To consider the attached report which sets out the 2021/22 General Fund and Housing Revenue Account positions, for both revenue and capital, as at 30th September 2021 (“Quarter 2”).
A Small introduced the quarter 2 budget monitoring report. The report set out the 2021/22 General Fund and Housing Revenue Account positions, for both revenue and capital, as at 30th September 2021 (“Quarter 2”).
In terms of General Fund revenue expenditure – at the Quarter 2 stage – a budget under spend of £0.129 million was forecast, with projected net expenditure of £16.682 million against an overall budget provision of £16.811 million.
The financial pressures due to the impact of the Covid-19 pandemic had generally stabilised, with the Leisure Facilities budget especially now back on track (albeit based on lower income expectations) as leisure centre usage recovers more sharply than expected. Similarly, Car Park usage was now back to around 80% of pre-pandemic levels, although the budget was off track.
The temporary delay in asset disposals to Qualis – as part of the Regeneration element of the initiative – was also causing some financial pressure in areas such as Building Costs and (Qualis) Interest Receivable, although the disposal has subsequently taken place on 20th October 2021, so the financial pressure would not get any worse.
As with 2020/21, the Housing Revenue Account position was less affected by the Covid-19 pandemic. However, a range of other financial pressures were combining to result in a projected year-end deficit of £1.403 million. The largest spending pressure relates to Housing Repairs (£560,000), which had been a challenge for the Council in recent years. However, the recently established delivery arrangements through Qualis were expected to deliver significant savings in the medium term.
Finally Members were reminded that the Council’s draft Balance Sheet position as at 31st March 2021 was showing that the General Fund unallocated reserve was now getting close to the £4.0 million minimum contingency balance adopted by full Council in February 2021, which was partly a consequence of late accounting adjustments to the 2019/20 Statement of Accounts (reported to Audit and Governance Committee, and approved by full Council in July 2021).
Councillor H Kane asked about the section on Repairs and Maintenance, she noted that it said that there had been a substantial number of repair works (both general and void) that currently sat outside the base contract with Qualis; what were these? Councillor Philip replied that there was a detailed contract between Qualis and the Housing department in terms of repairs particularly for voids. This has been an issue for a number of years. We could now track it throughout the year, that is why it was showing up more. Voids were completely demand driven, when a property became void it depended on the state it had been left in. There was no real planning you could do for this. There had been a significant number of voids this year and that was driving this forecast underspend. Mr Small added that when Qualis took over the housing repairs function we had a transitional period where we had some work being done by the previous contractors.
Councillor H Kane went on to ask about the housing development forecast underspend, she would like some action taken on planning issues which were to be addressed on housebuilding. Councillor Philip said the issue here was how to get into phase 5, the properties being designed and built were of the highest possible standard and it was important to get them right at this stage. This would be greatly helped by talking to the planners first. After this it was up to the planning committees. Mr Small added that we needed to be realistic about the assumptions we put into the Capital Programme as to how long things would take. Councillor H Kane suggested that we monitored this situation very carefully. Councillor Philip said that the monitoring was allocated to the Council Housebuilding Cabinet Committee which any member was welcome to attend, and this was also reported to the Cabinet.
The Select Committee noted:
1. The General Fund revenue position at the end of Quarter 2 (30th September 2021) for 2021/22, including actions being or proposed to improve the position, where significant variances have been identified;
2. The General Fund capital position at the end of Quarter 2 (30th September 2021) for 2021/22;
3. The Housing Revenue Account revenue position at the end of Quarter 2 (30th September 2021) for 2021/22, including actions proposed to ameliorate the position, where significant variances have been identified; and
4. The Housing Revenue Account capital position at the end of Quarter 2 (30th September 2021) for 2021/22.