Agenda item

To consider a report from the Finance Business Partner Specialist regarding information related to WSC and TDBC’s financial performance for the 2018/19 financial year.

RESOLVED that Executive:-

i.                Reviewed the financial performance and end of year position for both WSC and TDBC General Fund and the Housing Revenue Account for TDBC, including pre-approved carry forwards and transfers to earmarked reserves.

ii.                Noted the reported TDBC General Fund Revenue Budget underspend of £240k in 2018/19 and the TDBC General Reserves Balance of £2.22m as at 31 March 2019.

iii.                Noted the reported WSC General Fund Revenue Budget underspend of £251k in 2018/19 and the TDBC General Reserves Balance of £0.98m as at 31 March 2019.

iv.                Noted the reported Housing Revenue Account Budget underspend of £296k in 2018/19 and the TDBC General Reserves Balance of £2.72m as at 31 March 2019.

v.                Noted that the assets for sale target for the Transformation Programme was not met in 18/19 and therefore the first £1.2m of future sale of assets is required to “payback” the NHB reserve.

The Portfolio Holder for Corporate Resources introduced this item which concerned the information related to WSC and TDBC’s financial performance for the 2018/19 financial year. The outturn figures included were provisional subject to external audit review; the findings of which are to be reported to the Audit, Governance and Standards Committee on 31st July this year. Monitoring the budget was an important part of the Council’s performance management framework. There had been continued frustration at the Transformation Project’s costs being above what had originally been predicted when commissioned. This was now being brought to a conclusion and a structure would be delivered that would not see these costs rise.

The s151 Officer thanked his colleagues in the finance team for their hard work in a challenging period. The report clearly presented a closedown position for the legacy Councils and opening position for SWT.

The revenue outturn position for the financial year 2018/19 was as follows:

a)    The TDBC General Fund (GF) Revenue Outturn position for 2018/19 is a net underspend of £240k (1.7% of Net Budget), after reserve transfers and carry forwards.

b)    The WSC General Fund (GF) Revenue Outturn position for 2018/19 is a net underspend of £251k (4.6% of Net Budget), after reserve transfers and carry forwards.

c)     The HRA is a ‘Self-Financing’ account for the Council’s Housing Landlord function, which is budgeted to ‘break even’ (net of approved transfers to/from HRA Reserves). The HRA Outturn for 2018/19 is a net underspend of £296k (1.1 % of gross income).

The capital outturn position for 2018/19 was as follows:

a)    The total TDBC General Fund Capital Programme budget is £78.731m, including ongoing schemes from previous years and new schemes approved at the start of and during 2018/19. Of this, £16.611m has already been spent in previous years and a further £15.398m has been spent during 2018/19. The projected spend in 2019/20 and future years is £46.716m (not including new 2019/20 budget approvals). A net underspend of £7k is being reported against the overall approved budget for the Programme.

b)    The total WSC General Fund Capital Programme budget is £15.233m, including ongoing schemes from previous years and new schemes approved at the start of and during 2018/19. Of this, £1.367m has already been spent in previous years and a further £2.510m has been spent during 2018/19. The projected spend in 2019/20 and future 2 years is £11.556m (not including new 2019/20 budget approvals). There are no reported variances against the overall approved budgets.

c)     The HRA approved Capital Programme at the end of 2018/19 was £24.886m. This relates to schemes which will be completed over the next five years. The actual expenditure on the Capital Programme during 2018/19 was £11.379m with £13.533m for planned investment to implement approved schemes in future years. There are no reported variances against the total approved programme.

The General Reserves positions as at 31st March 2019 were:

a)    TDBC was £2.22m, which is £0.52m above the minimum level of £1.70m.

b)    WSC was £0.98m, which is £0.28m above the minimum level of £0.70m.

c)     HRA was £2.72m, which is £0.92m above the minimum level of £1.80m.

The opening balances for the General Reserves for SWT as at 1st April 2019 were:

a)    General Fund is £3.20m, which is £0.80m above the minimum level of £2.40m.

b)    HRA is £2.72m, which is £0.92m above the minimum level of £1.80m.

The Portfolio Holder proposed the recommendations which were seconded by Councillor Booth.

