Page 1 of 101

HERTFORDSHIRE COUNTY COUNCIL

CABINET MONDAY 17 DECEMBER 2018 AT 2.00PM

FINANCE BUDGET MONITOR - QUARTER 2

Report of the Director of Resources

Author: Steven Pilsworth, Assistant Director – Finance(Tel: 01992 555737)

Executive Member: Ralph Sangster, Resources & Performance

1. Purpose of report

1.1 This is the Quarter 2 (July to September 2018) Budget Monitor report which summarises the 2018/19 position against revenue and capital budgets and highlights key areas of risk to prompt the discussion for actions to be taken.

2. Summary

2.1 The report summarises the 2018/19 position against revenue and capital budgets and forecasts the year end position.

2.2 Finance Regulations provide that, Capital Reprogramming is required to be approved by Cabinet. Further information is listed below.

3. Recommendations

3.1 The Resources and Performance Cabinet Panel will consider a report on this item of business at its meeting on 14 December 2018. The Panel will be invited to recommend to Cabinet that Cabinet approves the proposed Capital Reprogramming of £62.907m outlined in Section 1.2 and detailed further in Section 3 of the report and Appendix C.

3.2 The Panel’s recommendations to Cabinet will be reported orally at the Cabinet meeting and circulated to Members in the Order of Business sheet.

4. Financial Implications

4.1 Financial Implications are considered within the budget monitor.

Agenda Item No.

6

Page 2 of 101

5. Equalities Impact Assessment (EqIA)

5.1 When considering proposals placed before Members it is important that they are fully aware of, and have themselves rigorously considered the equalities implications of the decision that they are taking.

5.2 Rigorous consideration will ensure that proper appreciation of any potential impact of that decision on the County Council’s statutory obligations under the Public Sector Equality Duty. As a minimum this requires decision makers to read and carefully consider the content of any Equalities Impact Assessment (EqIA) produced by officers.

5.3 The Equality Act 2010 requires the Council when exercising its functions to have due regard to the need to (a) eliminate discrimination, harassment, victimisation and other conduct prohibited under the Act; (b) advance equality of opportunity between persons who share a relevant protected characteristic and persons who do not share it and (c) foster good relations between persons who share a relevant protected characteristic and persons who do not share it. The protected characteristics under the Equality Act 2010 are age; disability; gender reassignment; marriage and civil partnership; pregnancy and maternity; race; religion and belief, sex and sexual orientation.

5.4 No EqIA was undertaken for this report. This is not applicable for this report as the impact will apply equally across all areas of activity and will not impact directly on any part of the local community. Impacts will be determined through Cabinet policy choices and the impact will be assessed at that point.

Background Information:None

Page 3 of 101

HERTFORDSHIRE COUNTY COUNCILBUDGET MONITOR REPORTQuarter 2 – 2018/19

Page 4 of 101

Contents

Section 1 – Executive Summary5

Section 2 – Service Variances/Movements over £250k15

Section 3 – Capital Monitor37

Section 4 – Children’s Services (Schools) Variances48

Section 5 – Other Financial Information55

Appendices 57

Appendix A – Details of Approved Virements & Technical Adjustments57

Appendix B – Invest to Transform 60

Appendix C – Capital Reprogramming66

Appendix D– Prudential Indicators 77

Page 5 of 101

Section 1 – Executive Summary

1.1 Revenue Monitor

The overall position shows significant service overspending of £5.763m which is driven by a number of ongoing pressures which are currently offset by one off income. The underlying service pressures will need to be reflected in the updated Integrated Plan and will widen the budget gaps the County Council faces in future years. The projected revenue outturn as at 30th September 2018 is a projected revenue overspend of £673k after ringfenced underspends and carry forwards, taking together service pressures of £5.763m and one off income of £5.090m.

Table 1 - Summary Revenue Budget Monitor at 30 September 2018

1.1.1 Latest approved budget

The original Net Revenue Budget for the year was £804.576m. The Latest Approved Budget (above) is £798.383m (principally due to a net £6.188m contribution to reserves - see appendix A. This is in line with the decisions taken at County Council in February).

A number of other virements have been made, including transfers from central budgets to department budgets in respect of such items as pay inflation and the apprenticeship levy. Details of approved virements and technical adjustments, showing all movements from the Original Budget, can be found in Appendix A.

Page 6 of 101

1.1.2 Projected outturn and projected variance

Projected spending for the year is £799.056m, which means a year end variance of £673k overspend in comparison to a £1.030m projected overspend last quarter. This is a £357k decrease from the previous quarter.

The current position shows service overspending of £5.763m that is partly offset by one-off central income, meaning that these pressures will continue in future years.

The forecast expenditure takes account of £4.274m of funding intended to be carried forward (chiefly Better Care Fund [BCF], of £4.076m) to be used next year. This reflects the difference between the profile of funding and spending for BCF.

1.1.3 Key Variances by area

Table 2 –Key Movements since the last quarterly reportArea Movement

£000sRef Summary

Adult Care Services

3,023 2.1 The majority of this movement has been caused by the following areas:

- Older People & Adult Disability Services (2.1.1)

Public Health - 2.2 - Children’s Services

3,412 2.3 The majority of this movement has been caused by the following areas:

- SEN Transport (2.3.3)- Independent Placements (2.3.4)- 0-25 Together Under 18 Direct

Spend (2.3.8) Environment and Infrastructure

(407) 2.4 This movement has been caused within Highways Advance Preparation & Consultancy (2.4.1)

Resources (1,451) 2.5 This movement has been caused within Property (2.5.1)

Community Protection

(358) 2.6 The majority of this movement has been caused within Fire & Rescue – Response & Resilience (2.6.1)

Central Items (4,576) 2.7 This movement has been caused by the following areas:

- Central Capital Financing & Interest on Balances (2.7.1)

- Income (2.7.2) (357)

Page 7 of 101

1.1.4 Breakdown of Variances by type

The £673k forecast overspend table set out in table 1 is further analysed in table 3 to show where items are one-off or ongoing.

This shows that the majority of the variance is due to additional pressures (£5.387m), being offset by One off Savings/Income, primarily within Central Items.

Table 3 – Breakdown of Variances

1.1.5 Hertfordshire County Council Variance TrendThe graph below show how the variance has moved (post carry forwards) each quarter for the last 2 financial years, in comparison to this year:

Page 8 of 101

Q1 Q2 Q3 Q4

-8

-6

-4

-2

0

2

4

2016/172017/182018/19

Forecast Variance trend£m

1.1.6 Cabinet Requests/Recommendations

As part of the schedule of delegation, Capital Reprogramming is required to be approved by Cabinet before they can be actioned.

1.1.7 Contingency

The forecast position of £673k overspend at year end (Table 1) shows service overspending that is offset by one-off or fortuitous central income, which is not sustainable position.

In the event of an overspend (currently forecasted as £673k), it will be the first call on contingency. It should be noted that several requests against the contingency budgets have already been raised and it has been assumed within the forecast that the full value of contingency will be spent. The current commitments against the Contingency Budget are the projected overspend (£673k) and other commitments including redundancies (£113k).

1.1.8 Savings Delivery

To support delivery of the 2018/19 budget and to assist active management of the Integrated Plan, savings delivery has been reviewed. The table below sets out the current savings requirement in the Integrated Plan, along with how these are profiled into service areas. Integrated Plan (IP) Savings are included in the net budget included in Table 1.

Page 9 of 101

Table 4a – Integrated Plan Savings2018/19 IP, Table 1 (Extract) Savings: 2018/19 2019/20 2020/21 2021/22 £000s £000s £000s £000sExisting Efficiencies - ongoing impact (5,013) (5,807) (5,786) (5,807)Existing Policy Choice - ongoing impact (563) (1,157) (1,862) (1,912)New Efficiencies (21,170) (31,275) (42,763) (54,812)New Policy Choices (2,996) (6,927) (7,418) (8,643)Subtotal - Identified Savings (29,742) (45,166) (57,829) (71,174)

Further Savings Required

- (6,593) (22,416) (28,170)Total Savings Required by IP (29,742) (51,759) (80,245) (99,344)

Table 4b – Identified savings distributed by service area2018/19 IP, Service Breakdown 2018/19 2019/20 2020/21 2021/22 £000s £000s £000s £000sAdult Care & Health (15,045) (24,754) (33,113) (41,698)Resources, Property & the Economy (5,453) (6,413) (8,619) (12,787)Children's Services (2,168) (5,253) (5,429) (5,623)Community Safety & Waste Management (1,979) (1,482) (1,402) (1,402)Education, Libraries & Localism (1,843) (2,343) (2,343) (2,393)Public Health, Prevention & Performance (1,504) (1,779) (2,464) (2,785)Cross Cutting (722) (1,222) (1,722) (1,722)Highways (543) (1,260) (2,011) (2,038)Environment, Planning & Transport (485) (660) (26) (726)Total (29,742) (45,166) (57,129) (71,174)

Delivery of savings are monitored each month and reported to SMB and risks to delivery are included in the medium term (IP) planning. The table below shows that of £29.742m savings planned for 2018/19, £19.063m are rated as green or blue – meaning that there is a high level of confidence that the planned savings can be delivered.

Page 10 of 101

Table 5 – Savings Review

Q2 2018 2018/19£000s

2019/20£000s

2020/21£000s

2021/22£000s

Total (Q2)

£000s

Total (Q1)

£000sRed (3,202) (5,887) (7,511) (10,461) (27,061) (27,324)

Amber (7,477) (12,280) (17,260) (20,625) (57,642) (58,929)Green (12,194) (21,230) (26,218) (29,774) (89,416) (88,666)Blue (6,869) (5,769) (6,840) (10,314) (29,972) (28,992)

TOTAL (29,742) (45,166) (57,829) (71,174) (203,911) (203,911)

However, amber rated savings equate to £7.477m. Red rated savings, where material risks to delivery have been identified, amount to £3.202m in 2018/19, or 11% of the total planned savings for the year. These are included in the forecast above (Table 1).

The objective is to minimise the savings that are appearing as ‘red’ (i.e. at risk of not being delivered) or ‘amber’ (i.e. with some risks to delivery having been identified), and to maximise those in ‘green’ (substantial confidence in delivery) or ‘blue’ (strong confidence of delivery).

The table above shows that there has been some change between Q1 and Q2:

Levels of savings in Green or Blue categories remain around 64% of planned savings, despite some increase in green and blue rated savings.

Levels of savings in Red or Amber categories remain around 36%, with some movement from amber to green/blue savings.

1.1.9 Invest to Transform (ITT)

ITT is a fund to enable one off costs of transformation to be met, where a longer term benefit can be achieved. Details of investments in year are set out in Appendix B. There are commitments within 2018/19 of £8.330m.

1.1.10 Risks & Uncertainties

The forecast for this quarter is based upon a number of estimates and judgements about future events and associated costs. The summaries below provide further insight into these and identify areas of risk and uncertainty in the forecast.

Adult Care Services

All care purchasing forecasts include a significant element of client income. Current assumptions exclude potential income associated with the non-receipt of financial assessment forms, but includes an adjustment for band 20 clients, (whereby clients who have not provided us with the necessary information to undertake a financial assessment are treated as if they were self-funders and invoiced for the full amount of their care).

Page 11 of 101

The older people residential forecast assumes that the current increase in short stay placements is temporary and not continue for the remainder of the financial year.

Care purchasing budgets are high risk due to the requirement to meet statutory care needs and therefore any increase in the support of eligible clients could result in an additional pressure against the current reported position.

Public Health

There is a risk around the Out of Area genitourinary medicine (GUM) budget which is demand led. Worst case projection shows that the overspend might be as high as £200k, which has reduced from previous estimated figure by £50k. Work is being done to mitigate this as much as possible with extended capacity at in county (block purchased) clinics and a new hub in Hatfield. This will be updated again at Q3.

Children’s Services

The Youth Connections restructure took place from 1 June this year so there will not be a full year effect in 2018/19. However, it is expected that the savings will be achieved. Work is currently being undertaken on the plans to achieve future year's savings; a further assessment will be given once the plans have gone through the various panels.

The current forecast assumes some community packages will end as clients are able to access short breaks. If this is not the case and all commitments are realised there would be an additional pressure on this budget.

Resources

Trading conditions remain challenging for Herts Full Stop with continued budget pressures across the education sector.

Property - Feasibility projects often span several financial years. There are a number of live Feasibility projects as well as a number of pipeline projects but it's too early in the year to confirm whether all of the pipeline projects will proceed, whether there will be new projects and how much of that cost will affect 2018/19.

Community Libraries – although the roll out is forecast to complete in 2018/19 any unachieved saving would be carried forward into the next financial year, which could lead to an overspend in the 2019/20 budget.

Community Protection

Recruitment is underway for new recruits for the vacancies against establishment to be reduced from January 2019. Recruits from the 2017/18 intake have passed out into the whole time service as of July 2018, so the pre-arranged overtime will begin to reduce. However at this stage it is difficult to predict the precise reduction on the Response & Resilience budget.

Page 12 of 101

1.2 Capital Monitor

Capital spend by 31 March 2019 is forecast to be £185.840m, summarised below with commentary on key variances.

The capital programme, based on the forecast outturn, will be funded through grants and third party contributions (61% of investment), use of County Council funds (4% of investment) and borrowing (35% of investment).

Significant variances against the latest approved budget are shown below. Details of variances over £100k are shown in section 3. The largest current variations are summarised below:

25 by 20 – Acquisition: (£22.1m) variance, of which (£21.2m) relates to the purchase of office accommodation to support the rationalisation of operational assets. When the setting the budget the council wanted flexibility to either be able to purchase the site, or to amend lease arrangements. Following development of the business case, Cabinet approved the lease option. As such the purchase budget is no longer needed.

Metropolitan Line Extension: Partners have halted work on this project and future payments by funding partners have therefore been suspended. (£20.030m) is requested to be reprogrammed to 2019/20 and beyond pending clarification on future plans.

A120 Bypass Project: Works are planned to commence in Q2 2019/20 therefore the funding of (£8.085m) is requested to be reprogrammed.

New School Developments & Site Acquisitions: (£5.393m) is requested to be reprogrammed due to the anticipated timings of land acquisitions and developer progress.

Care Homes (older people) Phase 1 - 3: Reprogramming of (£11.135m) is requested as award of care provider and build contracts are now anticipated in 19/20.

Land Acquisition – Stevenage: An underspend of (£5.882m) is forecast as it is unlikely that this acquisition will take place.

The budgeted capital receipts total for the year is comprised of £10m IP in addition to £3.8m spend to achieve and £5.2m carried forward (where the full target for 2017/18 was not achieved), to give a total budget for 2018/19 of £19.0m. Capital receipts for 2018/19 are forecast to be £7m, which is £12.048m less than the budgeted receipts for the year.

The £62.907m Reprogramming, which is required to be approved by Cabinet, is detailed in Table 6 below and also in Appendix C. Key items include:

£20m Metropolitan Line Extension (Environment) £8m A120 Bypass Project (Environment) £11m Elder People’s Homes (ACS) £8m Schools (Children’s Services – Schools)

Page 13 of 101

Table 6 – Capital Programme Summary Position

Analysis of Variance

LAB 2018/19

£'000Outturn

£'000

Total Varianc

e£'000

Under-spend£'000

Over-spend£'000

Re-program

m-ing£'000

Children's Services - schools 83,960 73,519 (10,441) (2,000) 24 (8,465)

Children's Services – non schools 1,125 1,078 (47) - - (47)

Environment 120,515 85,366 (35,149) - - (35,149)Fire 4,077 2,340 (1,737) - - (1,737)ACS 24,873 8,715 (16,158) (2,489) - (13,669)Resources 45,018 14,821 (30,197) (27,082) - (3,115)Public Health 725 - (725) - - (725)Grand Total 280,294 185,840 (94,454) (31,571) 24 (62,907)

Page 14 of 101

1.3 Schools Monitor

The Schools’ budget is funded from the Dedicated Schools Grant (DSG) and sixth form grant which is received separately from the Education Funding Agency (EFA). The total amount for which the County Council is accountable is £614m, summarised below. This is divided into areas where budget responsibility is delegated to schools, and areas for which the County Council retain responsibility.

