
Status – September 30th Red

(Social Care)

Looked after children – Additional usage of secure accommodation together with an increase in complex needs cases is likely to result in a projected overspend which is offset in part by savings in other areas. However it is anticipated that the overspend by the year end will be in the region of £0.460m. However a review of all after care placements is currently underway with a view to reducing the projected overspend

Community Protection Panel £0.097m

Status – June 30th Green
Status – September 30th Amber

Asylum Seeker contract – The current contract relating to Asylum Seekers ceased at the end of September 2006. Additional costs have been incurred. This together with an increased contribution towards Brecon Close is expected to result in a £0.097m overspend by the end of the year.

Environment Panel -£0.238m

Status – June 30th Green
Status – September 30th Green

(Car parking)

As previously reported to Cabinet 10 August Car Parking income is expected to be lower than anticipated by £0.190m by the end of the year.

(Planning & Regeneration)

Staff slippage is still an issue with increased turnover and difficulties in the filling of posts. It is now expected that salaries will be underspent by £0.267m

Fee income is also expected to increase in excess of the current budget and generate additional income of £0.041m

(Engineering Services)

Whilst traditionally it is extremely difficult to accurately assess the projection to the year end of the waste disposal/collection budgets. These items together with other underspends across the departments are expected to attain £0.150m saving during the year.

Performance Panel -£0.905m

Status – June 30th Green
Status – September 30th Green

Given the overall position of the Council the proposal to transfer £600,000 of the anticipated underspend to the IT investment account to fund the implementation of new systems as part of the IT Strategy and Joint Service Centre project is deferred until the overall year end financial position is known.

Regeneration Panel -£0.300m

Status – June 30th Amber
Status – September 30th Amber

It is anticipated that the Neighbourhood renewal programme will underspend in the current year to fund previous years overspends which have been funded by general balances

6. Specific Service Areas identified for Reporting Separately (High Risk)

The arrangements for budget monitoring require separate reporting arrangements for a number of specific service areas. These are set out below.

6.1 Adult and Children and Young Peoples Services

As explained reports have previously been considered by Cabinet on 21 September 2006

6.2 Waste Disposal and Recycling Costs

Details of the position on Waste Disposal are given earlier in this report.

6.3 Neighbourhood Renewal Fund budgets

The NRF budgets are planned on the basis that grant funding will meet all programmed expenditure. In 2005/06 there was a net overspending on NRF schemes which had to be funded by the Council. Economic Regeneration now plan to underspend against grant allocation by £0.300m in 2006/07 in order to correct this accumulated deficit position

6.4 Repair and Maintenance Budgets

Details on the position on the Central Repairs & Maintenance Fund are given earlier in this report. It is not expected at this stage that there will be any adverse variation at the end of the financial year.

6.5 Decriminalised Parking Income

Details on the position on Decriminalised Parking Income are given earlier in this report

6.6 Catering and Building Cleaning DSO

Current projections are that both the Catering and Cleaning sides of the operation will break even. The school meals service is a cause for concern given the dual impact of rising food costs and falling numbers of meals served. It is expected that these factors will be covered by the 10p per meal price increase due to take effect in September and the use of around £0.135m of Standards Fund grant. Any grant monies which may remain unspent will be used to invest in refrigeration equipment to meet Government regulations around fresh ingredients. It is therefore planned and expected that there will be a break even position by the end of the year.

6.7 Housing Revenue Account

The monitoring report at Appendix A also gives a position for the HRA. Again it can be seen that some adjustments have been necessary to profiling and timing items to enable a better statement to be constructed rather than just extracting a simple comparison of spend against budget from Agresso. At the second quarter the HRA is showing an underspend of £0.239m, mainly comprising an underspend on legal fees of £0.090m, fixtures of £0.081m and funding of £0.070m for the Smarter Neighbourhoods project not included within the original estimate. At this stage it is not possible to assume that the underspend on legal fees will continue to the financial year end. The ongoing property review being undertaken by Wigan & Leigh Housing may also result in the underspend on fixtures being committed by the year end.

The review of Supervision & Management expenses identified a potential reductions in costs of £0.300m. The impact of these will be to increase the surplus at year end to £2.2m against the £1.7m budgeted for in the original estimate

The expenditure on responsive repairs continues to be closely monitored, an increase in the work subject to capitalisation has resulted in an additional £0.500m being added to the Capitalised Repairs provision. The current projection for the year end expenditure on responsive repairs is £12.6m, this provision has been built into the Housing Revenue Account Forecast for 2006/07

7. Other Issues

School Balances and Dedicated Schools Grant

An exercise has been undertaken to disaggregate the Local Authority Education budget from the Dedicated Schools Grant. The Dedicated Schools Grant is ringfenced and must contain all relevant Schools Budget Costs.

The Schools Budget comprises two main elements the Individual Schools Budget (ISB) which is delegated to schools (approx £160m) and the Central Expenditure (approx £10m). at 31st March 2006 the unspent balances held by the schools amounted to £6.953 million.

