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Agenda item
Quarter 2 Budget Monitoring Report - 2022/23
To note and comment on the quarter 2 Budget Monitoring Report for 2022/23.
Minutes:
The Interim Chief Financial Officer, Chris Hartgrove introduced the quarter 2 budget monitoring report for 2022/23. This report set out the 2022/23 General Fund and Housing Revenue Account positions, for both revenue and capital, as at 30th September 2022 (“Quarter 2”).
In terms of General Fund revenue expenditure – at the Quarter 2 stage – a budget overspend of £1.259 million, with projected net expenditure of £16.890 million against an overall budget provision of £15.631 million, was forecast.
As with Quarter 1, the Quarter 2 position was dominated by a range of substantial spending pressures, as detailed in the report.
The committee thanked Mr Hartgrove and his team for the work they were doing in difficult circumstances. They asked if the council had heard anything about any forthcoming government help? They were told that they have had the autumn statement recently, with some clues in there; but no good news for district councils. It tended to be dominated by adult social care costs and support for business rates. There was no good or bad news at present and because of this, this was a cautious financial plan.
The committee noting the problems with social housing and rents etc., wanted to know what the current collection rates were. They were told it was holding up quite well at present, but as the economic difficulties bite, this would cause problems and may reduce what was collected.
They then wished to know if more people were cancelling direct debits and asked how were our rent collections holding out? Mr Hartgrove did not know but would find out and come back with an answer.
After the meeting Mr Hartgrove supplied this answer:
“In response to the question at the Stronger Council Select Committee on Thursday evening (24th November), regarding the potential cancellation of Council Tax Direct Debits in the light of the worsening economic situation, I can confirm the following:
• April 2022 - number of Direct Debits taken 40,507
• October 2022 - number of Direct Debits taken 41,225
As you can see the numbers have actually increased since the start of the year. However, it was suspected that the Council Tax Energy Rebate scheme has had an impact, whereby the quickest way to get the Rebate (for non-Direct Debit customers) was to sign up to Direct Debit.
This analysis is of course backward looking. As I mentioned on Thursday evening, there appears to be an emerging consensus that the future prospects for Council Tax collection generally are not as bright certainly for 2023/24 and potentially beyond.
As for rent collections: The outcome is that performance on Rent Collection is – so far – comparable to previous years. Thus:
• Arrears as a % of Debit Raised (October 2021) – 1.55%
• Arrears as a % of Debit Raised (October 2022) – 1.59%
Overall therefore performance fractionally down (by 0.04%) compared to last year.”
The committee expressed the hope that the housing teams would be proactive in putting in plans for people having problems.
The committee noted that people were delaying putting in planning applications at present, but we also had applications still waiting a decision. Should not the planning department be expediting these applications. They were told that developers were holding back and waiting for the Local Plan. Asked if there was a backlog officers said that there had been one but were not sure of the current situation. However, the projected shortfall for planning applications income had reduced in quarter 2.
The committee asked about the Qualis income from the squeeze in loan margins generated from Qualis loans for the council. They were told that the council matched the loans it took from the PWLB and to loan to Qualis at a higher rate. But interest rates have increased, and our borrowing costs have gone up, so as we loan to Qualis at the same level our margins have gone down.
RESOLVED:
1. That the General Fund revenue position at the end of Quarter 2 (30th September 2022) for 2022/23, including actions being undertaken or proposed to improve the position, where significant variances have been identified, be noted.
2. That the General Fund capital position at the end of Quarter 2 (30th September 2022) for 2022/23 be noted.
3. That the Housing Revenue Account revenue position at the end of Quarter 2 (30th September 2022) for 2022/23, including actions proposed to ameliorate the position, where significant variances had been identified, be noted; and
4. That the Housing Revenue Account capital position at the end of Quarter 2 (30th September 2022) for 2022/23 be noted.
Supporting documents: