Agenda item

The Assistant Director of Finance introduced the item and provided an overview of the report.  

Members were informed that the report was an update on the latest budget forecasts for the General Fund, Housing Revenue Account (HRA) and capital programme for the 2024/2025 year, based on the half year performance from April 2024 to September 2024 inclusive.  

It was explained that there was some movement in the individual budget forecasts but that the latest position in the general fund remained unchanged from Quarter one with effectively a balanced budget at Portfolio Holder level. 

The HRA account forecast deficit had increased by £78,000 to £200,000 and the capital programme had increased by £300,000 subject to the approval of the recommendations in the report.  

The approval of a further £75,000 for the refurbishment of the Salisbury Arcade in Totton would support the regeneration of the area by enhancing the overall appearance of the area whilst also linking to two of the Council’s adjoining assets. This would be funded via the reallocation of resources from another scheme. 

The third recommendation, for a £375,000 supplementary budget for the Hardley Depot scheme, was due for abnormal ground works and approval of this would ensure a modern, fit for purpose Council asset. 

The pay award for 2024/2025 had now been concluded and members were reassured that sufficient budget exists to meet the increased in-year pay costs.

New variations to the general fund and HRA included pressures on income streams, totalling £350,000, relating to car parking income and planning fees. This was in spite of an overall increase in parking income and the Council’s ability to charge more for planning services following the rise in national set planning fees. 

Operational pressures of £90,000 regarding agency staffing and vehicle hire costs affected the Street Scene services. This was due to sickness levels and vacancies, resulting in more expensive agency costs. The Council’s aging fleet also required more repairs and maintenance.  

Necessary ICT cloud storage costs were greater than budget and there had been a spike in insurance costs following a sustained period of lower premiums. These pressures affected both the general fund and HRA with £175,000 increase relating to the General Fund and a £78,000 increase relating to the HRA. The £78,000 increase made up the total movements in adverse variances in the HRA and was uncontrollable by the service. 

The Council’s fuel costs were 15% lower than budget, resulting in a saving of £30,000 in first half of the year. Furthermore, the Council continued to benefit from holding cash balances in a relatively high interest rate environment, which provided an additional £400,000 of interest earnings.  

Further mitigation of the General Fund pressures came from vacancies within the Revenue and Benefits and Support and Planning services, totalling £185,000, resulting in a balanced budget forecast for the General Fund. 

The Portfolio Holder for Finance and Corporate commented on the report and highlighted that the £75,000 supplementary budget for the Salisbury Arcade was an excellent, deliverable project and would continue to be improve a capital asset that generated income for the Council whilst enhancing the wider area of Totton.  

A briefing on Hardley Depot was provided to all members recently where it was explained that building costs had increased since the start of the project. The Portfolio Holder explained that although the supplementary budget was not desirable it should be considered relative to the overall cost of the project (£7million). The project would deliver a modern, fit for purpose facility and it was acknowledged that the new design would enhance staff safety by preventing the need for large vehicles to reverse on site.  

Non-executive members commented on the design of the project and how some of the extra costs were attributed to the gas network. It was explained by the Strategic Director, Corporate Resources, S151 and Transformation that delays from the utility providers (gas and water) had added £110,000 of extra costs to the project. 

RESOLVED: 

That Cabinet –  

1.     Noted the latest budget forecasts of the General Fund, HRA and Capital Fund. 

2.     Approved the £75,000 supplementary budget for the Salisbury Arcade, Totton scheme funded via a corresponding reduction in the Council’s Revenue Contribution to Capital Outlay (RCCO) and Milford-on-Sea Public conveniences capital scheme.  

3.     Recommend that Council approve the £375,000 supplementary budget for the Hardley Depot scheme as a result of abnormal groundworks.