Agenda item

N Howcutt highlighted that due to timing issues the report was slightly out of date, however most of the numbers and significant issues still remain. He advised that the general fund had a pressure of £5.8M; the caveat of that was at the time of producing the report we were unaware of how much we may receive from the Governments lost income reimbursement scheme. He suggested it could be approximately £1.2M from the guidance released last week but we wouldn’t know the exact figure until later on this year. The HRA has a projected surplus of £900k, the underspends and overspends are also linked to coronavirus. In regards to Capital, there has been increased expenditure of £0.5M around waste services vehicles to support social distancing and an enhanced wheelie bin roll out.

He explained that a large section of our overspend is linked to loss of income; investment property income is the largest at £2.7M followed by car parking income at £1M and garages income also at £1M. These figures will change throughout the year but there is still lots of uncertainty from now until year-end. He summarised that although the projections seem quite stark, they are directly related to coronavirus and will be monitored on a monthly basis.

The Chairman asked if the projections were a worst case scenario approach. N Howcutt replied the projections were prudent but realistic due to the uncertainty. He said only time would tell.

Councillor Tindall referred to capital slippage at points 1.3 and 1.4. He asked if we were monitoring that and being careful not to make any firm promises. N Howcutt advised that capital was monitored on a monthly basis to keep as up to date as possible and we were also working very hard with our partners to ensure they have the capacity to deliver. He explained that all work that was planned for this year wasn’t forgotten and will need to be rescheduled as soon as possible. He said we were trying to deliver what we can alongside government guidelines and will continue to work effectively and maintain the capital programme as much as we can.  

Councillor Tindall referred to paragraphs 5.2 and 8.2 concerning the waste services fleet and sought clarification on the reason for the overspend. N Howcutt explained that the procurement of the new fleet took longer than expected so we had to hire more vehicles and also put more maintenance in to the existing vehicles. He advised that approximately £40k was for additional vehicles to allow us to support social distancing to keep our workforce safe.

Councillor Symington sought clarification on the makeup of investment property income. N Howcutt advised that tables one and two were our entire commercial assets portfolio from local neighbourhood shops to commercial assets such as The Forum and Marlowes. The key will be quarters three and four when all government grants would have been paid to businesses, the eat out to help out scheme ends and with the furlough scheme unrolling. He said they didn’t know what to expect over the next few months but they were projecting a 50% collection for the second half of the year. He added that they had distributed a business survey and 94% of our commercial asset portfolio said they were severely or significantly impacted by coronavirus which was concerning.

Councillor Symington asked if there was a policy that surrounded helping with commercial rents or if it was dealt with on a case by case basis. N Howcutt advised that the commercial assets team would carry out rent reviews and deal with payment plans. If someone exceeded that or was looking for a rent reduction or rent holiday it would be escalated to N Howcutt or J Deane to review. Anything in excess of £10k would be escalated and reviewed with the Portfolio Holder or higher depending on the organisation. He said we hadn’t offered anything outside of business as usual at present.

Councillor Symington asked how much we would have to eat into reserves by the end of the year if the projected figures were the reality. N Howcutt replied that Dacorum were very strong and allowed reserves to be set aside for these kind of circumstances. Last year we put another £2.7M in to reserves, most of which was ring-fenced and allocated for projects but we do have a strong balance sheet that we can rely on in-year. He added the reserves couldn’t be relied on year on year as they would quickly diminish but we were financially able to deal with this crisis.

The Chairman asked if the car parking figures were based on the first six months of the year. N Howcutt advised we lost 85% of car parking income in quarter one due to lockdown. We projected a 50% reduction in income for the remainder of the year but it is difficult to predict whether the figure will be higher or lower especially if another lockdown is enforced.

The Chairman noted an increase in salaries of £355k and queried what this was for. N Howcutt advised there was an additional pressure on neighbourhood delivery where we had been helping the county council with food deliveries and assessing those in need in the community. We have also projected additional staffing needs to support the coronavirus response in revenues and benefits and environmental protection.

Councillor Tindall queried the overage payment for paradise fields. N Howcutt advised we purchased land at paradise fields from Homes England on the basis to provide a certain number of properties and that was what the land was valued on. We have now produced a definitive end plan and that has more homes than expected so it was positive news.

Councillor Adeleke asked what our financial impact would be long term if we were to have a second wave of coronavirus and another lockdown. N Howcutt advised we have put in place projections that would allow us to continue to deliver as we are now. If there was a long term lockdown it would have further impacts on income streams, car parking, commercial property income, etc. but we have gone for a prudent, middle ground approach as everything is so uncertain.

Councillor Symington referred to paragraph 4.2 regarding payments to Everyone Active. She said she had previously asked about relief of the management fee at the July meeting but queried if they had received additional payments. N Howcutt clarified that the £205k was the initial payment members were made aware of at the previous meeting for the top-up of furlough pay, and the additional payment of £320k covered July to September and was for reopening the centres as quickly as possible. He referred to the Dacorum Coronavirus Impact Act which states we have to support our contracted providers.

N Howcutt asked if M Brookes had anything to add about Everyone Active. M Brookes advised we didn’t have the figures yet as Everyone Active had only been open again for just over a month so there wasn’t much he could update on at present.

Councillor Symington asked which of the Everyone Active figures would have been reported at the July meeting. N Howcutt replied the relief of the management fee and the top-up of furlough pay. Councillor Symington said that wasn’t what was said in the minutes. N Howcutt said he would have to go back and check the papers but the financials had been published and made widely available. Action: N Howcutt

The Chairman sought clarification on paragraph 5.1 regarding 20 waste services employees self-isolating for 12 weeks. N Howcutt advised that was the volume of staff that met the shielding government guidance for the first three months. 

The Chairman asked if the £2.2M repairs and maintenance budget would be savings or if it would be carried over to complete any outstanding works. N Howcutt advised it would be in-year savings but the work would still need to be completed next year. The Chairman felt it wouldn’t be possible to double up the works and spend this years and next year’s budget and asked if some of that money could be used as savings. N Howcutt advised they had started looking at the budget setting for 2021/22 so they would be discussing that in detail and putting together a programme for what is deliverable. He said they would need to put that money aside until then. The Chairman suggested it was just something to keep in mind during the budget setting process.

Outcome:

The report was noted.