During the discussion of this item, Members made comments and asked questions which included:-

·       It was confirmed that all of the budget provided for the Cricket World Cup had been used.

·       Councillor Lisgo raised queries around the additional spend of £309k on temporary accommodation such as Bed and Breakfasts and what we as a Council had put in place to reduce that?

·       The Housing Portfolio Holder had confirmed this had been a temporary spike associated with a change in legislation from central government of which this Council had received additional funding to support.

·       The latest figures for Q1 of this year were a lot lower (£27,029.99), but a written answer could be provided on the specifics of this.

The following written response was provided to Councillor Lisgo on the 7^th August 2019:-

Reasons for the increase in B&B Budget in 2018/19:

The homeless service has been impacted significantly in two ways in the last 12 months which has adversely affected the cost of B&B usage.

The Transformation project increased the reliance on agency staff, as experienced staff had left and not been permanently replaced. Given the demand for experienced Homeless Officers last year in England, due to the legislation changes, we experienced a relatively high turnover of temporary staff which in turn has led to cases taking longer to process. This was due to constant change of officer and therefore the time in bed and breakfast and temp accommodation was prolonged. This was a problem not just experienced in SWT but country wide.

The Introduction of The Homeless Reduction Act in April 2018 has also led to a significant increase (480 homeless approaches in 17/18 to 1130 cases in 18/19) in the demands on our service both in the number of applications and time taken to process due to legislative changes. This has had a knock-on effect on Officer time and the provision of Interim accommodation. The increase of timescales to work with families who are homeless and in B&B to 56 days before looking at a full duty decision was a major factor in lengthening the time in bed and breakfast. The lack of affordable private sector rents as well as the reluctance of private landlords (and some social) to take the more complex families was a barrier to being able to close the cases and kept families in B&B longer than they should have been. All this contributed to the increase in the b&b budget usage and in turn the overspend.

The homeless case work team now has a full complement of permanent staff who are subject to intensive training in homeless legislation as well as training to help understand working with clients with complex issues. We have a full time member of staff with a lettings agency background who is building networks with landlords so we are having access to private rented accommodation. Staff stability means they have experience and understanding of their cases from day one and are working with clients to keep them in their current homes for a longer term to enable us time to find alternative accommodation if needed. We have changed the working procedures and through having stability in the team, and core experience, we have a greater emphasis on prevention and are now showing a reduction in clients accessing B&B.

With regards to anticipating the rise in B&B, we adopted the forecast from central government of a 26% increase in approach's for homeless assistance under the new Homeless Reduction Act, with the main rise being single applicants (this was based on the information they received from Welsh authorities who had a similar change in the homeless legislation three years previously). Our increase was over 100% in numbers approaching and an increase in families so although we had anticipated a rise in approaches, we couldn’t have forecasted the huge increase nor the rise in the number of families approaching.

We currently have the following numbers in B&B

Families: 2 – both one parent and one child

Couples: 1 – pregnant couple

Singles: 5

Total – 9 adults and 2 children

Total spend in quarter (Apr to June) -

Actual costs - £27k

Credit Card costs – April to June is 59k however there was an outstanding payment made at beginning of April for last year of £40k

Total spend April to June - £86k.

RESOLVED that Executive:-

i.                    Reviewed the financial performance and end of year position for both WSC and TDBC General Fund and the Housing Revenue Account for TDBC, including pre-approved carry forwards and transfers to earmarked reserves.

ii.                    Noted the reported TDBC General Fund Revenue Budget underspend of £240k in 2018/19 and the TDBC General Reserves Balance of £2.22m as at 31 March 2019.

iii.                    Noted the reported WSC General Fund Revenue Budget underspend of £251k in 2018/19 and the TDBC General Reserves Balance of £0.98m as at 31 March 2019.

iv.                    Noted the reported Housing Revenue Account Budget underspend of £296k in 2018/19 and the TDBC General Reserves Balance of £2.72m as at 31 March 2019.

v.                    Noted that the assets for sale target for the Transformation Programme was not met in 18/19 and therefore the first £1.2m of future sale of assets is required to “payback” the NHB reserve.