A net variance of (£2,161k) underspend is projected against areas within the control of the County Council. Additional details regarding this variance can be found in Section 4 and is summarised below.

As these budgets are funded by ringfenced DSG and 6th Form Grant, they are required to be carried forward to support the schools budget in future years.

Table 7a – Summary Schools Funding

Schools Funding Budget£'000

DSG Allocation to HCC 938,796Less: Transfer to Sixth Form Funding re High Needs Places (1,416)

Less: Academies (343,589)Add: Carry Forward from previous year 5,821Total DSG 599,612 Sixth Form Funding 13,897Total Schools Grants & Other Funding 613,509

Table 7b – Summary of Key County Council controlled education budget variances

Key VariancesLatest

Budget£000s

Variance£000s

Primary Delegated 322,684 (8,843)Secondary Delegated 88,779 (5,479)School Grants & Other Funding (613,509) 12,789

Page 15 of 101

Section 2 – Service Variance/Movements over £250k

The tables below summarise the monitor position for each department, with the graph beneath showing how the variance has moved each quarter for the previous 2 financial years after carry forwards.

2.1 Adult Care Services

LABSpend

to Date

Projected

Outturn at Year

End

Carry Forwar

ds

Projected

Variance after

C/F

Variance Last

Quarter

Quarterly

Movement

ACS Ref

£000s £000s £000s £000s £000s £000s £000s

Older People & Adult Disability Services

2.1.1

254,67

4

109,65

3

253,761

4,076

3,163

(185)

3,348

Mental Health Services

16,680

(2,439)

16,714

-

34 22 12

Preventative Services

15,571

9,312

15,374

-

(197) 50 (247)

Provider Services 2.1.2

30,336

14,600

29,862

-

(474) (453) (21)

Transport SLA 2.1.3

4,111

2,177

4,690

-

579 659 (80)

Strategic Centre & Support Services

7,712

3,707

7,675

-

(37) (48) 11

Grant Funded Projects

40

(1,513)

40

-

- - -

Total

329,123

135,49

8

328,115

4,076

3,068

45

3,023

Page 16 of 101

Q1 Q2 Q3 Q4

-2

0

2

4

6

8

10

2016/172017/182018/19

Adult Care Services- Forecast Variance Trend£m

2.1.1 Older People & Adult Disability ServicesBreakdown of Variance

LAB Projected Spend

Carry Forwar

d

Forecast

Variance

Variance Last

QuarterMovemen

t

Early Achievemen

t of IP Savings / Pressures

One-Off

Additional Ongoing Savings/ Pressure

s£000 £000 £000 £000 £000 £000 £000 £00

0 £000

254,674 253,761 4,076 3,163 (185) 3,348 3,318 153 (308)

The care purchasing budgets for the Older People & Adult Disability Service have remained under pressure from demand, increased unit costs from care providers and requests to increase existing care packages. Some of the increase in package costs are due to the lack of availability of homecare which has resulted in some placements having to be made in more expensive residential and supported living establishments.

The main components of the variance are:

1. £4,820 net overspend on the residential / supported living budget. There are a number of factors causing this overspend including a £1,650k overspend as a result of an anticipated shortfall in the delivery of IP savings for this financial year and a £1,070k pressure as a result increases in unit costs. In addition we have seen an increase in client numbers and increased in existing packages due to increased complexity and client need as well as increases in the average unit price for residential providers which are further impacting the out-turn position. 2. (£1,660k) net underspend on supporting people to stay at home (homecare, direct payments, carers direct payments and daycare). The underspend is predominantly as a result of reduced homecare activity against budgeted hours as well as delivery of the IP demand management reviewing strategy. However, there continues to be a client waiting list because of workforce shortages and resolving this through the Adult Care Service (ACS) workforce strategy could cause a pressure in future.

Main reason for quarterly movement:

Page 17 of 101

£3,390k increased overspend on the core care purchasing budgets, £1,590k as a result of a net increase in clients over and above anticipated levels for the quarter and the unexpected requirement to provide long term care support for 2 clients, 1 of which has resulted in a placement in an out of county establishment. In addition, changes to a number of existing packages has resulted in a further pressure of £1,800k.

2.1.2 Provider ServicesBreakdown of Variance

LAB Projected Spend

Carry Forwar

d

Forecast

Variance

Variance Last

QuarterMovemen

t

Early Achievemen

t of IP Savings / Pressures

One-Off

Additional Ongoing Savings/ Pressure

s£000 £000 £000 £000 £000 £000 £000 £000 £00030,33

6 29,862 - (474) (453) (21) (474) - -

The main components of the variance are:1. (£310k) underspend on the In-House Daycare budget as a result of vacancy management and less use of agency to fulfil rota's.

2. (£150k) underspend on the In-House Supported Living budget as a result of vacancy management.

2.1.3 Transport SLABreakdown of Variance

LAB Projected Spend

Carry Forward

Forecast Variance

Variance Last

QuarterMovement

Early Achievement

of IP Savings / Pressures

One-Off

Additional Ongoing Savings/

Pressures£000 £000 £000 £000 £000 £000 £000 £000 £0004,111 4,690 - 579 659 (80) 579 - -

Whilst IP savings have been achieved in relation to the efficient utilisation of drivers and reducing fleet maintenance costs, additional demand for taxi transport is creating an overspend position on this budget. A Best Value Transport officer role has been recruited, and will be responsible for reviewing new transport requests and identifying further scope for using County Council fleet to substitute for existing taxi journeys; this role will work closely with those responsible for organising care placements for people to ensure full consideration of transportation requirements as part of the placement planning process.

Page 18 of 101

2.2 Public Health

In line with grant conditions, public health variations to budget will be taken to the dedicated Public Health Reserve at the year end (for underspending) or funded from that reserve (for overspending), hence reporting nil variances, after carryforwards. The table below is therefore presented before carryforwards to clearly show movements in quarterly forecasts.

LABSpend

to Date

Projected

Outturn at Year

End

Projected

Variance before

C/F

Variance

Last Quarte

r

Quarterly

Movement

PH Ref

£000s £000s £000s £000s £000s £000s

Corporate PH 2,522 1,160 2,518 (4)4

(8)

Smoking Cessation Service

1,592 403 1,514 (78)(72)

(6)

Sexual Health 9,301 3,678 9,422 121118

3

Drugs & Alcohol 7,280 4,497 7,275 (5)(4)

(1)

Children 19,340 11,433 19,340 - 1 (1)

Adults 1,143 284 1,161 18 10 8

District & Partnership Working

1,996 765 1,941 (55)(5)

(50)

PH Initiatives & Commissioning

5,553 1,201 5,550 (3) (3) -

Total 48,727 23,421 48,721 (6) 49 (55)

The graph below shows the PH position excluding carry forwards:

Page 19 of 101

Q1 Q2 Q3 Q4

-2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

2016/172017/182018/19

Public Health - Forecast Variance Trend£m

Page 20 of 101

2.3 Children’s Services

LABSpend to Date

Projected

Outturn at Year

End

Carry Forwar

ds

Projected

Variance after

C/F

Variance Last

Quarter

Quarterly Movement

CS Ref

£000s £000s £000s £000s £000s £000s £000s

Education & Early Intervention

2.3.12.3.22.3.3

50,246

24,73

5

50,346

-

100 (642)

741

CLA2.3.42.3.52.3.6

44,521

23,73

2

47,055

-

2,534

401

2,133

Other Safeguarding & Specialist Services

2.3.72.3.82.3.9

76,392

38,12

9

77,443

-

1,050 517

534

Safeguarding & Specialist Services Total

120,91

3

61,86

1

124,498

-

3,584 918

2,666

Children’s Services Overheads

212

9

145

-

(67) (71)

4

Total

171,371

86,60

4

174,988

-

3,617

205

3,412

Q1 Q2 Q3 Q4

-1.0

0.0

1.0

2.0

3.0

4.0

2016/172017/182018/19

Children's Services - Forecast Variance Trend

£m

Page 21 of 101

2.3.1 Integrated Services for LearningBreakdown of Variance

LAB Projected Spend

Carry Forwar

d

Forecast

Variance

Variance Last

QuarterMovemen

t

Early Achievemen

t of IP Savings / Pressures

One-Off

Additional Ongoing Savings/

Pressures£000 £000 £000 £000 £000 £000 £000 £000 £0005,88

7 5,595 - (292) (434) 141 -(292

) -

Integrated Services for Learning are expected to underspend by (£292k).

The Educational Psychology Service is underspending by (£274k) which relates to the high volume of vacant positions in the service. The budget can fund 35.1 whole time equivalent educational psychologist (EP) posts and there are currently only 22.5 EPs in post leaving total vacant positions at 12.6. Historically the EP service have struggled to recruit and retain educational psychologists however increased market forces payments have been introduced this year as an incentive to help reduce the vacant positions. The service is implementing additional recruitment marketing campaigns through social media and the local offer page. They are meetings with HR working on longer term strategies including overseas employment and enhancing their relationship with the University of Hertfordshire.

The remaining (£18K) underspend is made up of smaller variances across other budgets.

2.3.2 Mainstream TransportBreakdown of Variance

LAB Projected Spend

Carry Forwar

d

Forecast

Variance

Variance Last

QuarterMovemen

t

Early Achievemen

t of IP Savings / Pressures

One-Off

Additional Ongoing Savings/

Pressures£000 £000 £000 £000 £000 £000 £000 £000 £0005,53

7 5,278 - (259) 0 (259) -(259

) -

Page 22 of 101

Mainstream transport is reporting an underspend of £259k. The three main reasons for this variance are:

1. The trend of a decreasing cohort of primary school children eligible to receive transport provision has continued. 2. There has been a change in the admission process which has allowed children moving into Hertfordshire to be allocated to a local school over their allotted number. 3. The removal of passenger’s assistants from vehicles has reduced the cost of transporting the remaining primary children requiring the transport service. The table below shows a reduction in students and contract being transported since last year.

Mainstream transport is reporting an underspend of £259k since the last quarter. There are three main reason that would offer an explanation. 1. A reduced cohort has led to a decrease in primary school children receiving transport. 2. There has been a change in the admission process which has allowed children moving into Hertfordshire to be allocated to a local school over their allotted number. 3. The removal of passenger’s assistants from vehicles has reduced the cost of transporting the remaining primary children requiring the transport service.

2.3.3 Special Educational Needs (SEN) TransportBreakdown of Variance

LAB Projected Spend

Carry Forwar

d

Forecast

Variance

Variance Last

QuarterMovemen

t

Early Achievemen

t of IP Savings / Pressures

One-Off

Additional Ongoing Savings/ Pressure

s£000 £000 £000 £000 £000 £000 £000 £000 £00014,30

1 15,022 - 721 0 721 - 721 -

SEN Home to School transport is predicting to be overspent by £721k. This time last year the number of SEN pupils being transported was 2,188 in September 2017 compared to 2,245 in September 2018. The average cost per pupil has increased (£6,422 Sep 2017 to £6,541 Sep 2018). There are 57 more students and 85 more vehicles than this time last year. SEN children are presenting with more complex needs and are requiring more individual transport. The number of students costing more than £15k has increased significantly this year, 141 (96 last year).

Page 23 of 101

In the second quarter, the new school year has seen an increase in transport provision as pupils transfer from primary to secondary schools. The current budget for SEN transport would support 2126 students based on an average cost of £6,419 (average cost as at April 2018). With the commencement of the new school year, the number of pupils at the end of the second quarter being transported was 2,245, at an average cost of £6,541. It should be noted that the number of students varies each month.

2.3.4 Independent PlacementsBreakdown of Variance

LAB Projected Spend

Carry Forwar

d

Forecast

Variance

Variance Last

QuarterMovemen

t

Early Achievemen

t of IP Savings / Pressures

One-Off

Additional Ongoing Savings/ Pressure

s£000 £000 £000 £000 £000 £000 £000 £000 £00023,88

1 27,239 - 3,357 1,336 2,021 2,601 - 750

The Independent Placement overspend of £3,357k is mainly due to an overspend in the following areas:

1) Residential placements: £2,611k The forecast overspend reflects a lack of provision for complexities of need, leading to high costs and additional support. The number of placement weeks forecast in residential homes represents 63 full time equivalent (FTE) against a budgeted figure of 48. In addition, current average weekly cost of £4,101 is 6% higher than the average cost as at March 2018. This does, however, represent a significant decrease on the average cost last month of £4,508.

2) Independent Fostering: £981k. This budget continues to be under pressure as placement numbers are above target. The forecast FTE for 2018/19 is 165 as compared to a budgeted figure of 143.

3) Disability: £118k The overspend against disability funded placements is due to higher than budgeted number of residential school placements (28 FTE compared to a budgeted 17).

4) Family Assessment: £480k, due to court ordered assessments being required.

These overspends are partly off-set by the underspend in Semi Independent (£779k) and Secure (£55k), both as a result of lower than budgeted number of placement weeks being forecast.

The service have completed an action plan for Children’s Board and are conducting in-depth reviews of all Independent Placements. In house clients have been reviewed so that they can move on and other young people have been identified for new referrals to in house, which it is hoped will avoid a

Page 24 of 101

further increase in IP numbers. Potential step downs have been identified and will continue to be identified. Other options are also being considered such as whether clients meet criteria for continuing care. This will take time and a full picture should be available towards the end of October. All 18+ placements are also being reviewed and actions identified.

Work is still ongoing to redress the balance between in-house fostering and Independent fostering placements. During September, 1 placement has transferred from in-house fostering into IP residential and 5 IP fostering placements have transferred to In House Fostering.

The service are actively seeking to increase residential placement capacity by working with other Local Authorities to seek a regional solution to placement matching and a number of options are being worked on, however this is a national issue and there is lack of market provision to support the complexity of needs that are being presented.

The forecast overspend against Independent Placements has increased by £2,021k since quarter one. This is broadly due to an increased number of placement weeks being forecast in the most expensive placement types, particularly residential homes. In addition there have been significant increases to weekly costs of these placement types, reflecting both increased complexity of need and difficult in matching placements.Major movements by placement type are highlighted below:

Independent Placements - September, 2018

Placement

August 2018

(£'000)

September 2018

(£'000)Movement

(£'000) Placement Forecast

Residential 2,375 2,611 236

Resi CH 64, Aug 61 movement +3Resi Sch 5, Aug 5 movement 0

Family Assessment 355 480 125 3, Aug 3 movement 0

Semi-independent (644) (779) (135)

50, Aug 53 movement -3

Disability 82 118 3734, Aug 34 movement 0

Secure (56) (55) 1 5, Aug 7 movement -2

Fostering 1,030 981 (49) 167, Aug 172

Page 25 of 101

movement -5

3,143 3,357 214328, Aug 335, movement -7

1) Residential - £1,701k. The adverse movement is a result of an increased number of placement weeks being forecast, reflecting a significant increase in the number of placements. In June weeks equating to 56 FTE were forecast, whereas in September this has increased to 63 FTE. 2) Independent fostering - £417k. The increase in forecast is a result both of an increased number of placement weeks being forecast (165 FTE compared to 159 FTE in June) along with an increased average weekly cost of £970 per week compared to £927 in June.3) Family assessment - 253k. The increased forecast is due to a higher number of placement weeks being forecast (3 FTE compared to 1.25 in June). In addition there has been an increase to the average cost, although due to the small number of this placement type this does fluctuate based on actual placements.

