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Agenda item

Budget Strategy Report

Joint Report of the Corporate Director of Neighbourhoods and Climate Change and the Corporate Director of Resources / Treasurer to the Joint Committee.

Minutes:

The Head of Finance and Transactional Services reminded the Joint Committee that Members had considered similar budget strategy reports previously, the purpose being to seek the views of Members on a number of matters, as part of the medium-term financial plan for the Joint Committee.

 

The Head of Finance and Transactional Services noted the issues that may arise in the next few years and options available.  He referred Members to the section of the report that set out the capital investment at the Crematorium totalling approximately £3.8 million and the planned works for the next few years, as outlined within the SAMP.  Members noted that current estimates for the replacement of the cremators was around £1.6 million, though the working life of the equipment was such they would likely not need replacing until around 2032.  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 and the £213,000 loan budget had been removed and factored into the medium-term budget forecasts. 

 

The Head of Finance and Transactional Services reiterated that the Crematorium business plan was prudent in terms of the numbers of cremations and it was highlighted that the financial position was very strong with the level of reserves already being sufficient to fund cremator replacement. 

 

The Head of Finance and Transactional Services noted that the prudent assumption was for 2,200 cremations per year, noting that it was projected for 2,787 cremations in 2020/21, the increase as a result of COVID-19. 

 

Members noted that the proposed fee for 2021/22 was £740, the lowest in comparison with other neighbouring facilities, even with a £20 increase on the current £720 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.  Members were reminded that Mounsett Crematorium Joint Committee had agreed no increase to their fees during the period when Durham Crematorium had undergone its programme of works and that there had been a harmonisation of fees between the two facilities following Local Government Reorganisation. 

Members were reminded of the planning permission that had been granted for a new crematorium at Castle Eden.

 

The Head of Finance and Transactional Services referred Members to the table set out at paragraph 25 of the report, a matrix highlighting the potential additional income from a number of cremations each year and with an increase in fee, in £10 increments.  It was explained that the recommendation to the Joint Committee was for an increase to £740, with a continued assumption of 2,200 cremations per year, giving an increased income of £44,000.

 

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.

 

Councillor J Blakey asked as regards the situation in terms of the emergency electricity generator, and whether the Crematorium could look to offer “direct” cremations, as that may be something to offset any loss of business to a new facility at Castle Eden.  The Bereavement Services Manager and Registrar noted work was still ongoing with the electricity situation, delayed as a result of COVID-19.  He added that Durham Crematorium did offer direct cremations, and while there had not been a large uptake, there were a number of those cremations taking place.  The Head of Finance and Transactional Services noted that, from the previous experience when the facility at Coundon had opened, it took a number of years for a facility to mature and as crematoria were expensive to build, the return on investment would likely mean high fees for any new facility at Castle Eden.  The Chair noted that in many cases, Durham would be a choice based upon where previous family members had been cremated and price may not be the only deciding factor.

 

Councillor R Ormerod noted the regional comparison of fees and charges omitted Redcar and Cleveland and asked if there was a reason.  The Head of Finance and Transactional Services noted the usual benchmarks had been included, however, it could be added if felt useful.  Councillor R Ormerod noted their fee was relatively expensive and would therefore help highlight the low cost at Durham.  The Chair noted it could be added in future.

 

Councillor P Jopling noted the proposed £20 fee increase was very modest and added that keeping the fee competitive would be to the advantage of the Crematorium, especially in the economic climate resulting from COVID-19.  She noted her thanks to all the staff for their hard work and the way in which the situation in terms of additional cremations had been handled.

 

The Chair asked the Head of Finance and Transactional Services and the Bereavement Services Manager and Registrar to pass on the thanks of the Joint Committee to their staff for their hard work.

 

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 two years’ time in preparation for the 2023/24 budget setting year.

 

Supporting documents:

 

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