Item 11 - Appendices 1 and 2
West Dunbartonshire Council · 28 February 2024
Back to Housing & Communities Committee — 28 February 2024 and its agenda
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WEST DUNBARTONSHIRE COUNCIL ITEM 11 - APPENDIX 1 HRA REVENUE BUDGETARY CONTROL 2023/24 PERIOD END DATE Subjective Summary Total Budget 2023/24 £000 Spend to Date 2023/24 £000 Forecast Spend £000 Annual RAG Status Employee Costs 7,669 3,922 7,955 286 4% Property Costs 2,377 1,288 2,217 (160) -7% Transport Costs 142 55 141 (1) 0% Supplies, Services And Admin 389 119 397 8 2% Support Services 2,720 1,564 2,681 (39) -1% Other Expenditure 534 465 585 51 10% Repairs & Maintenance 16,257 7,675 16,147 (110) -1% Bad Debt Provision 1,089 52 960 (129) -12% Void Loss (Council Tax/Lost Rents) 1,261 958 1,475 214 17% Loan Charges 15,476 11,049 18,829 3,353 22% CFCR 1,729 0 0 (1,729) -100% Total Expenditure 49,643 27,147 51,387 1,744 4% House Rents 47,729 26,861 47,652 77 0% Lockup Rents 217 116 202 15 7% Factoring/Insurance Charges 1,434 1,494 1,494 (60) -4% Other rents 117 59 120 (3) -3% Interest on Revenue Balance 30 0 146 (116) -387% Transfer from Reserves 0 0 1,642 (1,642) 0% Miscellaneous income 116 37 131 (15) -13% Total Income 49,643 28,567 51,387 (1,744) -4% Net Expenditure 0 (1,420) (0) (0) Forecast Variance 2023/24 £000 % 31/10/2023
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WEST DUNBARTONSHIRE COUNCIL APPENDIX 2 HRA REVENUE BUDGETARY CONTROL 2023/24 ANALYSIS FOR VARIANCES OVER £50,000 MONTH END DATE 31/10/2023 PERIOD 7 Budget Forecast Spend RAG Status £000 £000 £000 % EMPLOYEE COSTS 7,669 7,955 286 4% Main Issues Mitigating Action Anticipated Outcome Budget Forecast Spend RAG Status £000 £000 £000 % PROPERTY COSTS 2,377 2,217 (160) -7% Main Issues Mitigating Action No mitigating action is required. Anticipated Outcome Budget Forecast Spend RAG Status £000 £000 £000 % SUPPORT SERVICES 2,720 2,681 (39) -1% Main Issues Mitigating Action No mitigating action is required. Anticipated Outcome Budget Forecast Spend RAG Status £000 £000 £000 % REPAIRS & MAINTENANCE 16,257 16,147 (110) -1% Main Issues Mitigating Action Anticipated Outcome Service Description Budget Details Variance Analysis Subjective Analysis forecast Variance Budget Details Variance Analysis Subjective Analysis forecast Variance Budget Details Variance Analysis Subjective Analysis forecast Variance Subjective Description This budget covers all employees charged directly to the HRA including caretakers. Variance Narrative This adverse variance is mainly due to additional posts being approved, after time of budget setting to meet the demands of the service. In addition to this , the pay award for 2324 is expected to be higher than the budgeted 4%. A favourable variance is expected with the assumption that the 2023/24 forecast outturn for support services is expected to be in line with the 2022/23 outturn adjusted for pay uplifts etc. This charge is calculated each year end based on HRA's percentage usage of the total cost of WDC support services. The 2023/24 HRA budget was set before this 2022/23 outturn was known so was based on 2021/22 charge which was higher. Managers will continue to consider ways to keep staffing costs down including considering each vacancy as it arises re need / urgency to fill. High volume of jobs and inflationary increases in materials and labour have resulted in the budget for jobbing repairs being insufficient to meet current demand. However this had been more than offset by an underspend in the electrical installation inspection reports ( EICR) budget due to the contract only being awarded half way through the year. Variance Narrative Variance Narrative This budget covers all repair and maintenance expenditure to houses and lockups Subjective Description A year end underspend is anticipated A year end small underspend is anticipated There are uncontrollable costs, such as materials and inflation as well as the demand for repairs which continues to increase. However as we continue to progress with the building services improvement plan, we expect costs to reduce particularly in relation to void houses. The later than anticipated start on EICR work at present covers these costs but we need to continue to ensure the costs remain contained. Budget Details A year end overspend is anticipated This budget covers central support recharges to the HRA Variance Analysis Subjective Analysis forecast Variance Subjective Description This budget covers electricity, gas, rates, rents, cleaning and insurance costs. Variance Narrative A favourable variance is expected due to the assumption that office accommodation and utility costs will be similar to last year which is lower than anticipated at time of budget setting, resulting in a favourable variance. A year end underspend is anticipated
