General Services Revenue, Housing Revenue Account (HRA) and Capital Budget Monitoring CaH 20 08 24
Renfrewshire Council · 20 August 2024
Back to Communities and Housing Policy Board — 20 August 2024 and its agenda
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___________________________________________________________________ To: Communities and Housing Policy Board On: 20 August 2024 ___________________________________________________________________ Report by: Director of Finance and Resources & Director of Environment, Housing and Infrastructure ___________________________________________________________________ Heading: General Services Revenue, Housing Revenue Account (HRA) and Capital Budget Monitoring as at 21 June 2024 ___________________________________________________________________ 1. Summary 1.1 At the close of reporting period 3 on 21 June 2024, the projected revenue outturn at 31 March 2025 for those services reporting to the Communities and Housing Policy Board, including the Housing Revenue Account, is break-even against the revised budget for the year in General Services and a break-even position in the HRA. 1.2 The projected capital outturn at 31 March 2025 for projects reporting to the Communities and Housing Policy Board, is a break-even position. 1.3 This is summarised over the relevant services in the table below and further analysis is provided in the report and appendices. Revised Annual Budget £000 Projected Outturn £000 Budget Variance (Adv)/Fav £000 Budget Variance % Revenue Housing Revenue Account (HRA) 0 0 0 0.0% Housing – General Services (Non-HRA) 4,613 4,613 0 0.0% Communities and Public Protection 5,861 5,861 0 0.0% Criminal Justice 3,125 3,125 0 0.0% Total 13,599 13,599 0 0.0%
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Revised Annual Budget £000 Projected Outturn £000 Budget Variance (Adv)/Fav £000 Budget Variance % Capital Housing Revenue Account (HRA) 41,236 41,236 0 0.0% Other Housing PSHG 526 526 0 0.0% Total 41,762 41,762 0 0.0% ___________________________________________________________________ 2. Recommendations 2.1 Members are requested to: a) Note the projected Revenue outturn break-even position; and b) Note the projected Capital outturn break-even position; and c) Agree to homologate the budget adjustments detailed at sections 6.2 and 7.2; and d) Approve the budget adjustments proposed at sections 6.3. 3. Revenue Budget Projection – break-even by 31 March 2025 3.1 The tables in Appendix 1 present the projected year-end position for all services reporting to this board, by both subjective analysis (what the budget is spent on) and objective analysis (which division is spending the budget). Significant variances affecting the projected position are analysed further below. 3.2 It should be noted that the projected outturn position reported here is based on the latest information available, which is subject to change during the financial year. The impact of any change on this projection will be updated at each board cycle until the close of reporting period 10. Budget holders are obliged to seek mitigating action to minimise significant budget variances. 4. Objective Analysis – Significant Variances 4.1 Housing Revenue Account (HRA) - break-even by 31 March 2025 The HRA is projected to break-even overall in 2024-25. Demand for repairs to HRA premises including Void properties as well as the impact of a higher than budgeted level of void empty property costs, will in year be managed through higher than budgeted levels of temporary interest received. Overall, a favourable £0.346m is currently anticipated from a reduced level of projected drawdown from reserves, to break-even, it is proposed that this is allocated to the Housing Management Systems Replacement programme.
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4.2 Housing – General Services (Non-HRA) - break-even by 31 March 2025 The projected outturn for Homelessness within Housing – General Services Non-HRA, continues to be a risk over the remainder of the financial year, with demand on services being managed within existing resources at present, which included additional staffing being supported through migration and asylum funding streams allocated to the Council by the UK and Scottish Government. The significant potential increase in homeless presentations linked to asylum population in Renfrewshire and more widely across the West of Scotland, continues to create additional potential long-term financial pressures for Council services. Projections of these pressures will continue to be reviewed and reported to future Communities and Housing Policy Boards as required. 4.3 Communities and Public Protection - break-even by 31 March 2025 Employee costs are projected to underspend which is due to vacancies within the service, this area is under review with management. The underspend has been allocated against spend across other budget lines and overall, the service is projected to break-even at year end. 4.4 Criminal Justice - break-even by 31 March 2025 There are no significant variances to report. 5. Subjective Analysis – Significant Variances GENERAL SERVICES (excluding HRA) 5.1 Employee costs - £0.095m underspend by 31 March 2025 This is a combination of offsetting variances across services, for example, in Homelessness this is primarily underspent due to the timing of recruitment within the Homelessness Prevention service. Underspends within Public Protection are due to vacancies and are currently under review. The Community Learning and Development Service delivers externally funded programmes each year supported by employees requiring an increase in budgets. A temporary budget transfer is recommended to increase the employee costs budget by £0.200m within Community Learning and Development. 5.2 Premises Related costs - (£0.438m) overspend by 31 March 2025 This reflects the current levels of demand for Bed & Breakfast accommodation. While much of this is recovered by additional income recovered from Housing Benefits, it continues to be an area of concern within the Homelessness Service. A temporary budget transfer is recommended to increase bed & breakfast expenditure budget by £0.300m.
