Appendix 1
Executive Summary Page 2
Part A: Second Quarter Revenue Budget 2019/20
A1) Revenue Budget: Council Page 4
A2) Revenue Budget: Communities, Housing & Environment Page 5
A3) Revenue Budget: Significant Variances (>£30,000) Page 7
Part B: Second Quarter Capital Budget 2019/20
B1) Capital Budget: Council Page 10
B2) Capital Budget: Communities, Housing & Environment Page 10
This
report provides Members with an overview of progress against the 2019/20
revenue and capital budgets as at 30th September 2019 (i.e. the Quarter 2
cumulative position) for the services falling within the remit of the
Communities, Housing and Environment Committee (CHE). The analysis also
includes both revenue and capital year-end projections (to 31st March 2020) for
CHE services, as well as some important context, with consideration given to
the Council’s overall position.
The headlines for Quarter 2 are as follows:
Part A: Second Quarter Revenue Budget 2019/20
· Overall net expenditure for the services reporting to CHE is £3.563 million, compared to the profiled budget of £4.169 million, representing an under spend of £605,000. CHE is also expected to remain within its overall net revenue expenditure budget for the year, recording a small under spend of £126,000 against its annual budget of £8.972 million.
· Overall net expenditure for the Council is £6.813 million, compared to the profiled budget of £7.553 million, representing an under spend of £0.74 million. The Council is also expected to remain within its overall net revenue expenditure budget of £21.138 million for the year.
Part B: Second Quarter Capital Budget 2019/20
· Capital expenditure for the services reporting to CHE of £4.319 million has been incurred against the annual budget of £17.677 million. At this stage, it is anticipated that there will be slippage of £5.34 million.
· Capital expenditure for the Council overall of £5.443 million has been incurred against the annual budget of £51.754 million.
A1) Revenue Budget: Council
A1.1 At the Quarter 2 stage, overall net expenditure for the Council is £6.813 million, compared to the profiled budget of £7.553 million, representing an under spend of £0.74 million. Based on forward projections, the Council is expected to remain within its overall net revenue expenditure budget of £21.138 million for the year.
A1.2 The two charts below show the income and expenditure position for each service committee.
Chart 1: MBC Revenue Budget: INCOME BY SERVICE COMMITTEE
Chart 2: MBC Revenue Budget: EXPENDITURE BY SERVICE COMMITTEE
A2) Revenue Budget: Communities, Housing & Environment (CHE)
A2.1 Table 1 below provides a detailed summary on the budgeted net expenditure position for CHE services at the end of Quarter 2. The financial figures are presented on an ‘accruals’ basis (e.g. expenditure for goods and services received, but not yet paid for, is included).
Table 1: CHE Revenue Budget: NET EXPENDITURE
A2.2 The table shows that, at the Quarter 2 stage, overall net expenditure for the services reporting to CHE is £3.563 million, compared to the profiled budget of £4.169 million, representing an under spend of £605,000. Based on forward projections, CHE is expected to remain within its overall net revenue expenditure budget for the year, recording an under spend of £126,000 against a budget of £8.972 million.
A3) CHE Revenue Budget: Significant Variances (>£30,000)
A3.1 Within the headline figures, there are a number of both adverse and favourable net expenditure variances for individual cost centres. It is important that the implications of variances are considered at an early stage, so that contingency plans can be put in place and, if necessary, be used to inform future financial planning.
A3.2 Table 2 below highlights and provides further detail on the most significant variances i.e. those meeting or exceeding £30,000, either at the end of Quarter 2, or expected to do so by year-end.
Table 2: CHE Variances >£30,000 (@ Quarter 2)
|
|
Positive Variance Q2 |
Adverse Variance Q2 |
Year End Forecast Variance |
|
Communities, Housing & Environment Committee
|
£000s |
||
|
Parks and Open Spaces – Residual undelivered savings of £63,000 in respect of a previous re-structure is the most significant factor in the over spend.
|
|
-35 |
-61 |
|
Crematorium – Higher than budgeted maintenance costs partly driven by un-accrued (maintenance) expenditure from 2018/19 (of £18,000) is the reason for the budget pressure at the Quarter 2 stage, although the budget is expected to be met by year end.
|
|
-60 |
+21 |
|
Recycling Collection – Savings from the purchase of wheeled bins (£31k April to September 2019) has been the biggest factor in lower than budgeted expenditure at the Quarter 2 stage. Current expenditure patterns are assumed to continue for the remainder of the financial year.
