Agenda item

Budget Monitoring Report


F Jump presented the Council’s forecast outturn for 2022-23 as at the 30 June 2022.   The report covers the following budgets with associated appendices: The General Fund at Appendix A shows a pressure against budget of £0.872m is forecast. The Housing revenue Account (HRA) at Appendix B, a pressure of £1.040 is forecast. The Capital Programme at Appendix C. The General Fund Budgets are forecasting re-phasing to future years of £13.740m (14.5% of the budget). The HRA capital programme is forecast to budget. She welcomed questions from the committee.


Councillor Adeleke referred to item 8.2 on page 22 regarding the Berkhamsted Leisure Centre works that will continue into next year. Councillor Adeleke asked if this would be within the same budget or if there would be slippage.


F Jump stated that the programme should stay within the allocated budget and that the reference to slippage is in relation to decisions around the work and no budget pressure is expected at this point.


Councillor Adeleke next looked at item 8.4, asking how many properties they expect to purchase with £1m.


F Jump responded that purchase prices will vary but she expected £1m would only cover a handful of properties.


Councillor Tindall also referred to item 8.4. He asked if anyone had evaluated the turnover in Right to Buy properties in recent years to get an idea of how far the policy could be taken. He commented that £1m was on the low side, particularly when we are desperate for housing, and that he felt it was an easy way to mitigate some of the actions taken in the 1980s.


F Jump replied she did not have the statistics to hand but was happy to circulate the information. Action.


Councillor Tindall suggested they consider increasing the budget subject to the statistics.


F Jump took the comments on board. She felt that the budget of £1m is reasonable at this stage, and if they receive offers in excess of this amount they can look to reassess the figure as part of the budget setting for next year.


Councillor Tindall suggested there may be an increase in people selling Right to Buy properties in the wake of the financial crisis.


The Chairman noted the volatile environment and varying energy costs, stating that the new Prime Minister will also bring in new policies, and that they should wait to take a pragmatic approach.


Councillor Townsend requested more information on item 4.1 regarding residential services and the pressure of £0.729m. He suggested that this figure was being attributed to employee costs and asked for clarification on why employee costs have increased.


F Jump commented that employee costs are emerging as they respond to changes in round patterns and staffing requirements. Whilst they would've had an idea of staffing costs when setting the budget, costs have increased throughout the year. It was noted that this figure also includes agency staff costs, which are also increasing.


Councillor Symington commented on wages for waste staff, noting that last year a one-off payment was made, and that the expectation of staff would be that this would be the base level for this year. She asked if it is consolidated or what they are doing to retain staff.


F Jump advised that it was a one-off payment and has not been consolidated into current pay.


M Rawdon commented on retention, noting that the payment has not been extended to next year. Turnover rate is low and the national issue regarding drivers has now subsided. M Rawdon advised that they have checked with other local authorities and they have also looked to stop this payment, though this will continue to be monitored.


Councillor Symington referred to a discussion at the last meeting on pay being factored into the Medium-Term Financial Strategy at 2.5%. She noted it was said to be 0.3% higher than the average council, noting that Herts County Council are currently negotiating 7% with unions and have provided the pressure for each additional 1% charge. She then asked what additional pressure would be caused by having to match this.


F Jump advised that every 1% increase in the council's wage cost is around £240k and mitigating measures are currently under discussion. F Jump confirmed that she would update the Committee on these measures once appropriate to do so. It was confirmed that the current presented figures assume a 2.5% pay increase and that the document will be refreshed.


The Chairman commented that national negotiations are in hand and the offer to unions has not been accepted, noting that they would require clarity until discussing further.


Councillor Mahmood referred to item 3.4 on the benefits for the income of HRA due to a rise in interest rates, noting that he did not see the negative impact of rising inflation.


The Chairman suggested that this is covered in the current budget and revised forecast outturn under item 4.


F Jump added that known inflationary pressures have been included in the overall forecast outturn figure.


Councillor Mahmood noted the item on the reduction in council tax due to empty homes and asked if this was a particular issue.


F Jump noted that there are void properties in HRA stock that still have council tax liability, resulting in a high level of cost to the council. This position is closely monitored and work is ongoing in the housing service to look to reduce the level of voids.


Councillor Symington remarked that parking income hasn't recovered to pre-Covid levels as a result to changes in behaviour, asking if there are any plans to repurpose spaces if this becomes a long-term change.


B Hosier confirmed that they are reviewing car park income and are considering ways of reducing costs or increasing income. He highlighted the Smart Parking project, which is another way to look at income generated through car parks. It was noted that there is no set timeframe, though there is pressure this financial year, and unless parking behaviours change this year then this pressure will continue and they will consider alternatives.


Councillor Symington commented on the capital spend and that the year to date spend is only £1.1m of a £12m project outturn. She remarked that this is a significantly low spend, particularly in a high inflationary environment, and asked if it was therefore realistic to assume they would hit £12m.


F Jump advised that the forecast is for early in the financial year and the current expectation is that they will spend as per the forecast year, though any changes will inform a revision of the budget.


Councillor Symington referred to item 8.2 regarding £13.7m against Berkhamsted Leisure Centre. She noted that capital expenditure has been deferred for the year and asked when other options would come forward.


M Brookes advised that they have been reviewing options over the summer and they hoped to be in a position to table something to the appropriate working groups. This will first go to the Berkhamsted Sports Centre Working Group before seeking formal approval for the next steps. M Brookes commented that they hope to move forward with this in the next 2-3 months.


Councillor Stevens commented that members had not been able to discuss the status of proposals with residents and asked if they could now be more open given that is in a public domain document.


The Chairman recommended that they refrain from making any statements so as to avoid speculation and they should instead wait until they are further down the line. M Brookes agreed with this approach.




The report was noted.


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