Budget Monitoring Report - Q1 2018/19
- Meeting of Finance and Audit Committee, Tuesday, 11 September 2018 7.30 pm (Item 77.)
- View the declarations of interest for item 77.
Members were provided with information on actual performance against the approved Revenue and Capital budgets for 2018/19, 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) advised that it is the first budget report of the 2018/19 financial year for the period 01 April to 30 June 2018 and directed Members attention to Page 58 of the report. It was a detailed one page executive summary that highlighted and explained the main points from the report regarding:
- General Fund (Revenue)
- General Fund (Capital)
- HRA (Revenue)
- Housing Capital
The Principal Accountant (General Fund) and the Principal Accountant (Housing & Exchequer) elaborated further on their respective fields outlined in the executive summary:
- At the end of Quarter One there is projected underspend for the year of £135,370. Movements affecting the forecast position against the original budget for the year in the main pertain to continued implementation of Bridging the Gap activity
- The acquisition of the Wickes site, as part of the second tranche of acquisitions, produced a favourable variance of £377K in-year, and a projected full-year income rental stream from 2019/20 onwards of £511K
- The HR Shared Service produces a saving of £23K and adds some additional non-financial benefits such as greater resilience for both Medway and Gravesham
- With regard to the St Georges Centre, there is a permanent loss of £195K from basic rental income with an adverse variance of £146K in 2018/19, derived from the strategic decision taken by the council to enter into agreement to redevelop the St George’s Shopping Centre
- The Garden Waste Collection Service produced a £70K favourable variance due to a continued expansion of the subscription service during 2018/19 and increased charges implemented from 1 April 2018
- With regard to the Kent Business Rates Pilot scheme for 2018/19, the council anticipated receiving £250K from the Financial Sustainability Fund established through the pilot. Following the latest business rates monitoring across Kent, a healthy position is projected and therefore a further £150K is being recognised from that fund. Both figures are being applied directly to working balances
- For the first quarter to 30 June 2018, actual staffing spend was £113K lower than budgeted
- The table on page 64 of the report shows that the forecast working balances as at 30 June 2018 is £7.3 million; it is comprised of three elements: the minimum General Fund balance, the additional General Fund reserve and the forecast Useable Working Balances
- The total earmarked reserves for the General Fund as at 01/04/2018 was £7.498 million and it is forecasted to be £7.885 million by 31/03/2019
- The General Fund Capital Programme on page 67, sets out a table which shows the combine programme 2018/19 working budget of £31.8 million; summary comments for each scheme are located from page 67-69
- Page 69-70 shows tables that were introduced to give Members information on Capital Resources and Capital Funds being held by GBC
Further to the comments on page 64 regarding homelessness, concern was expressed by a Member that the homelessness situation is not being dealt with properly in Gravesham and the wording needed to be reviewed to show a more favourable outlook on dealing with homeless people. It was suggested that the planning team is potentially frustrating works required to ensure HMO licencing at a facility in Edwin Street, which could result in those being helped currently being turned out onto the street.
The Assistant Director (Housing) gave a detailed response to the Committee on the robust work being carried out to help house homeless people in conjunction with the Homelessness Act and the various homeless Charites and organisations around the Borough.
The Director (Housing & Regeneration) advised that he would look into the planning application that was discussed, after the meeting.
Essential repairs for the Civic Centre were questioned and Members felt that motion sensor should be looked into for the Civic Centre so that at night the lights aren’t left on constantly resulting in a waste of money.
The Director (Housing & Regeneration) explained that Dipna Pattni is looking at energy efficiency issues in the Council housing stock as well as for Civic buildings; she is in talks with the Property Department about that issue who advise it is planned for the future. He added that it was also being instilled in staff to think more about energy savings, including turning off all lights when they aren’t in use as they do in their own homes.
In response to concern raised over the purchase of Wickes, the Assistant Director (Corporate Services) advised that the location of the Wickes site is the most crucial aspect as it is so close to Town and other prominent Council sites. The freehold can be bought for one pound in the future and then if Wickes is no longer the renter, it can be taken in a new direction. The rental income stream is secured and the Council will be looking forward to what the site could achieve in the future.
- As at 30 June 2018 the forecast reflects a saving of £837k due to variances within
Supervision and Management, Repairs and Maintenance and Capital Finance against the Original Budget
- The position at Q1 is expecting the HR to make a contribution to the general reserves of some £710K instead of drawing from it
- With regard to Vacancy Management, the HRA staffing budget for 2018/19 incorporated a vacancy allowance of £100k for the year but for the first quarter to 30 June 2018, actual staffing spend was a further £85k lower than budgeted. That produced an £85K favourable variance
- A £750K favourable variance was reported for Repairs & Maintenance, it was a continuation of the efficiencies and savings that were delivered in 2017/18 whilst still providing an equitable service that meets the council’s objectives as a landlord as well as managing tenant’s expectations
- As at 30 June 2018 the usable working balances for the HRA is £3 million which is forecasted to be maintained through the year
- The HRA Business Plan reflects the current and future financial spend profiles identified in the recent Stock Condition Survey produced by Penningtons in July 2018. It also reflects future forecasts of the New Build Programme beyond the existing three year scheme based on the current assumption of the sale of 30 Council Houses per annum
- The Housing Capital programme for 2018/19 is £14,425,330 of which £13,463,240 relates to HRA capital schemes and £962,090 relates to non-HRA capital schemes
- The council continues its commitment to build new homes with £5,406,780 allocated for that purpose, the details of those works that are completed are listed on page 75 and the new build programme on page 76 of the report
- With regard to Treasury Management, a full list of internally managed investments held by the Council as at 30 June 2018 can be found at Appendix 4 of the report
The officers fielded questions from Members of the Committee:
· The conversion of the Kings Farm Estate Office to a 4 bed wheelchair home has been completed and the tenant moved in at the start of September; the property helps overcome all the problems the gentleman faces as a wheelchair user and has a large garden for him
· Referencing 5.7.2 of the report, the sale of 30 Council Houses per annum does relate to Right-To-Buy sales. At the request of Members, an updated HRA Debt Repayment Profile would be circulated by email to Members
The Committee was delighted to see that the work from one of the cross parking scrutiny sub-groups had directly led to savings being made and efficiency increasing within the Repairs and Maintenance Service.
- BMR - Q1 2018-19 F&A, item 77. PDF 375 KB
- Appendix 2 MTFP - V2 - 2018-19 - BMR Q1, item 77. PDF 76 KB
- Appendix 3 - HRA Business Plan, item 77. PDF 46 KB
- Appendix 4 - Investments as at 30 June 2018, item 77. PDF 14 KB