WARNING - By their nature, text files cannot include scanned images and tables. The process of converting documents to text only, can cause formatting changes and misinterpretation of the contents can sometimes result. Wherever possible you should refer to the pdf version of this document. CAIRNGORMS NATIONAL PARK AUTHORITY Finance Committee Paper 2 06/05/05 CAIRNGORMS NATIONAL PARK AUTHORITY FINANCE COMMITTEE Title: 2005/06 PROPOSED BUDGET (year to 31 March 2006) Prepared by: DENBY PETTITT, FINANCE MANAGER Purpose To provide Members with the proposed budget for the 2005/06 Financial Year together with a guide to the budget for the next two Financial Years. Recommendations • That the Committee examine the proposed budget for 2005/06 and note the forecast for the following two financial years. • That the Committee approve the 2005/06 budget, or suggest changes as necessary. Executive Summary (i) Scottish Executive funding is £4.3m, £4.3m and £4.5m for the next three financial years. (ii) Although approval is only sought for the proposed 2005/06 budget we are presenting indicative budgets for the next two financial years given that we already know our resource allocation for those years. (iii) The budgets have been drawn up based on staffing levels at the end of 2004-05 with known changes in future years that have been agreed with individual Heads of Group. 2005/06 PROPOSED BUDGET (year to 31 March 2005) Introduction 1. The Authority’s annual resource funding for the three financial years to 31 March 2008 has been set by the Scottish Executive as £4.3m for both 2005/06 and 2006/07 increasing to £4.5m for 2007/08. 2. Within these limits the Authority incurs two main types of expenditure: • Core running costs covering administrative expenditure such as Board costs, staff salaries, office running costs and capital expenditure; and • Programme expenditure that covers expenditure on the Operational Plan that is spent in meeting Corporate Plan goals. 3. Core expenditure tends to be relatively fixed monthly expenditure whilst the amount spent on Programme expenditure can vary from month to month depending on activity being undertaken. Methodology and assumptions 4. The Core budget has been rolled over to reflect known changes in staffing levels but with the same mode of operation i.e. offices in Grantown and Ballater. 5. Table - Key assumptions are as follows: NIC 2005/06 9.3% 2006/07 9.3% 2007/08 9.3% * Superannuation - average rate 2005/06 14.3% 2006/07 19.2% 2007/08 19.2% * General inflation 2005/06 2.5% 2006/07 2.5% 2007/08 2.5% * NIC rates for future years and superannuation rates for 2007/08 are not confirmed. Core expenditure 6. Table - The following table summarises the overall percentage split between Core and Programme expenditure compared to total funding: Actual 2003/04 / Draft 2004/05 / Budget 2005/06 / Forecast 2006/07 / Forecast 2007/08 Board 12.0% 7.1% 5.7% 6.8% 5.9% Staff salaries 25.1% 38.9% 39.6% 43.3% 45.4% Other staff costs 14.6% 9.3% 4.8% 3.9% 4.1% Office 10.2% 10.4% 7.9% 8.5% 8.5% Capex 22.1% 3.3% 1.4% 1.5% 1.5% Notional costs 2.4% 3.0% 2.9% 3.0% 2.8% Core 86.4% 71.9% 62.4% 67.0% 68.2% Programme 13.6% 28.1% 37.6% 33.0% 31.8% 100.0% 100.0% 100.0% 100.0% 100.0% Annex 2 shows a more detailed breakdown of Core expenditure. Staff salaries 7. Table - Starting with staff in place at March 2005 there have been the following new post additions in 2005/06 after discussions with individual Heads of Group: Post / Group / Pay Band Head of Group / Natural Heritage / 1 Tourism & Economic Development Manager / Economic Development / 2 Senior Natural Heritage Officer / Natural Heritage / 2 Senior Land Management Officer / Land Management / 2 8. In addition there are a number of staff on fixed length contracts but these are mainly non-core staff and their expense is covered by Programme expenditure. 9. Table - As well as the salary cost of posts there is a considerable, and increasing, cost of NIC and superannuation expense. Superannuation contributions vary according to salary level and the current ones are: Previous salary bands / 2004/05 % / Future salary bands / 2005/06 % / 2006/07 % / 2007/08 % £17,500 and less / 12.0 / £18,000 and less / 16.2 / 17.1 / Not known £17,501 to £36,000 / 13.5 / £18,0001 to £37,000 / 18.6 / 19.5 / Not known £36,001 to £62,000 / 16.5 / £37,001 to £63,500 / 22.3 / 23.2 / Not known £62,000 and higher / 18.5 / £63,501 and higher / 24.6 / 25.5 / Not known CNPA average / 14.3 / 19.2 / 20.1 Superannuation costs are one-third higher in 2005/06 than in 2004/05 and with the current focus on pensions and investment returns superannuation and NIC can add almost 30% to the cost of staff. Other Core expenditure 10. Board costs to increase broadly in line with inflation. Remuneration levels are set by Scottish Executive with increases effective April. The increased costs in 2006/07 reflect the need to fund election expenses. 