Contact: Ejner Knudsen, (01962) 847403 email: [email protected]

1 Summary

1.1 This report provides a further update on the revenue budget monitoring position for the Environment services for the 2006/07 financial year, covering the budgets for highways and transportation, planning and development, and waste management.

1.2 The budget monitoring position shows a satisfactory position for this stage in the financial year and the year-end outturn on cash limited budgets is expected to be close to the approved budget. Expenditure on highways winter maintenance, which is outside of the cash limit for the purposes of reporting the final outturn position at year-end, is also expected to be contained within the approved budget.

1 Recommendation

1.1 That the actions being taken to manage expenditure within the approved funding allocation be endorsed.

2 Cash limit 2006/07

2.1 The previous budget monitoring position for the current financial year was reflected in the construction of the 2006/07 revised budget, which was approved by the Executive Member for Environment on 16 January 2007, for submission to the Leader and Cabinet.

2.2 The revised budget totalled £102.156 million and included a number of changes to the cash limit that had been made since the beginning of the year, together with specific proposals for the carry forward of resources of £490,000 to the 2007/08 budget, as a result of timing delays on specific projects and system developments.

2.3 The revised budget proposals were approved by Cabinet on 9 February 2007, together with a further amendment carrying forward an additional underspending of £250,000 on highways and transport management and support services to the 2007/08 budget. These resources have been added to the 2007/08 budget for routine highways maintenance, to enable an additional programme of works to be implemented next year.

2.4 The only other subsequent change to the 2006/07 revenue budget cash limit since January has been in relation to the waste management contract related services. A further allocation of £1.168 million has been made from the central waste management contingency to cover estimated cost increases arising from the operation of the waste management contract during the third quarter of the financial year.

2.5 The Environment services' budget has been amended to take account of the above changes, giving an adjusted 2006/07 cash limit of £103.074 million. Further changes to the cash limit will be made at the end of the year to reflect the final call on the waste management contingency, together with any other adjustments that may be necessary, including any variations in grant funded expenditure.

3 Outcome of latest budget monitoring review

3.1 This report reflects the outcome of the most recent budget monitoring review, which was carried out in consultation with departmental budget holders during January and February. During the review, expenditure and income trends were considered and planned commitments for the remainder of the year evaluated, in order to update the forecast outturn for comparison with the approved 2006/07 revised budget.

3.2 The attached appendix provides a summary of the updated 2006/07 budget over the standard divisions of service headings, together with assessed expenditure to 31 January 2007. No variations between the forecast outturn and the approved budget plan are currently anticipated.

3.3 However, it should be noted that the figures in this final 2006/07 budget monitoring report are only projections of the likely outturn for the year, based on the most up-to-date information available during February. They do not, at this stage, represent the final year end position for the 2006/07 financial year, which will be reported in June after the accounts have been closed.

3.4 The main issues arising from the budget monitoring review are discussed in the following paragraphs.

Highways maintenance

3.5 The 2006/07 revised revenue budget for routine highways maintenance is £21.128 million, excluding the ring-fenced provision of £2.645 million for winter maintenance salting and snow clearance and after allowing for the previously approved carry forward of underspendings of £390,000 to the 2007/08 budget.

3.6 Further allocations to the highways units and other departmental budget holders were made during January to meet operational priorities, and monitoring suggests that expenditure is being progressed in accordance with the revised plan. These additional allocations have now fully committed this year's highways maintenance budget and provided that progress is maintained in implementing the various schemes and programmes, a close outturn can be expected at year end.

3.7 At the time of writing this report, the level of winter maintenance activity on salting and snow clearance remains below what could be expected in an average year. Although the position on this budget can change quite quickly if severe weather is experienced, if current trends continue then overall expenditure on this activity during 2006/07 should be contained within the ring-fenced winter maintenance budget of £2.645 million. Under the special budgeting arrangements that apply to winter maintenance, any underspending or overspending against this budget heading would not count against the Environment services' cash limit, as year-end variations are either credited to or met from central balances.

Highways and transport management and support services

3.8 The 2006/07 adjusted cash limit for the highways and transport management and support services is £19.680 million. This allows for the carry forward of £100,000 to the 2007/08 budget in relation to delayed expenditure in connection with the development of an asset management approach to highways, which was approved as part of the 2006/07 revised budget.

3.9 As mentioned in paragraph 3.3 above, a further change to the Environment revised budget was proposed and agreed at the Cabinet meeting on 9 February 2007. Additional underspendings are currently projected on the management and support services this year, mainly arising from ongoing staff vacancies. It has been agreed that £250,000 be carried forward to the 2007/08 budget, to enable an additional programme of highways maintenance works to be implemented.

3.10 Should any further management and support services savings be identified during the latter stages of the financial year, management action will be taken as required to bring forward items of expenditure that would otherwise need to be met from the 2007/08 budget, or provide additional resources for operational services.

Waste management

3.11 Information on waste volumes during the third quarter of the financial year has now been evaluated and show that overall tonnages during the third quarter were comparatively higher than in the previous two quarters. However, the overall level of waste volumes during the first nine months of the year is still only 0.1% above that in 2005/06, and is well within the allowance for growth of 2.5% included in the £4.800 million central waste management contingency. Within the overall variation, waste volumes from household collections fell by 1.5%, compared to a year earlier. On the other hand, volumes of civic amenity waste from household waste recycling centres rose by 4.0%.

3.12 An assessment has now been made of the call on the central waste management contingency to reflect additional expenditure arising from the operation of the waste management contract during the third quarter of the year, which amounted to £1.168 million. The overall call on the contingency for the first nine months of the year is £3.473 million, including previous quarterly calls totalling £2.225 million calculated earlier in the year, together with the agreed allocation of £80,000 relating to ongoing financial obligations for the maintenance of closed landfill sites. This leaves just over £1.3 million to cover higher contract related expenditure during the remainder of the year.

3.13 Although waste volumes are still well within the overall allowance included in the 2006/07 budget, the associated variable cost savings are expected to be largely offset by the absorption of additional fixed contract costs, including the disposal of hazardous waste such as paint, televisions and computer monitors. Nevertheless, provided waste volumes during the final quarter of the year are not significantly out of line with the first nine months of the year, total waste contract related expenditure should be contained within the overall budget allowance, including the central contingency sum.

Other services

3.14 Budget monitoring indicates that spending on the other main Environment services, including public transport support, school crossing patrols, road safety education and planning and development, is being progressed in accordance with the 2006/07 revised budget plan.

4 Impact assessment

4.1 Monitoring of the Environment revenue budget benefits all sectors of the community equally, as it helps to ensure that the department's services are delivered in a cost effective manner within overall corporate budget guidelines. As such, proposals in this report are not considered to be discriminatory.

Conclusion

4.2 The budget monitoring position shows a satisfactory position for this stage of the financial year. Expenditure on the main operational budgets, including highways maintenance, is being carefully managed to utilise the available funding and the year-end outturn is expected to be close to the approved allocations.

4.3 A further saving of £250,000 from staff vacancies identified on the highways and transport management and support services, has been carried forward to the 2007/08 budget to provide resources for an additional programme of highways maintenance works next year.

4.4 Expenditure on waste contract related services is expected to be contained within the overall budget provision, including the central waste management contingency.

Section 100 D - :Local Government Act 1972 - background documents

The following documents discuss facts or matters on which this report, or an important part of it, is based and have been relied upon to a material extent in the preparation of this report.

NB: the list excludes:

1. Published works

2. Documents which disclose exempt or confidential information as defined in the Act.

None.

Appendix

Environment

Revenue budget 2006/07 - monitoring statement

Analysis of variations