Agenda item

Quarter 4 Performance Report - Corporate and Commercial


The Chair noted that new members had raised questions regarding terms of reference and phrases used within the report and explained that key terms can be defined at the beginning of the report.


Cllr Gale commented on the use of 'slippage' and 'pressure' within the report and asked if these could be explained further. N Howcutt explained that slippage refers to the timing of when money is spent and financial pressure is when a budget is under pressure due to an underspend or expected overspend.


B Hosier presented the report on commercial development, noting that this includes procurement, parking, the leisure contract, garages and the commercial programme. The report was taken as read and members were invited to raise questions regarding the report.


Cllr Santamaria commented on the temporary agency staff costs, noting that these appear to be significant and asked if any actions are being taken to reduce dependency of agency staff and increase employment of local people. M Rawdon noted the challenges within the hiring market and advised that they have set up a new agency framework where agencies will bid for work where agency staff are required and it is hoped that the Council will get a better mark-up rate rather than going direct to agencies. M Rawdon added that there is work underway to address how individuals are recruited, including the market forces policy that looks at areas where the Council struggles to recruit and retain staff to look at how to address concerns. M Rawdon noted that they will look to continue careers fairs and work with schools and careers advisors to help encourage the pipeline.


Cllr Santamaria asked how DBC compares to other councils in terms of their dependence on agency staff. M Rawdon stated that he was unsure though he could look into this further, though he would expect a similar picture across Hertfordshire.


The Chair asked B Hosier what the greatest challenge is at present. B Hosier stated that the main challenges are recruitment and the economy, noting that he is looking to generate income through garages and parking services, and that it is challenging to achieve these targets.


Cllr Capozzi commented on the garage service and asked how much of unused stock is due to it being unfit for use or people no longer having an interest in using these sites. B Hosier explained that the stock condition survey identified the number of garages not currently being used, noting that there are a number of areas where there are an excess of sites and other areas within the borough have waiting lists. B Hosier confirmed that they are looking at garages that require work in areas where there is strong demand and a programme of works is being put together to focus on these areas first.


Cllr Capozzi asked if the decrease in rental income could be a result of not having garages of good enough quality in areas where they are required. B Hosier explained that there is a 3-year business plan for garages with a stretch income target for each year and around £3.2m income was achieved in 2022-23. There is a stretch target in place for this year and B Hosier suggested that they need to look in further detail at where garages are to then feed into the strategic asset review as some locations may be suitable for alternative uses.


Cllr Gale commented on penalty charge notices ("PCN") and asked how much the Council relies on the income from these and how much of an impact there would be on finances if parking restrictions were relaxed. B Hosier explained that PCN charges are set by central government and that the Council has a right to charge these. If free parking was allowed in council car parks then this would have a significant impact on income generated for the General Fund. There is an agency agreement in place with HCC whereby DBC enforce on-street to make roads and highways safe for road users and pedestrians, and there are very few on-parking bays compared to car parks.


Cllr Gale asked how dependent the Council is on the income from PCNs. B Hosier explained that the majority of PCNs come from on-street locations, which is enforced through the agency agreement with HCC. This income is received by DBC and if this was not enforced then roads and highways would become more dangerous. B Hosier stated that if DBC chose to not charge for parking in car parks then this would have a significant impact on the income generated for the General Fund. C Silva Donayre added that it is the Council's third largest income stream and brings in around £3m a year and that they could look into this further.


The Chair commented on the leisure contract, noting that it would be helpful to have benchmarked attendance figures given that Everyone Active have contracts in other boroughs. The Chair remarked on the Hemel Hempstead gym numbers, noting that the Q4 weekly average has doubled in recent years. It was noted that members can no longer enter the gym unless they scan their card. B Hosier agreed that the increase in attendance is due to the entry scanning facility and that they weren't previously picking up the full attendance figures. B Hosier advised that the gym was closed in Q3 and that investment has been undertaken, and Q4 tends to be busier for gyms in relation to the festive period.


The Chair commented on swimming levels and asked if this is happening in other areas. B Hosier explained that swimming is higher than pre-Covid levels and that they typically see lower levels in Q4. B Hosier noted that Everyone Active have stated that this is one of the highest areas for swimming across their contracts. It was asked if the lower figures may also be related to the colder pool temperatures. B Hosier stated that he was unsure on this.