This is to some extent offset by reductions in forecast in semi-independent (£110k), disability funded placements (£128k) and secure (£113k) mainly due to lower than previously forecast number of placement weeks.

2.3.5 Fostering Direct SpendBreakdown of Variance

LAB Projected Spend

Carry Forward

Forecast Variance

Variance Last

QuarterMovement

Early Achievement

of IP Savings / Pressures

One-Off

Additional Ongoing Savings/

Pressures£000 £000 £000 £000 £000 £000 £000 £000 £000

10,957 10,425 - (533) (581) 49 - (533) -

In house fostering is forecast to underspend by £533k. This is due to:

1)Forecast underspend of £179k against Family and Friends placements, due to there being 2,257 fewer placement weeks forecast than budgeted. This is in part due to the increased use of Special Guardianship Orders (SGOs) as shown in the adoption direct spend budget (please see SGO overspend below).

2) Forecast underspend of £337k in Section 23 over 18 placements. This is due to a combination of there being 597 fewer placement weeks forecast than budgeted and lower average weekly cost than budgeted (£52 per week against a budgeted £134 per week).

Page 26 of 101

This forecast reflects transfer of £1m to independent fostering to better reflect the current placement mix in addition to use of £250k to support the Diversion from the Children Looked After (CLA) budget. A review of previous work by iMPOWER on the foster carer recruitment pipeline is going to be conducted in order to identify options for increased recruitment in in house foster carers. At present, however, given national issues in this area the impact of this is uncertain and no financial impact has been built into the forecast position for 2018/19.

2.3.6 Unaccompanied Asylum Seeking Children (UASC) Direct SpendBreakdown of Variance

LAB Projected Spend

Carry Forward

Forecast Variance

Variance Last

QuarterMovement

Early Achievement

of IP Savings / Pressures

One-Off

Additional Ongoing Savings/

Pressures£000 £000 £000 £000 £000 £000 £000 £000 £0002,172 1,674 - (497) (457) (40) (450) (47) -

The overall UASC budget is forecast to underspend by £497k. This is made up of:

1) Forecast underspend of £1,214k against under 18 placement budgets. This is mainly due to there being significantly fewer under 18 UASC than budgeted. At the end of September there are 95 (excluding 5 missing) against a budgeted number by this period of 121. There is availability for 21 placements in block semi-independent contracts where the weekly cost per placement is lower than the budgeted cost for that placement type. These offset other placements where the cost is greater than the available grant.

2) Forecast overspend of £716k against over 18 budgets due to higher numbers than budgeted, including 26 more under 18s turning 18 during the remainder of this financial year.

2.3.7 Adoption Direct SpendBreakdown of Variance

LAB Projected Spend

Carry Forwar

d

Forecast

Variance

Variance Last

QuarterMovemen

t

Early Achievemen

t of IP Savings / Pressures

One-Off

Additional Ongoing Savings/

Pressures£000 £000 £000 £000 £000 £000 £000 £000 £0007,96

5 7,467 - (498) (376) (123) -(498

) -

Page 27 of 101

Allowances budgets are forecasting an underspend of £498k as a result of: 1. Adoption allowances forecast underspend of (£330k). There are currently 293 adoption allowances and a provision for 11 new adoptions equally placed between October - March. The budget can support 362 placements but the growth in the number of adoption allowances has been less than budgeted.

2. Child arrangement orders (CAO) / residence order forecast underspend of (£669k). There are currently 81 orders and a provision for 5 new ones during the remainder of 2018/19. The budget can support 180 orders but the trend is for the use of Special Guardianship Orders (SGOs) and not CAO's leading to a lower than budgeted level of these type of allowances.

3. Special Guardianship orders forecast overspend of £568k. There are currently 565 orders and a provision for 37 during the remainder of 2018/19. The budget can support 538 orders and the higher than budgeted numbers are a result of the use of SGOs rather than both CAOs and family and friends placements (please see family and friends underspend within the in-house fostering budget).

4. Inter-agency adoption forecast underspend of (£67k). This forecast is based on the current level of interagency adoptions and there is a risk this could change based on actual placements taking place during the remainder of the year.

The annual review of allowances is currently underway. The forecast is based on the assumption that all outstanding assessments will result in an increase of 1.44% based on inflation. The results of the remaining assessments will therefore potentially lead to movement in forecast.

2.3.8 0-25 Together Under 18 Direct SpendBreakdown of Variance

LAB Projected Spend

Carry Forward

Forecast Variance

Variance Last

QuarterMovement

Early Achievement

of IP Savings / Pressures

One-Off

Additional Ongoing Savings/

Pressures£000 £000 £000 £000 £000 £000 £000 £000 £0008,861 10,059 - 1,199 464 734 - 388 811

0-25 Together Childrens direct spend is forecast to overspend by £1,199k. This is a result of:

1) Nascot Lawn - £517k. As a result of the closure of Nascot Lawn a need has been identified to extend the existing West Hyde shorts break facility by an additional two bedrooms at an estimated cost of £350k. There is currently no identified capital budget for this work so expenditure is being shown as an additional revenue overspend. In addition there is an additional overspend forecast of £167k as a result of community packages (including homecare and direct payments) required for this

Page 28 of 101

client group. These costs are now shown separately rather than against the base homecare and direct payment budgets.

2) Homecare - £485k. The base budget can support 65,359 hours of care and the current forecast is for 22,470 additional hours to be purchased during 2018/19.

3) Direct Payments - £74k. The base budget can support 191,203 hours of payment and the current forecast is for 196,731 hours to be purchased during 2018/19.

4) Short break local offer - £71k. This overspend is due to higher than budgeted take up of the service.

In order to address these overspends there is an active review looking at a variety of options including review of packages and the role that community navigation can play in directing people to community based resources instead of specialist resources, as well as a number of other options.

The adverse movement in forecast in 0-25 Together Childrens direct spend is due to:

1) £350k of costs relating to the extension of West Hyde short breaks facility being shown in this budget.

2) £307k as a result of increased costs for overnight short break contracts, particularly in response to the need to provide additional services to clients formerly in receipt of services from Nascot Lawn.

The remaining increase is made up of a number of smaller increases across the service.

2.3.9 Other Specialist ServicesBreakdown of Variance

LAB Projected Spend

Carry Forward

Forecast Variance

Variance Last

QuarterMovement

Early Achievement

of IP Savings / Pressures

One-Off

Additional Ongoing Savings/

Pressures£000 £000 £000 £000 £000 £000 £000 £000 £000153 447 - 294 179 114 - 294 -

Page 29 of 101

The forecast overspend of £293k is due to increased expenditure on preventative work in order to reduce the number of children and young people coming in to care, particularly through commissioned services with organisations such as Herts Practical Parenting.

Page 30 of 101

2.4 Environment & Infrastructure

LABSpend

to Date

Projected

Outturn at Year

End

Carry Forwar

ds

Projected

Variance after

C/F

Variance Last

Quarter

Quarterly

Movement

ENV Ref

£000s £000s £000s £000s £000s £000s £000s

Central Management

821

408

869

-

48 -

48

Highways 2.4.1

42,008

15,135

42,453

-

445 -

445

Transport, Waste & Environmental Management

2.4.2

64,687

19,649

64,445

-

(242) 445

(687)

Planning, Growth & Infrastructure

2,489

1,416

2,716

-

227 440

(213)

Total

110,005

36,608

110,483

-

478

885

(407)

Q1 Q2 Q3 Q4

-1

-1

0

1

1

2

2016/172017/182018/19

Environment - Forecast Variance Trend

£m

Page 31 of 101

2.4.1 Highways Advance Preparation & ConsultationBreakdown of Variance

LAB Projected Spend

Carry Forward

Forecast Variance

Variance Last

QuarterMovement

Early Achievement

of IP Savings / Pressures

One-Off

Additional Ongoing Savings/

Pressures£000 £000 £000 £000 £000 £000 £000 £000 £000848 1,293 - 445 - 445 - 445 -

Baldock Bridges, the revenue funding in 18/19 and 19/20 has not yet been allocated, but is required to support the production of the Housing Infrastructure Fund (HIF) business case and early scheme preparation, particularly Network Rail engagement. This project is being developed by Highways on behalf of County Council Property.

2.4.1 Waste Management (incl Waste Aware)Breakdown of Variance

LAB Projected Spend

Carry Forwar

d

Forecast

Variance

Variance Last

QuarterMovemen

t

Early Achievemen

t of IP Savings / Pressures

One-Off

Additional Ongoing Savings/ Pressure

s£000 £000 £000 £000 £000 £000 £000 £000 £00044,64

1 44,399 - (242) 445 (687) -(242

) -

Operational challenges (identified in the last quarter) at the Edmonton Energy from Waste Facility have now been averted with the facility now able to receive waste from the Waterdale Waste Transfer Station. This, alongside the first projection of total tonnage being managed for the financial year has reduced the previously identified overspend. Waste volumes are lower than expected and the current projection is that the net overall budget will be in the region of a £240k underspend for the year.

Page 32 of 101

2.5 Resources

LABSpend

to Date

Projected

Outturn at Year

End

Carry Forwar

ds

Projected

Variance after

C/F

Variance Last

Quarter

Quarterly

Movement

RES Ref

£000s £000s £000s £000s £000s £000s £000s

Corporate Services

2.5.1

58,521

30,710

56,311

192

(2,018) (851)

(1,167)

Traded Services

(2,691)

(1,140)

(2,516)

-

175 424

(249)

Customer Engagement

5,785

2,918

5,792

-

7 42

(35)

Libraries & HALS

10,408

5,240

10,628

-

220 220

-

Total

72,023

37,728

70,215

192

(1,616) (165)

(1,451)

Q1 Q2 Q3 Q4

-3.5-3.0-2.5-2.0-1.5-1.0-0.50.00.5

2016/172017/182018/19

Resources - Forecast Variance Trend

£m

Page 33 of 101

2.5.1 Property Breakdown of Variance

LAB Projected Spend

Carry Forwar

d

Forecast

Variance

Variance Last

QuarterMovemen

t

Early Achievemen

t of IP Savings / Pressures

One-Off

Additional Ongoing Savings/ Pressure

s£000 £000 £000 £000 £000 £000 £000 £000 £00016,15

8 13,805 192 (2,161) (928) (1,233) 103(871

) (1,393)

The (£1,233k) movement since quarter 1 is mainly due to:

• (£821k) – Central & Shared – A one-off rates refund (£821k) for Leahoe• £-100k - Staff Housing - Maintenance works have been postponed pending a review of the estate• £-1,119k - Utilities - Energy prices have been volatile for a number of years and has resulted in over-inflation of the energy budgets. A permanent saving will form part of the 2019/20 Resources IP to bring the budgets back in line• £100k - Tree management to identify trees subject to infestation across Rural Estates• £400k - Maintenance backlog across Rural Estates for works that the County Council rather than the tenants is liable to fund• £94k - Project costs due to a move to SMART working and innovation with the facilities management portal• £92k - Service Property - Rent and service charge for The Forum• £49k - Corporately Managed Properties - Additional consultancy fees on Baldock & Broxbourne feasibility work due to unresolved highways & infrastructure issues.

Page 34 of 101

2.6 Community Protection

LABSpend

to Date

Projected

Outturn at Year

End

Carry Forwar

ds

Projected

Variance after

C/F

Variance Last

Quarter

Quarterly

Movement

CP Ref

£000s £000s £000s £000s £000s £000s £000s

Fire & Rescue

2.6.1

2.6.2

30,499

15,193

30,690

-

191

546

(355)

Joint Protective Services

4,506

2,366

4,531

-

25 28

(3)

Total

35,005

17,559

35,221

-

216

574

(358)

Q1 Q2 Q3 Q4

-0.6

-0.4

-0.2

0.0

0.2

0.4

0.6

0.8

2016/172017/182018/19

Community Protection - Forecast Variance Trend

£m

2.6.1 Fire & Rescue – Response & ResilienceBreakdown of Variance

LAB Projected Spend

Carry Forwar

d

Forecast

Variance

Variance Last

QuarterMovemen

t

Early Achievemen

t of IP Savings / Pressures

One-Off

Additional Ongoing Savings/ Pressure

s£000 £000 £000 £000 £000 £000 £000 £000 £00022,84

3 22,570 - (273) 211 (484) -(273

) -

Page 35 of 101

The forecast movement in Response and Resilience since quarter 1 is due to management action to ensure pre-arranged overtime will now be used to maintain minimum whole time crewing levels (as opposed to full establishment levels) whilst still keeping whole time appliances on the run, and this will lead to a reduction in the amount of pre-arranged overtime required, and the forecast reflects this change.

2.6.2 Fire & Rescue – Service SupportBreakdown of Variance

LAB Projected Spend

Carry Forward

Forecast Variance

Variance Last

QuarterMovement

Early Achievement

of IP Savings / Pressures

One-Off

Additional Ongoing Savings/

Pressures£000 £000 £000 £000 £000 £000 £000 £000 £0006,650 7,024 - 374 335 39 - 329 45

The overspend is attributable to less predicted income than the budget provides for in Commercial training, additional staffing costs across Service Support due to pre-arranged overtime to maintain response service levels, and significant additional costs in the cleaning of protective clothing and uniforms.

Commercial Training's income shortfall is as a result of the Hertfordshire Fire and Rescue Service Service (HFRS) being unable to market services until a trading/commercial unit is created, which is being pursued with the County Council. The sales target is historical and sales have been gradually falling over the years due to being unable to pursue new business.

Monthly Personal Protective Equipment (PPE) provision, maintenance and laundry costs have increased by approx. £6k per month. This is due partly to HFRS actively encouraging staff to get uniform cleaned due to research around the increased risks from carcinogens remaining on the uniform and additional contract costs from new recruits.

The summer heatwave and associated increase in operational activity has additionally had an impact on the Technical Services budget, through costs of repairing, maintaining and replacing a greater volume of damaged or used equipment/consumables than originally predicted.

Page 36 of 101

2.7 Central Items

LAB Spend to Date

Projected

Outturn at Year End

Carry Forwar

ds

Projected

Variance after

C/F

Variance Last Quarte

r

Quarterly Moveme

ntCEN Ref

£000s £000s £000s £000s £000s £000s £000sCentral Capital Financing & Interest on Balances

2.7.1

21,010

2,107

19,611

-

(1,399) (634)

(765)

Contingency – General

5,909

-

5,909

-

- - -

Other Central Items

2,202

(131)

2,202

-

- - -

Apprenticeship levy

962

594

962

-

- -

-

Income Generating Initiatives

-

32

120

-

120 120

-

Levies

2,046

1,267

2,046

-

- -

-

Income 2.7.2

-

-

(3,811)

-

(3,811) -

(3,811)

Total

32,129

3,869

27,039

-

(5,090)

(514)

(4,576)

Q1 Q2 Q3 Q4

-8

-6

-4

-2

0

2

2016/172017/182018/19

Central Items - Forecast Variance Trend

£m

Page 37 of 101

2.7.1 Capital FinancingBreakdown of Variance

LAB Projected Spend

Carry Forward

Forecast Variance

Variance Last

QuarterMovement

Early Achievement

of IP Savings / Pressures

One-Off

Additional Ongoing Savings/

Pressures

£000 £000 £000 £000 £000 £000 £000 £000 £00011,950 10,551 - (1,399) (634) (764) - (1,399) -

Interest received underspend of (£833k).The overall value results from increasing market rates as a result of the increase in Bank of England Base Rate, and higher than budgeted cash balances. The cash balances result from a combination of forward funding received and prior year reprogramming of Capital Expenditure.

