Agenda item

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

The Chairman introduced Principal Accounts, Resources, John Hughes and Paul Raine who were in attendance to speak to Members in relation to the Quarter 3 Revenue and Capital Outturn 2014/15 (for copy see file of minutes).

The Principal Accountant, P Raine 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.  Members noted the service was reporting a cash limit underspend of approximately £1.320 million at Quarter 3, against a revised General Fund Revenue Budget of £45.136 million.  Members noted the major variances fell within Planning and Assets and Transport and Contracted.  The Committee were informed that the service grouping was on track to maintain spending within the cash limit and Medium Term Financial Plan (MTFP) savings were incorporated into the outturn position.

The Committee noted that the HRA for 2014/15 had no major issues and the variances within the HRA being set out within the report including: increased income as fewer Right to Buy sales and a lower void rate had meant additional rental income; an underspend due to lower interest payments; and an overspend in respect of supervision and management costs, in the context of setting up the new Housing Company.

The Chairman thanked the Principal Accountants and asked Members for their questions on the finance report.

Councillors asked questions in respect of the difference between the original HRA capital budget and the revised budget and whether Traveller Sites at paragraph 16 referred to permanent sites.

Members noted the Traveller Sites referred to were permanent sites.  The Principal Accountant, P Raine noted that capital spend within a year could vary as schemes could roll over several years and also if there were any slippages in a schedule, schemes could roll over into the next financial year.  Councillor J Clare noted that the change to the HRA capital budget did not seem like slippage and rather more a revision to the budget and asked for clarification.  The Principal Accountant, P Raine noted the Member/Officer Working Group made decisions upon changes to capital budgets, and the Performance and Planning Manager, Regeneration and Economic Development, Graham Tebbutt added that some examples of schemes that had moved back included works at the Sniperley Park and Ride and Sunderland Bridge.

Councillor R Crute requested that the committee receive detail of the reasons for the revision of the capital programme and it was also suggested that as part of Quarter 4 Budget Update the Committee receive a summary of the slippage on individual capital schemes. 

Councillor E Adam asked as regards the underachievement in business rates in relation to vacant properties and the underachievement in parking income, noting that with the “free after 3” scheme the underachievement in parking income should have been foreseen. 

The Principal Accountant, P Raine noted an example at Newgate Street in Bishop Auckland where units had collapsed and therefore they would not be usable, and loss of rental at vacant units at Bracken Hill, Shotton Colliery and Millennium Square in Durham City, the Durham units being used by DCC currently.  Councillor E Adam noted the collapse at Bishop Auckland, however, asked what work was being undertaken to let those units at Bracken Hill and Millennium Square and whether use by DCC was the best use of the resource.

The Principal Accountant, P Raine noted the units at Millennium Square were being utilised by Business Durham and Durham Vision.  The Principal Accountant, J Hughes noted the underachievement in terms of parking income was as a result of several issues, not only the “free before 3” scheme, including free parking being provided in respect of activities relating to the filming of Inspector George Gently and fee increases not being carried forward.  Councillor E Adam requested further detail of the work undertaken by DCC to improve occupancy rates and increase income.

Councillor D Hall asked as regards debt written off, as set out at Appendix 2 on page 19 of the agenda pack, and also as regards an outturn forecast of zero for the welfare reform reserve.  The Principal Accountant, J Hughes noted that the bad debt was primarily Council house rent, repairs and associated court costs, with provision having been made within the budget.  It was noted that the welfare reform reserve was set up 3 years ago in preparation for Welfare Reform changes, to be used to help those affected by the changes.  It was noted that the £393,000 was the balance remaining as at the end of 2013/14, and it was expected that the remaining reserve would be spend within the 2014/15 year in order to help Tenants.

Councillor J Clare noted the underachievement in terms of business rates and parking income, however, asked whether those relating to use of properties by DCC and the “free before 3” scheme for parking could have been factored into the budget rather than being reported as underachievement.  The Principal Accountant, P Raine noted that the business rates and car parking were set as potential income generation once void properties and those occupied by DCC were taken into account.    

Resolved:   

That the report be noted.