Agenda item

Quarter 1 Budget Monitoring Report


NH was invited to talk through the budget monitoring report, noting the change in format and style of the report so it is more service driven. NH is open to feedback on the report. There is a general fund pressure of circa £1 million, of which £0.7 million is linked to COVID and £0.3 million is linked to non-COVID risks. One of those non-COVID pressures is the lack of temporary accommodation which could be argued is partly due to COVID.


There is no movement in the capital for the Q1 programme. This isn’t to say there won’t be changes, but these will be known by Q2. The HRA is largely on budget with a £50 million budget and a variance of only £59,000. The reason for the variance is due to 10% of the capital programme slipping into 2022/23 due to COVID linked delays. The COVID linked delays extend as far as tender processes needing to be longer, lack of resources and skilled workforce and materials.

There is still uncertainty around COVID, some of the behaviours are returning to pre-COVID levels, like the commercial assets portfolio but car parking revenues are still significantly down.


Questions and Answers:


Cllr Tindall asked whether the contractor costs for car parking remained the same even though revenue collected was down. BH explained that the contractors’ costs remained the same regardless of usage in car parks or the number of PCNs issued. NH added that when the contractor did furlough staff last year, there was a cost savings, but now the cost is the full amount.


Cllr Tindall asked whether the public could use the upper decks of Water Gardens North car park and whether CCG would allow this, given they would in due course be integrated in the care services restructuring. BH commented that the upper deck of Water Gardens North car park has actually been opened already to members of the public throughout August until the end of September because Water Gardens South car park is closed. There are discussions that are due to take place about public use longer term of the upper decks of Water Gardens North car park. NH added that these are ongoing discussions and another tenant could be considered as well.


Cllr Tindall also queried whether the Police and Crime Commissioner fund could help pay towards costs of clearing fly tipping. AW clarified that this fund is only for the costs of clearing fly tipping from private land and wouldn’t apply to the council. Therefore the costs of £40,000 relating to fly tipping couldn’t be amended.


Cllr Symington asked how pressure on wages and materials is anticipated in capital programmes. NH commented that it’s difficult and frustrating as they’re seeing increasing costs in tenders of between 8-25% so it’s very difficult to gauge how much these are short-term changes or longer-term cost increases. NH hopes that by the time the next budget is set he will have a better idea of what the increases will be to set the budget accurately.


Cllr Symington also asked when it seems that thetraffic levels are at pre-COVID levels, and in some instances in excess of this, why is car parking income lower. For NH, everyone assumes that this is due to COVID when there could be many reasons such as people are choosing not to use their cars for short journeys. The council’s car parks are in the town centres and local community parades, so through people not commuting or wanting to be more ‘green’ they may naturally choose to not drive for short journeys.


However, overall car parking revenue is improving month on month. The September data is due shortly and it will be interesting to review as it’s post-holiday and will be a better barometer for the future. BH added that that whilst the report showed an average reduction of 36% in parking sessions for the quarter, for August this is actually 16% so things are moving in the right direction.


Cllr Symington asked for an update on the £90,000 for the government compensation for the leisure contract. NH explained that the £90,000 was included in the last meeting but the Income Guarantee Scheme for the first quarter was made after the budget was set in January which is why it’s shown here.


Cllr Adeleke queried whether the assistance received from the government as a result of COVID was sufficient and what conditions were attached to the spending of it. NH responded saying that the funding was based on many aspects, from population number, the amount of benefit encumbrance, etc. Co-funding also has different criteria and the Council has no say in how much is allocated. The burdens they’ve provided are sufficient for the additional cost and the amount seems sufficient but doesn’t cover additional areas, such as waste, that has seen increased costs during COVID.


Cllr Adeleke asked for clarity about the additional costs in waste services. NH explained this was due to access issues and having to hire more staff to do more routes which impacted route time and length. Cllr Adeleke asked that residents are informed that they need to be more considerate.


Cllr Adeleke asked a third question about whether there are sufficient measures to enforce and discourage fly tipping. NH said there is an effective policy on clearing fly tipping and that it has to be cleared promptly so as not to encourage more fly tipping but some of the camera surveillance work wasn’t possible during COVID. MB added that this enforcement was with the environmental services team, but the key focus is on taking surveillance and all action possible.


Cllr Symington asked if the £1 million budget is just a survey for 10,000 dwellings. NH explained it is, but there had been an under-spend as the stock condition surveys had been delayed. Repairs and maintenance costs are approximately £15 million on HRA stock. 30% of the surveys have been carried out. NH added that these full stock condition surveys are carried out every 5-10 years. NH believes the surveyors usually carry out the surveys based on selected neighbourhoods. Maintenance is carried out based on the existing stock condition surveys.


The Chair asked what the process is for dipping into reserves. NH stated all reserves require cabinet approval to be drawn down. All reserves have a specific set up that they can be utilised for. Cllr Townsend’s understanding is that at the end of each year the general reserve fund is balanced and a contribution is made to the reserves. NH explained that at the end of the year if there is an under-spend a recommendation is made as to how that money is to be spent. In recent years this hasn’t been a problem as it’s rare to underspend, in addition the reserves are predicted to be going down £2-3 million this year and next so an underspend is unlikely.


The Chair queried how potential additional costs like new legislation and inflation are taken into account in the budget. NH responded saying that when the budget is set it includes setting a contingency of 2.5-10% depending on the complexity and value of the contract. Inflation isn’t a contingency as it’s taken into account as part of the budget. For longer term budgets, these are reviewed annually to ensure they are accurate.


The Chair is concerned by fly tipping and particularly when fly tipping waste includes asbestos as it’s dangerous for the animals and plants as well. The Chair also asked if underspendsare a blessing and if they have helped. For NH, in a perfect world there wouldn’t be overspends or underspends. Underspends and overspends need to be based on information that wasn’t available at the time the budget was set.


The Chair asked for more information on the £500,000 allowance for the Building Safety Bill and NH commented that this was new legislation going through parliament which will require additional expense on existing HRA stock, mainly because of changes required as a result of the Grenfell Inquiry. There are also additional requirements for commercial properties due to come in force in April 2023 regarding EPC ratings. This budget of £500,000 will also include additional officers and employees time required, if necessary.


Cllr Tindall asked for clarification about the £100,000 dealing with asbestos and NH explained this was an expense relating to existing council housing properties to ensure that the database for asbestos is maintained and repots are carried out annually or on an on-going basis.




NH to see if there is a report on enforcement measures for fly tipping to share.


NH to find out how the surveyors decide which dwellings to survey first, if this differs from being by neighbourhood.




The report was noted.


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