Agenda item

The Chief Finance Officer:

 

·         Presented to the Performance Scrutiny Committee the provisional 2018/19 financial outturn position on the Council’s revenue and capital budgets, including the General Fund, the Housing Revenue Account, the Housing Repairs Service and Capital Programmes.

 

·         Reported that for 2018/19 the Council’s net General Fund revenue budget was set at £14,276,460, including a planned contribution to balances of £288,360, resulting in an estimated level of general balances at the year-end of £1,897,724.

 

·         Reported that the financial performance quarterly monitoring report for the third quarter predicted a shortfall against the revised budget of £206,302. The provisional outturn for 2018/19 now indicated that this shortfall had decreased by £159,946, resulting in an overall budget shortfall of £46,356 and represented a variance against the revised budget of 0.33%. Full details of the main variances were provided in Appendix B, but the key variances were summarised as follows:

 

-       car parking – reduced income of £1,015,648;

-       housing benefit overpayments – reduced income of £604,533

-       homelessness bed and breakfast – increased expenditure of £101,418

-       borrowing costs – reduced expenditure of £270,063

-       earmarked reserves – released increased income of £280,220

-       contingencies released – reduced costs of £175,930

-       business rates Section 31 grants – increased income of £385,881

-       revenues and benefits new burdens – increased income of £180,207.

 

·         Reported that the following contributions to earmarked reserves were requested as part of the report:

 

-       planning delivery fund – the transfer of £95,000 of grant income received to fund an additional post to support large scale applications in 2019/20;

-       overachievement of crematorium income – the transfer of £100,000 of surplus income, net of increased cost, to an income equalisation reserve to mitigate against future fluctuations in income levels;

-       revenues and benefits shared service – transfer of £100,00 of new burdens funding to a reserve to be utilised in 2019/20, as determined by the Joint Committee.

 

·         Reported that, following the final outturn being known, it was proposed that the £95,000 planning delivery grant and £100,000 crematorium income were transferred into reserves as previously agreed. However, due to the significant reduction in housing benefit overpayments within the revenues and benefits area, it was proposed that only £45,000 of the new burdens funding was transferred into the reserve. These transfers to reserves were reflected in the provisional outturn position.

·         Reported that the savings target included in the Medium Term Financial Strategy for the 2018/19 Towards Financial Sustainability Programme was £3,800,000. Progress against this target, based on the outturn position, showed a secured total of £3,828,050. A summary of the provisional outturn position was shown in the table at paragraph 3.15 of the report.

 

·         Reported that for 2018/19 the Council’s Housing Revenue Account net revenue budget was set at zero, resulting in an estimated level of general balances at the year-end of £1,023,099. The financial performance quarterly monitoring report for the third quarter predicted an underspend of £5,000. The provisional outturn for 2018/19 now indicated an underspend of £3,467 and would result in Housing Revenue Account balances at 31 March 2019 of £1,026,568. The main over and underspends included within the provisional outturn were summarised as follows:

 

-       Housing Repairs Service – additional income of £271,534;

-       rental income – additional income of £161,055;

-       supervision and management – additional income and reduced expenditure equating to £141,547;

-       repairs and maintenance – increased expenditure of £641,287.

 

·         Reported that, following outturn, Housing Revenue Account general balances would be £1,026,568, in line with the Medium Term Financial Strategy.

 

·         Reported that for 2018/19 the Council’s Housing Repairs Service net revenue budget was set at zero, reflecting its full cost recovery nature. The financial performance quarterly monitoring report for the third quarter predicted a £146,000 surplus outturn for 2018/19. The provisional outturn for 2018/19 showed a trading surplus of £271,534. The net trading surplus of £271,534 was the result of a number of year-end variations in income and expenditure against the approved budget. The fluctuation between the forecast at quarter three and the final outturn was mainly down to the performance of voids function. The surplus of £271,534 had been repatriated to the Housing Revenue Account which was the major service user and was reflected in the Housing Revenue Account outturn within the report.