Interest paid underspend (£396k) forecast as no new long-term loans are expected to be taken during 2018/19. As a result interest payable will be lower than budgeted.

Non-investment income underspend of (£521k) results from recovery of forward funding of Watford Sexual Health Clinic, and includes (£349k) expected in respect of interest accrued on backdated settlement from disposal of Wormley School site.

Internal Interest allocation budget overspend £352k. This results from interest rates now expected to be higher than budgeting assumptions, and average value of LEP forward funding balance expected to be £21m higher than previous year due to significant grant funding received.

Explanation of quarterly movement:

A small £6k overspend on debt management services.

Interest received underspend of (£531k). The income forecast has increased due to greater certainty over pooled fund returns, new fixed-term deals, call and notice account balances and revised interest rate and balance expectations for Money Market Fund Investments.

Non-investment income underspend of (£379k) results from recovery of forward funding of Watford Sexual Health Clinic, and includes (£349k) expected in respect of interest accrued on backdated settlement from disposal of Wormley School site and also (£28k) invoice accrual for Quantum Care.

Internal Interest allocation budget overspend £139k. This results from interest rates now expected to be higher than budgeting assumptions, and average value of LEP forward funding balance expected to be £21m higher than previous year due to significant grant funding received.

Page 38 of 101

2.7.2 IncomeBreakdown of Variance

LAB Projected Spend

Carry Forward

Forecast Variance

Variance Last

QuarterMovement

Early Achievement

of IP Savings / Pressures

One-Off

Additional Ongoing Savings/

Pressures

£000 £000 £000 £000 £000 £000 £000 £000 £000(14,570) (18,381) - (3,811) - (3,811) - (3,811)

£649k - Estimate of the County Council's share of the gain arising from the Business Rates Pool.

£3.162m – Additional Non-Ringfenced Grants

Page 39 of 101

Section 3 – Capital Monitor

3.1 Capital Summary

The projected capital outturn position as at 30th September 2018 is as follows:

£000s

Reprogramming to future years (62,907)

Underspends (31,571)

Overspends 24

Total Variance (94,454)

- Details of significant capital variances are shown below.

- These variances are calculated on the latest budget of £280.294m. This includes the reprogramming from 2017/18 that was approved by Cabinet in June 2018.

£’000 £’000 Original Budget Per 2018/19 Integrated Plan 244,024

2017/18 Reprogramming 36,049

Increase in Pothole allocation - DFT 2,723School Expansion Budget Adjustments (3,664) Other Budget Adjustments 1,162

Total Budget Adjustments 221

Latest Approved Budget for 2018/19 280,294

Summary Capital Budget Monitor

Page 40 of 101

Analysis of Variance

Latest

Approved Budget 2018/19

Forecast

Outturn

Total Variance

Underspend

Overspend

Reprogramming

£'000 £'000 £'000 £'000 £'000 £'000Children's Services School Expansions 63,903 53,462 (10,441) (2,000) 24 (8,465)Schools R&M 18,837 18,837 - - - -High Needs projects 1,220 1,220 - - - -Other - Children's Services

1,125 1,078 (47) - - (47)

Total Children's Services

85,085 74,597 (10,488) (2,000) 24 (8,512)

EnvironmentMajor Projects 34,957 5,586 (29,371) - - (29,371)Road Maintenance 52,276 52,276 - - - -Street Lighting 8,849 8,849 - - - -ITP 5,918 5,918 - - - -Bridge Maintenance 5,325 5,325 - - - -Other - Environment 13,190 7,412 (5,778) - - (5,778)Total Environment 120,515 85,366 (35,149) - - (35,149) Fire 4,077 2,340 (1,737) - - (1,737) ACSEPH Provision 11,385 250 (11,135) - - (11,135)Disabled Facilities Grant

3,333 3,333 - - - -

HCS Property 4,156 1,548 (2,608) (2,411) - (197)Home Improvements Agency

4,353 2,016 (2,337) - - (2,337)

Other - ACS 1,647 1,569 (78) (78) - -

Total ACS 24,873 8,715 (16,158) (2,489) - (13,669) Resources 25 by 20 22,563 563 (22,000) (21,200) - (800)Acquisitions 6,675 793 (5,882) (5,882) - -Broadband 7,869 5,669 (2,200) - - (2,200)BMT Projects 1,144 772 (372) - - (372)Non-School Cap. Maint.

1,750 1,750 - - - -

Co-location of Libraries

1,825 1,825 - - - -

Page 41 of 101

Analysis of Variance

Latest

Approved Budget 2018/19

Forecast

Outturn

Total Variance

Underspend

Overspend

Reprogramming

£'000 £'000 £'000 £'000 £'000 £'000Technology Purchasing

1,262 1,262 - - - -

Other -Resources 1,930 2,187 257 - - 257Total Resources 45,018 14,821 (30,197) (27,082) - (3,115) Public Health 725 - (725) - - (725)

Grand Total

280,294 185,84

0

(94,454) (31,571) 24 (62,907)

The net variance of (£94,454k) comprises re-programming of (£62,907k), underspends of (£31,571k), and overspends of £24k.

Details of major variances (over £250k) against the revised budget are shown below. Further information regarding the £62.907m Reprogramming can be found in Appendix C.

The impact of these variances on total financing including the borrowing requirement is shown in Table 4.

3.2 Significant Capital Forecast Variances

Children’s Services

New School Developments & Site AcquisitionsBreakdown of Variance

LAB£000s

Projected

Spend£000s

Forecast

Variance

£000s

Variance last

quarter£000s

Movement£000s

Underspend

£000s

Overspend

£000s

Reprogramming

£000s22,807 17,414 (5,393) (5,191) (202) - - (5,393)The main reasons for the variance are:

(£4.691m) is requested to be reprogrammed as these projects are dependent on developer’s progress.

(£702k) is requested to be reprogrammed due to timings of spend now anticipated on two parcels of land. Further reprogramming may be required. Schemes are reliant on developer progress and external factors.

Primary Expansions PEP6 & Temporary Expansions Sept 2016 - HCC Managed

Page 42 of 101

Primary Expansions PEP6 & Temporary Expansions Sept 2016 - HCC ManagedBreakdown of Variance

LAB£000s

Projected

Spend£000s

Forecast

Variance

£000s

Variance last

quarter£000s

Movement£000s

Underspend

£000s

Overspend

£000s

Reprogramming

£000s3,650 1,941 (1,709) (776) (933) (933) 24 (800)

The main reasons for the variance are: A underspend of (£933k) is declared as an underspend for the Temporary 16/17

expansions. This funding was reprogrammed at year end to contribute towards the £2m allocation for the 18/19 Temp expansions but after reviewing the demand across the Authority, this is no longer required and can be released back into the funding envelope to support future projects to address the demand for pupil places.

(£800k) is requested to be reprogrammed for the expansion at Leavesden Green. The project has been broken into three phases, with the third phase completing in 2019/20.

£24k overspend relates to final works at Almond Hill.

Primary Expansions PEP7 & Temporary Expansions Sept 2017 - HCC ManagedBreakdown of Variance

LAB£000s

Projected

Spend£000s

Forecast

Variance

£000s

Variance last

quarter£000s

Movement£000s

Underspend

£000s

Overspend

£000s

Reprogramming

£000s4,992 3,264 (1,728) - (1,728) (728) - (1,000)

The main reasons for the variance are: Reprogramming of (£1m) is requested for a scheme that is being managed by the EFA. An underspend of (£728k) is forecast for the Temporary 17/18 expansions. This funding

was reprogrammed at year end to contribute towards the £2m allocation for the 18/19 Temp expansions but after reviewing the demand across the Authority, this is no longer required and can be released back into the funding envelope for future projects to address the demand for pupil places.

Primary Expansions PEP8 & Temporary Expansions Sept 2018 - HCC ManagedBreakdown of Variance

LAB£000s

Projected

Spend£000s

Forecast

Variance

£000s

Variance last

quarter£000s

Movement£000s

Underspend

£000s

Overspend

£000s

Reprogramming

£000s4,200 2,261 (1,939) (1,600) (339) (339) - (1,600)

The main reasons for the variance are: After reviewing the demand across the Authority, (£339k) is declared as an underspend for

the Temporary 18/19 expansions and can be released back into the funding envelope for future projects to address the demand for pupil places. This will be reviewed throughout the year and a further underspend of up to (£800k) that is currently uncommitted may be reported later in the year.

(£1.600m) is forecast to be reprogrammed, due to a review of the anticipated timescales for the two PEP8 expansions. Reprogramming may be required for the temporary expansion budget, a review is in progress.

Page 43 of 101

Secondary Expansions - SEC2Breakdown of Variance

LAB£000s

Projected

Spend£000s

Forecast

Variance

£000s

Variance last

quarter£000s

Movement£000s

Underspend

£000s

Overspend

£000s

Reprogramming

£000s11,901 9,331 (2,570) (885) (1,685) - - (2,570)The main reasons for the variance are:

(£1.685m) is requested to be reprogrammed across school expansions schemes based on the latest forecast information from the independent certifier. (£885k) is forecast to be reprogrammed for one school where spend is dependent on a deed of variation.

Secondary Expansions – SEC3Breakdown of Variance

LAB£000s

Projected

Spend£000s

Forecast

Variance

£000s

Variance last

quarter£000s

Movement£000s

Underspend

£000s

Overspend

£000s

Reprogramming

£000s8,502 11,400 2,898 0 2,898 - - 2,898

The main reasons for the variance are: £2.898m is requested to be reprogrammed for the Secondary expansions schemes based

on the latest forecast information from the independent certifier. This is an estimate and will be reviewed and updated as the year progresses.

Environment

Metropolitan Line ExtensionBreakdown of Variance

LAB£000s

Projected

Spend£000s

Forecast

Variance

£000s

Variance last

quarter£000s

Movement£000s

Underspend

£000s

Overspend

£000s

Reprogramming

£000s20,030 - (20,030) (20,030) - - - (20,030)The main reasons for the variance are:

Metropolitan Line Extension – Partners have halted work on this project and future payments by funding partners have therefore been suspended. It is requested that this scheme is reprogrammed to 2019/20 and beyond pending clarification of future plans.

A120 Bypass ProjectBreakdown of Variance

LAB£000s

Projected

Spend£000s

Forecast

Variance

£000s

Variance last

quarter£000s

Movement£000s

Underspend

£000s

Overspend

£000s

Reprogramming

£000s8,779 694 (8,085) (6,285) (1,800) - - (8,085)

Page 44 of 101

A120 Bypass ProjectThe main reasons for the variance are:

The scheme is programmed to achieve full approval following a Secretary of State decision and completion of the tender procedures in Q4 2018/19. (£6.885m) of funding is requested to be reprogrammed to 2019/20 as main on-site works will start in early Q2 2019/20.

£1.2m grant will be released from other schemes and has resulted in HCC funding no longer being required in year. The proposal is for this to be reprogrammed in addition to the (£6.885m) and used to support the A120 programme in future years.

Essex RoadBreakdown of Variance

LAB£000s

Projected

Spend£000s

Forecast

Variance

£000s

Variance last

quarter£000s

Movement£000s

Underspend

£000s

Overspend

£000s

Reprogramming

£000s501 895 394 394 - - - 394

The main reasons for the variance are: Reprogramming of £394k from 2019/20 into 2018/19 is required due to the anticipated

programme of spend on this scheme. LEP are aware of the reprofiling and a formal request will be made to the LEP board who are funding this scheme.

A120 Standon Highways Improvement ProjectBreakdown of Variance

LAB£000s

Projected

Spend£000s

Forecast

Variance

£000s

Variance last

quarter£000s

Movement£000s

Underspend

£000s

Overspend

£000s

Reprogramming

£000s1,500 1,200 (300) - (300) - - (300)

The main reasons for the variance are: Additional works have been identified to be included within the budget for this project. This

will result in a longer programme and some aspects of the scheme which will now be delivered in 2019/20. It is requested that (£300k) be reprogrammed into 2019/20.

Ware Household Waste SiteBreakdown of Variance

LAB£000s

Projected

Spend£000s

Forecast

Variance

£000s

Variance last

quarter£000s

Movement£000s

Underspend

£000s

Overspend

£000s

Reprogramming

£000s5,500 3,000 (2,500) - (2,500) - - (2,500)

The main reasons for the variance are: The approximate start date for this project is now November 18 and therefore (£2.5m) is

requested to be reprogrammed to 2019/20 to enable the project to be completed.

A414 Hertford Major ProjectBreakdown of Variance

LAB£000s

Projected

Spend£000s

Forecast

Variance

Variance last

quarter£000s

Movement£000s

Underspend

£000s

Overspend

£000s

Reprogramming

£000s

Page 45 of 101

A414 Hertford Major Project£000s

1,750 400 (1,350) (850) (500) - - (1,350)The main reasons for the variance are:

The A414 Strategy development period has been longer than anticipated which has delayed start of development work on the Hertford Major scheme emerging from this strategy. It is requested that (£1.35m) be reprogrammed to 2019/20. This will be reviewed once work has started, further reprogramming may be required.

Stevenage Household Waste Recycling CentreBreakdown of Variance

LAB£000s

Projected

Spend£000s

Forecast

Variance

£000s

Variance last

quarter£000s

Movement£000s

Underspend

£000s

Overspend

£000s

Reprogramming

£000s3,203 - (3,203) - (3,203) - - (3,203)

The main reasons for the variance are: As a decision is yet to be made on this project, the budget (£3.203m) is requested to be

reprogrammed to 2019/20.

Fire

F&R Vehicle ReplacementBreakdown of Variance

LAB£000s

Projected

Spend£000s

Forecast

Variance

£000s

Variance last

quarter£000s

Movement£000s

Underspend

£000s

Overspend

£000s

Reprogramming

£000s2,177 1,177 (1,000) - (1,000) - - (1,000)

The main reasons for the variance are: Delivery of the 2018/19 fire appliances will not be until 2019/20. It is requested that (£1m)

of the budget be reprogrammed to 2019/20. This is an estimate; an adjustment to reprogramming at year end may be required once orders are placed.

Relocation of Fire HQBreakdown of Variance

LAB£000s

Projected

Spend£000s

Forecast

Variance

£000s

Variance last

quarter£000s

Movement£000s

Underspend

£000s

Overspend

£000s

Reprogramming

£000s637 - (637) - (637) - - (637)

The main reasons for the variance are: Initial feasibility work is currently being undertaken with development works starting in

2019/20. Therefore (£637k) is requested to be reprogrammed.

Adult Care Services (ACS)

Page 46 of 101

Commissioning for Independence (formerly Supported Living)Breakdown of Variance

LAB£000s

Projected Spend£000s

Forecast Variance

£000s

Variance last

quarter£000s

Movement£000s

Underspend£000s

Overspend£000s

Reprogramming£000s

3,301 950 (2,351) (1,651) (700) (2,351) - -The main reasons for the variance are:

A review of the ACS Accommodation Strategy is being undertaken which includes the provision of supported accommodation for people with care and support needs. Anticipated spend on known projects in 18/19 is £950k. Whilst the review is being undertaken and governance processes are set up to ensure effective prioritisation according to service needs, oversight and decision making, it is unlikely the full allocation of the capital budget for 18/19 will be utilised.