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WEST DUNBARTONSHIRE COUNCIL ITEM 11 - APPENDIX 2HRA REVENUE BUDGETARY CONTROL 2023/24 ANALYSIS FOR VARIANCES OVER £50,000 MONTH END DATE 31/10/2023 PERIOD 7 Budget Forecast Spend RAG Status £000 £000 £000 % BAD DEBT PROVISION 1,089 960 (129) -12% Main Issues Mitigating Action No mitigating action is required. Anticipated Outcome Budget Forecast Spend RAG Status £000 £000 £000 % VOID LOSS 1,261 1,475 214 17% Main Issues Mitigating Action Anticipated Outcome Budget Forecast Spend RAG Status £000 £000 £000 % LOAN CHARGES 15,476 18,829 3,353 22% Main Issues Mitigating Action Anticipated Outcome Budget Forecast Spend RAG Status £000 £000 £000 % CFCR 1,729 0 (1,729) -100% Main Issues Mitigating Action Anticipated Outcome Budget Forecast Spend RAG Status £000 £000 £000 % Rents 47,729 47,652 77 0% Main Issues Mitigating Action Anticipated Outcome Variance Narrative The main reason for the projected adverse variance relates to the number of void properties being higher than expected at time of budget setting. The budget was set on the assumption that backlogs following COVID delays in getting voids turned around would be resolved however the numbers continued to be high at the beginning of this financial year. They have now lowered considerably Budget Details Variance Analysis Service Description Budget Details Variance Analysis Subjective Analysis forecast Variance Service Description This budget allows for the provision for bad and doubtful debts to be maintained at an appropriate level Subjective Analysis forecast Variance A year end underspend is anticipated Variance Narrative The Bad Debt Provision expected to be required for 2023/24 is less than estimated at time of budget setting, resulting in a favourable variance. This assumes that the provision required in 2023/24 will be similar to the 2022/23 provision. A year end underspend is anticipated Service Description This budget covers the contribution from revenue to Capital Variance Narrative In order to offset the cost pressures on the revenue HRA in 2023/24 , it is anticipated that there will be no contribution to capital spend in 2023/24. None available Budget Details Variance Analysis Subjective Analysis forecast Variance A year end overspend is anticipated Subjective Analysis forecast Variance Service Description Loan Charges is made up of repayments of principle sums, and the payments of interest and expenses A void working group has been reviewing the issues and have been implementing actions and working with Housing Maintenance managers to improve the situation and it is expected that the void figures will continue to decrease over the next few months. This budget covers the rents lost on void houses and lockups and the cost of council tax on void properties. Variance Narrative The main reason for this variance is the due to interest payments being higher than anticipated at time of budget setting. The recent increase in bank interest rates has to led to a significant increase in loan interest payments. None available Budget Details Variance Analysis A year end overspend is anticipated Service Description This budget covers the rental income due from tenants Variance Narrative Timing of buy backs and new builds being ready for letting is slightly behind that budgeted Turn around of buy backs continues to be monitored to maximise income Budget Details Variance Analysis Subjective Analysis forecast Variance Small adverse variance Budget Details Variance Analysis
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WEST DUNBARTONSHIRE COUNCIL APPENDIX 2 HRA REVENUE BUDGETARY CONTROL 2023/24 ANALYSIS FOR VARIANCES OVER £50,000 MONTH END DATE 31/10/2023 PERIOD 7 Budget Forecast Spend RAG Status £000 £000 £000 % Factoring/Insurance Charges 1,434 1,494 (60) -4% Main Issues Mitigating Action Anticipated Outcome Budget Forecast Spend RAG Status £000 £000 £000 % Interest on Revenue Balance 30 146 (116) -387% Main Issues Mitigating Action Anticipated Outcome Budget Forecast Spend RAG Status £000 £000 £000 % Transfer from Reserves 0 1,642 (1,642) 0% Main Issues Mitigating Action Anticipated Outcome Service Description Income received from insurance and factoring Variance Narrative 10% increases were applied to fees 2324 in line with the councils sales fees charges increase approved in March 2023. The budget only assumed 4% increase Subjective Analysis forecast Variance Service Description Income received from insurance and factoring Variance Narrative This income is dependant on bank interest rates . The revised forecast takes account of the high interest rate rises in past year None required Small favourable variance Budget Details Variance Analysis Subjective Analysis forecast Variance If costs reduce below the forecast at P7 then the call on reserves can be reduced Reduction in reserves Service Description Utilisation of reserves to fund forecast overspend Variance Narrative In order to achieve a break even position within the HRA , it is necessary to draw down the shortfall from the current HRA reserves . The current reserve is £2.634M therefore this will reduce reserves to £0.992M which is just above the prudential reserve target of £0.984M None required Small favourable variance Budget Details Variance Analysis Subjective Analysis forecast Variance