Agenda item

Budget Monitoring

This report is for information and relates to the quarter one budget monitoring position as reported to Cabinet on 12 September 2017.



Rita Bacheta, Senior Business Partner, introduced the report as set out and commenced her presentation by providing an overview of the budget monitoring position for Corporate Plan Priorities 4 and 5.


The Panel was informed, as of 30 June 2017 (Quarter 1), Priorities 4 and 5 were projecting an overspend of £0.959. It was noted the Housing Revenue Account (HRA) was projecting an overspend of £0.4m.    


Ms Bacheta provided further information on the overspend of £0.17m for Priority 4, the overspend of £0.80m for Priority 5 (General Fund), and the £0.4m overspend for Priority 5 (HRA).


The following points were noted in relation to Priority 4:


-       An overspend of £0.25m was largely due to an unmet saving which had extended employment of a team of commercial property valuers from March 2017 to March 2018. The Panel was informed that the majority of these posts would no longer be required once the HDV was established and when some commercial properties had been transferred.


-       It was noted that the overspend in this area had been offset by £0.08m from an overachievement of planning income and an additional contribution from NWLA to staff costs.


The following points were noted in relation to Priority 5 (General Fund):


-       There was a projected £0.60m overspend in in-borough private sector leases; £0.70M overspend in bed and breakfast accommodation and a £0.40m underspend in supplier managed private sector leases.


-       It was noted the service had identified a number of actions in order to reduce the projected overspend by year end. For example, the Panel was informed that officers were in dialogue with providers in order to deliver further shared facility hostels in 2017/18. Officers also explained they were in dialogue with providers to deliver further shared facility hostels in 2017/18. Work was also underway with various landlords to ensure retaining existing and sourcing future leased accommodation. It was also noted that there were various options being explored to increase supply and acquisitions.


In terms of the HRA, the following points were noted:


-       The income shortfall related primarily to income receivable from garage lets. It was noted officers were in the process of drawing up an action plan to address this.


-       Waste management costs had increased due to contract inflation. However, it was noted this had been offset by a lower than anticipated charge in landlord insurance costs. The Panel was informed that these charges would be reflected in Tenant and Leaseholders’ service charges.


-       Outstanding debt remained in relation to water rates. It was noted the contract with Thames Water continued to create financial pressures for the HRA. This was because the HRA had to bear costs of non-payment of bills which could not be passed back to Thames Water.


During the discussion, the Panel was informed of a recent court case which had ruled against Southwark Council for a longstanding agreement with Thames Water. The Panel was informed Southwark had collected water charges along with tenant’s rents. As a result, tenants did not deal directly with the water company as the Council had managed both billing and collection of payments. It was noted that a recent court case had challenged this arrangement and the commission the Council received from Thames Water for collecting water charges on their behalf. The court ruled that Southwark  had acted as a 'water reseller' and had overcharged tenants. As a result, Southwark was paying this money back. The Panel was informed Homes for Haringey was looking closely at this case and what the decision might mean for Haringey.


In response to questions about the capital expenditure forecast, the Panel was informed that at Quarter 1, the capital programme for Priorities 4 and 5 was forecasting an underspend of £46.6m. As set out on pages 13 – 15 of the agenda, the Panel was informed further scrutiny would take place to ensure any capital programmes were capable of being delivered and that resources were allocated for their delivery.


The Panel raised concerns about the delivery percentage on the capital programme and it was agreed further information should be made available in future scrutiny reports to show the difference between an underspend and slippage on projects. A range of issues were discussed in relation to expenditure and underspend. This included consideration of payments on Alexandra Palace Heritage and underspends in relation to Wards Corner CPO, the Marsh Lane relocation project, acquisitions in relation to High Road West, schemes in Tottenham Hale, Northumberland Park School, and the District Energy Network scheme. In response to questions, officers provided further information on the process for dealing with unspent money and how this would be carried forward. In terms of HRA capital stock investment, the Panel was informed money would be carried forward to help fund stock acquisitions as part of a detailed programme for 2018/19. 


Ms Bacheta concluded her presentation by providing information on the MTSF savings targets for 2017/18. The Panel was informed that at Quarter 1, it was projected £1.3m (84%) of the target would be achieved.


AGREED:  That the overview of the budget monitoring position for Priorities 4 and 5 be noted.    

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