Members received and considered the report of the Chief Finance Officer (CFO) on the Quarter 2 Revenue Budget and Capital Programme Monitoring  for 2022/23. The report updated Members on the Council’s finances as at the end of September 2022 and projected provisional outturn for 2022/23.  The Revenue Budget, Capital Programme Statements and impact of the forecast on the Council’s reserves were summarised at Appendices A, B and C respectively.

At the end of Quarter 2, the Revenue Budget showed a surplus of £527,000, against the approved budget drawdown from reserves of £3.2m.  The report detailed the material variances and the forecast was summarised at Appendix A to the report.  The main variances included a reduction in planning appeal costs, improvement in planning application income, unbudgeted rent income from Buckhurst Place and additional car parking income. These were partially offset by an, increase in temporary accommodation costs,  and lower than anticipated recovery of Housing Benefit overpayments.

It was noted that the staff pay award agreed by the Council in October had not been factored into the report at the time that it was written.  The pay award would cost the Council an additional £145,000, which was a part year cost, some of which would be met by the £200,000 budget contingency. 

The revised Capital Programme budget was £140.2m, the actual spend as at September 2022 was £14.9m.  Two new schemes were included within the programme namely the purchase of a property in Buckhurst Place at a cost of £10.5m as part of the Property Investment Strategy (PIS), and redevelopment of Council-owned sites at Beeching Road / Wainwright Road at a cost of £15m.    It was noted that there was a £34,000 overspend for the Community Grant Scheme which was attributed to a higher uptake of grants from previous years.  Confirmation of Government funding was still outstanding for some projects; progress reports would be presented to Cabinet later this year.  It was noted that the Leisure Centre projects were currently on hold, the Disabled Facilities Grant was being spent and Temporary Accommodation Purchase Budget would be allocated when suitable properties became available. 

The forecast impact on Reserves was a reduction of £3.072m against the planned use of £3.560m, a decrease of £488,000 from the previous forecast.

The Council Tax collection rate at the end of Quarter 2 was 47.97% of the collectable debit, which was 0.04% lower than the corresponding figures in 2021/22.  The Business Rates collection rate at the end of Quarter 2 was 51.17% of the collectable debit which was 14.47% higher than the corresponding figure in 2021/22.  There were two reasons for the significant difference, namely 2021/22 Quarter 1 collectible debit was reduced as a result of retail businesses receiving 100% relief, which was further reduced to 66% in Quarter 2, increasing the collectable debit by approximately £5.1m; and schools paying Business Rates in one single payment, rather than instalments.  It was noted that the 2022/23 collection rates were now in line with pre-COVID 2019/20 rates.  The next few months would provide a clearer picture on the impact of the current economic crisis on the Council’s finances.  The CFO would work closely with Heads of Services and Members to reduce areas of overspend and its impact on reserves.

The Capital Programme was forecast to underspend by £112.2m against the revised budget, with slippage relating to schemes in 2022/23, in particular the design of the spine road for the Blackfriars development and negotiations with the Clinical Commissioning Group over potential income at the Barnhorn Road development.  The CFO and Heads of Services would review and carry forward into the following financial years, if required.

RESOLVED: That the report be noted.

(Councillor J. Barnes declared a Personal Interest in this matter as Director of Rother DC Housing Company Ltd and in accordance with the Members’ Code of Conduct remained in the meeting during the consideration thereof).