Item: 2

Harbour Authority Sub-committee: 25 August 2026

Revenue Expenditure Monitoring

Report by Head of Finance

IMAGE: The Orkney Islands Council crest appears alongside the words “ORKNEY ISLANDS COUNCIL”, identifying the issuing council.

1. Overview

1.1

This report presents the revenue financial summary position of expenditure incurred, as at 30 June 2026, in respect of the Scapa Flow Oil Port and Miscellaneous Piers and Harbours.

1.2

On 17 March 2026, the Council set its overall revenue budget for financial year 2026/27. On 16 June 2026, the Policy and Resources Committee recommended approval of the detailed revenue budgets for 2026/27, which form the basis of the individual revenue expenditure monitoring reports.

1.3

Individual revenue expenditure monitoring reports are circulated every month to inform elected members of the up-to-date financial position. Quarterly revenue expenditure monitoring reports are presented to individual service committees.

1.4

In terms of revenue spending, at an individual cost centre level, budget holders are required to provide an explanation of the causes of each material variance and to identify appropriate corrective actions to remedy the situation.

1.5

Material variances are identified automatically as Priority Actions within individual budget cost centres according to the following criteria:

• Variance of £10,000 and more than 110% or less than 90% of anticipated position (1B).
• Not more than 110% or less than 90% of anticipated position but variance greater than £50,000 (1C).

1.6

Priority Actions can be identified at the Service Function level according to the same criteria and these are shown in the Revenue Expenditure Statements. As with individual cost centre variances, each of these Priority Actions requires an explanation and corrective action to be identified and these are shown in the Budget Action Plan.

1.7

The details have been provided following consultation with the relevant Directors and their staff.

1.8

The figures quoted within the Budget Action Plan by way of the underspend (-) and overspend position will always relate to the position within the current month.

2. Recommendations

2.1

It is recommended that members of the Sub-committee:

1. Note the revenue financial summary statement in respect of the Scapa Flow Oil Port and Miscellaneous Piers and Harbours for the period 1 April to 30 June 2026, attached as Annex 1 to this report, indicating a budget deficit position of £145,000.
2. Note the revenue financial service area statement in respect of the Scapa Flow Oil Port and Miscellaneous Piers and Harbours for the period 1 April to 30 June 2026, attached as Annex 2 to this report.
3. Note the explanations given and actions proposed in respect of significant budget variances, as outlined in the Budget Action Plan, attached as Annex 3 to this report.

For Further Information please contact

Pat Robinson, Service Manager (Accounting), extension 2621, Email: pat.robinson@orkney.gov.uk

Implications of Report

1. Financial

The Financial Regulations state that Directors can incur expenditure within approved revenue and capital budgets. Such expenditure must be in accordance with the Council’s policies and objectives and subject to compliance with the Financial Regulations.

2. Legal

Regular financial monitoring and reporting help the Council meet its statutory obligation to secure best value.

3. Corporate Governance

In terms of the Scheme of Administration, monitoring, on a quarterly basis, the levels of revenue expenditure incurred against approved budgets, in respect of each of the service areas for which the Sub-committee is responsible is referred to the Harbour Authority Sub-committee.

4. Human Resources

N/A

5. Equalities

Equality Impact Assessment is not required for financial monitoring.

6. Island Communities Impact

Island Communities Impact Assessment is not required for financial monitoring.

7. Links to Council Plan

The proposals in this report support and contribute to improved outcomes for communities as outlined in the following Council Plan strategic priorities:

• ☐ Growing our economy.
• ☐ Strengthening our Communities.
• ☐ Developing our Infrastructure.
• ☐ Transforming our Council.

8. Links to Local Outcomes Improvement Plan

The proposals in this report support and contribute to improved outcomes for communities as outlined in the following Local Outcomes Improvement Plan priorities:

• ☐ Cost of Living.
• ☐ Sustainable Development.
• ☐ Local Equality.
• ☐ Improving Population Health.

9. Environmental and Climate Risk

N/A

10. Risk

N/A

11. Procurement

N/A

12. Health and Safety

N/A

13. Property and Assets

N/A

14. Information Technology

N/A

15. Cost of Living

N/A

List of Background Papers

• Policy and Resources Committee, 3 March 2026, Budget and Council Tax Level for 2025/26.
• Policy and Resources Committee, 16 June 2026, Detailed Revenue Budgets.

Annexes

• Annex 1: Financial Summary.
• Annex 2: Financial Detail by Service Area.
• Annex 3: Budget Action Plan.

Annex 1: Financial Summary June 2026

Date of Issue - 07 July 2026

The table below provides a summary of the position across all Service Areas.

Compared to last month, the total number of PAs has changed as follows:

Annex 2: Financial Detail by Service Area June 2026

Date of Issue - 07 July 2026

The following tables show the spending position by service function.

Scapa Flow Oil Port

Miscellaneous Piers & Harbours

Annex 3: Budget Action Plan June 2026

Date of Issue - 11 August 2026

Scapa Flow Oil Port

IMAGE: The image presents an Annex 3 Budget Action Plan table for Scapa Flow Oil Port, dated June 2026, with columns for Function, Function Description/Explanation, Action Category/Action Description, Responsible Officer, Deadline and Status. It contains the entries R52A Administration - SF and R52G Towage Services, which are transcribed below.

IMAGE: The image presents a second Scapa Flow Oil Port Budget Action Plan table for June 2026, containing the entries R52I Harbour Dues and R52L Scapa Flow Development, which are transcribed below.

Miscellaneous Piers & Harbours

IMAGE: The image presents an Annex 3 Budget Action Plan table for Miscellaneous Piers & Harbours, dated June 2026, with columns for Function, Function Description/Explanation, Action Category/Action Description, Responsible Officer, Deadline and Status. It contains the entries R53A Piers, R53B Environmental Unit and R53C Marine Officers & Pilots, which are transcribed below.

IMAGE: The image presents a further Miscellaneous Piers & Harbours Budget Action Plan table for June 2026, containing the entries R53F Harbour Launches, R53J Administration - MP, R53L Miscellaneous Piers Development and R53M Oil Pollution, which are transcribed below.

IMAGE: The image presents the final Miscellaneous Piers & Harbours Budget Action Plan entry for June 2026, R53Y Finance Charges - MP, which is transcribed below.