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5.3 Transport Related - (£0.025m) overspend by 31 March 2025 This will be offset by other minor anticipated underspends in the Criminal Justice budget. 5.4 Supplies and Services - (£0.287m) overspend by 31 March 2025 This includes (£0.168m) for one-off software and licencing costs within the Public Protection Service. Furniture costs within the Homelessness Service are projected to overspend and is consistent with the overall demand to support Homelessness cases. Finally, Community Learning & Development Service costs to deliver the externally funded programmes will be offset by additional external funding streams. A temporary budget transfer is recommended to increase the expenditure budget by £0.060m. 5.5 Income – over-recovery of £0.671m by 31 March 2025 This is partly due to the recovery of costs as income (£0.352m) from Housing Benefit for Bed & Breakfast accommodation. A temporary budget transfer is recommended to increase the bed & breakfast income budget by £0.300m. In addition, increased external funding secured within the Community Learning and Development Service has contributed (£0.260m) to this over- recovery. A temporary budget transfer is recommended to increase the external funding budget by £0.260m. HOUSING REVENUE ACCOUNT (HRA) 5.6 Employee costs - £0.258m underspend by 31 March 2025 The projected underspend in Employee costs reflects the timing of recruitment and the level of vacancies across the service, in particular within Housing Management. Additional costs associated with the development of the Single Voids Team are being managed within the overall budget. 5.7 Premises Related costs - (£0.955m) overspend by 31 March 2025 The level of demand for Repairs and Maintenance of HRA Properties remains high, especially within Void properties at present with additional focus on this area. In addition, increased Utility costs are contributing £0.183m to this overspend. The cost of Special Uplifts has increased this year and will continue to be monitored throughout the year. A temporary budget transfer is recommended to increase the Repairs & Maintenance budget by £1.000m.
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5.8 Transfer Payments - (£1.051m) overspend by 31 March 2025 A higher than budgeted level of void rent loss at the start of the year is the main reason for this overspend being the loss of rental income when properties are empty. The implementation of the Single Voids Team will directly manage this issue, with a view to minimising this loss throughout this and future years and reverting to budget levels. A temporary budget transfer is recommended to increase the void rent loss budget by £0.750m. The overall HRA revenue projections at this time will allow for a reduction of £0.346m in the budgeted drawdown from the HRA Reserve in year. At year- end this will increase the available Reserve balances for future commitments, such as the Housing Management Systems Replacement Programme. 5.9 Income - over recovery of £1.738m by 31 March 2025 Higher than anticipated interest rates nationally are generating a significant over-recovery on the level of temporary interest received. A temporary budget transfer is recommended to increase the income budget by £1.750m and to fund the increases in expenditure budgets noted above. 6. Revenue Budget Virements 6.1. Under the Council’s financial regulations, Directors, and their nominated officers, in consultation with the Director of Finance and Resources, have certain delegated authority to transfer sums between subjective budget headings within a service division to enable budget management throughout the financial year. This is known as ‘budget virement’. 6.2. Transfers between divisions of the same service / department in excess of £100,000, and transfers between services / departments must be authorised by the respective service Director and the Director of Finance and Resources for submission to the relevant policy board for approval. Since the last board reporting period, the Director now seeks homologation from the Board for the following affected virements: Revenue Budget Adjustments Objective Heading Subjective Heading Amount (£m) Reason Housing - General Services (Not HRA) Employee Costs 0.269 Refugee Resettlement Programme alignment of Budgets to reflect projected costs and grant funding. Supplies & Services 0.145 Various other 0.052 Income (0.466)
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Housing - General Services (Not HRA) Supplies & Services (0.390) Private Sector Housing Grant alignment to reflect the profile of expenditure and allocation of funding from Capital and Reserves. Various other 0.116 Income (0.274) Housing - General Services (Not HRA) Employee Costs 0.136 Transfer to Homelessness staff team from Customer Services. HRA Employee 0.474 Asset Investment Team increase in employee costs funded from Capital to deliver investment plans. Income (0.474) HRA Premises costs 0.586 Repairs & Maintenance rationalisation of budgets under premises costs to reflect recharges. Third-Party (0.586) Communities and Public Protection Income 0.298 Transfer of Lets Income budget to Environment and Infrastructure Department. Communities and Public Protection Employee Costs (0.086) Transfer of staff from Public Protection to Finance and Resources. 6.3. Budget holders are obliged to seek mitigating action to minimise significant budget variances. The Board is therefore asked to approve the following virements, which are not currently applied to the budget: Revenue Budget Adjustments Objective Heading Subjective Heading Amount (£m) Reason Housing - General Services (Not HRA) Premises Related 0.300 Homelessness temporary alignment of Bed and Breakfast costs and income. Income (0.300)
