Agenda item

Joint Report of the Corporate Director of Regeneration and Economic Development and Corporate Director - Resources – presented by the Finance Manager, Resources.

The Chairman introduced the Finance Manager, Resources,Azhar Rafiq who was in attendance to speak to Members in relation to the Quarter 4, 2012/13 Revenue and Capital Outturn and Quarter 1 Revenue and Capital Outturn 2013/14 (for copy see file of minutes).

Quarter 4, 2012/13

The Finance Manager reminded Members of the areas reported upon, the General Fund Revenue Account, the Housing Revenue Account (HRA) and the Capital Programme for the RED Service.  It was explained that the first report set out the financial position as at the year end for 2012/13 and it was noted there was a cash limit under spend of £556,000 on the General Fund Revenue Account, with the major variances being an under spend within Planning and Assets, and an overspend within Strategic Transport, with the detailed explanations as set out within the report.  It was noted that the forecast outturn during the year of a £615,000 under spend predicted at the Quarter 3 stage turned out be very accurate. The Committee were also asked to note that the Medium Term Financial Plan (MTFP) savings target for 2012/13 of £2.612 million for the Regeneration and Economic Development (RED) service grouping had been delivered.

The Finance Manager then explained the outturn position on the HRA   which showed a surplus outturn position alongside a balance on the general HRA reserve of £7.154 million.  Councillors were reminded of the potential overspend on the Durham City Homes (DCH) repairs and maintenance budget that was flagged up as part of the volatile reporting arrangements during the year, and that the  actual outturn position regarding this item of expenditure was brought in line with the budget. Early identification and reporting of the potential overspend during the year allowed corrective action to be taken by budget managers to bring spend in line with the budget at year end.

Members were reminded that the RED Capital Programme was a flagship capital programme for the Authority and that the final budget position was a programme of £85.995 million, with the actual spend being £80.146 million, split between the General Fund (£36.227 million) and the HRA (£43.919 million). It was noted that although expenditure during the early stages of the year appeared slow, activity picked up towards the end of the year which was reflected in a substantial part of the programme being delivered.  The HRA programme showed 97% of spend against budget and the General Fund just under 90%. It was explained that the HRA programme is relatively easier to deliver as it is mainly concerned with making improvements in tenants’ homes such as installing kitchens, bathrooms, and heating systems. The General Fund programme on the other hand is more complex with many schemes running over different financial years, involving many partners and funding streams, with multiple land ownership issues and multiple contracts to manage at the same time.  Members noted that Appendix 3 gave a breakdown of the spend across major projects, with Appendix 4 setting out in more detail the many projects delivered across the County in 2012/13.

Quarter 1, 2013/14

The Finance Manager explained that with increasing pressures on Local Government finances and the impact of cumulative savings targets, the outturn position for 2013/14 for RED would be tighter. .  Members noted the service was reporting a cash limit under spend of approximately £87,000 for 2013/14 based on the Quarter 1 forecast outturn against a General Fund Revenue Budget of £41.726 million.  Members noted the major predicted under spend fell within Planning and Assets, with the detailed explanations as set out within the report including an increased income due to a small number of major applications generating extra income such as the Hitachi site at Newton Aycliffe.  The Committee learned that there was continued overspend for Traffic, relating to parking services and enforcement activities,  noting a “building-in” of the impact of large scale events such as the Lindisfarne Gospels and Lumiere.

The Committee noted that the HRA for 2013/14 had no major issues; with a forecasted balanced position after using a projected surplus of £1.549 million towards the Capital Programme.

As regards the Capital Programme, the Finance Manager explained that subsequent to revisions to take into account grant additions/reductions and re-profiling the budget now stood at approximately £103.654 million split between the General Fund (£48.071 million) and HRA (£55.583 million).  Members noted a significant boost to the HRA programme coming from a £19 million HCA Decent Homes “Backlog” Grant which had enabled 864 properties to be brought up to the Decent Homes Standard within Quarter 1.

The Chairman thanked the Finance Manager and asked Members for their questions on the two finance reports.

The Committee asked whether the backlog of work in relation to the Decent Homes Standard was with those properties managed by East Durham Homes (EDH).  The Finance Manager noted that the position for Dale and Valley Homes (DVH) and Durham City Homes (DCH) was 0% non-decent properties at the beginning of the year and while there would be some properties falling into non-decency during the year, it was envisaged that it would be 0% also at the year end as these properties would be made addressed in the current year HRA capital programme.  The Customer and Services Intelligence Manager, Regeneration and Economic Development, Graham Tebbutt added that the figure of non-decent properties for EDH had decreased from 36% at the beginning of the year to 25%, which was good progress in itself and a marked improvement upon the positions 2-3 years ago of around 81%.

Resolved:   

That the reports be noted.