 

·         Reported that the details of all earmarked reserves and their balance as at 31 March 2019 were attached to the report at Appendix G and summarised in paragraph 6.1 of the report.

 

·         Reported that the revised General Fund Investment Programme for 2018/19, as approved in the Medium Term Financial Strategy, amounted to £23,460,862. Movements in the programme since the approval of the revised budget decreased actual capital expenditure in 2018/19 to £13,968,238. A further £175,000 was approved in 2018/19 to transfer land from the Housing Revenue Account to the General Fund, creating additional resources within the Housing Investment Programme. No physical income, receipt or expenditure had been recorded as transfer occurred between council funds.

 

·         Reported that budget re-profiles approved by the Chief Finance Officer during the final quarter were detailed at Appendix I attached to the report.

 

·         Reported that the provisional outturn position for the General Investment Programme was set out in paragraph 7.5. Overall spending on the programme for 2018/19 was £13,968,238 which was 59.54% of the revised 2018/19 programme as per the 2018-23 Medium Term Financial Strategy. It was noted that the following should be taken into consideration alongside these figures:

 

-       expected budgeted expenditure of £6.9 million relating to Deacon Road occurred in April 2019 just after the 2018/19 financial year;

-       Disabled Facilities Grant works of £467,687 had been agreed and were expected to occur within 2019/20;

-       the retention payment and related expenditure of £845,357 with regards to the Lincoln Transport HUB had not yet been paid due to delays on final sign off.

 

·         Reported that the revised Housing Investment Programme for 2018/19 as approved in the Medium Term Financial Strategy amounted to £31,457,789. Movements in the programme since the approval of the revised budget decreased actual capital expenditure to £24,985,322 in 2018/19. Changes approved by the Chief Finance Officer in the final quarter were set out in Appendix K of the report and summarised in paragraph 7.9 of the report.

 

·         Reported that changes requiring Executive approved were highlighted as follows:

 

-       six property purchases funded from the unallocated new build programme under delegated authority on 20 March 2019 at Turner Street (£67,465), Williamson Street (£110,210) and Naval Court (£680,125);

-       reallocations from the unallocated new build programme to Trelawney Crescent (£30,259), Marham House (£6,589) within the 2018/19 programme;

-       landscaping and boundaries reallocated into CO Detector Installation (£40,826), Communal Hardstanding (£118,150) and communal electrics (£23,202);

-       new services reallocated into Decent Homes (£11,481) and CO Detector Installation (£7,961) in 2018/19;

-       the 2018/19 wall structure repairs (£6,951), over bath showers (£28,003), asbestos surveys (£51,457), plastering (£222,854), adaption works (£28,916), landscaping and boundaries (£110,623), void capitalised works (£26,555)  programmes moved into uncommitted resources.

 

·         Reported that the overall spending on the Housing Investment Programme for 2018/19 was £24,985,322 which was 79.42% of the revised 2018/19 programme, as per the Medium Term Financial Strategy 2018-23. It was noted that the following should be considered alongside these figures:

 

-       due to external factors, work programmed on individual flat fire door sets a Shuttleworth House for £739,000 was only around 30% complete at the end of the financial year;

-       the budget included £18.3 million for the 2018/19 New Build Programme. £15.6 million had been spent on the new build programme including homes at Allenby, Westwick, Ingleby and Lytton Street, further budget had been earmarked for the DeWint Extra Care facility which was approved during 2018/19.

-       the budget included £3 million for land acquisitions, of which £1.9 million had been spent in 2018/19. The remaining budget of £1.1 million had been allocated against the Western Growth Corridor Scheme to fund the Housing Investment Programme contribution towards the scheme.

 

·         Invited members’ comments and questions.

 

Question: In relation to car parking, was the shortfall in budget rather than a shortfall in actual income?