Home Improvements AgencyBreakdown of Variance

LAB£000s

Projected Spend£000s

Forecast Variance

£000s

Variance last

quarter£000s

Movement£000s

Underspend£000s

Overspend£000s

Reprogramming£000s

4,353 2,016 (2,337) (1,355) (982) - - (2,337)The main reasons for the variance are:

The phased handover of cases from partner authorities and staggered recruitment of the HHIA team resulted in an underspend during 2017/18, which was carried forward into future years. The outturn reflects current estimates of works that will be completed during 2018/19. Unspent grant balances (£2.337m) from the 18/19 allocation will be carried forward to fund approved works that will not complete by year end.

Care Homes (older people) Phase 1Breakdown of Variance

LAB£000s

Projected Spend£000s

Forecast Variance

£000s

Variance last

quarter£000s

Movement£000s

Underspend£000s

Overspend£000s

Reprogramming£000s

5,573 250 (5,323) (4,573) (750) - - (5,323)The main reasons for the variance are:

The delivery model for the scheme has now been agreed and work has commenced to procure the care provider. Work is now anticipated to start in 2019/20, so it is requested that (£5.323m) be reprogrammed.

Care Homes (older people) Phases 2 & 3Breakdown of Variance

LAB£000s

Projected Spend£000s

Forecast Variance

£000s

Variance last

quarter£000s

Movement£000s

Underspend£000s

Overspend£000s

Reprogramming£000s

5,812 - (5,812) - (5,812) - - (5,812)The main reasons for the variance are:

A needs analysis has been undertaken to identify the strategic areas for development. Alternative models of delivery are currently being considered for these areas, including a review of available sites. Feasibility work will begin in 19/20, with the procurement for the care provider and build contract for the schemes commencing thereafter. It is requested that the (£5.812m) be reprogrammed to 2019/20.

Page 47 of 101

Resources

25 by 20 – AcquisitionBreakdown of Variance

LAB£000s

Projected Spend£000s

Forecast Variance

£000s

Variance last

quarter£000s

Movement£000s

Underspend£000s

Overspend£000s

Reprogramming£000s

22,200 100 (22,100) (22,200) 100 (21,200) - (900)The main reasons for the variance are:

Purchase of office accommodation to support the rationalisation of operational assets is no longer proceeding therefore an underspend of (£21.2m) is declared. When the setting the budget the council wanted flexibility to either be able to purchase the site, or to amend lease arrangements. Following development of the business case, Cabinet approved the lease option. As such the purchase budget is no longer needed.

Broadband delivery – Contract 2Breakdown of Variance

LAB£000s

Projected Spend£000s

Forecast Variance

£000s

Variance last

quarter£000s

Movement£000s

Underspend£000s

Overspend£000s

Reprogramming£000s

7,869 5,669 (2,200) - (2,200) - - (2,200)The main reasons for the variance are:

Openreach are still experiencing delivery issues with rollout of superfast broadband due to delays in planning, resource challenges and infrastructure rollout. Based on the forecast for 2018/19 from Openreach, it is anticipated that (£2.2m) will be required to be reprogrammed to 2019/20. This will continue to be monitored, so there is risk that the reprogramming figure may change.

Land Acquisition – StevenageBreakdown of Variance

LAB£000s

Projected Spend£000s

Forecast Variance

£000s

Variance last

quarter£000s

Movement£000s

Underspend£000s

Overspend£000s

Reprogramming£000s

5,882 - (5,882) - (5,882) (5,882) - -The main reasons for the variance are:

An underspend of (£5.882m) is forecast as it is unlikely that this acquisition will take place

Access Control/Car Park ImprovementsBreakdown of Variance

LAB£000s

Projected Spend£000s

Forecast Variance

£000s

Variance last

quarter£000s

Movement£000s

Underspend£000s

Overspend£000s

Reprogramming£000s

502 130 (372) - (372) - - (372)The main reasons for the variance are:

Work will start on the access improvements in November 2018, which are expected to be completed in February 2019. (£372k) is requested to be reprogrammed to 2019/20 for Phases 2&3 front access control to County hall.

Page 48 of 101

RFID KiosksBreakdown of Variance

LAB£000s

Projected Spend£000s

Forecast Variance

£000s

Variance last

quarter£000s

Movement£000s

Underspend£000s

Overspend£000s

Reprogramming£000s

405 662 257 - 257 - - 257The main reasons for the variance are:

Orders have now been placed for 90 new kiosks to be installed across the County’s Libraries. Reprogramming of £257k is requested as work will be completed earlier than originally anticipated.

Public Health

Sexual Health ClinicBreakdown of Variance

LAB£000s

Projected Spend£000s

Forecast Variance

£000s

Variance last

quarter£000s

Movement£000s

Underspend£000s

Overspend£000s

Reprogramming£000s

725 - (725) - (725) - - (725)The main reasons for the variance are:

(£725k) is requested to be reprogrammed. The service is currently looking into 2 options for the location of the Hatfield Clinic. It is expected that once confirmed; works will commence in the next financial year.

3.3 Movements in the Financing of Capital Budget’s

Table 3 below summarises the changes in financing to support the revised budget and the forecast financing position based on expected outturn against budget. Reprogramming and underspend, except where these are linked to grant funding or external contributions, result in a higher level of capital reserves to carry forward for funding in future years.

Capital Budget Financing

Budget Financing SourceOriginal Budget (2018/19

IP)

Funding Movements

Agreed

Latest Adjusted Budget 2018/19

Latest Forecast Outturn

Variance (Additional

Funding Movements)

£'000 £'000 £'000 £'000 £'000Capital Receipts 10,000

5,248 15,248 3,200 (12,048)

Capital Grants 81,649 22,634 104,283 91,180 (13,103)

Revenue contributions - 1,250 1,250 1,250 -

Contributions from Third Parties 48,148

927 49,075 22,205 (26,870)

Specific Reserves 2,761 3,003 3,003 -

Page 49 of 101

242

Borrowing 101,466 5,969 107,435 65,002 (42,433)

Total 244,024 36,270 280,294 185,840 (94,454)

3.4 Capital Receipts

£973k was achieved by 30th September 2018.

The total budgeted receipts for 2018/19 are £19.048m, which includes £13.8m of capital receipts funding assumed in the Integrated Plan to fund the Capital Programme and Spend to Achieve plus £5.2m shortfall in capital receipts from 2017/18 which has been carried forward to be achieved in the current year.

As at 30th September 2018, a shortfall of £12.048m is forecast.

Capital Receipts for 2018/19 – 2020/21

Forecast Forecast ForecastReceipts to

30.09.18 2018/19 2019/20 2020/21

£'000 £'000 £'000 £'000

Budgeted Receipts:

Capital receipts funding assumed in IP for Capital Programme 10,000 10,000 10,000

Capital Receipts – Spend to Achieve 3,800

2017/18 shortfall 5,248Total Budgeted Receipts 19,048 10,000 10,000

Total Targeted Receipts 973 7,000 34,795 35,875

Surplus/ (shortfall) (12,048) 24,795 25,875

Page 50 of 101

3.5 Spend to Achieve

The Spend to Achieve Capital Receipts Reserve is a fund that is used to deliver projects that require investment prior to generating a Capital receipt or a revenue income stream. The fund is reviewed monthly. At present, there is anticipated to be a surplus of £3.196m on this reserve at year end due to expenditure now being forecast to occur in 2019/20.

The £3.8m top up from Capital Receipts is yet to be achieved. This is set out below:

£000Starting Balance 01/04/18 2,594Top up from capital receipts 2018/19 3,800Total Funds available 2018/19 6,394 Forecast for approved schemes (3,198)

Balance forecast to 31/03/19 3,196

3.6 Other Matters

School expansions

Further reprogramming of up to £16m may be required for new school developments as the timing of spend is dependent on a range of external factors. In addition, reprogramming for the Secondary Expansions may be required in 2018/19. These are mainly school managed projects, where the Council have less control over the delivery of the projects and when the payments are due.

Page 51 of 101

Section 4 – Children’s Services (Schools) Variances

LAB Spend to Date

Projected

Outturn at Year

End

Carry Forwar

ds

Projected

Variance after

C/F

Variance Last

Quarter

Quarterly

Movement

SCH Ref

£000s £000s £000s £000s £000s £000s £000s

Schools Delegated

4.1.14.1.24.1.34.1.44.1.54.1.64.1.74.1.8

562,406 331,142 548,840 - (13,566) (11,372) (2,194)

Central Element of DSG

4.1.94.1.1

04.1.114.1.

12

51,102 21,029 49,208 - (1,894) (2,184) 290

Schools Grants & Other Funding

4.1.13

4.1.14

(613,509)

(307,499) (600,209) - 13,299 11,714 1,586

Total - 44,671 (2,161) - (2,161) (1,841) (318)

4.1.1 3 & 4 Year OldsBreakdown of Variance

LAB Projected Spend

Carry Forwar

d

Forecast

Variance

Variance Last

QuarterMovemen

t

Early Achievemen

t of IP Savings / Pressures

One-Off

Additional Ongoing Savings/ Pressure

s£000 £000 £000 £000 £000 £000 £000 £000 £00057,07

1 56,171 - (900) - (900) -(900

) -

A £900k movement is projected on 3 & 4 year olds due to slightly lower than budgeted pupil numbers

Page 52 of 101

4.1.2 Primary DelegatedBreakdown of Variance

LAB Projected Spend

Carry Forward

Forecast Variance

Variance Last

QuarterMovement

Early Achievement

of IP Savings / Pressures

One-Off

Additional Ongoing Savings/

Pressures

£000 £000 £000 £000 £000 £000 £000 £000 £000322,684 313,841 - (8,843) (8,340) (503) - (8,843) -

The underspend in Primary Delegated is due to the Academy conversions that have taken place since the submission of the APT In December 2017. Six Primary schools have converted to Academy status with a further eight Primary schools having conversion dates in place. The underspend reflects the proposed conversions in budget share payments.

Forecasting for variances on schools delegated budgets is based on provisional dates for Academy Conversions. These dates are subject to approval at DfE and the Regional Headteacher meetings. As a consequence they often change and there is therefore constant movement in the forecast. Schools can chose to convert at any point in the year, and any prospective applications are often unknown.

4.1.3 Pre 16 SecondaryBreakdown of Variance

LAB Projected Spend

Carry Forward

Forecast Variance

Variance Last

QuarterMovement

Early Achievement

of IP Savings / Pressures

One-Off

Additional Ongoing Savings/

Pressures

£000 £000 £000 £000 £000 £000 £000 £000 £00076,298 71,374 - (4,925) (3,946) (979) - (4,925) -

The underspend in Secondary Delegated is due to the Academy conversions that are expected to take place (calculated on the latest known conversion dates) post the submission of the APT in December 2017. Three Secondary schools now have conversion dates in place for 2018/19. Two converted on 1st September and it is proposed that the third will convert on 1st January 2019. The underspend reflects their proposed conversion reductions in budget share payments.

Forecasting for variances on schools delegated budgets is based on provisional dates for Academy Conversions. These dates are subject to approval at DfE and the Regional Headteacher meetings. As a consequence they often change and there is therefore constant movement in the forecast. Schools can chose to convert at any point in the year, and any prospective applications are often unknown.

Page 53 of 101

4.1.4 Sixth FormBreakdown of Variance

LAB Projected Spend

Carry Forwar

d

Forecast

Variance

Variance Last

QuarterMovemen

t

Early Achievemen

t of IP Savings / Pressures

One-Off

Additional Ongoing Savings/ Pressure

s£000 £000 £000 £000 £000 £000 £000 £000 £00012,48

1 11,926 - (554) (372) (182) -(554

) -

The underspend reflects reductions in sixth form payments for proposed Academy conversions. There is an offsetting overspend on the Secondary Sixth Form Grant income budget.

Forecasting for variances on schools delegated budgets is based on provisional dates for Academy Conversions. These dates are subject to approval at DfE and Reginal Headteacher meetings. As a consequence they often change and there is therefore constant movement in the forecast. Schools can chose to convert at any point in the year, and any prospective applications are often unknown.

4.1.5 Top UpsBreakdown of Variance

LAB Projected Spend

Carry Forwar

d

Forecast

Variance

Variance Last

QuarterMovemen

t

Early Achievemen

t of IP Savings / Pressures

One-Off

Additional Ongoing Savings/ Pressure

s£000 £000 £000 £000 £000 £000 £000 £000 £00021,62

3 20,835 - (787) - (787) -(787

) -

The underspend of £787k is based on information received from the decisions made at panel in relation to Top Up Funding for the summer term. This forecast is reviewed in July, October and March, and will be amended based on student demand and approval at SEN panels held in those months.

Forecasting for Special Schools top up and residential funding is completed based on the outcomes of panel meetings. These meetings are not scheduled in line with quarterly forecasting, the first provisional forecast not being available until late in the summer term.

Page 54 of 101

4.1.6 ContingencyBreakdown of Variance

LAB Projected Spend

Carry Forwar

d

Forecast

Variance

Variance Last

QuarterMovemen

t

Early Achievemen

t of IP Savings / Pressures

One-Off

Additional Ongoing Savings/ Pressure

s£00

0 £000 £000 £000 £000 £000 £000 £000 £000

78 977 - 899 - 899 - 899 -

The Contingency budget is expected to overspend by £899k and this is made up of:

- Two Secondary schools that have or are expected to convert to Academy status in this financial year and are likely to close as maintained schools in deficit. The final deficit figure is not yet known but £550k has been included as an estimate.

- Schools Forum agreed to carry forward the underspend on the primary schools element £349k of the schools contingency from 2017-18. This is shown as an overspend in 2018-19, as it is not included within the budget.

The agreement for the carry forward of the primary schools contingency £349k was not previously forecast. The remaining movement £550k relates to the request to for support from the contingency fund to write off the anticipated deficit balances of 2 Secondary School Academy Order conversions in the Autumn Term.

4.1.7 Disapplication FundBreakdown of Variance

LAB Projected Spend

Carry Forwar

d

Forecast

Variance

Variance Last

QuarterMovemen

t

Early Achievemen

t of IP Savings / Pressures

One-Off

Additional Ongoing Savings/ Pressure

s£00

0 £000 £000 £000 £000 £000 £000 £000 £000

- 2,360 - 2,360 2,006 354 -2,36

0 -

Page 55 of 101

In 2017/18 the Authority requested a Disapplication approval for schools with significant lagged pupil funding and was granted approval to apply DSG in disapplication funding, in specific relations to five schools who had intentions to convert to Academy Status and are in a period of exceptional growth which requires financial stability in relation to lagged pupil funding. Only one of those schools converted in 2017/18, so further approval was sought to carry this forward for those four schools, who hadn't converted into 2018/19, which was agreed.

The approval to disapply Schools Funding regulations means an approval to overspend the budget. Therefore the overspend reported in this monitor represents the amount approved to the schools converting this year.

Three of the four remaining schools included in the disapplication request have confirmed dates to convert in 2018/19. Two will convert in September and one is expected to convert in November the remaining school has yet to receive a confirmed date.

Sir Frederic Osborn (£1,023k) and Adeyfield (£655k) converted on 1st September 2018.Cavendish (£331k) is expected to convert on 1st November 2018. The remaining school Barclay (£340k) does not currently have an agreed date.

Barclay has not previously been included within the forecast for the disapplication funding as it was thought unlikely that the school would convert in 2018/19. It may now be possible that Barclay will convert in the latter part of the financial year.

