General Services Revenue, Housing Revenue Account (HRA) and Capital Budget Monitoring as at 13 September 2024
Renfrewshire Council · 29 October 2024
Back to Communities and Housing Policy Board — 29 October 2024 and its agenda
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___________________________________________________________________ To: Communities and Housing Policy Board On: 29 October 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 13 September 2024 ___________________________________________________________________ 1. Summary 1.1 At the close of reporting period 6 on 13 September 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) 4,626 4,626 0 0.0% Communities and Public Protection 5,832 5,832 0 0.0% Criminal Justice 4,171 4,171 0 0.0% Total 14,629 14,629 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) 30,769 30,769 0 0.0% Other Housing PSHG 526 526 0 0.0% Total 31,295 31,295 0 0.0% 2. Recommendations It is recommended that the Communities and Housing Policy Board: 2.1 Note the projected Revenue outturn break-even position 2.2 Note the projected Capital outturn break-even position 2.3 Agree to homologate the budget adjustments detailed at sections 6.2 and 7.2 2.4 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 for 2024-25. The demand for repairs to HRA properties, including Void properties, is currently expected to be managed within the revised budget levels, although it remains an area of potential pressure. A favourable £0.346 million is anticipated within the Transfer Payments budget due to a reduced projected drawdown from reserves. It is proposed that these excess funds be allocated to the Housing Management System Replacement project. 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. Demand on services is currently being managed within existing resources, including additional
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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 due to vacancies within the service, this area is under review by management. The underspend has been allocated against spend across other budget lines and overall, the service is projected to break-even at year end. 5. Subjective Analysis – Significant Variances GENERAL SERVICES (excluding HRA) 5.1 Employee costs - £0.209m underspend by 31 March 2025 This is a combination of underspends across services, for example, in Public Protection underspends are due to vacancies which are currently under review. Underspends in Criminal Justice and Homelessness are offset by minor overspends across their service areas. 5.2 Supplies and Services - (£0.198m) overspend by 31 March 2025 This includes £0.168m for one-off software and licencing costs within the Public Protection Service, funded by underspends in employee costs as noted above. Furniture costs within the Homelessness Service are projected to overspend and this is consistent with the overall demand on Homelessness services. 5.3 Transfer Payments - £0.060m underspend by 31 March 2025 The underspend within the Homelessness budget for payments to service providers is being managed to cover small overspends in other areas of the Homelessness Service. HOUSING REVENUE ACCOUNT (HRA) 5.4 Employee costs - £0.155m 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. Projected staff costs for the new Housing Management system are included in the overall projection, as are additional costs associated with the Single Voids Team. An underspend in the timing of recruitment within the Regeneration Team is offset by a reduction in recharges to capital, therefore a temporary transfer to adjust for both variances is proposed. 5.5 Premises Related costs - £0.032m underspend by 31 March 2025 The level of demand for Repairs and Maintenance of HRA Properties remains high, especially within Void properties, however at present this is forecast to be managed within the revised budget. Additional focus will continue on this area to understand