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Revenue Budget Adjustments (continued) Objective Heading Subjective Heading Amount (£m) Reason HRA Premises costs 1.000 Temporary realignment of offsetting budget variances as detailed in section 5. Transfer Payments 0.750 Income (1.750) Communities and Public Protection Employee costs 0.200 Temporary realignment of costs funded by external income streams. Supplies & Services 0.060 Income (0.260) 7. Capital Budget Projection – break-even position by 31 March 2025 7.1 The Non-Housing Capital Investment Programme 2024/25 to 2028/29 was approved by the Council on 29 February 2024. For Communities and Housing Service the revised capital spend for 2024/25 is £41.762m. 7.2 The in-year Capital budget is forecast to break-even by 31 March 2025, a budget adjustment between years has taken place, to reflect revised programming of some capital projects. Details of the adjustment, which amount to (£0.118m), are as follows: Capital Budget Adjustments Project Amount (£m) Reason Private Sector Housing Grant Programme (0.118) Budget brought forward from 2024/25 into 2023/24 to reflect update programme timing. Implications of the Report 1. Financial The projected budget outturn position for Finance, Resources and Customer Services’ Revenue budget is a break-even position at 31 March 2025. The budget virements proposed in section 6.3, subject to approval, will be reflected in the next policy board report. Income and expenditure will continue to be monitored closely for the rest of the financial year and as far as possible, steps will be taken to mitigate any overspend. The projected outturn position for Communities and Housing Services Capital budget is break-even, after the adjustments outlined at section 7.
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2. HR & Organisational Development While staffing budgets form a significant proportion of the Council’s revenue budgets, there are no direct implications arising from the recommendations in this report. 3. Community/Council Planning Community Plan Our Renfrewshire is thriving The Council’s revenue and capital spend ensures that its facilities are fit for purpose and safe for the community, to maximise accessibility. Our Renfrewshire is well Our Renfrewshire is fair Our Renfrewshire is safe Council Plan Reshaping our place, our economy and our future The Council’s revenue and capital spend ensures that its facilities are fit for purpose and safe for the community, to maximise accessibility. Building strong, safe and resilient communities Tackling inequality, ensuring opportunities for all Creating a sustainable Renfrewshire for all to enjoy Ongoing revenue and capital budget monitoring is a tool to enable good financial management so that the Council has resources now and in the future for continued service delivery. Working together to improve outcomes 4. Legal There are no direct implications arising from the recommendations in this report. 5. Property/Assets The capital expenditure noted in this report will result in lifecycle maintenance improvements to existing properties and replacement of ICT assets and infrastructure. 6. Information Technology ICT assets and revenue costs are included within these reported budgets, and the costs associated with the replacement of the Housing Management system will have both an ongoing revenue and capital budget impact. 7. Equality & Human Rights While new areas of spend may impact on particular groups, any such impact would be assessed prior to the spend being incurred, therefore there are no direct implications arising from the recommendations in this report.
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8. Health & Safety The capital expenditure noted in this report will result in lifecycle maintenance improvements to existing properties and replacement of ICT assets, which may in some cases rectify health and safety issues. 9. Procurement While Procurement is an important consideration prior to the Council incurring any revenue or capital spend, there are no direct implications arising from the recommendations in this report. 10. Risk The potential financial risk that the Council will overspend its approved revenue budgets for the year is managed at a Council-wide level by the Chief Executive and Directors. 11. Privacy Impact There are no direct implications arising from the recommendations in this report. 12. Cosla Policy Position N/a 13. Children’s Rights There are no direct implications arising from the recommendations in this report. 14. Climate Change The Council aims to reduce its carbon and other emissions to net zero by 2030, however there are no direct implications arising from the recommendations in this report. List of Background Papers • Housing Revenue Account Budget & Rent Levels 2024/25 and Housing Capital Investment Plan 2024/25 to 2028/29, Council 29 February 2024. • Non-housing Capital Investment Programme, prudential Framework and Treasury Management Strategy, and Capital Strategy 2024/25 – 2028/29, Council 29 February 2024. Author: John Kilpatrick, Finance Business Partner; Linsey McGregor, Capital Accountant.