4.1.8 Special Units & BasesBreakdown of Variance

LAB Projected Spend

Carry Forwar

d

Forecast

Variance

Variance Last

QuarterMovemen

t

Early Achievemen

t of IP Savings / Pressures

One-Off

Additional Ongoing Savings/ Pressure

s£000 £000 £000 £000 £000 £000 £000 £000 £0004,73

8 4,360 - (378) (479) 101 -(378

) -

SEN are currently in consultation on the re-commissioning of Units and Bases as part of a specialists provision work stream. As a result of this period of transition levels of services are limited. Budgets included in this underspend are currently those that have no commissioned service and location, and only direct employee expenditure is being incurred.

The results of the re-commissioning is expected to provide a level of service that supports the needs of more complex Children and Young People. During the transition and recommissioning process there is an anticipated underspend whilst current arrangements are funded based on a current level of provision.

Page 56 of 101

The consultation is due to be completed during this financial year, with an implementation date of 1st April 2019.

4.1.9 Early Years SEN Development FundBreakdown of Variance

LAB Projected Spend

Carry Forwar

d

Forecast

Variance

Variance Last

QuarterMovemen

t

Early Achievemen

t of IP Savings / Pressures

One-Off

Additional Ongoing Savings/ Pressure

s£00

0 £000 £000 £000 £000 £000 £000 £000 £000

600 - - (600) - (600) -(600

) -

Due to the SEND Transformation across all age ranges, it has been decided to put the EY SEND support review for early years providers work on hold and therefore the £600k budget will not be spent this financial year

4.1.10 SEN Strategy Development FundBreakdown of Variance

LAB Projected Spend

Carry Forwar

d

Forecast

Variance

Variance Last

QuarterMovemen

t

Early Achievemen

t of IP Savings / Pressures

One-Off

Additional Ongoing Savings/ Pressure

s£000 £000 £000 £000 £000 £000 £000 £000 £0002,07

7 - - (2,077) (2,077) - -(2,077

) -

The SEN Strategy Development Fund is expected to underspend in full. This fund was established to support new initiatives, including key priorities within the SEND strategy. As an uncommitted resource, the fund also provides useful flexibility in managing budget risks.

Page 57 of 101

4.1.11 Other Central Budgets – High NeedsBreakdown of Variance

LAB Projected Spend

Carry Forwar

d

Forecast

Variance

Variance Last

QuarterMovemen

t

Early Achievemen

t of IP Savings / Pressures

One-Off

Additional Ongoing Savings/ Pressure

s£000 £000 £000 £000 £000 £000 £000 £000 £0008,17

9 7,902 - (277) 123 (400) -(277

) -

SEND SAS is estimated to be underspent by £229k. This is mainly due to the service holding vacancies. (The £450k given by School Forum won't be fully utilised this year). The remaining £48k underspend relates mainly to the Lift Maintenance budget not being utilised (£32k) and other smaller budget variances.The movement is due to staff vacancies (£88K). The remaining movements are incremental changes throughout the service (£3k)

4.1.12 High Needs CapitalBreakdown of Variance

LAB Projected Spend

Carry Forwar

d

Forecast

Variance

Variance Last

QuarterMovemen

t

Early Achievemen

t of IP Savings / Pressures

One-Off

Additional Ongoing Savings/ Pressure

s£00

0 £000 £000 £000 £000 £000 £000 £000 £000

750 1,970 - 1,220 - 1,220 -1,22

0 -

Overspend of £1.22m is a result of several of the 2017/18 Special School capital schemes to increase capacity in special schools have slipped into 2018/19. As a result there was an underspend in 2017/18 and there is a corresponding overspend of £1.22m in 2018/19, as this is not included within the 2018/19 budget.

This was not shown separately in quarter 1 and therefore not a true movement between quarters.

4.1.13 Dedicated Schools GrantBreakdown of Variance

LAB Projected Spend

Carry Forward

Forecast Variance

Variance Last

QuarterMovement

Early Achievement

of IP Savings /

One-Off

Additional Ongoing Savings/

Pressures

Page 58 of 101

Pressures

£000 £000 £000 £000 £000 £000 £000 £000 £000(599,612) (586,867) - 12,744 11,341 1,403 - 12,744 -

The £12,744k overspend against budget is made up of:

£13,768k relates to delegated budget shares, less grant will be received by the authority as when maintained schools convert to academy status, the authority is no longer required to make Budget Share payments to converted schoolsplus (overspend) £787k retrospective adjustment to 2017/18 early years DSG to reflect the January 2018 early years pupil data. less (underspend) £196k extra high needs DSG relating to 2018/19 (the extra £474k early years DSG relating to 2018/19 has been reflected by adjusting the budget) less (underspend) £271k adjustment to rates that are recouped by the EFSA less (underspend) £750k of additional funding received for Growth Funding Allocations made to Academies in the summer termless (underspend) £594k saving due to Katherine Warrington Free school not opening in September 2018.

The movement of DSG reflects the fluctuation of dates in relation to academy conversions.

4.1.14 Sixth Form GrantBreakdown of Variance

LAB Projected Spend

Carry Forwar

d

Forecast

Variance

Variance Last

QuarterMovemen

t

Early Achievemen

t of IP Savings / Pressures

One-Off

Additional

Ongoing Savings/ Pressure

s£000 £000 £000 £000 £000 £000 £000 £00

0 £000

(13,897) (13,342) - 554 372 182 - 554 -

Less sixth form grant will be received by the authority as when maintained secondary schools convert to academy status, the authority is no longer required to make the sixth form funding payments to converted schools. There is an offsetting underspend on the Secondary Sixth Form budget.

Page 59 of 101

Section 5 – Other Financial Information

5.1 Treasury Management Report

The Council’s Treasury management activities in this period were undertaken in an environment marked by uncertainty over the UK’s future relationship with the EU, geopolitical tensions, and the influence of expectations around the potential for fiscal tightening in the US and EU.

During Q2 Consumer Price Index [CPI] inflation was 2.4%, the same as in June 2018 but remaining above the 2% Bank of England target. UK wage growth adjusted for inflation was 0.4% during the period.

Inflationary pressures were expected to subside, but have increased again recently, together with the rising price of oil and tightness in the labour market; this may keep inflation above the Bank of England’s 2% target for the near future. Upward contributions to inflation came from increasing transport costs and utility and owner occupier housing costs.

Following a weak reading in the first quarter of 2018 attributed to weather-related factors, UK GDP growth rebounded in the second quarter to 0.4%, but at an annual rate of only 1.2% this remains below trend. As economic growth had evolved broadly in line with its May inflation report forecast, the Bank of England’s Monetary Policy Committee (MPC) voted unanimously for a rate rise of 0.25% in August, taking Bank Rate to 0.75%.

Investment yields have been stable during the period. The 7-day LIBID benchmark was 0.51% for the quarter, increasing from 0.46% in the previous period.

During the second quarter of 2018/19 the County Council held an average investment portfolio of £194.58m, and achieved an investment return of £0.612m or 1.26%.

The projected interest earned on treasury investments for 2018/19 is £2.212m, which represents additional income of £0.834m compared to budget. This projection is based on an expectation that the strategic pooled fund investments will continue to provide stable returns, along with cash balances and interest rates both higher than were foreseen when the budget was set. This has enabled more cash lending to other local authorities for durations between one and three months, which has had a positive effect on credit risk and yield metrics.

The overall rate of return for the second quarter was 1.26%, which represents a reduction of 0.14% compared to the previous quarter. Underlying this, the pooled fund investments returned 4.76% (a reduction of 0.51%) while the remaining, mainly short-term investments returned 0.62% (increase of 0.11%). This reflects seasonality in dividend payments from pooled equity investments, which peak during the first quarter in line with the financial reporting year end for many corporate

Page 60 of 101

entities. Pooled fund returns are considered likely to remain broadly stable for the remainder of the financial year.

5.2 Debt Management Report

A summary of the debt position for the second quarter of 2018/19 is provided:

The following table summarises the aged debt position for invoices at end of the previous quarter and shows the in-quarter change in total outstanding.

As at 30/06/1

8

As at 30/09/18

£ m

Debt Recovery Status

£ m % of Total

Description

Quarterly

Change£ m

25.14 Within Payment Terms 33.05 67.44

Invoices that have not reached the due date for payment

7.91

5.47 Under 1 Month Overdue 0.90 1.84 Invoices where reminders

have been issued -4.57

5.67 1-3 Months Overdue 2.38 4.86 -3.29

6.21 3-9 Months Overdue 4.40 8.98 -1.81

9.88 >9 Months Overdue 8.28 16.88

Invoices where active debt recovery is in progress or awaiting budget manager/holder decision -1.6

52.37 Total 49.01 100.0 -3.36

Total debt at 30 September 2018 was £49.01m – this is a decrease of £3.36m from the previous quarter.

The category with the largest increase (of £7.91m) related to invoices Within Payment Terms. Debt up to three months overdue decreased by £8.03m. Debt more than three months overdue has decreased, with similar decreases in the amount between three and 9 months overdue (£1.81m decrease) and over 9 months overdue (£1.6m decrease).

The increase in debt within payment terms is due to a number of areas having large increases. Of the large increases, £2.2m relates to deferred payment agreements within Adult Care Services, where backdated accounts have been raised to clients. These aren’t due until their properties are sold. There is also a £1.11m increase due to the seasonal cycle of Herts Full Stop, with most of their business occurring in the summer months resulting in significant increases in invoices raised during July and August.

Page 61 of 101

There is also a £0.98m increase in payment not yet overdue, this relates to Clinical Commissioning Group contributions towards Independent Placement costs.

There has been a total decrease in debt not within payment terms of £11.27m.

Of this, £5.38m relates to Adult Care Services and in particular, £2.77m reflecting invoices that were overdue by less than one month in Q1 now having been recovered.There has also been a £1.03m decrease in Herts Full Stop debt less than one month overdue due to a large quantity of smaller value invoices being paid.

5.3 Financial Implications

There are no financial implications directly associated with this report.

Page 62 of 101

Appendices

Appendix A – Approved Virements & Technical AdjustmentSummary Revenue Budget Monitor as at 30 September 2018

SERVICE Original Budget

Approved Virements & Tech Adj

Latest Approved Budget

£’000 £’000 £’000

Explanation of Approved Virements & Technical Adjustments

Adult Care Services 321,690 7,433 329,123

o Apprentice Levy Charge (-246k) MAYo 2018/19 Pay Inflation ( +1,772k) MAYo 2017/18 Grant Drawdowns (+1,115k) JUNEo BCF & IBCF Drawdowns (+5,054k) JUNEo Drawdown from ADASS Reserve (+262k) JULYo Drawdown from ITT Fund (+2k) JULYo Transfer to Resources (+16k) JULYo Transfer to ADASS Reserve (-524k) AUGUSTo Redundancy Costs Funded from Central Items (+14k) AUGUST

Public Health 47,612 1,115 48,727 o Apprentice Levy Charge (-12k) MAYo 2017/18 PH Drawdown (+1,127k) JUNE

Children's Services 169,984 1,387 171,371

o 2018/19 Pay Inflation ( +1,457k) MAYo Apprentice Levy Charge (-338k) MAYo 2017/18 CS Grant Drawdowns (+£26k) JUNEo Drawdown from Bowes Lyon House Reserve (+£25K) JULYo Redundancy Costs Funded from Central Items (+39k) AUGUSTo Pension Strain Costs Funded from Central Items (+17k) AUGUSTo CS Grant Allocation (-161k) SEPTEMBER

Page 63 of 101

Summary Revenue Budget Monitor as at 30 September 2018

SERVICE Original Budget

Approved Virements & Tech Adj

Latest Approved Budget Explanation of Approved Virements & Technical

Adjustments £’000 £’000 £’000

Environment & Infrastructure

107,762 2,242 110,005

o 2018/19 Pay Inflation ( +314k) MAYo Apprentice Levy Charge (-54k) MAYo Various 18/19 Scheme Savings (+1,085k) MAYo Contribution for Development Services for Growth & Infrastructure (+371k) MAYo Drawdown from Members Highways Locality Reserve (+321k) JULYo Drawdown from Strategic Planning Authority Reserve (+186k) AUGUSTo Pension Strain Costs (+19k) SEPTMEBER

Resources 70,940 1,085 72,023

o 2018/19 Pay Inflation ( +1,220k) MAYo Apprentice Levy Charge (-182k) MAYo Contribution to Development Services for Growth & Infrastructure (-371k) MAYo 2017/18 Property Drawdown (+89k) JUNEo Drawdown from Corporate Carry Forward Reserve (+45k) JULYo Transfer from ACS (+16k) JULYo Contribution to Hemel Public Service Quarter (PSQ) (-5k) AUGUSTo Drawdown from Herts Property Carry Forward (247k) SEPTEMBERo Redundancy Costs (+25k) SEPTEMBER

Community Protection 34,983 22 35,005 o 2018/19 Pay Inflation ( +152k) MAY

o Apprentice Levy Charge (-130k) MAY

Page 64 of 101

Summary Revenue Budget Monitor as at 30 September 2018

SERVICE Original Budget

Approved Virements & Tech Adj

Latest Approved Budget Explanation of Approved Virements & Technical

Adjustments £’000 £’000 £’000

Central Items 51,605 (19,476) 32,129

o Apprentice Levy Charge (+962k) MAYo 2018/19 Pay Inflation ( -4,916k) MAYo 2017/18 Business Rates Pooling Drawdown (+140k) JUNEo Transfer to Transition Reserve (-5,960k) JULYo Transfer to ITT Fund (-6,428k) JULYo Other movements to reserves (-211k) JULYo Redundancy Costs (-53k) AUGUSTo Pension Strain Costs (-17k) AUGUSTo Redundancy Costs (-25k) SEPTEMBERo Pension Strain Costs (-19k) SEPTEMBERo CS Grant Allocation (-161k) SEPTEMBERo Carry forward transferred to Reserve (-2,789k) SEPTEMBER

NET REVENUE BUDGET

804,576 (6,193) 798,383

Funded from Balances - 6,188 6,188

o Transfer to Environment for Various 18/19 Scheme Savings (-1,085k) MAYo 2017/18 Carry Forwards transferred to 2018/19 (-7,552k) JUNEo Transfer from Collection Fund (+11,920k) JULYo Other movements to reserves (+25k) JULYo Transfer from Strategic Planning Authority Reserve (-186k) AUGUSTo Transfer for ADASS Reserve (+524k) AUGUSTo Transfer to Herts Property Carry Forward (-247k)

Page 65 of 101

Summary Revenue Budget Monitor as at 30 September 2018

SERVICE Original Budget

Approved Virements & Tech Adj

Latest Approved Budget Explanation of Approved Virements & Technical

Adjustments £’000 £’000 £’000

SEPTEMBERo Carry forward transferred to Reserve (+2,789k) SEPTEMBER

Contribution to Capital - 5 5 o Contribution for Hemel Public Service Quarter

(PSQ) (+5k) AUGUSTCOUNTY FUND TOTAL 804,576 - 804,576

Page 66 of 101

Appendix B – Invest to Transform (ITT)

Live Schemes (approved before

2018/19

Spend to 31/03/20

18

2018/19 Estimat

ed Spend

Future Years

Total Future

Commitments

Project Update

Telecare (1,840)

(87)

(78)

(165)

This investment has funded the provision of preventative telecare to a cohort of circa 1,000 people with low to moderate needs at the time of assessment. Preventative telecare supports the delivery of savings by enabling people to live more independent lives and delay the progression to more expensive forms of care. There is scope to realise efficiencies/savings through the application of modern digitally enabled assistive technologies. A project team has been created to lead on delivering Hertfordshire’s Assistive Technology strategy and to pilot digitally enabled technologies which will inform and more modern and efficient assistive technology offer across the County post April 2021.