|
+40 |
|
+80 |
|
Community Environmental Engagement – The variance relates to the “Go Green, Go Wild” project, funded by the Business Rates Pilot initiative. The updated spending profile for the project envisages £31,000 being rolled forward into 2020/21 to fund a Community Engagement Officer post.
|
+31 |
|
0 |
|
Table 2 cont. |
Positive Variance Q2 |
Adverse Variance Q2 |
Year End Forecast Variance |
|
Communities, Housing & Environment Committee
|
£000s |
||
|
Homeless Temporary Accommodation – A positive variance has arisen at the Quarter 2 stage as savings are being realised due to the use of MBC properties for temporary accommodation (compared to the former use of third party providers). The savings realised will offset overspending elsewhere on MBC temporary accommodation properties.
|
+39 |
|
0 |
|
Homelessness Prevention – The variance at this stage is largely due to unspent Government Housing Grant. It is currently assumed that this will be spent by the year end, although any balance would be carried forward into 2020/21.
|
+216 |
|
0
|
|
Housing First Project – The variance relates to the “Housing First and Rough Sleepers” project, funded by the Business Rates Pilot initiative, which has been successful in housing 6 homeless people. The residual budget is now available to meet potential landlord liabilities upon the expiry of the tenancies and is being re-profiled to reflect this pattern.
|
+39 |
|
0
|
|
Depot Services Section – Lower employee costs are being experienced following the recent implementation of a staff re-structure.
|
+36 |
|
+30 |
|
Salary Slippage – This is a credit budget, which allows for service underspends on salaries, due to temporary vacancies arising from staff turnover. There is currently an adverse variance, which is expected to be offset by service underspends by the year end.
|
|
-49 |
-99 |
|
Fleet Workshop & Management – A reduced need for vehicle hire (saving £22,000, following the recent purchase 3 new sweepers) is the single largest item in reduced expenditure at the Quarter 2 stage, although the cost centre is expected to come in on budget, with no significant surplus, at year end.
|
+40 |
|
0 |
|
Grounds Maintenance Commercial – Additional income has been generated in this area from Section 106 funded works, and other external works.
|
+56 |
|
+86 |
B1) Capital Budget: Council
B1.1 The overall five-year Capital Programme for 2019/20 to 2023/24 was approved by the Council on 27th February 2019. Most capital funding will now come from prudential borrowing as other sources of funding are not sufficient to cover the costs of the Programme, although funding does continue to be available from the New Homes Bonus (NHB). At the time of preparing this report there has been no need to borrow, but it is anticipated that borrowing will be needed during the latter half of 2019/20.
B1.2 The 2019/20 element of the Capital Programme has a total budget of £51.754 million. At the Quarter 2 stage, capital expenditure of £4.608 million has been incurred.
B2) Capital Budget: Communities, Housing & Environment Committee (CHE)
B2.1 Progress towards the delivery of the 2019/20 CHE element of the Capital Programme at the Quarter 2 stage is presented in Table 3 below. The budget for 2019/20 includes resources brought forward from 2018/19.
B2.2 At the Quarter 2 stage, expenditure of £4.301 million has been incurred against a budget of £17.677 million. It is anticipated that there will be slippage of £5.34 million at year end (the Committee will be asked to approve/note the carry forward of resources into the next financial year).
Table 3: CHE Capital Programme 2019/20 (@ Quarter 2)
B2.3 The most (financially) significant items in the table above are as follows:
§ Indicative Schemes – The budget included provision for the purchase of a property initially valued at £1.2 million. However that purchase is no longer proceeding. In addition, updated cash flow projections for the Springfield Mill project anticipate slippage of £708,000 into 2020/21 (from a budget provision of £2.924 million). £100,000 is assumed to be spent in 2019/20 on feasibility works for replacement schemes
§ Housing – Disabled Facilities Grants – Expenditure on housing adaptations often does not match the Council’s financial year. The 2019/20 budget of £1.57 million is fully and includes allocations for a wider range of initiatives, including the “Helping You Home” scheme, operated in conjunction with Maidstone and Pembury hospitals
§ Housing Incentives – Historically this budget has been under-utilised. The proposal with regard to the current surplus is to utilize it for major refurbishment works at the Council-owned gypsy sites in order to modernize facilities and bring them up to a good standard; initial survey works have started. The future use of the Housing Incentives budget is to be considered within the updated Housing Strategy (scheduled for 2020); and
§ Flood Action Plan - The project specifications are currently being developed with the Environment Agency and the timing of the works has yet to be confirmed. At this stage it has been assumed that the majority (80%) of the budget will be carried forward into 2020/21.