Agenda item

N Howcutt introduced the item and gave a high level summary of the quarter 3 budget monitoring report. The report shows a general fund pressure of £3.2m of which £2.9m relates to Covid in terms of implications to services. The housing revenue account (HRA) is a different story, we’re projecting a surplus by year end of £2.5m, a significant increase on the end of quarter 2; this is primarily due to the reduction in repairs and maintenance because of not being able to access people’s homes throughout the year due to lockdowns and restrictions. In terms of the capital side, the general fund is relatively on line in terms of budget; there’s a 7-8% slippage and underspend which is not significant. There’s around 5% of slippage and underspend in the HRA so not vastly outside the realms of what we would be looking to see in a normal year.

He explained the big stories from the report was from the general fund prospective and was mainly around reduced income from a lot of our income streams which has really hit our bottom line and that’s been the real pressure on the general fund. In terms of the HRA, a circa of £4m underspend of repairs and maintenance, netted off by an increase in bad debt provision of just over £1m which gives you that bottom line surplus. Members of the Housing and Community OSC that were at last week’s meeting would have seen the revised 30 year Housing Business Plan that incorporates significant additional spend over the next three years to make up for the work that couldn’t be done this year. From that perspective the work will be done but will have to be rescheduled for the next few years.

Councillor Tindall drew attention to the £85k pressure in neighbourhood delivery due to interim resource to support the delivery of new initiatives within the service. He queried if this was for new ideas that had been recently developed.

N Howcutt explained that there were a couple of schemes that he knew about in detail, such as the rollout of recycling to flats that happened earlier in the financial year that needed additional resource to deliver, and there are some additional resources that have been brought in for initiatives around Covid as well as some additional advertising around what to recycle now more people are at home and disposing of more waste.

Councillor Tindall said he could understand the pressures around Covid but questioned why we were getting pressure on the waste from flats as that should have been in the programme over the last couple of years.

N Howcutt advised it was partly because more work fell into 2021 than was expected for 19/20 as there was slippage in the programme, and partly because the nature of what that involved and because of Covid we couldn’t do mass participation events so it was more one-to-one provision and actually cost more to do than planned.

Councillor Tindall referred to the £140k pressure in insurance costs. He said he wasn’t questioning the costs but was wondering if we were talking to our insurers as to what we can do to protect ourselves against future weather events which are likely to happen on a more regular basis due to climate change.

N Howcutt responded that we work very closely with our insurance partners and this year we aim to roll out several schemes; one of which related to vehicle insurance at Cupid Green by sending our drivers on additional and advanced training courses to reduce insurance premiums. We had some freak weather events last year the insurance team had been extremely busy. He advised they were looking at the provision of insurance because the present contract runs out next year and they’re working with different insurance partners to see what they can do to prevent some of these events and what we can invest to be more preventative than reactive.

Councillor Tindall requested a report on Everyone Active at the next meeting so that members could have an up to date picture in view of the current situation.

Action: M Brookes confirmed that was possible.

Councillor Claughton queried why all underspend didn’t count as slippage.

N Howcutt advised that slippage was when works still need to be done and still need to be funded so we provide those funds in the next financial year and underspend is when the project is finished and costed less than we expected it to so effectively that can go back into a capital cycle.

Councillor Claughton referred to the works at Canal Fields in Berkhamsted. He noted the report said there were delays because of capacity issues and asked if the officers could expand on that.

B Hosier advised that Herts County Council were doing some work to a bridge in the Canal Fields area and they were utilising part of the Canal Fields car park to act as their base, the car park will not be resurfaced until HCC have used that space to carry out their works. The alternative was for them to use the grassland as their base but B Hosier explained that it was felt it would cause damage to the grassland so it was just easier to delay the resurfacing of the car park.

Councillor Claughton advised that Berkhamsted Town Council wanted the path that goes through Canal Fields to be resurfaced due to bad condition and said there was a suggestion that the contract for the bridge should be extended to include that. He sought clarification on whether that was the responsibility of DBC or Herts County Council.

B Hosier responded it would be the responsibility of Herts County Council.

Councillor Adeleke referred to the transport costs on page 11 and sought clarification on what the £3k variation was for.

Action: N Howcutt said he would need to come back to him on that variation.

Councillor Adeleke drew attention to the agency costs on page 12. He questioned how far we had got with the recruitment process and what would happen if we didn’t succeed in getting the positions filled by professionals.

N Howcutt explained that as of the start of the 21/22 financial year we will have a fully staffed commercial assets team which is where the estates service sits for the first time in approximately 5 years so we won’t have that pressure going forward. He said they had found recruiting qualified surveyors has been phenomenally difficult in recent years but that had become slightly easier at the moment, potentially as a result of other economic impacts. 

Councillor Symington noted that there was £1m shortfall due to arrears in commercial property. She said Councillor Elliot gave quite an upbeat speech about occupancy rates being around 94% but equally some of those tenants are obviously taking a payment holiday, and then later in the report we’ve got data for bad debts. She asked for some clarification and detail about how the officers felt all those will play out.

N Howcutt advised we normally have around a 94% occupancy rate in our commercial assets division and at present that hasn’t changed. Part of that is because there is a government moratorium in terms of evicting people so that percentage won’t change. In terms of the £1m that relates to approximately 20% of the overall income from commercial assets; he explained the pressure is a combination of people who we think aren’t going to be able to pay and may go bust at some point in the future or have debt at the moment at levels that worry us. He advised there was a Covid related report going to Cabinet this month that shows year on year we’re down 10% on collection at this moment in time. He explained that we’re expecting the final quarter of the financial year to be the worst as business grants have run out, businesses have used all their reserves and cash flow and the trading environment is far harsher than what we were projecting earlier in the year. He added we have some very secure tenants on our database which we RAG (red/amber/green) rate and we think we are very comfortable with around 50% of it and the other 50% falls into the amber or red due to the lack of communication and lack of understanding of how the economy will grow.

Councillor Symington said she had seen on the news recently that councils have been using incinerators to get rid of some of their recycling waste. She queried whether Dacorum had been involved in doing this.

Action: N Howcutt advised we have our recycling waste picked up and taken to a site to be sorted and then recycled. As far as he was aware this process had continued. He said he would investigate and let the committee know so they could be sure.

The Chairman asked if there was a significant difference in costs for agency staff compared to permanent staff as agency staff may not receive the same benefits as permanent staff, such as sick pay or holiday entitlement.

N Howcutt advised there wasn’t a huge difference between agency and permanent staff costs, partly due to the reasons that the Chairman highlighted.

The Chairman referred to the works at the Forum to ensure the building was Covid compliant. He said he couldn’t see anything in the budget that allows for reversing those works when we go back to some normality.

N Howcutt suggested there wouldn’t be a huge amount of cost to remove some of the elements that we have put in. Some elements, such as the electric doors, will probably stay in place. He advised that there wasn’t a full Covid recovery plan at the moment but in terms of what may or may not be done as part of that, we will allocate budget for it if required.

B Hosier advised that due to the ongoing work and discussions around what the Forum will be used for going forward, we would not know at this stage what would need to be removed or how the Forum would need to look.

Outcome: