Agenda item

 

To present the second quarter’s performance on the Council’s General Fund, Housing Revenue Account, Housing Repairs Service and Capital Programme.

 

Decision

 

That the Executive:

 

(1)       Notes the progress on the financial performance for the period 1 April 2019 to 30 September 2019 and the projected outturns for 2019/20.

 

(2)       Notes the underlying impact of the pressures and underspends identified in paragraphs 3.2, 4.2 and 5.2 of the report, as set out in Appendices B, D and F respectively.

 

(3)       Approves the changes to the General Investment Programme and Housing Investment Programme as detailed in paragraphs 7.4, 7.5, 7.11 and 7.12 of the report.

 

(4)       Approves the proposed contributions to and from reserves.

 

 

None.

 

 

Updates were reported as follows:

 

General Fund Revenue Account

 

For 2019/20 the Council’s net General Fund revenue budget was set at £13,655,090, including a planned contribution from balances of £554,410, resulting in an estimated level of general balances at the year-end of £2,452,134.

 

The General Fund summary was currently projecting a forecast overspend of £86,698, as set out in Appendix A of the report. This forecast variance was the result of a number of forecast year-end variations in income and expenditure against the approved budget. Full details of the main variances were provided in Appendix B of the report while the key variances were noted as follows:

 

·         Housing Benefit overpayment reduction income - £368,000;

·         Houses in Multiple Occupation reduced income - £74,260;

·         Interest Payable reduced expenditure - £200,000

·         Crematorium additional income - £125,990

·         Car parking income - £119,000

 

The most significant of the forecast variations was the reduction in the level of housing benefit overpayment being raised. Whilst this was positive in that the number of overpayments were reducing, this in turn created a budgetary pressure. This was a continuation of a trend from 2017/18 and 2018/19 with the transition of benefits customers to Universal Credit and the use of ‘real time’ information which meant that the level of overpayments raised had drastically reduced. The budget pressure was as a result of the consequential reduced income from reclaiming the overpayment from the claimant and would require a budget realignment as part of the Medium Term Financial Strategy.

 

Although forecast outturn for the General Fund was a shortfall of £86,698, at this stage in the financial year forecast outturns were difficult to predict and often subject to volatility. This would continue to be monitored, with a further report to the Executive on this issue as part of the quarter three update report.

 

Further to  additional contributions from reserves there were also a number of contributions from earmarked reserves that were required, subject to outturn, as set out in paragraph 3.5 of the report.

 

Towards Financial Sustainability Programme

 

The savings target included in the Medium Term Financial Strategy for 2019/20 was £4,650,000. Progress against this target, based on quarter two  performance, showed that secured and confident projections totalled £4,631,710, which resulted in a current forecast under achievement of the target in 2019/20 of £18,290. Work was currently underway through the Towards Financial Sustainability Programme Board to progress a further phase of year six projects, with a summary of the current position illustrated in paragraph 3.7 of the report.

 

Fees and Charges Income

 

Income from fees and charges represented a significant proportion of income to the Council, with primary sources being from car parking, development management and building regulations. A summary of the progress of these key income streams against the approved budget, together with the actual variance for the second quarter of the financial year, was provided at paragraph 3.8 of the report.

 

Housing Revenue Account

 

For 2019/20 the Council’s Housing Revenue Account net revenue budget was set at £52,040, resulting in an estimated level of general balances at the year-end of £1,075,141.

 

The Housing Revenue Account was currently projecting an in-year underspend of £610. This forecast variance was the result of a number of forecast year-end variations in income and expenditure against the approved budget.

 

Full details of the main variances were provided at Appendix D of the report whilst the key variances were summarised below:

 

·         Staff Vacancies – Reduced Expenditure of £202,000;

·         Increased Repairs Costs (Offset from HRS Surplus) £234,000

·         Council Tax – Increased Expenditure £67,000

·         Increased Depreciation re Revaluations £328,000

·         Increased Interest Payable on Borrowings £73,000

·         Decreased DRF Contribution £392,000

·         HRS Surplus – Additional Income £200,000

 

Housing Repairs Service

 

For 2019/20 the Council’s Housing Repairs Service net revenue budget was set at zero, reflecting its full cost recovery nature.

 

At quarter two the Housing Repairs Service was forecasting a surplus of £200,000 in 2019/20, with a summary and details of main variances set out in Appendices E and F respectively.

 

General Fund Investment Programme

 

The last quarterly report approved a General Fund Investment Programme for 2019/20 of £14,977,453. Movements in the programme during the second quarter had decreased overall planned expenditure in 2019/20 to £14,755,906. A summary of overall changes to the programme was set out in paragraph 7.2 of the report.

 

There were no changes that required Executive approval for quarter 2.

 

New projects recommended by the Capital Programme Group were subject to Executive approval, as follows:

 

·         Broadgate Car Park asbestos removal and Dryrise Works - £20,000

·         City Hall Toilet Improvements - £10,838

·         Bridge works in West Common - £8,000

·         Michaelgate Structural Works - £10,000

·         Yarborough Leisure Centre Teaching Pool Pipeworks - £17,300

·         Hartsholme Park Drainage Improvements

 

The overall spending on the General Fund Investment Programme for the second quarter was £8.57 million, which was 58.09% of the 2019/20 programme and 61.93% of the active programme and was detailed further at Appendix J of the report.

 

Housing Investment Programme

 

The last quarterly report approved a Housing Investment Programme for 19/20 of £19,123,929. Movements in the programme since had increased overall planned expenditure in 2019/20 to £20,629,324. A summary of the changes were shown at paragraph 7.9 of the report.

 

The changes that required approval from Executive were detailed at Appendix K of the report and summarised as follows:

 

·         Movements back to available resources from;

o   Over bath showers 19/20 £433,656

o   Thermal Comfort Works 19/20 £129,297

o   Rewiring 19/20 £130,000

o   Wall structural repairs 19/20 £20,000

o   Decent Homes Decoration Allowances 19/20 £13,638

o   Canopy and Porches 19/20 £14,548

·      Movements from available resources into

o   Hermit Street regeneration 19/20 £18,725

o   Fire Alarms 19/20 £40,000

 

Expenditure against the Housing Investment Programme budget during the first 2 quarters was £4.83 million, which was 23.16% of the programme, the expenditure was detailed further at Appendix L to the report.

 

Although this would appear to be low at this stage of the financial year, the following points should be considered:

 

·         An element of the programme in 2019/20 was the De Wint new build scheme and Markham House, construction was yet to commence.

·         11 property acquisitions were yet to complete.