Agenda item

Joint Report of the Corporate Director of Resources / Treasurer to the Joint Committee and the Corporate Director of Regeneration and Local Services.

The Head of Finance and Transactional Services reminded the Joint Committee that Members had requested a report setting out a range of issues that would need to be considered as part of the medium term budget strategy and look at the possible increase in the distribution of surplus to the partner Authorities from 2018/19.  He added that the purpose of the report as set out in the agenda pack was to gauge the views of Members in advance of the January meeting that would look at budget proposals.

Councillors noted the table set out at Paragraph 4, which listed that capital investment at the Crematorium totalling approximately £3.7 million which had secured a core asset for the future, with the building being in good shape, new cremators and mercury abatement equipment being in place, compliant with the necessary EU regulations. 

Members noted future planned capital works of approximately £600,000 over the next three to four years and that the new cremators had a asset life that would take them through to around 2032, maybe longer and that current estimates for the replacement of the cremators was for around £1million.  Councillors recalled that the previous works had been funded partly by reserves and partly by borrowing, and that payments in terms of the borrowing would end in 2020/21, giving a £210,000 surplus from then on. 

The Head of Finance and Transactional Services noted that the Crematorium Business Plan was prudent in terms of the numbers of cremations and financial performance and set out that the £210,000 would go back into reserves.  It was highlighted that as the financial position was much stronger, not as much was needed within the reserves.

The Joint Committee noted that in terms of fees and charges, it was noted that in 2017/18 there had been no increase as Mountsett Crematorium was now ongoing a programme of improvement works.  Members were reminded that Mounsett Crematorium Joint Committee had agreed a no increase to their fees during the period when Durham Crematorium had undergone its programme of works.

Members noted that the proposed fee for 2018/19 was £680, still being the lowest in comparison with other neighbouring facilities, even with a £30 increase on the current £650 charge.  The Head of Finance and Transactional Services noted that Members of the Joint Committee had been mindful in the past to ensure the affordability of the service.

The Head of Finance and Transactional Services noted that planning permission had been granted for a new crematorium at Castle Eden, however timescales in terms of construction and opening were not known.  It was added that this would need to be taken into account in terms of risk moving forward.

Members were referred to the proposed increased distributable surplus to each partner Authority and asked to consider these and the increased fees and charges to allow for budget reports to be drafted, and to review the budget strategy and surplus redistribution in three years’ time in preparation for the 2021/22 budget setting year.

Councillor K Thompson asked if there was a need to declare an interest as he was also a Spennymoor Town Councillor.  The Chairman noted that Councillor K Thompson was a representative of Durham County Council on the Joint Committee and the Clerk to the Joint Committee, Laura Renaudon noted that it was to bear in mind, however both Authorities would benefit from the proposals in terms of increased surplus redistribution.

Councillor M McGaun asked if there was a business case in terms of the increase to the fees, in light of the information in terms of £210,000 being available once the borrowing had been paid off.  He noted that it may be a very good “quick win” and help to impact positively where other cuts to both Authorities had been made, however he asked for further information for the proposed increase in fees.

The Head of Finance and Transactional Services noted that there was an identified need for works to be carried out at Durham Crematorium, as set out within the SAMP.  It was added there was a need to harmonise the fees and charges with those of Mountsett Crematorium, with there being a need for this in terms of the ongoing improvement works being undertaken.  The Head of Finance and Transactional Services noted that also in terms of medium term financial plans, both partner Authorities could benefit from the redistribution to help offset against cuts being made to those Authorities.

Councillor P Jopling noted the proposed increase in fee, and that it would still be the lowest in our area.  She added that she felt that with the other facilities in the area and new ones that had recently gained planning permission, it would be prudent to be able to have a “cushion”, in order to react positively should any other facility offer a new service or product.  The Head of Finance and Transactional Services noted that any new facility at Castle Eden would likely draw more users from the Hartlepool facility rather than Durham, however, it was noted that it was not always the charge itself, rather with some funeral directors and their relationships to a particular facility.

Councillor M McGaun asked what the justification was for the increase in fees and charges.  The Head of Finance and Transactional Services noted that it was in order to meet the needs of the capital investment required and was in line with the strategy to build up reserves, including the distributable surplus.

The Chairman noted that the SAMP indentified issues that required works and there was always the possibility of a requirement that would necessitate a change, for example a new cremator in order to accommodate a larger person.

The Head of Finance and Transactional Services noted that should Members agree, the additional £30 in respect of the cremation fee would be factored into the 2018/19 budget and this would give an additional £120,000 and £30,000 respectively to Durham County Council and Spennymoor Town Council.  Members were reminded that as the loan would drop out of the budget in three years, this would be a good point to look again at issues and options.  The Head of Finance and Transactional Services noted the amount distributable to Spennymoor Town Council was proposed as being £111,250 for 2018/19.

Resolved:

(i)           That the report be noted.

(ii)          That the Central Durham Crematorium Joint Committee approve the proposed increase in the fees and charges, and the surplus redistribution, as identified within the report.

(iii)         That the Joint Committee review the budget strategy and surplus distribution in three years’ time in preparation for the 2021/22 budget setting year.