Agenda item

The purpose of this report is to apprise the Housing and Wellbeing Committee of its forecast out turn against the 2023/24 budgets, which were approved by Full Council at its meeting of the 9 March 2023.

The Interim Financial Services Manager was invited by the Chair to present the report.  He highlighted Table 1 that set out the 2023/24 revenue out turn forecast  as at Quarter 1, which anticipated an underspend of £400,000; and  the forecast outturn position for the HRA at Table 3 that would result in an overspend of £179,000.

The Chair then invited questions and comments from members. 

·     It was asked whether the deficit in the HRA account was due, in part, to the number of agency staff currently employed by the council and how the Council intended to reduce reliance on agency staff?  The Interim Head of Housing confirmed the number of agency staff employed within the Housing Service was continuing to reduce and would reduce further in the next two months.

·    The Group Head of Housing and the Interim Financial Services Manager undertook to investigate the reasons for the £50,000 compensation costs and provide members with  a written answer.

·    The Interim Financial Services Manager advised that contract renegotiations between  Freedom Leisure’s utility suppliers had reduced their rates.  As at the end of Quarter 1 there been no decease in income expected from Freedom Leisure.

·    The Interim Financial Services Manager undertook to provide further details of the underspend regarding the vacant post, at paragraph 3.4 of the report, and if the vacancy had resulted in a negative impact on the service.

·    The Interim Financial Services Manager undertook to provide details to members, outside of the meeting, of the timing difference between budget setting and the beginning of the financial year for the £40,000 variance.  The council’s budget had been revised after the close of the 2022-23 accounts and any underspends rolled forward to the current financial year, ensuring current schemes in the work programme can still be delivered. He undertook to provide more detail concerning the revised Capital budget relating to Housing Improvements and Stock Development, outside of the meeting.

·     The Interim Group Head Housing added that the variance was the result of a more focused approach to undertake repairs and maintenance where properties were reaching their end of life.  The boiler replacement programme would meet the Council’s  decarbonisation targets in terms of sustainable solutions as these solutions were introduced.

·    The Interim Financial Services Manager explained that whilst the Housing Revenue Account reserve had fallen below the £2m threshold, steps were being taken to address the deficit.  It was anticipated it would take three to four years to bring back into balance, the details of which were set out in the original council budget report.

·     Concern was expressed at the high cost of Deprecation, and it was asked how long it would be before positive results were seen?  The Interim Financial Services Manager advised that depreciation had already reduced by £1 million during 2022-23.  Officers would continue to review the Depreciation Policy and both Housing and Finance would work together to look into the impact.

·     Concern was expressed about the void’s figures and the loss of rental income and the importance of bringing these properties back into use was expressed. The Interim Financial Services Manager advised the voids figures related to a standard 2.5% assumption for  a loss in housing rental income each year and stated this percentage was standard across every local authority.  He also confirmed that garage rents had last been reviewed during 2022-23.

·     A breakdown of the compliance work taking place as part of budget monitoring was requested, with concern expressed that the work undertaken was either not required,  the council was paying too much for this work or was not being carried out to a good standard.  The Interim Group Head Housing confirmed compliance was a statutory requirement, with certain functions required to ensure the safety of residents.  The Regulatory Notice had recently been removed and officers were confident the service was now following processes appropriately.  Having achieved the standards required by the Regulator and the recommendations of the independent consultant.  He confirmed all sub-standard work should be reported to the council to be investigated.  The Council had a good inspection regime to check the required work is undertaken.  Councillor Bicknell referred to a meeting compliance he had requested with officers.

·     There was concern that some information requested by members, to enable them to make an  informed decision, had not been forthcoming from officers.

·    The Interim Financial Services Manager confirmed that the Council’s Depreciation Policy was agreed by the Audit and Governance Committee and published on an annual basis prior to the close of accounts. It was reviewed on an annual basis to ensure any depreciation charged to the Revenue account was in line with expectations.  A benchmarking exercise was carried out against other local authorities. 

·     A non-member of the committee was allowed to make comment and ask questions.  He shared most of the concerns expressed by members.  He expressed concern as to the number of variants to the forecast already made during Quarter 1 and advised some of the figures he had challenged with officers.  However, he was pleased to see the costs for Leisure Management had reduced.  Referring to paragraph 3.10, he asked why costs had increased above budget despite agency staff decreasing?  He asked officers and the Committee how they would guarantee the savings, detailed at paragraph 3.11, would be made.  More confidence was needed that the budget will be put on a positive trajectory.  The Interim Group Head of Housing explained that agency costs were not in included in the budget for established salaries and were not budgeted for.  Therefore, any agency costs would create an overspend.  Work carried out so far had led to improvements and a £1million adjustment being made.  Financial Services had already achieved a considerable improvement, supported further by work taking place on the Service Plan to identify savings across the operational area.  

·     In response to a question asking if there would be a reduction in the quality of the service with front loaded expenditure on agency costs, the Interim Group Head of Housing clarified that, once agency staff were replaced with permanent staff, costs reverted back to those allowed for in the base budget.  When preparing the budget officers identified the expected overspends and looked for underspends elsewhere to mitigate the impact.  It would not result in a reduction in staff.

The Committee noted the report.