Broadband (Funding ring-fenced)

-

(1,500)

-

(1,500)

03.10.18-The ITT reserve will be spent in 2018/19.It is currently anticipated that BT/Open Reach will meet all project milestones in 18/19

Broxbourne Land Acquisition

(211)

(289)

-

(289)

Planning Application to be summited in Autumn 2018, Housing infrastructure Funding (HIF) being pursued by way of Green Book Appraisal works still going forward

Page 67 of 101

Live Schemes (approved before

2018/19

Spend to 31/03/20

18

2018/19 Estimat

ed Spend

Future Years

Total Future

Commitments

Project Update

Web-site Upgrade (including £120k Intranet)

(783)

(211)

-

(211)

The County Council’s public-facing website hertfordshire.gov.uk replaced hertsdirect.org to deliver online services and information more effectively to customers. Since the main implementation we have seen a decrease in calls to our Customer Service Centre, increase in customer satisfaction volumes and ratings and are using cheaper technology. This improved platform has prevented the need for services to use other websites, and current improvements to accessibility for users and continuing iteration and development is underway.

Library Strategy Review (AKA Inspiring Libraries)

(612)

(928)

(4,460)

(5,388)

10.10.18- It is estimated that the approx spend for 2018/19 will be £928k. This budget will be used to support agreed Library Property Projects at St Albans and Knebworth, plus agreed improvements in Library Technology. It will also be used to supplement funding for the Co-location of Library projects.

E- commerce Project

(209)

(16)

-

(16)

Phase 1 services are now all migrated and being fully supported. All 3rd party integration has been completed with some outstanding issues being resolved. All agreed chip & pin machines have been deployed with the procurement of a new Merchant Card provider delayed due to the opportunity to secure a better deal with current provider.

Families First (635)

(64)

-

(64)

Although work is taking place which is reducing the number of contacts, the savings are not cashable. If successful, the impact will be to prevent further increase in spend on CLA, so should be treated as cost avoidance. Cashable savings are to be found from elsewhere in the service.

Page 68 of 101

Live Schemes (approved before

2018/19

Spend to 31/03/20

18

2018/19 Estimat

ed Spend

Future Years

Total Future

Commitments

Project Update

E-allowances (Development of e-allowances)

(28)

(74)

-

(74)

03.10.18-Phase 2 is under review. The supplier of Phase 1 has increased the costs for completing Phase 2, so other options are being discussed for suitability. It is unsure if this will be completed before year end. The Provider portal (phase 1) went live in April 2018 for a pilot group of foster carers. Work is progressing for a phased roll-out of phase 1 to all foster carers towards the end of the summer.”

Local Authority Trading Company for Adult Care Services (LATC)

(51)

(93)

-

(93)

Herts at Home Limited has been incorporated and work is now underway to look at options for putting in place a plan to mitigate the risks of a significant market failure - a support at home provider (home care) not being able to continue to provide services. This includes an assessment of the risks and associated mitigating factors as well as the potential to commence service provision via the LATC.

A414 Strategy Studies

-

(150)

-

(150)

The A414 Strategy is well advanced and will be put to Cabinet for adoption in Q4 18/19, following an autumn (Q3) Public Consultation. The Strategy will set out a preferred route corridor for a Hertford Bypass and identify a series of interventions and improvements along the length of the A414 corridor to reduce congestion and support economic growth and development. The Strategy will provide a basis for the develop of a forward works programme, support funding bids and the development of business cases for priority schemes as well as enabling informed discussions with developers.

Page 69 of 101

Live Schemes (approved before

2018/19

Spend to 31/03/20

18

2018/19 Estimat

ed Spend

Future Years

Total Future

Commitments

Project Update

Adult Care Services - Business Process Efficiency

(48)

(10)

-

(10)

The technological approach to citizen engagement within ACS will be reviewed with suppliers to develop the online offering to service users and families, improve information flow and reduce transaction costs.

Adult Care Services - Transport Co-ordinator (Learning Disabilities)

(47)

(2)

-

(2)

ITT fund ended May 2018. Current Officer [GB] has now left the County Council. New post being recruited within service / commissioning to extend remit of reviewing both cost & volume outcomes of Transport arrangements across ACS to managing cost outputs.

Adult Care Services - Occupational Therapists (3 posts)

(75)

(53)

-

(53) All 3 Occupational Therapists are in post

Promoting County Council Land to Emerging Local Plans.

(17)

(133)

-

(133)

Work has started on project and Vincent Gorbing will be doing the STA Technical module works and Technical drawings

Introduction of Job Families

-

(30)

-

(30)

Meetings are ongoing in order to seek agreement on the next steps for this project.

Learning Disability (LD)Transformation

(147)

(768)

(227)

(995)

Number of differing Projects being pursued including; Shared Lives Service Development, Supported Living Transformation, Older LD people moves to mainstream Residential/Nursing Care and Access to mainstream housing alongside residential Services Task and Finish Group and Capital Investment options.

Page 70 of 101

Live Schemes (approved before

2018/19

Spend to 31/03/20

18

2018/19 Estimat

ed Spend

Future Years

Total Future

Commitments

Project Update

Smart Digital - Customer Facing Services

(39)

(46)

(65)

(111)

Started Sept 17 - projects include:• Online van permit system for recycling centres• Events and booking system• Investigating customer account login need and feasibility• Market research on the use of artificial intelligence, robotics and voice assistants to streamline services and provide broader access to services and information via emerging channels• Business analyst appointed, and Digital Product Manager started Dec 17. These roles support a range of digital projects, including e-payments and an internal / external event booking system.

Herts Full Stop ICT Infrastructure Investment

-

(980)

(987)

(1,967)

The business has completed a full pre market engagement exercise and will be going out to tender for the full requirements in early November, with the intention to award the contract to start in January 2019. At present full delivery of the solution is likely to be December 2019.

Hertfordshire Art Collection

(21)

(33)

-

(33)

There have been ongoing delays to the project resulting in it currently being behind schedule.

ACS Implementation Capacity(See below)

-

-

-

- See below

ACS Implementation Capacity - 1. Older People's Accommodation

-

(219)

(1,108)

(1,327)

Recruitment has been brought forward for all 3 Programme Managers and the 3 Project Managers

Page 71 of 101

Live Schemes (approved before

2018/19

Spend to 31/03/20

18

2018/19 Estimat

ed Spend

Future Years

Total Future

Commitments

Project Update

ACS Implementation Capacity - 2. LD Transformation - Commissioning

-

(256)

(224)

(480) Majority of posts are now filled

ACS Implementation Capacity - 2. LD Transformation

-

(508)

(438)

(946) Majority of posts are now filled

ACS Implementation Capacity - 3. Income

-

(253)

(331)

(584) Majority of posts are now filled

ACS Implementation Capacity - 4. Assistive Technology

-

(346)

(288)

(634) Majority of posts are now filled

ACS Implementation Capacity - 5. Programme Management

-

(396)

(531)

(927) Majority of posts are now filled

Page 72 of 101

Live Schemes (approved before

2018/19

Spend to 31/03/20

18

2018/19 Estimat

ed Spend

Future Years

Total Future

Commitments

Project Update

Children's Services - SEND Transformation

-

(514)

(2,499)

(3,012)

The main progress as at quarter 2 has been in recruiting to posts – for the Programme Implementation (FSC) and for the digitalisation (Customer Service team). The Head of Transformation: SEND post has been HAY graded, and the advert is due to go out next week. During the current ‘understand’ phase we are gathering background information about services, teams and structures in readiness for co-producing options for development in the New Year.

Libraries Alternative Delivery Model

-

-

(500)

(500)

This is a pipeline scheme and the bid has not yet been submitted.

Integrated Transport Development (Head of Integrated Transport Development post)

-

(35)

(83)

(118)

Approved July 2018Interviews are scheduled for Thursday 11th October 2018 for the Head of Integrated Transport role, and it's anticipated that a successful candidate will start in January/February 2019 on a PMC grade

Office Accommodation Strategy (preparatory work at Apsley and Mundells)

-

(256)

(217)

(473)

The Project has now commenced and is in the initial consultancy/planning stage. The initial move of staff from Apsley 1 to Apsley 2 is due to occur in January 2019 with staff moving back to Apsley 1 in March 2019. The project manager has been recruited and is due to start in October 2018 with other recruitment expected to be completed soon.

Total Estimated Spend

(4,762)

(8,250)

(12,036)

(20,286)

Page 73 of 101

Live Schemes (approved before

2018/19

Spend to 31/03/20

18

2018/19 Estimat

ed Spend

Future Years

Total Future

Commitments

Project Update

Completed schemes payback to 31/03/18

2,522

-

-

-

LED Street Lighting Phase 1 & 2 (ongoing payback)

3,084

1,196

9,727

10,923

Total Estimated Payback

5,606

1,196

9,727

10,923

Net Position 844

(7,054)

(2,309)

(9,363)

Page 74 of 101

Appendix C – Capital Reprogramming

Directorate and

Service Area

Name of Scheme

Total Reprogrammi

ng

Externally

FundedCommentary

Future Years

Budget (as per 2018/19

IP)

19-20 Reprogrammin

g

20-21Reprogrammi

ng

Environment

Metropolitan Line

Extension(20,030) Yes

Partners have halted work on this project and future payments by funding partners have therefore been suspended. (£20.030m) is requested to be reprogrammed to 2019/20 and beyond pending clarification on future plans.

52,922 20,030 0

Environment

A120 Bypass Project (8,085)

£6,285k external, £1,800k

HCC

The scheme is programmed to achieve full approval following a Secretary of State decision and completion of the tender procedures in Q4 2018/19. (£6.885m) of funding is requested to be

26,516 6,885 1,200

Page 75 of 101

Directorate and

Service Area

Name of Scheme

Total Reprogrammi

ng

Externally

FundedCommentary

Future Years

Budget (as per 2018/19

IP)

19-20 Reprogrammin

g

20-21Reprogrammi

ng

reprogrammed to 2019/20 as main on-site works will start in early Q2 2019/20.£1.2m grant will be released from other schemes and has resulted in County Council funding no longer being required in year. The proposal is for this to be reprogrammed in addition to the (6.885m) to support the A120 programme in future years.

ACSCare Homes

(older people) Phase 2 & 3

(5,812) No

A needs analysis has been undertaken to identify the strategic areas for development. Alternative models of delivery are currently being considered for these areas, including a review of available sites.

22,500 5,812 0

Page 76 of 101

Directorate and

Service Area

Name of Scheme

Total Reprogrammi

ng

Externally

FundedCommentary

Future Years

Budget (as per 2018/19

IP)

19-20 Reprogrammin

g

20-21Reprogrammi

ng

Feasibility work will begin in 19/20, with the procurement for the care provider and build contract for the schemes commencing thereafter. It is requested that the (£5.812m) be reprogrammed to 2019/20.

ACSCare Homes

(older people) Phase 1

(5,323) No

The delivery model for the scheme has now been agreed and work has commenced to procure the care provider. Work is now anticipated to start in 2019/20, so it is requested that (£5.323m) be reprogrammed.

5,083 5,323 0

Children's Services

New School Development

s - Budget Holding

(4,691) Yes

(£4.691m) is requested to be reprogrammed as these projects are dependent on

81,114 4,691 0

Page 77 of 101

Directorate and

Service Area

Name of Scheme

Total Reprogrammi

ng

Externally

FundedCommentary

Future Years

Budget (as per 2018/19

IP)

19-20 Reprogrammin

g

20-21Reprogrammi

ng

developer’s progress.

Environment

Stevenage Household

Waste Recycling

Centre

(3,203) No

As a decision is yet to be made on this project, the budget (£3.203m) is requested to be reprogrammed to 2019/20.

0 3,203 0

Children's Services

Secondary Expansions -

SEC2(2,570) Yes

(£1.685m) is requested to be reprogrammed across school expansions schemes based on the latest forecast information from the independent certifier. (£885k) is forecast to be reprogrammed for one school where spend is dependent on a deed of variation.

0 2,570 0

Page 78 of 101

Directorate and

Service Area

Name of Scheme

Total Reprogrammi

ng

Externally

FundedCommentary

Future Years

Budget (as per 2018/19

IP)

19-20 Reprogrammin

g

20-21Reprogrammi

ng

Environment

Ware Household Waste Site

(2,500) No

The approximate start date for this project is now November 18 and therefore (£2.5m) is requested to be reprogrammed to 2019/20 to enable the project to be completed.

500 2,500 0

ACSHome

Improvements Agency

(2,337) Yes

Unspent grant balances (£2.337m) from the 18/19 allocation will be carried forward to fund approved works that will not complete by year end.

7,514 2,337 0

Resources Broadband

Delivery (Contract 2)

(2,200)

£660k external, £1,540k

HCC

Openreach are still experiencing delivery issues with rollout of superfast broadband due to delays in planning, resource challenges and infrastructure rollout. Based on the forecast for 2018/19 from Openreach, it is

851 2,200 0

Page 79 of 101

Directorate and

Service Area

Name of Scheme

Total Reprogrammi

ng

Externally

FundedCommentary

Future Years

Budget (as per 2018/19

IP)

19-20 Reprogrammin

g

20-21Reprogrammi

ng

anticipated that (£2.2m) will be required to be reprogrammed to 2019/20. This will continue to be monitored, so there is risk that the reprogramming figure may change.

Children's Services

Primary Expansions

PEP8 & Temporary Expansions Sept 2018 -

HCC Managed

(1,600) Yes

(£1.6m) is requested to be reprogrammed, due to a review of the anticipated timescales for the 2 PEP8 expansions.

5,970 100 1,500

Environment

A414 Hertford Major Project (1,350) No

The A414 Strategy development period has been longer than anticipated which has delayed start of development work on the Hertford Major scheme emerging from this strategy. It is

7,250 1,350 0

Page 80 of 101

Directorate and

Service Area

Name of Scheme

Total Reprogrammi

ng

Externally

FundedCommentary

Future Years

Budget (as per 2018/19

IP)

19-20 Reprogrammin

g

20-21Reprogrammi

ng

requested that (£1.350m) be reprogrammed to 2019/20. This will be reviewed once work has started, further reprogramming may be required.

Children's Services

Primary Expansions

PEP7 & Temporary Expansions Sept 2017 -

HCC Managed

(1,000) Yes

Reprogramming of (£1m) is requested for a scheme that is being managed by the EFA.

0 1,000 0

Fire F&R Vehicle Replacement (1,000) No

Delivery of the 2018/19 fire appliances will not be until 2019/20. It is requested that (£1m) of the budget be reprogrammed to 2019/20. This is an estimate; an adjustment to reprogramming at year end may be

4,197 1,000 0

Page 81 of 101

Directorate and

Service Area

Name of Scheme

Total Reprogrammi

ng

Externally

FundedCommentary

Future Years

Budget (as per 2018/19

IP)

19-20 Reprogrammin

g

20-21Reprogrammi

ng

required once orders are placed.

Resources 25 by 20

Refurbishment Works

(900) No

Reprogramming of (£900k) for refurbishment costs is requested, to support the implementation of the revised Office Accommodation Strategy that was approved in July 2018.

1,000 900 0

Children's Services

Primary Expansions

PEP6 & Temporary Expansions Sept 2016 -

HCC Managed

(800) Yes

(£800k) is requested to be reprogrammed, this is for a project that has been broken into three phases, with the third phase completing in 2019/20.

