Agenda item

Budget Monitoring Q1


F Jump introduced the report outlining the financial position for the Council for 2020/21 and stated that these figures were correct as of the end of June but in the current climate, a lot has changed since then. The figures in the report are consistent with those in the Covid-19 update report that went to Cabinet in June and another update will go in September and likely to be a revision to financial position. Most of the variances in the report are covid-19 driven and in terms of highlights, in the General Fund, currently expecting a pressure of £5.8 million and this does include some funding streams received from central government. Further details have been received from government about the loss of income and it is believed the council could receive between £1-1.5 million. On the Housing Revenue Account, the forecast is a surplus of £900k and this is being driven by a reduction in expenditure in relation to the number of repairs which is directly related to the pandemic and accessibility issues into properties. There is also a £7.3milion in slippage in the HRA capital programme.


Councillor Adeleke referred to page 5, paragraph 1.2. There has been a reduction in expenditure of £2.2 million on repairs which is part of surplus that is being quoted. He asked if this is something that would be revisited and if so, if something is due to be repaired, how is this cost factored into the budget forecast?


F Jump said that as we are unable to access properties, we will see a saving in the current financial year but the repairs work needs to be done. This is a timing issue rather a saving in expenditure. 


Councillor England said that Covid-19 is a massive uncertainty and asked F Jump if she was able to say when things will be clearer.


F Jump said that it is difficult to say, the forecast reflects our current position but things are changing daily (i.e. policies, a statement from the Prime Minister today) and could potentially see another lockdown in winter. She said the financial forecasts were prudent but changing.


Councillor England referred to the assumption that the council are not expecting another lockdown in winter and asked if they were referring to a local or national lockdown.


F Jump said she wouldn’t distinguish between them, either of those situation would have a similar impact on Dacorum’s position.


Councillor Mahmood referred to the £5 million plus pressure and asked if it was a pessimistic forecast or if things had improved since June.


F Jump said that it is a prudent forecast and that they are more optimistic since the lockdown ended. She added that they could be in a worse position if we were locked down again but could also see an improvement in the forecast depending on the situation for the remainder of the financial year.


Councillor Mahmood referred to the Capital Programme which has not been spent and asked how this would impact on next year’s budget.


F Jump said that the capital programme is agreed over a rolling period so the funding has already been approved for these projects.


F Williamson said there will be several factors to determine whether the expenditure will be made next year. There are slippages on some of the development schemes which are still programmed for next year. The approach to kitchen and bathroom planned works is evolving and the rationale behind not undertaking these works this year is that these works involve many different trades going in and out of properties in a two week period and this potentially creates problems if there is an infection in household or with workers. Providing there are no restrictions in any complete lockdown for the construction sector, there will be a programme of external works rolled out throughout this year and into next. Cannot provide any guarantees that all the slippage will be spent next year but currently working on our programme and more information will be available on a monthly basis.


Councillor Johnson referred to page 9 about initial work on tenders for supported housing schemes and asked why they were no longer valid.


F Williamson said that the tender was out of the time limit for the contractor to be able to undertake any revisions so as with any competitive tendering process, there is a backstop on the time where it remains valid. Due to some revisions to the original design and further work that had been undertaken to review all of the supported housing schemes, that period has elapsed and that means we will need to either re-tender or look at the lowest previous bidder.


Councillor Adeleke referred to page 7, paragraph 4.2 in relation to garages. He said the committee have visited this in previous meetings about upgrading garages to make them more attractive to residents and how many tenants have returned keys for their garages through the current covid-19 pandemic.


F Williamson said that there had been a net gain of 9 additional garages since the beginning of the year. We were anticipating that a number of garages would be terminated if residents needed to make reductions to their household budgets.


Councillor Mahmood questioned the labelling of this period as a recession.


F Jump said we are in a recession in terms of the economic definition. She didn’t think the forecasts were pessimistic but are realistic and would be updated when we get more information.


Councillor Mahmood referred to the new build construction and asked if they were up and running as normal.


F Williamson said there was only a short suspension of around 3-5 weeks whilst the contractors introduced additional measures to make the sites covid secure. It has had a slight impact on the handover of the major sites but Magenta will be handed over in the next few days and Martindale is on track for the end of September.


Councillor England referred to the garages and said it seems as if the effects of the pandemic should expect to last as long as restrictions last but there are a few other indications that we are in a recession for other reasons. On balance, he felt the pessimism is well placed. He made an observation on the construction work and said he has read articles from experts who talk about ventilation and once you get the building weather tight, you face different challenges in terms of working space because there is less ventilation, and we are going from summer into winter and that might have an effect on building. He asked if conditions would be against us moving into winter and asked if this has been considered.


F Williamson said the main consideration on the sites is in the guidance. Internal work had been impacted and one contractor took the approach of placing multi trades in one apartment to finish which provided two benefits – there was no issue with social distancing and it gave them an insight into quality control of the trades. Contractors have come up with Innovative measures to work differently and minimise the impact.


Councillor Imarni said that we are yet to fill the full economic impact of covid-19. She added that after the furlough scheme ends, we will see the true impact and reminded members to bear this in mind.


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