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Objective Summary Approved Annual Budget Budget Adjustments Revised Annual Budget at Period 3 Projected Outturn Budget Variance (Adverse) or Favourable £000 £000 £000 £000 £000 % Housing Revenue Account (HRA) 0 0 0 0 0 0.0% Housing – General Services (Not HRA) 4,548 65 4,613 4,613 0 0.0% Communities and Public Protection 5,771 90 5,861 5,861 0 0.0% Criminal Justice 3,188 (63) 3,125 3,125 0 0.0% NET EXPENDITURE 13,507 92 13,599 13,599 0 0.0%
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Subjective Summary (General Services – excl HRA) Approved Annual Budget Budget Adjustments Revised Annual Budget at Period 3 Projected Outturn Budget Variance (Adverse) or Favourable £000 £000 £000 £000 £000 % 11,391 48 11,439 11,344 95 0.8% Premises Related 1,880 15 1,895 2,333 (438) (23.1%) Transport Related 171 16 187 212 (25) (13.4%) Supplies and Services 2,852 (221) 2,631 2,918 (287) (10.9%) Third Party Payments 87 0 87 85 2 2.3% Transfer Payments 2,607 102 2,709 2,715 (6) (0.2%) Support Services 54 0 54 54 0 0.0% Depreciation and Impairment Losses (23) 0 (23) (11) (12) (52.2%) GROSS EXPENDITURE 19,019 (40) 18,979 19,650 (671) (3.5%) Income (5,512) 132 (5,380) (6,051) 671 12.5% NET EXPENDITURE 13,507 92 13,599 13,599 0 0.0%
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Subjective Summary (HRA only) Approved Annual Budget Budget Adjustments Revised Annual Budget at Period 3 Projected Outturn Budget Variance (Adverse) or Favourable £000 £000 £000 £000 £000 % Employees 11,123 463 11,586 11,328 258 2.2% Premises Related 23,478 597 24,075 25,030 (955) (4.0%) Transport Related 53 0 53 59 (6) (11.3%) Supplies and Services 908 0 908 893 15 1.7% Third Party Payments 586 (586) 0 0 0 0.0% Transfer Payments 4,837 0 4,837 5,888 (1,051) (21.7%) Support Services 2,456 0 2,456 2,455 1 0.0% Depreciation and Impairment Losses 17,909 0 17,909 17,909 0 0.0% GROSS EXPENDITURE 61,350 474 61,824 63,562 (1,738) (2.8%) Income (61,350) (474) (61,824) (63,562) 1,738 2.8% NET EXPENDITURE 0 0 0 0 0 0.0%
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Prior Years Approved Budget Revised Projected Total Approved Projected Expenditure Budget Adjustments Budget Outturn Budget Outurn to 31/03/2024 2024-25 in 2024-25 2024-25 2024-25 to 31-Mar-29 to 31-Mar-29 Project Title £000 £000 £000 £000 £000 £000 £000 HOUSING(HRA) Improvements To Existing Properties 0 15,420 0 15,420 15,420 0 0% 15,713 15,713 0 0% Regeneration 10,743 19,401 0 19,401 19,401 0 0% 31,337 31,337 0 0% Other Assets 0 3,115 0 3,115 3,115 0 0% 3,205 3,205 0 0% Non Property Expenditure 0 400 0 400 400 0 0% 698 698 0 0% Council House New Build 42,665 1,000 0 1,000 1,000 0 0% 43,813 43,813 0 0% Professional Fees 0 1,900 0 1,900 1,900 0 0% 2,150 2,150 0 0% Total Housing (HRA) Programme 53,408 41,236 0 41,236 41,236 0 0% 96,916 96,916 0 0% HOUSING(PSHG) Private Sector Housing Grant Programme 0 644 (118) 526 526 0 0% 2,926 2,926 0 0% Total Housing (PSHG) Programme 0 644 (118) 526 526 0 0% 2,926 2,926 0 0% TOTAL COMMUNITIES, HOUSING & PLANNING BOARD 53,408 41,880 (118) 41,762 41,762 0 0% 99,842 99,842 0 0% Budget Variance (Adverse) or Favourable Budget Variance (Adverse) or Favourable RENFREWSHIRE COUNCIL CAPITAL INVESTMENT STRATEGY 1st April to 21st June 2024 POLICY BOARD: COMMUNITES & HOUSING Current Year 2024-25 Full Programme - All years