 

Response: That was correct, the shortfall was solely budgetary and not actual income. An estimate was made at the beginning of the last financial year based on a number of assumptions. Car parking income had actually increased, but the level of increase was performing lower than what had been originally estimated. The Council’s car parking income in 2017/18 totalled £4 million whereas 2018/19 saw a 25% increase with income totalling £5 million.

 

Comment: When the city centre development works were completed this would hopefully generate more car parking. These works must have had an impact on the number of people parking in the city.

 

Response: The Medium Term Financial Strategy had reduced car parking targets to reflect the impact of the city centre development works but had also increased the target upon anticipated completion of the works, acknowledging that these and wider improvements to the city would attract more people.

 

Question: Where was funding taken out of reserves, such as the tree risk reserve and park improvement funding, allocated to? Were there any updates regarding the park improvement funding and the costs associated with the Boultham Park project?

 

Response: Funding in respect of the tree risk reserve had been taken out to pay for associated works and had not been allocated to anything else. The park improvement fund represented a one-off grant that had been received at the end of the financial year. This had to be spent on parks and play areas and officers were currently considering how this fund should be applied. With regard to Boultham Park and the costs associated with this particular project, this was still the subject of dispute but the matter was coming towards a conclusion.

 

Question: Problems had been experienced with a barrier not working at the Central Car Park, which was not the first time such a fault had occurred. When would this fault be repaired?

 

Response: A decision had been taken to order two new barriers so that if one failed again in the future it could be changed straight away and not result in some of the congestion that this particular error caused. If they continued to fail consideration would be given to other options in order to address the issue.

 

Question: Car park ticket machines had not been working across the city, which a number of people had complained about. When would this be addressed?

 

Response: Car park ticket machines worked for cash payments, but the card payment facility had been unreliable due to poor mobile signal which they operated from. In the last couple of months broadband connection had been introduced at Lucy Tower Street car park, which had significantly improved their operation. Broadband would be rolled out to other car parks in due course and new ticket machines had also been ordered, with a view to moving to a cashless operation in the future on the basis that this was a better business model and would not require the physical emptying of cash from machines.

 

Question: With a view to maximising the Council’s car parking stock, it was understood that a car park strategy was in the pipeline. Would this strategy be considered by members?

 

Response: The Council’s Transport Strategy had been in place for four to five years and aspired to have four large multi-story car parks around the city centre and redevelop the authority’s flat car parks. There were now three multi-story car parks in the city and it remained an aspiration to achieve a fourth in the north of the city. The content of the countywide transport strategy, due to be approved later this year, would need to be considered as part of the development of the Council’s Car Parking Strategy. This proposed strategy, once developed, would be presented to and considered by members.

 

Question: It was pleasing to see that funding had been approved for the procurement and development of a new website. Had a launch date been set?

 

Response: This would be clarified outside of the meeting.

 

Question: Was the Council ensuring it was keeping track of all money spent in relation to the Western Growth Corridor, given it was a scheme that did not currently have planning permission?

 

Response: The Council was keeping a record of all money spent in relation to the Western Growth Corridor scheme in respect of revenue incurred and capital expenditure. No capital costs had yet been incurred, but a full record of revenue expenditure relating to the scheme could be shared with members.

 

Comment: In order to attract more people into the city further consideration should be given to the introduction of parent and toddler spaces.

 

Response: The inclusion of parent and toddler spaces had been considered, particularly regarding the development of the Central Car Park, but most feedback from across the country was that such facilities were heavily abused.

 

Comment: The Chair suggested adding the car parking income generation strategy, which consisted of five strands, to the Performance Scrutiny Committee’s work programme for its meeting in August. This was agreed.

 

Question: Was the commercialisation aspect of the Towards Financial Sustainability Programme about selling the Council’s services?

 

Response: This encompassed a range of projects and schemes under the commercialisation agenda which had achieved £833,680 to date, details of which would be shared with members. Future projects under this agenda would be reported to the Executive in due course.

 

It was RESOLVED that the report be noted and an item on the car parking income generation strategy be added to the Committee’s work programme for consideration in August 2019.