Agenda item

Budget Monitoring Q1 report




F Jump presented the first quarter budget monitoring report and asked Members if they had any questions.


Cllr Mahmood asked about the ongoing impact of the pandemic, we had set aside £1m, £700k has been spent in the first quarter and questioned whether we are seeing an end to that spending.  F Jump advised that £1m is the full year forecast pressure, £700k is the full year forecast pressure attributable to Covid  In terms of the ongoing impact we are continuing to see an impact on our income streams, for example, car parking.


Cllr Hollinghurst queried the £90k arising due to void properties in the hostels and temporary accommodation wanted to know how that had arisen.  N Beresford confirmed due to ‘Everyone In’ ask we had a significant spike in placements into temporary accommodation, now that has reduced in terms of flow but we still have a high number than usual applicants in temporary accommodation of just over 145 households, at the peak of this year that was in excess of 170.  The reduction in numbers are due to a number of factors, the cessation of the ‘Everyone In’ ask has meant that we are not continually bringing in new clients at the same rate and also we have been able to move them onto other accommodation. We have also had some very proactive prevention engagement with external providers and high street letting agents, which has meant we had over 50% increase of households moving into private sector accommodation, which in turn has meant an increase in voids.  We had expected and planned for an increase in homeless approaches as a result of the new Domestic Abuse Duty, but this didn’t happen, there has been an impact but it’s less than we expected.


Cllr Hollinghurst raised concerns about the advertised prices of accommodation per month in Tring and wondered how people are able to afford this.  N Beresford confirmed that there was some properties advertised recently with Legal and General for a new development.  These were affordable rent, not social rent, which were agreed through the planning process s106 agreement, within 80% market rental values, so much higher than social rents, but every person that is referred into those properties will have an affordability assessment by the Housing Needs Team and also the Registered Provider.  The same process is also undertaken when putting people into a private rented property, a number of assessments are completed to determine that the option is affordable for that family.


Cllr Adeleke asked about the Government Grant of £325k and how the Covid administration of £250k was spent, also queried the pressure arising due to Council liability on 5.8.  F Jump explained that the grant income we received is not ringfenced, corporately we use it to support the overall costs of the authority, but in terms of the specific reason those grants were provided for administration, they are for the test and trace which the Council is administrating.  They are taken to support the Council’s bottom line helping towards the delivery of all services and for us to distribute out to the local population and businesses.


Cllr Adeleke mentioned that he thought test and trace was down to Central Government and if it was us, did we have to employ specific officers.  F Jump confirmed that it was a national policy, but the authority was responsible for administering it and making sure individuals get the funding, so we are currently meeting the costs of administering that scheme with existing staff and are using the government funds that have been provided to deliver that service and existing staff have been used from the Benefits section to ensure that people are actually eligible for the grants.  F Jump added that her team would be responsible for carrying out financial checks and making sure that payments were made.


Cllr Adeleke repeated his earlier question on point 5.8 regarding the Council’s liabilities.  F Jump said that this relates to Council Tax and that there has been a change on the amount of time you can have council tax discount and it’s now down to one month, from three months, which means we are effectively paying more for Council owned properties.  We need to realign the budget associated with those council tax payments and this will be corrected next year so that we are correctly aligned with current policy.


Cllr Mahmood asked about variances on the capital programme, which is about £4.6m and wondered if that will be sufficient with costs increasing.  F Jump said that from a financial perspective, the £4.6m is the slippage on the capital programme, which means that the work is not happening this year, but it will happen in future financial years when we come to set the budget.  We will of course take into account that it’s slippage and it may be that some costs have gone up as a result, we are not currently factoring that into next year’s budget, but we will need to review that are part of the budget setting for next year.  The work that we are planning to deliver will not happen this year but we do expect it to happen in future years.


Cllr Mahmood queried how it would be managed in terms of workload and whether we will be able to catch up.  M Gaynor confirmed that there may be a delay, this is due to many issues, delays with planning permission, shortages of materials and that prices keep going up, but the staff will carry on working on future schemes.  M Gaynor confirmed that it’s not a real concern as projects do slip, we may have to spend more and there may be increased costs, but it will be delivered.


Cllr Mahmood asked if there should be a column identifying potential risks.  M Gaynor advised that we do build in a contingency and where the building price index has gone up this should be covered.


Cllr Freedman wondered if it would be possible to use the delays/slippage for bringing forward some of the climate emergency work on Council owned properties.  M Gaynor clarified that it would not be advisable to take the money out of building new homes as this was also a Council priority.  The stock condition survey will identify homes with lower EPC’s that would benefit the most from improvements and the programme for Council houses is due by 2050.  We need technology to catch up with the requirements, for instance the Government wanted 600,000 heat pumps a year and it’s actually closer to 50,000, which will also mean that we’ll pay more than we need to.


Cllr Freedman said if we’ve got issues carrying out the work, why couldn’t we address the insulation and noise problems now, given the government guidance and our own campaign to be net zero by 2030, are we missing an opportunity to change the priority.  M Gaynor confirmed that the more work we do, the longer the property will be void, we do need to turnaround around as quickly as possible, so that we have the rental income stream.  The point made has logic but we do need to look at the significant housing need we have in the borough.


Cllr Freedman asked about service charges to tenants and refunding some where the service had not been delivered to the expected frequency or quality.  N Beresford confirmed that we would need examples of where this was the case and then this could be investigated by Jason Grace.


Cllr Adeleke asked about the slippages and was concerned there were several areas where if they carried on at this rate would we be able to look at these again.  F Jump confirmed that in terms of monitoring the position, it’s done on a regular basis, including coming to Committee on a quarterly basis.  For the performance of our capital programme slippage F Jump advised it is kept under constant review.


The Chairman thanked everyone for the work that’s been put into the report and said that it was fantastic as usual. 


The Chairman said she was concerned that Councils were led to believe that there would be government funding to support councils that were forecasting a deficit, we are yet to see the fallout of the pandemic and the end of furlough will have an impact on us.  We are going to be £1m short and it will get worse and asked if there is any way to mitigate this.  The Chairman also mentioned the pressure on dwelling rents, which is down, some of which is due to sheltered schemes and asked if there is a wider strategy to combat this.  F Jump said that the Government funding is incorporated into the current forecast however the position can change, the Government has been compensating us for lost sales fees and charges income for the first quarter. From our forecast we expect pressures against our income to continue for the whole financial year, so it may be that Government change their position in terms of compensation that is offered to local authorities.  That means it could possibly improve the Council’s position but at the moment we are basing our forecast on what we know about Government support. 


F Jump mentioned that in terms of the rents, that part of the variance relates to a difference between what we assume in budget setting in terms of void levels and then what’s actually transpired during the year.  We review that every year and perhaps we could look at the methodology that we use to if it can be refined.  N Beresford advised that in terms of sheltered housing rental income, work was being undertaken on a sheltered housing review, which will be presented to Senior Leadership Team before going to Members.  There is also a review of the Allocations Policy which will revise the capital thresholds, which will be coming to Members in October.


The Chairman confirmed the recommendation to note the report.


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