Agenda item

Budget Monitoring Report 2017/18 - Quarter Three


Members were provided with information on actual performance against the approved Revenue and Capital budgets for 2017/18, including known variances agreed or identified through budgetary control activity. Members were also updated on other key areas of financial performance that may impact on the Council’s Medium Term Financial Strategy, Medium Term Financial Plan, HRA Business Plan or Financial Statements.


The Principal Accountant (General Fund) and the Principal Accountant (Housing & Exchequer) elaborated further on their respective fields outlined in the executive summary on page 12 of the report. Key points from the report were outlined to Members as follows:


General Fund


  • At the end of Quarter Three there is projected underspend for the year of £630,850. Main movements affecting the forecast position against the original budget for the year include impacts accruing against staffing budgets and implementation of ‘Bridging the Gap’ activity
  • The level of Working Balances at year end are projected to be £6.99m, constituted the minimum working balances of £1.25m, the General Fund reserve of £2m and usable Working Balances of £3.74m
  • The budget for 2017/18 incorporated a vacancy allowance of £350,000, and the current year-end projection is an underspend of £760,000 against staffing budgets, therefore giving rise to the net favourable variance of £410,000
  • As part of ‘Bridging the Gap’ activity identified within MTFS a number of shared service options are being explored. The establishment of a shared service with Medway Council for legal services from April 2017 has produced a positive effect to the Council’s Medium Term Financial Plan (MTFP) of £104k in 2017/18
  • There is an additional projected rental income for 2017/18 of £58K compared to the original budget following refinement of budgetary arrangements
  • There is a £44K favourable variance for the CCTV Partnership achieved by reducing staffing costs and funding previously set aside on an annual basis to support the installation of new CCTV cameras/equipment
  • £70K adverse variance for the Borough Market
  • The Garden Waste Collection Service has a projected surplus income of £50K due to continued growth of the garden waste subscription service
  • Government Grant Funding –the projections for Section 31 grants received to compensate the Council for various business rate reliefs granted (within the Government Grant Funding) and business rates income have been updated, giving a net benefit to the MTFP of £155K
  • The forecast usable Working Balances as at 31 December 2017 is £3,740,410
  • The forecast balance of General Fund Earmarked Reserves as at 31 March 2018 is £7,273,000
  • For the General Fund Capital Programme the 2017/18 working budget is £12,635,850, the vast majority of which relates to the Property Acquisition Programme (£10 million). The recent acquisition of the retail building in Sittingbourne high street was completed in January and will bring in an annual rental income stream of £85K
  • Section 4.4 shows the level of Capital Resources available to fund General Fund Capital projects


Housing Revenue Account


  • At the end of Quarter Three, income and expenditure for the year remains balanced, albeit there is a movement in the projected transfer to reserves due to adjustment in the funding for the New Build/Acquisition programme. Main movements affecting the forecast position against the original budget for the year include savings against staffing budgets, increases in rental income, the impact of the disposal of the PV Panel stock and savings generated from ongoing activity to improve the efficiency and effectiveness of the repairs and maintenance service to tenants
  • The level of Working Balances at year end are projected to be £3.0m, at the minimum level of Working Balances for the HRA. Movements in the year are projected to result in a net increase in the General HRA Reserves of £2.1m, with the level of reserves being £4.6m at start of year and projected to be £6.7m at year end. As with the GF, the significant risk to the HRA’s financial position continues to be the lack of clarity regarding funding, in particular changes to funding for supported housing
  • The Housing Capital Programme for the year is budgeted at £14.7m, with spend to the end of Quarter Two of £9.5m
  • The Housing Strategy Development Manager is working hard to ensure that all the Councils right to buy receipts are correctly used and so far twenty four properties have been purchased with an additional number of offers being accepted
  • With regard to the Disabled Facilities Grant the combined total expenditure and committed funds to date is £713,046 and with the anticipated progress on the outstanding cases, the remaining budget of £418,454 is expected to be fully expended/committed by the end of 2017/18


Following Members questions and comments, the finance officers advised that:


  • There is £153K forecasted expenditure of the Leisure Centre Reserve; the purpose of this will be checked and brought back to the Committee. In relation to the reserve itself, it was established to secure ongoing delivery of the leisure services in Gravesham
  • The reserve was also originally set up to accumulate the payments of the management contributions that would be paid by GCLL to the Council over a period of ten years ending in 2020; it was aimed to make a reserve of £2 million however as a part of an agreement the Council was forced to make the payments for utilities which is why the reserve is much lower
  • As Members will be aware, agreement was given to extend the Leisure Centre Management Contract by an additional five years taking them through to 2025; the centres do need major investment to update and refurbish them. The Director (Communities) is arranging trips to other leisure centres to understand how they reenergised their centres as well as reviewing their financial models
  • The error on page 32, under Southfield Shaw Capital Works will be rectified and the committee informed of the correct figure
  • A sheltered housing review was required and carried out by GBC due to the reduction in funding from KCC, one of the outcomes from that was to remove wardens from being residential and have them as ‘floating support’. By changing this, the Council has removed the additional cost of meeting their rent
  • Referencing the disabled facilities grant on page 35, Members were advised that additional assurances would be sought from the Assistant Director (Housing) that all of the 88 live cases would be completed or they would have funds committed to them by the end of the financial year
  • With regard to the £410k favourable variance for staff vacancies, GBC budgets for a full staffing establishment and has a vacancy allowance of £350K. The favourable variance against staffing budgets has accrued this year due to natural turnover, difficulty in finding staff for professional positions such as planners and accountants and the implementation of Service Review Options.  These will not be known when setting the budget, resulting in an in-year variance.
  • The saving delivered by the shared CCTV service with Medway is due to the sharing of a desk and resultantly fewer staff being needed, with it understood that one officer was made redundant. GBC were unaware initially that Medway had privatised that service although that had no correlation with the one officer being made redundant
  • With regards to the decision to stop the Revs & Bens shared service with TMBC, the two officers that left the service after the announcement were met with to discuss their reasons for leaving.  Members can be assured that they left for entirely unrelated reasons to the shared service
  • The Queens Statue is being funded solely by external investors but as it is owned by GBC it is classed as an asset and therefore is reflected in the Capital Programme
  • The funds put in an earmarked reserve for the Lower Thames Crossing (LTC) were agreed at a meeting of Full Council last year and will remain in the reserve until expended or a decision is taken to release the funds back to working balances.
  • The donations towards the statue could not be disclosed at the meeting and officers would need to check the terms of the donation before disclosing information on the donors.


Cllr Halpin wanted it noted that the signage for the new cemetery in Chalk/Higham was very poor and had had numerous complaints of it from his residents. Cllr Hills replied to this that he too had received many complaints from his constituents but that it was down to KCC Highways to erect more signage.


The Chair thanked the officers for an informative update.


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