Agenda item

The Budget Monitoring Report sets out the Capital, Housing Revenue and General Fund Revenue Budget performance to the end of September 2023.

The Group Head of Finance and Section 151 Officer presented to Members the Budget Monitoring Report to 30 September 2023.

          The report set out the General Fund Revenue Budget, Capital Programme and Housing Revenue Account (HRA) forecast outturn performance against budget as at the end of quarter 2. The Group Head of Finance and Section 151 Officer confirmed a revenue budget underspend of £136k and explained that this was an adverse change of approximately £500k from the previous quarter’s forecast. The forecast reported a nil variance against the transformation budget. The forecast variance explanations had been set out within the report. Mention was made of the £452k overspend against budget for the Planning Policy Committee because of a downturn in planning fee income. The Government had recently confirmed that planning application fee increases would be applied from 6 December 2023, which could have a positive impact on fee income for the remainder of 2023/24, though it was too early to confirm what the full impact might be. Homelessness continued to be a national issue and the Quarter 2 forecast overspend had increased by £300k due to expenditure on providing temporary accommodation. Work was progressing with Housing in terms of whether the recent announcements made in the Autumn Statement would have any material impact on the Council’s position regarding homelessness expenditure. There were smaller overspends across the revenue budget arising from staff vacancies and small amounts of income from beach hut income.

Looking at capital monitoring, this showed an underspend of £6.5m (23%) below the revised budget of £28.5m for the year. This was due to slippage on current schemes into the future financial year, the detail of which had been provided in Table 4 of the report. As reported to the Committee on 26 October 2023, the following schemes had been approved since Quarter 1 and added to the capital programme:

·       Littlehampton Harbour west wall works - £0.75 million

·       Warwick Nurseries and Boweries housing purchase scheme - £3.78 million

·       Bognor Regis Arcade project - £7.991 million

·       Waterloo Square scheme - £1 million

Turning to the Housing Revenue Account (HRA), the forecast showed a reserve balance of £902k by 31 March 2024, which was £281k below the budgeted position of £1.183m. Appendix B included the full report that had been taken to the meeting of the Housing & Wellbeing Committee held on 23 November 2023 setting out the reasons for this and the actions being taken to improve the position.

The Group Head of Finance and Section 151 Officer outlined that the £2m reserve figure, which had been set by the Council as its own target might need to be revisited and brought down to a more realistic figure. Of critical importance was to ensure that this account would not go overdrawn. Currently, it was a tough and challenging situation, and this had been very clearly outlined to Members at the meeting of the Housing & Wellbeing Committee. However, there was a plan, and this had been highlighted in Appendix B, outlining the measures that were being taken to ensure that the Council would remain within the financial parameters. The situation continued to be monitored very closely. A main contributing factor had been the additional cost of agency staff to cover vacancies, but this was now starting to reduce. There had also been issues with procurement which were being dealt with as part of the whole package of assessing and reacting to the repairs and maintenance issues within the HRA. An update on the HRA Budget for 2024/25 would be presented to Members in early 2024.

In finalising his presentation, the Group Head of Finance and Section 151 Officer confirmed that regarding the Revenue Budget, this was on broadly on target at the halfway point. When budget issues had been identified, Officers had reacted quickly to mitigate the problems. Turning to the Autum Statement, it had not revealed any positive indications of additional funding to be announced as part of the Local Government Finance Settlement which was due later this month. 

          The Chair then invited questions from Members. The first question related to the Littlehampton Harbour west wall works and reference was made to correspondence that had been sent by the Joint Interim Chief Executive to the Chief Executive of the Littlehampton Harbour Board earlier on in the day but not provided to Council Members sitting on the Harbour Board. The letter set out the Council’s concerns over financial matters. A request was made that the letter to the Harbour Board outlining the concerns be provided to Members. The Joint Interim Chief Executive and Director of Environment and Communities confirmed that an explanatory email had been sent to Arun Councillors in their capacity as nominated representatives of the Littlehampton Harbour Board but that this was not an appropriate item to raise at this meeting.

          Other questions asked related to Homelessness, and how this would be budgeted as costs continued to increase. Reassurance was provided that the issue was being addressed in detail as part of 2024/25 revenue budget setting process. Discussions were taking place with the new Group Head of Housing who had now commenced his employment.

          Concern was expressed over the continuing problems being experienced in recruiting permanent staff and what was being done to tackle this long-term problem and to attract people and encourage them to work in local government. The Group Head of Finance and Section 151 Officer responded confirming that staffing costs and positions were being scrutinised very closely by the Corporate Management Team to discuss which posts the Council could recruit to. This was a national problem and many organisations now relied upon agency workers as many people now preferred to work as interims. The council was also undertaking a lot of apprenticeship work to broaden skills which was being successful in certain areas of the council such as Planning where there had been long term staff shortages. The transformation work and excellence programme was looking at how Arun could become the type of organisation that people would want to join undertaking work on culture and staff engagement. There were specific activities that were being promoted and recruitment was one of these. 

          A question was asked that looked back to the Special Council meeting held in March 2023, where it had been proposed to not increase council tax. The Group Head of Finance and Section 151 Officer was asked what position this would have put the Council in and what were Officers doing to prevent this suggestion coming forward again. The Group Head of Finance and Section 151 Officer repeated the advice he had provided at that time which was that he strongly advised against freezing council tax because there would almost certainly be no opportunity to replace that funding and the financial impact would increase year on year. He also stated that he would be giving the same advice again as part of the 2024/25 budget setting process.

          The Committee then noted the content of the report.

(During the course of the discussion on this item, Councillor Walsh declared a Personal Interest as a Member of the Littlehampton Harbour Board).