11. Other staff costs are forecast to fall since there should be no need for the levels of recruitment and relocation expense incurred in 2004/05. For future posts we have estimated average recruitment costs of £7,500 and relocation of £5,000 per post. 12. Office costs in 2004/05 included £50,000 for additional office accommodation that was not used but was transferred to meet the increased cost of Pay & Grading awards. The increased staff levels anticipated in future mean that we have budgeted a similar level for future years temporary accommodation costs. 13. The capital costs in 2004/05 were unusually high given the need to buy a number of one-off assets to enable the increasing staff numbers to perform their roles. Future capital expenditure has been budgeted in line with the level envisaged at the time of the 2004/05 mid-year review, before we decided to make additional one-off capital investments in 2004/05. Programme expenditure 14. Table - Budgeting for Core costs leaves us the following funds for Programme spend in the next three financial years: £'000 Actual 2003/04 267 Draft 2004/05 944 Budget 2005/06 1,635 Forecast 2006/07 1,431 Forecast 2007/08 1,444 15. The detailed Programme spend is derived from the Corporate Plan’s 20 goals. DENBY PETTITT 27 April 2005 denbypettitt@cairngorms.co.uk CAIRNGORMS NATIONAL PARK AUTHORITY Finance Committee Paper 2 Annex 1 06/05/05 CNPA Table - Income & Expenditure account (2003-2008) Historic - Actual 2003-04 £'000s / Draft 2004-05 £'000s Income Grant in Aid (GIA) from SE 1,926 / 3,111 See para 1 Other income 1 / 42 GIA to meet notional costs 3 / 11 see para 1 Total income 1,927 / 3,164 Core Expenditure Board costs 235 / 238 see para 10 Staff salaries 492 / 1,308 see para 7-9 Staff (other costs) 285 / 312 see para 11 Office costs 199 / 350 see para 12 Capital expenditure 432 / 111 see para 13 1,643 / 2,319 Programme Expenditure Projects - managed by CNP - / - Park objectives - / - 267 / 944 see para 14-15 Notional costs 3 / 11 Depreciation 44 / 90 Total expenditure 1,957 / 3,364 Future years - Forecast 2005/06 £'000s / Forecast 2006-07 £'000s / Forecast 2007-08 £'000s Income Grant in Aid (GIA) from SE 4,288 / 4,287 / 4,487 / see para 1 Other income 42 / 45 / 48 GIA to meet notional costs 12 / 13 / 13 / see para 1 Total income 4,342 / 4,332 / 4,535 Core Expenditure Board costs 249 / 295 / 266 / see para 10 Staff salaries 1,717 / 1,875 / 2,057 / see para 7-9 Staff (other costs) 210 / 171 / 185 / see para 11 Office costs 344 / 367 / 385 / see para 12 Capital expenditure 60 / 65 / 70 / see para 13 2,580 / 2,773 / 2,963 Programme Expenditure Projects - managed by CNP - / - Park objectives - / - 1,635 / 1,431 / 1,444 / see para 14-15 Notional costs 12 / 13 / 13 Depreciation 115 / 115 / 115 Total expenditure 4,342 / 4,332 / 4,535 CNPA Core expenditure (2005-08) Historic - Actual 2003-04 £'000s / Draft 2004-05 £'000s Board costs Board member salaries 183 / 188 Other costs 52 / 50 / see para 10 235 / 238 Staff salaries Core staff 492 / 1,308 / see para 7-9 Other staff costs Recruitment 227 / 117 / see para 11 Relocation 4 / 70 / see para 11 Professional subscriptions - / 1 Training 11 / 55 Conferences & courses - / 6 Pool cars 8 / 22 Travel and subsistence 35 / 41 285 / 312 Office running Standing charges 53 / 79 Utilities 10 / 15 Stationery 14 / 18 Other supplies 11 / 16 Maintenance 2 / 12 / see para 12 Postages 6 / 10 Telephone 13 / 17 Computer support 24 / 88 Library 2 / 6 Professional support 64 / 88 Corporate expenses - / 1 199 / 350 Capital expenditure Total capex 432 / 111 / see para 13 Total expenditure 1,643 / 2,319 Future years Budget 2005-06 / Forecast 2006-07/ Forecast 2007-08 Board costs Board member salaries 194 / 200 / 206 Other costs 55 / 95 / 60 / see para 10 249 / 295 / 266 Staff salaries Core staff 1,717 / 1,875 / 2,057 / see para 7-9 Other staff costs Recruitment 50 / 20 / 20 / see para 11 Relocation 25 / 5 / 5 / see para 11 Professional subscriptions 5 / 5 / 5 Training 55 / 60 / 65 Conferences & courses 10 / 12 / 15 Pool cars 35 / 37 / 40 Travel and subsistence 30 / 32 / 35 210 / 171 / 185 Office running Standing charges 90 / 90 / 95 Utilities 15 / 15 / 17 Stationery 16 / 18 / 20 Other supplies 15 / 15 / 15 Maintenance 70 / 75 / 75 / see para 12 Postages 12 / 15 / 15 Telephone 20 / 22 / 25 Computer support 35 / 40 / 40 Library 6 / 7 / 8 Professional support 60 / 65 / 70 Corporate expenses 5 / 5 / 5 344 / 367 / 385 Capital expenditure Total capex 60 / 65 / 70 / see para 13 Total expenditure 2,580 / 2,773 / 2,963