An exercise is underway to monitor individual schools budgets as at 30 September 2006. A report will be issued to each school on completion of the exercise making recommendations of budgets/expenditure that need further investigation at school level or, highlighting that balances are not being spent in accordance with their spending plans.

In addition to this we are monitoring the budgets of primary schools with exceptionally high balances as at 31 March 2006, on a monthly basis. The Headteachers and where possible the Chair of Governors of these schools are meeting with two senior officers to confirm their spending plans for 2006-07. At these meetings it is being made clear that the balances control mechanism will be applied at the end of 2006-07 if there is no reduction in their level of school balances.

Any variances within the central expenditure must be contained within overall DSG resources. Currently there are two potentially significant variances, relating to independent school placements and extra district recoupment. At this stage of the financial year we are hopeful that these can be met from within the ISB contingency, to avoid a deficit carrying over to be offset by the 2007-08 DSG.

Pay and Grading Review

This is a risk, which we currently carry against balances. The team appointed last year have now carried out substantial work on both the potential equal pay claim (based on a comparison of jobs carried out largely by female staff with similar value jobs carried out largely by male staff who have opportunities to earn bonus), and the larger job evaluation exercise which looks at every job within the Council (excluding teaching staff) with a view to producing a new grading structure which would be defensible against equal value/equal pay claims in the future. It is clear from preliminary exemplifications that both elements of this exercise may have significant financial consequences which will need to be acknowledged in our forward planning. The scale of compensation claims submitted elsewhere, and in some places awarded by Tribunals, amounts to many tens of millions of £’s. The Council is working with other AGMA authorities to address the issue and arrive at a solution that is affordable to taxpayers and does not adversely affect the competitiveness of the workforce.

Council agreed on 1st November 2006 to authorise the Chief Executive and Director of Finance and IT to deploy the Council’s reserves and balances to assist in the implementation of the pay and grading review / single status agreement and any related settlements.

Energy Prices

As reported previously the ending of fixed price contracts for gas and electricity have resulted in large increases compared with original budget provision. Normal practice would be to require Departments to take action to contain/offset these increases which given the nature of the out turn for 2005/06 should be feasible. The base budget for 2007/08 will be inflated in full to reflect the effect of these contract prices with possible large increases recurring coming in 2008 & 2009. In this context much depends on global demand and supply conditions.

8. Level of Balances

The level of balances anticipated in the medium term revenue budget forecast at the end of 2006/07 was assessed at £14.583m.

The table below shows the anticipated position in the light of this report

		£’m
Balances 1st April 2006		21.328
Use of balances in 2006/07 Estimate	Re forecasted Probable underspends	-1.200
Commitments	Rolling programmes	-1.546
	c/fwd Bids approved	-1.332
Supplementary Estimate	Audit fees/County Records/Airport Dividend	1.122
Predicted out turn adverse variation		-0.939
Service Improvement Fund	Balance of 2005/06 underspend approved by Cabinet 29/6/06	-3.500
Predicted balances 31st March 2007		13.933

The medium term position on balances will be reviewed as part of the 2007/8 budget when further commitments notably the pay and grading review and the deficit on the capital programme will need to be determined.

9. Conclusions and Recommendations

Approaching the budget monitoring exercise from a top down perspective as recommended by the Audit Commission has identified a number of areas for improvement in the current departmental financial management arrangements. Briefly these are

Work on profiles to better reflect patterns of expenditure and income: Since the submission of the first budget monitoring statement submitted to Cabinet 10 August 2006 a review of profiles has taken place in a number of high value areas. These profiles have been revised and have contributed towards the improvement in the figures included in this report. A further exercise will be undertaken on profiling in readiness for the next budget monitoring report submitted later this year.
Work on specific grant related budgets particularly around Dedicated Schools Grant, Standards Fund, Neighbourhood Renewal Funds and Housing Benefit to ensure that budget reports are not distorted. Future monitoring reports will exclude the ringfenced DSG from the main appendices which will improve the clarity of the reports.
The maintenance of separate Departmental systems (clearly which must be fed from Agresso but then supplemented by local information) and the extent to which these can be decommissioned once purchase orders and commitments are rolled out.

The effort and resource which supports these processes both centrally and Departmentally will form part of the Support Services Review which has now started.

This budget monitoring statement is based on the first 6 months of the financial year. 6 months net expenditure is a reasonably accurate base in which to predict the position for the year but with some reservations. These predictions have been made in line with best practice requirements. The position has worsened from when the previous quarterly budget monitoring report was considered.

It is therefore recommended that :

Adult Services and Children and Young Peoples Services continue to take steps to try and bring expenditure for 2006/07 back into line with the approved budgets

The Council as a whole monitor the situation and offer underspends up to Adult Services and Children and Young Peoples Services to help fund the overspends and keep the overall Council budget in balance

That the funding of the Customer Relationship Management (CRM) system is best reviewed at year end once the overall financial position for 2006/07 has been determined

Appendix

Summary Budget Monitoring Statement - Budget Monitoring Statement : April - September 2006 50(kb)

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