|
Title |
Q1 Revenue Monitoring Report as at 30 June 2024 |
|
Purpose of the report |
To note |
|
Report Author |
Mahmud Rogers, Joint Financial Services Manager |
|
Ward(s) Affected |
All Wards
|
|
Exempt |
No |
|
Corporate Priority |
Addressing Housing Need Resilience Environment Services[MR1]
|
|
Recommendations
|
Committee is asked to: Note the forecast underspend of £46,000 for 2024-25 as at 30th June 2024 |
|
Reason for Recommendation |
Not applicable |
1. Summary of the report
|
What is the situation |
Why we want to do something |
|
• Spelthorne Borough Council is expected to underspend its Revenue budget position by £46,000 |
• Ensuring the financial stability of the Council |
|
This is what we want to do about it |
These are the next steps |
|
• Note the report |
• Note the report |
1.1 This report seeks to summarise the financial situation of Spelthorne Borough Council at the end of June 2024. Please see the detail in Appendix 1.
2. Key issues
A summary of the main variances at 30th June is below:
|
Variance to budget |
Area |
Reasons for the variance to budget |
|
(331) |
Corporate Policy and Resources |
Lower pension contributions to Surrey Pension Fund due to vacancies across Council, offset by IT costs of partnership project, underachievement of building control income, and Best Value Inspection costs |
|
(302) |
Community Wellbeing & Housing |
Additional Grant for Homelessness Prevention, plus savings from vacancies, offset by High demand for emergency accommodation and high cost in sourcing Temporary Accommodation on privately rented market |
|
225 |
Environment & Sustainability |
Unbudgeted costs for Thameside House, lower Car Park fees income, Incubator desk hire & office rental income under budget, offset by Shared Prosperity Fund Grant and savings from vacancies |
|
3,184 |
Investment Property Income |
This is an expected fluctuation linked to the rent top up budget of £4m for Charter Building, which has been utilised in FY 2023/24, but is offset by adjustment on rent free periods. There was an increase in rent income following the rent reviews for 2 offices at the Charter Building - Uxbridge Charter Place Centre Ltd t/a Spaces. |
|
78 |
Landlord Costs |
The forecast also includes rent free periods. In addition, there is an overspend on Stockley Park as a result of additional unbudgeted electricity charges of c. £69k per quarter, including an invoice backdated from Dec 23 and higher than expected service charge of £543k as building is now operational. As a result of no lettings to date, it is anticipated that there will be an underspend in this year’s budget, once reconciled at s/c year end and there is expected to be a refund from 2023 budget. A full review of the service charge will be undertaken to review the costs and electricity consumption to reverse the projected increase for Q3 and Q4. £156,000 overspend relates to two Regeneration properties. It is due to unbudgeted legal fees for reversionary lease with ADT and 6 smaller units plus the marketing fees for Unit 4 at Summit Centre. It is also due to design work for medium term RAAC solution at Elmsleigh Centre. |
|
410 |
Debt Interest Payable |
£410k over due to Local Authority Housing Fund (LAHF) additional borrowing that has been done through short term borrowing. The temporary accommodation acquired with the assistance of this funding will ease pressure on the Temporary Accommodation budget. |
|
(160) |
Interest KGE |
Knowle Green Estates (KGE) forecast of £921,500 - allowed for interest uplift for LAHF properties |
|
(3,152) |
National Non-Domestic Rates |
Forecast updated following advice we commissioned from LG Futures, following the positive outturn for 2023/24. This is expected to have a continued positive outcome into 2025/26. |
|
3 |
Net other minor variances |
See Appendix A for more detail |
|
(46) |
Overspend / (Underspend) |
|
2.1 As previously advised in the outturn report, £4m of the rates guarantees was released against the Charter Building's outturn in 2023/24. This £4m was budgeted to be drawn upon in 24/25 and a virement should be made to reverse this budget against the Sinking Funds in 2024/25.
