Council Overspends To Be Reviewed On Wednesday

Councillors will meet on Wednesday to scrutinise a budget overspend and consider the Council’s budgetary position since April this year.

The initial report, viewable here as a PDF on the Council’s website, gives detail of performance so far compared to the forecasted budgets for 2013-2014. Obviously as we are only in October 2013 this report covers the first five months of the 2013-14 financial year.

Currently the projected overspend is stated as £869,000. There are breakdowns of how this is made up, with the largest being under ‘Environment’. The report details this as:

• A shortfall in car park income of £120k.
• Savings of £397k were identified and included in the 2012/13 budget for transport. Savings of £300k have been identified to date from re-tendering exercises leaving a shortfall of £97k .
• School transport additional operational days resulting in an overspend of £253k.
• Additional Post 16 school transport costs following amalgamation of colleges of £75k.
• Reduction in Waste Management grant of £61k (late confirmation by WG this month).
• Losses carried forward from 2012/13 of £57k.

A ‘shortfall in planning fees’ is listed as explaining £200,000 of the shortfall. The Asset and Economic Development Department stating they are seeing a shortfall in commercial estates income of £580,000 amongst other things, however due to £651,000 savings being made the net overspend for their department is ‘only’ £227,000.

Other budgetary issues are highlighted, with the national and international climate being mentioned along with the low interest rates set by the Bank Of England, meaning “pressure on the Council’s treasury management team to generate investment income in line with budget”.

Contract Overspend Review

Every six months any Council contract that overspends by 10% or more is reviewed by a Scrutiny Committee. On Wednesday a £329,617 overspend will be discussed.

The role of the ‘Customers, Performance & Resources’ Scrutiny Committee is to consider any expenditure in excess
of 10% of a contract sum and the reasons why they occurred.

The report, that is readable here on the Council’s site via a PDF file, gives examples of what are acceptable and unacceptable reasons for an overspend.

eg. it is deemed acceptable if additional work is identified, however unacceptable if the contractor submits an artificially low tender to win the work.

The report being considered on Wednesday refers to a single case, the development of Llay Park CP School where the approved contract sum was £3,120,383 , however it states the overspend is £329,617.

The figure is broken down as:

• Client Variations £ 45,386 (Additional fencing to existing wild garden area / boundary to health centre; Temporary footpath to rear of site to enable access for pupils between infants and junior schools; Provide water and power supply to greenhouse position; supply and install additional CCTV camera; Upgrade in specification of interactive whiteboards; Additional interactive whiteboard tostudio hall)
• Other Contract Administrator’s Instructions £ 284,231 (Additional works to foundations due to poor ground conditions; Additional costs associated with the diversion of existing services; Additional drainage works; Additional works required to existing roads due to the poor condition once exposed; Additional sprinklers required to external soffits of roof; Provide temporary canteen facilities to Infants school for the duration of phase 2 and 3 works; Upgrade of existing light fittings to junior school; Upgrade of existing stage lighting to main hall; Additional areas of suspended ceiling required to junior school; Subsidence of ground adjacent to new extension after completion of the works; Additional drainage works required after completion).

The Council’s accounts as a whole has been a focus of this thread on the Wrexham.com forums. You can read and take part by clicking here…