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ongoing demand levels. All premises related costs, including utilities and estate management, are subject to fluctuations, and will continue to be closely monitored throughout the year. 5.6 Supplies - £0.043m underspend by 31 March 2025 A reduction in projected telephone system costs is contributing to this underspend. This is reflected in the reduced level of transfer from reserves. 5.7 Transfer Payments – (£0.101m) overspend by 31 March 2025 Due to improvements in void rent loss performance since the last report, there is an underspend of £0.246m now projected within the overall Transfer Payments budget. It is proposed to decrease the previously allocated temporary budget and move these funds to reserves also contained within the Transfer Payments budget and noted below. A temporary budget transfer is recommended to decrease the void rent loss budget by (£0.246m). The Transfer Payments budget also accommodates transfers between reserves. This includes a forecasted reduction reflecting the current levels of underspend across the wider service, resulting in a (£0.346m) under recovery of funding required from reserves. The underspend noted in void rent loss is proposed to be temporarily allocated to the reserves budget. A temporary budget transfer is recommended to decrease the contribution from Reserves by £0.246m. 5.8 Income - under recovery of (£0.127m) by 31 March 2025 The underspend in the Regeneration Team employee budget, as noted above, is offset by a reduction in recharges to capital. 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. The Director now seeks homologation from the Board for the following affected virements, actioned since the last board reporting period: Revenue Budget Adjustments Objective Heading Subjective Heading Amount (£m) Reason
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Housing - General Services (Not HRA) Employee Costs 0.029 Private Sector Housing Grant alignment to reflect the profile of expenditure and allocation of funding from Capital and Reserves. Supplies & Services 0.294 Transfer Payments (0.284) Income (0.039) Housing - General Services (Not HRA) Supplies & Services 1.700 Expenditure and offsetting income under the Scottish Government’s Home Energy Efficiency Programme. Income (1.700) Housing - General Services (Not HRA) Premises Related 0.262 Alignment of Homelessness Services Income and Expenditure to match expected rental and void costs. Supplies & Services 0.050 Transfer Payments (0.200) Income (0.112) HRA Premises Related (0.815) Alignment of Insurance Budgets between expenditure lines. Support Costs 0.815 Criminal Justice Supplies & Services 1.046 Additional funding outwith settlement aligned to relevant expenditure budgets. Transfer Payments 0.448 Income (0.448) 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 HRA Transfer Payments 0.246 Transfer of budget to Reserves, funded by reduction in Void Rental Loss costs. Reserves (0.246) 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 £31.295m. 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 (£10.467m), are as follows:
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Capital Budget Adjustments Project Amount (£m) Reason Improvements to Existing Properties 0.337 Net acceleration from 2025/26 to reflect start time of projects related to External Improvements, Heating and Rewiring. Regeneration (10.174) Deceleration to 2025/26 as expected start time of various projects including, Howwood Road, Auchentorlie, Howard Street and Waverley, will now be towards the later part of 2024/25 and extend into 2025/26. Other Assets (0.690) Deceleration to 2025/26 to reflect updated cash flows for various projects including fire alarms and electrical work within sheltered housing now not expected to complete until 2025/26. Non Property Expenditure 0.500 Acceleration from 2025/26 to 2024/25 for timing of condition surveys now that the contacts have been agreed. Council House New Build (0.390) Deceleration to 2025/26 to reflect updated cashflows for Professional Fees (0.050) Decelerated to 2025/26 for timing of work carried out by Property Services Total (10.467) Implications of the Report 1. Financial The projected budget outturn position for the Communities and Housing Revenue budget is a break-even position at 31 March 2025. 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. 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
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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. 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