M Brookes presented the Legal and Democratic Services report and advised that the report looks at the teams that fall under Legal, Licensing, Democratic Services and Elections. The legal section identifies key cases across the quarter with 3 fly-tipping cases and 1 injunction. The report also highlights the work of the Democratic Services, including arranging meetings, producing agendas and supporting the work of the Mayoralty. For Elections, the key activity over the last quarter was to prepare for the local elections and the outcome of this work will be presented at the next meeting.


The Chair asked M Brookes what the main challenges are for each of the teams. M Brookes noted the challenges for staffing, particularly in professional services where they are competing with the private sectors. It was asked if training contracts are offered. M Brookes noted that there aren't any in place at present though they have had training solicitors in the past. M Brookes commented that whilst training posts will typically encourage more applicants, the challenge is that they will require more supervision, noting that they are also looking at opportunities for shared services.


N Howcutt presented the update on finance and resources, noting that there is one red KPI regarding the time taken for debtors to pay. N Howcutt advised that this has been an issue since Covid and that a third of commercial income comes from the commercial property portfolio. When Covid hit, the government changed the policies on how councils could enforce and collect debts as well as how they could remove people from properties. Since November 2022, N Howcutt explained that they have worked on a programme to remove this problem, though the issue will remain for a period of time as they work through all the commercial debtors to put them on payment plans or arrange other forms of collecting payments. N Howcutt advised that payment plans will not reduce overall debt and the issue will therefore remain. There is almost 100% bad debt provision for all existing debts and this will therefore not negatively impact the bottom line, though there is a plan to bring debt payments back to pre-Covid levels this year. N Howcutt confirmed that other areas of debt not linked to commercial are within the 30-day period.


Looking at the operational risk report, N Howcutt noted that there is little change in scoring quarter on quarter with no significant new risks. There has been an issue regarding the collection of council tax, which did not achieve the annual target in 2022-23, which is an issue that has been seen across Hertfordshire. N Howcutt noted that the collection of business rates and council tax is a current concern.


N Howcutt advised that the main challenge at the moment is the wider economic environment as this impacts the Council's services and creates significant pressures for all service areas.


Cllr Santamaria asked if the Council can work with any organisations with regards to commercial debts. N Howcutt advised that Citizens Advice use several DBC offices for outreach into different areas of the community. On business rates, C Baker advised that there are agreed referral processes, noting that medium and larger sized businesses are most affected.


Cllr Weston asked if what is owed to the Council is taken from people's benefits before they are given. C Baker stated that if a resident receives housing benefit and has previously been overpaid then a weekly amount will be taken to cover this, though it doesn't cross from one benefit stream to another. C Baker added that the Council has the right, in certain circumstances, to apply to the DWP for debt to be repaid through Universal Credit via the DWP's debt management system. C Baker noted that it is now harder to collect housing benefit overpayments when people no longer receive a benefit that the Council controls. C Baker stated that if someone on benefits has not paid their council tax and are given a liability order then the Council can apply to the DWP to make an attachment to their benefits.


Cllr Weston asked if a tenant that owes money can be evicted and, if so, where this tenant would go. C Baker confirmed that a tenant can't be evicted for owing a benefit debt to the Council, though they could be evicted for not paying their rent. C Baker suggested that this would be best addressed by the Housing team.


Cllr Weston noted that tenants can no longer be removed from a property. C Baker suggested that this is the government's consideration of removing fixed-term tenancies, which is currently going through parliament.


Cllr Gale referred to the scorecard on page 39 of the report, noting the £80k variance against a target of £0 on FN03 and £113k variance against a target of £0 on FN04. Cllr Gale noted the pressure of £4.113m forecast against HRA at the end of December 2023 and asked when green items would become red and where the extra £4m is. N Howcutt noted the financial outturn report will cover these areas in terms of variances for capital, General Fund and HRA, stating that the items are currently green as it assumes that the recommendations in the report to draw down on reserves will balance the budget at year-end. N Howcutt stated that the items are green as the variance is currently under 1% and would move to amber at around 5% or if the variance was not resolved by year-end. N Howcutt advised that most targets would be revised in the coming months as they work with new Cabinet colleagues.


Regarding the £4m, N Howcutt advised that there is a variance in terms of the bottom line on the pressure of the HRA and it's actually around £2.9m residual before a draw down on reserves. N Howcutt stated that the outturn report explains the pressure and how it is resolved.


ACTION: M Rawdon to check agency usage at other councils.


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