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 6 30/11/07 CAIRNGORMS NATIONAL PARK AUTHORITY FINANCE COMMITTEE FOR INFORMATION Title: DRAFT RESOURCE ALLOCATIONS 2008/11 Prepared by: David Cameron, Head of Corporate Services Purpose To inform the Committee of draft resource allocations to the Authority for 2008 to 2011 which have been included within the Scottish Government’s draft budget for that period, and to compare these draft allocations with the indicative figures considered by the Committee at its meeting in September 2007. Recommendations The Committee is invited to: a) Note the indicative resource allocations to the Authority for the period 2008/11 included within the Scottish Government’s draft budget. b) Note the impact of these resource allocations on the financial forecast model previously considered by the Committee at its meeting in September 2007. Executive Summary The Committee considered a model of forecast income and expenditure over the forthcoming corporate plan period, 2008 to 2011, at its meeting in September 2007. This paper presents an update to that model now that draft resource allocations have been made available as part of the Scottish Government’s draft budget announcement. The Scottish Government’s budget remains a draft proposal. The indicative resource allocations to public bodies set out within the budget cannot be confirmed until after the Scottish Parliament has considered and voted on the proposals. On the whole, the draft allocations are close to the figures set out in the model presented to Committee in September. The draft budget has also set out a proposed target for cash- releasing efficiency savings, although the detail of how that might interact with the resource allocations now set out is yet to be announced. DRAFT RESOURCE ALLOCATIONS 2008/11 FOR INFORMATION Background 1. The Committee considered a model of forecast income and expenditure over the forthcoming corporate plan period, 2008 to 2011, at its meeting in September 2007. This model was based on best information available at that point on potential grant-inaid settlements. The model was presented at that time to support initial discussions of the Authority’s potential financial position over the period and to support Board discussions on the development of the new Corporate Plan. 2. The purpose of this paper is to provide an update to that model now that draft resource allocations have been made available as part of the Scottish Government’s draft budget announcement. Draft Resource Allocations 3. It must be stressed at this point that the Scottish Government’s budget remains a draft proposal. The indicative resource allocations to public bodies set out within the budget cannot be confirmed until after the Scottish Parliament has considered and voted on the proposals. 4. On the whole, the draft allocations are close to the figures set out in the model presented to Committee in September. A comparison of the figures presented in September with those now included in the Scottish Government’s draft budget is set out in the following table. Indicative total resource allocation (£000) Initial model (Sep 07) (£000) Of which cover for non-cash costs (£000) Initial model (Sep 07) (£000) 2007/08 (for comparison) 4,633 4,633 87 87 2008/09 4,633 4,691 87 77 2009/10 4,757 4,750 87 67 2010/11 4,922 4,810 87 57 5. Annex 1 to this paper reproduces the financial forecasts of income and expenditure considered by Committee in September, with the indicative resource allocations now included in place of the working assumptions previously set out. The resource allocation for 2008/09 is some £60,000 lower than that set out in the initial financial forecasts considered in September, with the allocation for 2009/10 in line with the original forecasts and that for 2010/11 some £110,000 higher. Efficiency Savings 6. As expected, the draft budget has set out a proposed target for cash-releasing efficiency savings. The efficiency saving target is set in the draft budget at 2% rather than the 1.5% included in the financial model presented in September. 7. At the time of writing, we have not received any further detail on how this target will operate, or whether the efficiency saving will be expected against the Authority’s full resource allocation level, or a sub-set of it such as organisational running costs. Further updates will be issued to Board members as we receive this information. Financial Forecasts to 2010/11 8. The financial forecasts set out in Annex 1 remain a broad overview of our potential budget position given the draft resource allocation figures now made available. A significant amount of work remains to be done before we can present proposed budget figures to the Committee. 9. In addition to any refinements required to accommodate the detail of the 2% efficiency savings mentioned previously, the Management Team is working in developing the detailed Corporate Plan proposals guided by recent discussion with the Board. The financial model continues to provide an estimate for each year’s Operational Plan, which will contribute to delivery of the Corporate Plan outcomes. At present, the Operational Plan figure remains at a level within the model which seeks to maintain potential expenditure in real terms. 10. Actual requirement for Operational Plan activities as well as those for Core costs have yet to be finalised. Next Steps 11. The Management Team will develop more detailed Corporate Plan proposals for consideration by the Board in light of this information now made available on indicative resource allocations for the period 2008 to 2011. 12. Budget forecasts themselves will be refined to take account of information on the operation of the 2% efficiency saving target, once that is made available, and in finalising expenditure estimates for the coming years in light of the most up to date information. DAVID CAMERON 22 November 2007 davidcameron@cairngorms.co.uk Annex 1: Financial Forecast Scenarios 2008/09 to 2010/11 based on indicative resource allocations set out in draft Scottish Government Budget CNPA Budget Forecast 2008/11 November 07 2007/08 2008/09 2009/10 2010/11 Initial Initial Forecasts Budget £000 £000 £000 £000 Grant in aid 4,546 4,546 4,670 4,835 Other income 55 56 57 58 Resource re non-cash transactions 87 87 87 87 Total Income 4,688 4,689 4,814 4,980 Board 259 264 269 274 Staff salaries 2,043 2,115 2,189 2,266 Staff other 212 216 220 224 Running costs 427 436 445 454 Capital expenditure 33 34 35 36 Operational Plan expenditure 1,682 1,716 1,750 1,785 Total cash expenditure 4,656 4,781 4,908 5,039 Non-cash transactions 87 87 87 87 Total expenditure 4,743 4,868 4,995 5,126 Budget surplus (deficit) (55) (179) (181) (146) as percentage of total income (1.17) (3.82) (3.76) (2.93) From previous model Budget surplus (deficit) (55) (111) (168) (228) as percentage of total income (1.17) (2.34) (3.49) (4.68) Assumptions: Annual price inflation 2% Annual change in Board fees 2% Annual staff salary change 3.50% Annual change in other income 2.50%