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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; Geoff Borland, Finance Manager.
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RENFREWSHIRE COUNCIL REVENUE BUDGET MONITORING STATEMENT 2024/25 1 April 2024 to 13 September 2024 POLICY BOARD: COMMUNITIES AND HOUSING - All SERVICES Objective Summary Annual Budget at Period 3 Budget Adjustments Revised Annual Budget at Period 6 Projected Outturn Budget Variance (Adverse) or Favourable Previous Projected Outturn Variance Movement £000 £000 £000 £000 £000 % £000 £000 Housing Revenue Account (HRA) 0 0 0 0 0 0.0% 0 0 Housing - General Services (Not HRA) 4,613 13 4,626 4,626 0 0.0% 0 0 Communities and Public Protection (including Regulatory Services) 5,861 (29) 5,832 5,832 0 0.0% 0 0 Criminal Justice 3,125 1,046 4,171 4,171 0 0.0% 0 0 NET EXPENDITURE 13,599 1,030 14,629 14,629 0 0.0% 0 0
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RENFREWSHIRE COUNCIL REVENUE BUDGET MONITORING STATEMENT 2024/25 1 April 2024 to 13 September 2024 POLICY BOARD: COMMUNITIES AND HOUSING - GENERAL SERVICES (excluding HRA) Subjective Summary (General Services – excl HRA) Annual Budget at Period 3 Budget Adjustments Revised Annual Budget at Period 6 Projected Outturn Budget Variance (Adverse) or Favourable Previous Projected Outturn Variance Movement £000 £000 £000 £000 £000 % £000 £000 Employees 11,439 292 11,731 11,522 209 1.8% 95 114 Premises Related 1,895 536 2,431 2,445 (14) (0.6%) (438) 424 Transport Related 187 0 187 208 (21) (11.1%) (25) 4 Supplies and Services 2,631 3,051 5,682 5,880 (198) (3.5%) (287) 89 Third Party Payments 87 0 87 74 13 14.9% 2 11 Transfer Payments 2,709 (36) 2,673 2,613 60 2.2% (6) 66 Support Services 54 0 54 49 5 9.2% 0 5 Depreciation and Impairment Losses (23) 0 (23) (11) (12) (52.2%) (12) 0 GROSS EXPENDITURE 18,979 3,843 22,822 22,780 42 0.2% (671) 713 Income (5,380) (2,813) (8,193) (8,151) (42) (0.5%) 671 (713) NET EXPENDITURE 13,599 1,030 14,629 14,629 0 0.0% 0 0
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RENFREWSHIRE COUNCIL REVENUE BUDGET MONITORING STATEMENT 2024/25 1 April 2024 to 13 September 2024 POLICY BOARD: COMMUNITIES, HOUSING AND PLANNING SERVICES - Housing Revenue Account (HRA) Only Subjective Summary Annual Budget at Period 3 Budget Adjustments Revised Annual Budget at Period 6 Projected Outturn Budget Variance (Adverse) or Favourable Previous Projected Outturn Variance Movement £000 £000 £000 £000 £000 % £000 £000 Employees 11,586 (25) 11,561 11,406 155 1.3% 258 (103) Premises Related 24,075 275 24,350 24,318 32 0.1% (955) 987 Transport Related 53 0 53 63 (10) (18.9%) (6) (4) Supplies and Services 908 0 908 865 43 4.7% 15 28 Third Party Payments 0 0 0 0 0 0.0% 0 0 Transfer Payments 4,837 680 5,517 5,618 (101) (1.8%) (1,051) 950 Support Services 2,456 866 3,322 3,314 8 0.2% 1 7 Depreciation and Impairment Losses 17,909 0 17,909 17,909 0 0.0% 0 0 GROSS EXPENDITURE 61,824 1,796 63,620 63,493 127 0.2% (1,738) 1,865 Income (61,824) (1,796) (63,620) (63,493) (127) (0.2%) 1,738 (1,865) NET EXPENDITURE 0 0 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 15,420 337 15,757 15,757 0 0% 111,757 111,757 0 0% Regeneration 10,743 19,401 (10,174) 9,227 9,227 0 0% 109,369 109,369 0 0% Other Assets 0 3,115 (690) 2,425 2,425 0 0% 4,550 4,550 0 0% Non Property Expenditure 0 400 500 900 900 0 0% 10,860 10,860 0 0% Council House New Build 42,665 1,000 (390) 610 610 0 0% 74,690 74,690 0 0% Professional Fees 0 1,900 (50) 1,850 1,850 0 0% 9,700 9,700 0 0% Total Housing (HRA) Programme 53,408 41,236 (10,467) 30,769 30,769 0 0% 320,926 320,926 0 0% HOUSING(PSHG) Private Sector Housing Grant Programme 0 526 0 526 526 0 0% 2,926 2,926 0 0% Total Housing (PSHG) Programme 0 526 0 526 526 0 0% 2,926 2,926 0 0% TOTAL COMMUNITIES, HOUSING & PLANNING BOARD 53,408 41,762 (10,467) 31,295 31,295 0 0% 323,852 323,852 0 0% *Rolling programmes have a prior year year expenditure of £0 as the expenditure is not directly linked from one year to the next as a singular project. Budget Variance (Adverse) or Favourable Budget Variance (Adverse) or Favourable RENFREWSHIRE COUNCIL CAPITAL INVESTMENT STRATEGY 1st April to 13th September 2024 POLICY BOARD: COMMUNITES & HOUSING Current Year 2024-25 Full Programme - All years