|
Commercial Assets |
Revised Budget £’000 |
Forecast Outturn £’000 |
Variance £’000 |
|
Rental Income (as per signed lease) |
(46,533) |
(43,349) |
3,184 |
|
less: Landlord costs |
5,454 |
5,375 |
(79) |
|
Net Rental Income receivable |
(41,079) |
(37,974) |
3,106 |
|
Loan Interest Payable |
22,092 |
22,092 |
0 |
|
Minimum Revenue Provision |
11,118 |
11,118 |
0 |
|
Sinking Funds - contributions to |
725 |
725 |
0 |
|
Sinking Funds - release from |
(2,500) |
(2,500) |
0 |
|
Set Asides for specific revenue purposes |
400 |
400 |
0 |
|
Net Income (to fund Revenue budget) |
(9,244) |
(6,139) |
3,106 |
|
Regeneration Assets |
Revised Budget £’000 |
Forecast Outturn £’000 |
Variance £’000 |
|
Rental Income (as per signed lease) |
(4,414) |
(4,414) |
0 |
|
less: Landlord costs |
1,374 |
1,530 |
156 |
|
Net Rental Income receivable |
(3,040) |
(2,884) |
156 |
|
Loan Interest Payable |
1,036 |
1,036 |
0 |
|
Minimum Revenue Provision |
898 |
898 |
0 |
|
Sinking Funds - contributions to |
109 |
109 |
0 |
|
Sinking Funds - release from |
(350) |
(350) |
0 |
|
Set Asides for specific revenue purposes |
250 |
250 |
0 |
|
Net Costs |
(1,096) |
(940) |
156 |
2.2 Progress to date on corporate efficiency savings are summarised in Appendix H with specific focus on this years (24/25) savings targets. Table 1 provides a summary of target savings to be achieved over the next 4 financial years. Table 2 summarises the savings achieved each quarter for 24/25 and currently shows that savings of £150,500 have been achieved to the end of the first quarter.
2.3 Estimates at this stage in relation to Planning Policy do not take into account resources needed for updating the Local Plan. Updates for this will be made later in the year.
3. Committee commentary and variance analysis
The net underspend at Committees Service Level of (£486,000) as at 30
June 2024 by Committee is shown below:
|
|
2024/25 Budget Revised £ |
2024/25 Forecast Outturn £ |
2024/25 Variance of forecast from revised budget £ |
|
Regulatory / Administrative Committees |
923,300 |
877,400 |
(45,900) |
|
Corporate Policy & Resources |
10,070,800 |
9,740,100 |
(330,700) |
|
Community Wellbeing & Housing |
5,670,400 |
5,368,000 |
(302,400) |
|
Business Infrastructure & Growth |
2,512,600 |
2,570,900 |
58,300 |
|
Environment & Sustainability |
7,082,000 |
7,306,700 |
224,700 |
|
NET EXPENDITURE AT SERVICE LEVEL |
26,259,100 |
25,863,100 |
(396,000) |
|
Interest, grants & reserve movements |
(17,631,500) |
(17,281,400) |
350,100 |
|
Net Position - Over/ (Under) budget |
8,627,600 |
8,581,700 |
(45,900) |
4. Legal comments
4.1 Comments please
5. Other considerations
5.1 There are no further considerations.
6. Equality and Diversity
6.1 There are no specific areas to highlight. However, equality, diversity and inclusion (EDI) are central to everything that Council does and are woven throughout Council’s Corporate Plans.
7. Sustainability/Climate Change Implications
There are no significant implications arising from the report.
8. Timetable for implementation
8.1 Not applicable
9. Contact
9.1 Mahmud Rogers m.rogers@spelthorne.gov.uk
Background papers: There are none.
Appendices:
Appendix A – Net Revenue Budget Monitoring 2024-25 30 June 2024
Appendix B – Net Revenue Budget Monitoring by Committee 2024-25 30 June 2024
Appendix C – Net Revenue Budget Monitoring Regulatory / Administrative Committee 2024-25 30 June 2024
Appendix D – Net Revenue Budget Monitoring Corporate Policy & Resources Committee 2024-25 30 June 2024
Appendix E – Net Revenue Budget Monitoring Community Wellbeing & Housing Committee 2024-25 30 June 2024
Appendix F – Net Revenue Budget Monitoring Business Infrastructure & Growth Committee 2024-25 30 June 2024
Appendix G – Net Revenue Budget Monitoring Environment & Sustainability Committee 2024-25 30 June 2024
Appendix H – Table of progress on savings Q1
[MR1]Need the new priorities