0 800 0

Page 82 of 101

Directorate and

Service Area

Name of Scheme

Total Reprogrammi

ng

Externally

FundedCommentary

Future Years

Budget (as per 2018/19

IP)

19-20 Reprogrammin

g

20-21Reprogrammi

ng

Public Health

Sexual Health Clinic (725) No

(£725k) is requested to be reprogrammed. The service is currently looking into 2 options for the location of the Hatfield Clinic. It is expected that once confirmed works will commence in the next financial year.

0 725 0

Children's Services

School Expansions -

Site Acquisitions

(702) Yes

(£702k) is requested to be reprogrammed due to timings of spend now anticipated on a parcel of land. Further reprogramming may be required. Schemes are reliant on developer progress and other external factors.

3,117 702 0

Fire Relocation of Fire HQ (637) No

Initial feasibility work is currently being undertaken with development works starting in 2019/20. Therefore £637k is

9,456 637 0

Page 83 of 101

Directorate and

Service Area

Name of Scheme

Total Reprogrammi

ng

Externally

FundedCommentary

Future Years

Budget (as per 2018/19

IP)

19-20 Reprogrammin

g

20-21Reprogrammi

ng

requested to be reprogrammed.

Resources

Access Control/Car

Park Improvement

s

(372) No

Work will start on the access improvements in November 2018, which are expected to be completed in February 2019. (£372k) is requested to be reprogrammed to 2019/20 for Phases 2&3 front access control to County hall.

0 372 0

Environment

A120 Standon

Highways Improvement

s

(300) No

Additional works have been identified to be included within the budget for this project. This will result in a longer programme and some aspects of the scheme which will now be delivered in 2019/20. It is requested that (£300k) be reprogrammed into

0 300 0

Page 84 of 101

Directorate and

Service Area

Name of Scheme

Total Reprogrammi

ng

Externally

FundedCommentary

Future Years

Budget (as per 2018/19

IP)

19-20 Reprogrammin

g

20-21Reprogrammi

ng

2019/20.

ACSDay Services Modernisatio

n(197) Yes

Reprogramming is requested to 19/20 for (£197k) to assist further development and refurbishment needs in day services to meet community development and increasing complexity of need. The scope of these projects will be developed during 18/19 with works commencing 19/20.

0 197 0

Children's Services

Liquidlogic EHM

Implementation (Early

Help Module)

(125) No

(£125k) is requested to be reprogrammed for the main upgrade which is anticipated to be completed in 2019/20.

0 125 0

Page 85 of 101

Directorate and

Service Area

Name of Scheme

Total Reprogrammi

ng

Externally

FundedCommentary

Future Years

Budget (as per 2018/19

IP)

19-20 Reprogrammin

g

20-21Reprogrammi

ng

Fire F&R ICT Equipment (100) No

(£100k) is requested to be reprogrammed to 2019/20 for the Single Place asset management system due to a review of project profiles.

625 100 0

Environment

Waste Management

System Development

(75) No

Initial meetings have been held with new supplier and it is estimated that £125k will be spent in this financial year. It is requested that (£75k) be reprogrammed to 2019/20, this will be reviewed once confirmation of the order has been made.

50 75 0

Children's Services

Building Schools for the Future-

ICT

78 No

£78k is requested to be reprogrammed as a result of the planned spend at 2 schools.

215 (78) 0

Page 86 of 101

Directorate and

Service Area

Name of Scheme

Total Reprogrammi

ng

Externally

FundedCommentary

Future Years

Budget (as per 2018/19

IP)

19-20 Reprogrammin

g

20-21Reprogrammi

ng

Resources 25 by 20 100 No

This funding will cover purchase of new furniture and collaboration space for a large office modernisation programme at County Hall. Reprogramming of £100k from 2019/20 is requested to cover works that have been brought forward.

250 (100) 0

Resources RFID Kiosks 257 No

Orders have now been placed for 90 new kiosks to be installed across the County’s Libraries. Reprogramming of £257k is requested as work will be completed earlier than originally anticipated.

405 (257) 0

Page 87 of 101

Directorate and

Service Area

Name of Scheme

Total Reprogrammi

ng

Externally

FundedCommentary

Future Years

Budget (as per 2018/19

IP)

19-20 Reprogrammin

g

20-21Reprogrammi

ng

Environment Essex Road 394 Yes

Reprogramming of £394k from 2019/20 into 2018/19 is requested due to the anticipated programme of spend on this scheme. LEP are aware of the reprofiling and a formal request will be made to the LEP board who are funding this scheme.

6,397 (394) 0

Children's Services

Secondary Expansions -

SEC32,898 Yes

£2.898m is requested to be reprogrammed for the Secondary expansions schemes based on the latest forecast information from the independent certifier. This is an estimate and will be reviewed and updated as the year progresses.

15,115 (2,898) 0

TOTAL (62,907) 251,047 60,207 2,700

Page 88 of 101

Appendix D – Prudential Indicators

1. Capital financing Indicators

Indicator Description Integrated Plan Ref.

2018/19

IP

2018/19

Q1

2018/19

Q2

2018/19

Q3

2018/19

Q4

Indicators 1 to 3 demonstrate the affordability and sustainability of the capital programme. The projections for financial years 2019/20 to 2021/22 are set out in the Integrated Plan at the reference shown in the table below.

Capital Expenditure

1 Monitors capital expenditure for 2018/19 against the projections set out in the Integrated Plan

2.4

Table 1£244.02m £215.34m £187.04m

Capital Financing Requirement (CFR)

2 Monitors the Council’s underlying need to borrow for capital purposes for 2018/19 against the projections set out in the Integrated Plan

2.13

Table 3£642.16m £633.42m £614.50m

Page 89 of 101

Indicator Description Integrated Plan Ref.

2018/19

IP

2018/19

Q1

2018/19

Q2

2018/19

Q3

2018/19

Q4

Ratio of financing costs to net revenue stream

3Monitors the percentage of revenue budget set aside to service capital financing costs (borrowing costs net of lending income) for 2018/19 against projections set out in the Integrated Plan.

2.14

Table 42.61% 2.52% 2.45%

Treasury Position:

The Treasury Management Prudential Indicators are set to contain lending and borrowing activities within approved limits. The indicators are set at a level that will provide enough flexibility for effective treasury management whilst managing the risk of a negative impact on the County Council’s overall financial position in the event of adverse movements in interest rates or borrowing decisions. The indicators are also used to demonstrate that Net Borrowing does not exceed the Capital Financing Requirement. The projections for financial years 2019/20-2021/22 are set out in the Integrated Plan.

Net Borrowing 4A

Monitors actual borrowing less actual lendingNA NA £75.34m £79.57m

4B Net Borrowing Less than CFR NA NA

Page 90 of 101

Indicator Description Integrated Plan Ref.

2018/19

IP

2018/19

Q1

2018/19

Q2

2018/19

Q3

2018/19

Q4

Comparison of net borrowing to CFR

Borrowing: Indicators 5 and 6 control the overall level of borrowing. The limits for 2018/19 to 2020/21 are set out in the Integrated Plan. The Authorised Limit is the maximum amount that may beyond which borrowing is prohibited without Member Approval. The Operational Boundary is an estimate for the external debt for the financing year – this is not a limit but an indicator to ensure the authorised limit is not breached.

Total Borrowing in Place at Quarter End Borrowing in £ at Q End £258.78m £258.78m

Maximum Borrowing Exposure in Quarter Quarter Maximum in £ £258.78m £258.78m

Authorised Limit Limit £545m £545m5

Compliance Indicator Complied?

6 Operational Boundary Indicator £515m £515m

Compliance indicator

6.5 Table 10

Complied?

Page 91 of 101

2. Treasury Management Indicators

Indicator Description Integrated Plan Ref.

2018/19 Budget

2018/19 Q1

2018/19 Q2

2018/19 Q3

2018/19 Q4

Interest Rate Exposure:

Indicators 7 and 8 limit the Council’s exposure to both fixed and variable interest rate movements.

The limits for 2017/18 to 2020/21 are set out in the Integrated Plan.

Upper limit on Fixed Interest rates (against maximum position)

7 Monitors the limits set for 2018/19 for the volume and value of the (lending)/borrowing portfolios that may be committed for fixed interest rate investments or borrowing

6.7

Table 12

£445.00m

(LIMIT)£258.78m £258.53m

Upper limits on variable interest rates (against maximum position)

8 Monitors the net limits set for 2018/19 for the volume and value of the (lending) /borrowing portfolios that may be committed for variable interest rate investments or borrowing

6.7

Table 12

£133.50m

(LIMIT)(£183.44m) (£179.45m

)

Page 92 of 101

Indicator Description Integrated Plan Ref.

2018/19 Budget

2018/19 Q1

2018/19 Q2

2018/19 Q3

2018/19 Q4

Maturity structure of fixed rate borrowing (against maximum position):

Indicator 9 limits the Council’s exposure to large fixed rate sums falling due for refinancing in the same period.

The indicators are set relatively high to give the council enough flexibility to respond to opportunities to repay or reschedule debt during the financial year, while remaining within the parameters set by the indicators.

9A Under 12 months 50% 0.00% 0.10%

9B 12 months to 2 years 50% 0.10% 0.00%

9C 2 years to 5 years 60% 2.09% 2.28%

9D 5 years to 10 years 80% 5.60% 5.41%

9E 10 years to 20 years 85% 7.10% 7.10%

9F 20 years to 30 years 90% 9.88% 9.88%

9G 30 years and above

6.8

Table 12

100% 75.24% 75.24%

Investments greater than 364 days (against maximum limit):

Indicator 10 measures the Council’s exposure to investing for periods greater than one year.

This indicator is required to ensure that the Council is aware of the cashflow implications for long term investments.

Page 93 of 101

Indicator Description Integrated Plan Ref.

2018/19 Budget

2018/19 Q1

2018/19 Q2

2018/19 Q3

2018/19 Q4

This includes deposits at risk in Icelandic Banks.

10 Investments greater than 364 days (Maximum Limit)*6.9

Table 13£50m £30.61m £30.60m

*Includes Pooled Fund investments, which can be withdrawn in less than one year but the intention is to hold for the long-term to minimise the risk of capital value volatility, as agreed at Full Council on the 25th November 2014.

Page 94 of 101

3. Treasury Management Performance and Activity Measures

Indicator Description Integrated Plan Ref.

2018/19 Q1

2018/19 Q2

2018/19 Q3

2018/19 Q4

The CIPFA Treasury Management Code of Practice requires the Council to set performance indicators to assess the treasury function. Group A measures performance for “Security, Liquidity and Yield” and Group B measures the performance of “Operational Activities”

GROUP A: Security, Liquidity and Yield

Average Investment Portfolio

Monitors the average amount the County Council has had invested in third parties.

7.3

Table 15£164.10m £194.58m

Average borrowing portfolio

Monitors the average amount the County Council has as long term borrowing during the quarter

6.3

Table 9 £258.78m £258.78m

Security Indicator: Average Credit Rating of Investments held

Measured on a 1 to 10 scale, where 1 is a very good Credit Rating, i.e., government guaranteed

Section 6.10 3.63 3.56

Page 95 of 101

Indicator Description Integrated Plan Ref.

2018/19 Q1

2018/19 Q2

2018/19 Q3

2018/19 Q4

Liquidity Indicator: Weighted Average Maturity of investments held

Measures the liquidity/accessibility of investments in average days

Section 6.10 15.65 34.30

Yield Indicator: Interest Earned*

Monitors the interest earned on County Council investments. Shown as the actual amount (in quarter) and equivalent annual percentage of amount invested

7.3

Table 15

£0.574m

1.40%

£0.612m

1.26%

Yield Indicator: Interest Paid

Monitors the interest earned on County Council investments. Shown as the actual amount (in quarter) and equivalent annual percentage of amount borrowed

7.2

Table 14

£3.09m

4.79%

£3.12m

4.84%

*includes Pooled Fund investments, see Yield section below for further information for rate excluding Pooled Funds

Page 96 of 101

Security, Liquidity and Yield

Security - Exposure to Risk

The Treasury Management Strategy was approved on 20 February 2018 as Part C of the Integrated Plan. This maintained the range of investment types approved for use in 2017/18. The approved instruments were last changed in 2014/15 to enable greater diversification of the investment portfolio; these changes introduced greater flexibility in use of investment instruments whilst continuing to maintain security and liquidity of investments.

The following diagrams illustrate the credit rating breakdown of all investment instruments by credit rating grade and investment type for the County Council’s investment portfolio as at 30 Sept 2018

Page 97 of 101

Investment Portfolio and Activity

The greater proportion of the investment portfolio is held in highly liquid money market funds and call accounts. This reflects the need to ensure adequate liquidity in the management of cash balances to meet daily cashflow requirements.

Investments in pooled funds consist of the CCLA Property Fund, two bond funds, two multi-asset funds and one equity fund.

4 new fixed deposits were made, and 8 matured, during the period. 2 were with the Debt Management Office and the remainder with Local Authorities.

Liquidity

Cash balances have been high during the first half of 2018/19. A significant amount (approx £75m) relates to forward funding being held on behalf of the Local Enterprise Partnership.

As a result of uncertainty about cashflows for capital expenditure a large proportion of the portfolio has been held in short term investments – with the Debt Management Account Deposit Facility (DMADF) during periods of high cash balances. As time has passed, the level of certain about liquidity needs has increased, allowing an increase in the use of fixed-term loans to other local authorities made during the second quarter.

Diagram 3 provides a graph showing the liquidity of the County Council’s investments portfolio as at 30th Sept 2018.

Page 98 of 101

Liquid < 1 month 1-3 months 3-6 months£0

£10

£20

£30

£40

£50

£60

Diagram 3: Investment Portfolio Liquidity ProfileAs at 30th Sept 2018

Mill

ions

The potential capital volatility of the pooled fund investments means that they are intended to be held for 3-5 years, but in the graph below these investments are shown on the basis of their accessibility. These funds are all classified as “liquid”, except the Property Fund which accessible on 30 days’ notice.

Yield

Yield: Short-Term Investments

The benchmark used for assessing the performance of return on short-term lending is the 7-Day London Interbank Bid Rate (LIBID). Diagram 4 shows yield against the benchmark for the last four quarters (solid lines, right-hand axis) and the actual cash earned (dashed line, right-hand axis).

LIBID was 0.51% during the quarter, and the return excluding pooled fund interest was stable at 0.62%. Overall rate of return increased during the quarter as the result of new fixed term investments, and higher prevailing rates.

Page 99 of 101

Q3 2017/18 Q4 2017/18 Q1 2018/19 Q2 2018/190.00%

0.10%

0.20%

0.30%

0.40%

0.50%

0.60%

0.70%

% Benchmark (Libid)% Yield (Actual)

Diagram 4: S/T Investment Yield Benchmarked against 7 day LIBID

Inte

rest

Rat

e

Yield: Pooled Funds

Page 100 of 101

The performance of the County Council’s strategic investments is benchmarked against the target yield level of 4.00%, which forms the basis of the income budget. Diagram 5 shows yield against budget for the last four quarters (sold lines, left-hand axis) and the actual cash earned (dashed line, right-hand axis).

The Pooled funds have continued to provide returns exceeding expectations, with a yield of 4.76% during the second quarter

Pooled fund returns have been relatively volatile during the first half of 2018/19. The drivers for this volatility are:

1) Short-term reduction on bond-yields following a market correction reported during the final quarter of 2017/18.

2) Exceptional equity yields during the first quarter of 2018/19.

Page 101 of 101

Overall returns from these strategic investments remain relatively stable and are expected to be in line with the previous years and exceed the 4% target for these funds.