240809Paper1ResourcesCttee2024-25BudgetMonitoring

For dis­cus­sion

Title: Budget mon­it­or­ing Pre­pared by: Louise Allen, Head of Fin­ance and Cor­por­ate Operations

Pur­pose This paper sets out an over­view of the Park Authority’s budget man­age­ment pos­i­tion at the end of June — month 3 of the ²⁰²⁴⁄₂₅ fin­an­cial year.

Recom­mend­a­tions The Resources Com­mit­tee is asked to: a) Con­sider the budget man­age­ment pos­i­tion for ²⁰²⁴⁄₂₅.

Over­view

1. Annex 1 provides a sum­mary of expendit­ure against the pro­filed budget.

2. The budget pro­file for payroll and run­ning costs has been developed from the phas­ing of the pre­vi­ous year’s expendit­ure. The pro­file of oper­a­tion­al plan expendit­ure is based on fore­casts by Heads of Service.

3. Total expendit­ure at the end of the first quarter of the year is 16% of the annu­al budget, as com­pared with 13% at the end of quarter 1 last year. In addi­tion, spend com­mit­ted to date, by requis­i­tion, against the oper­a­tion­al plan is £1,016k, as com­pared with £328k at the same time in 2023. These increases are a pos­it­ive indic­at­or of the pace of deliv­ery so far, this fin­an­cial year.

Budget changes

1. One small budget change has been over­layed on the budget presen­ted to the Board at the end of March; the adjust­ment is a real­loc­a­tion between budget head­ings and has no effect on the over­all budget pos­i­tion. This is recor­ded in the budget change log provided at Annex 2.

Staff and Board

1. The payroll budget con­tin­ues to be under­spent. The pro­file of the budget takes into account the fact that the annu­al award has not yet been made. The favour­able vari­ance of £85k is there­fore, a real­isa­tion of the allow­ance made in the annu­al budget for recruit­ment delays and vacancy savings.

2. The budget allows for per­form­ance related incre­ments, and an award designed to increase pay by 10% over the two years from April 2023. Provid­ing the final award remains at this level, the budget would appear to be realistic.

Pro­gramme management

1. The Park Authority’s agreed annu­al con­tri­bu­tion of £450k to the Cairngorms 2030 pro­gramme has now been made. This con­tri­bu­tion provides cash flow to the programme.

2. Most of the expendit­ure to date on the pro­gramme has been payroll cost (£212k). How­ever, com­mit­ted costs recor­ded are cur­rently £878k, demon­strat­ing pro­gress towards delivery.

3. Recov­ery of costs through grant claims has been straight­for­ward, with no expendit­ure turned back by Nation­al Lot­tery Her­it­age Fund (NLHF). Two claims have now been sub­mit­ted and funds received in full.

Over­heads

1. Over­all, run­ning costs are just under the phased budget for the quarter (£8k). This vari­ance is made up of com­pens­at­ing factors: advance spend on oth­er staff and board costs, and delayed spend­ing on facilities.

2. Recruit­ment costs have been high this quarter (£11k against a total annu­al budget of £22k) with asso­ci­ated inter­view expenses (in-per­son inter­views) and dis­clos­ure fees.

3. Reg­u­lar facil­it­ies activ­it­ies are con­tinu­ing as planned, but work on new intern­al admin­is­tra­tion sys­tems, includ­ing Share­Point, have intro­duced addi­tion­al work­load for the facil­it­ies team, lead­ing to a slight slow­ing of pro­gress. Now that these pro­cesses are embed­ded, this work­load should reduce.

Oper­a­tion­al plan

1. Oper­a­tion­al plan expendit­ure shows an under­spend of £36k against the phased budget.

2. The most sig­ni­fic­ant vari­ance on the oper­a­tion­al plan pro­file is an appar­ent under­spend on Place. This is in fact, a tim­ing dif­fer­ence in respect of grant fund­ing of £40k that is fore­cast to be paid in quarter two.

3. There has been very little expendit­ure to date against the ²⁰²⁴⁄₂₅ peat­land res­tor­a­tion budget. This is in line with expect­a­tions. In this ini­tial quarter of the year, expendit­ure of £600k has con­trib­uted to the final­isa­tion of pro­jects con­trac­ted in ²⁰²³⁄₂₄ and has there­fore been set against accru­als made at the year-end (£1.08 million).

4. Fore­cast spend on peat­land res­tor­a­tion for quarter two is £800k.

Grant-in-aid

1. Draw down of grant-in-aid has been made accord­ing to the plan sub­mit­ted to Scot­tish Gov­ern­ment at the start of the year. It provides cash flow to meet organ­isa­tion­al need for both core activ­it­ies and the Cairngorms 2030 (C2030) programme.

Sum­mary

1. The key points arising from the review of the fin­an­cial pos­i­tion at the end of the first quarter of 2024 are: a) Early indic­a­tions on the adequacy of the payroll budget repor­ted to the last meet­ing of the com­mit­tee con­tin­ue to be borne out. b) Deliv­ery on the C2030 pro­gramme is pro­gress­ing. Two claims have been sub­mit­ted and funds received in full. c) Run­ning costs are with­in the phased budget. d) Oper­a­tion­al plan expendit­ure is with­in the phased budget. e) There has been very little expendit­ure to date against the ²⁰²⁴⁄₂₅ peat­land res­tor­a­tion budget. Most of the expendit­ure in this first quarter has con­trib­uted to the final­isa­tion of pro­jects con­trac­ted in ²⁰²³⁄₂₄. The expect­a­tion is that expendit­ure on this year’s pro­jects will be seen in the fig­ures for quarter two.

Louise Allen, Head of Fin­ance and Cor­por­ate Operations