Agenda item

Consideration was given to a report presented by the Finance Manager, Neighbourhood and Adult Services, relating to the Housing Revenue Account based upon actual income and expenditure to the end of February, 2014.  The overall forecast was that the Housing Revenue Account (HRA) would make a contribution to working balances (reserves) of £0.369M, a variation of £-2.968M against approved budget. 

Appendix A of the report provided the Budget Operating Statement for 2013/14 which showed the various income and expenditure budget lines which made up the net cost of delivering the Service.  The latest forecast net cost of Service was £-8.781M, together with Revenue contribution to Capital costs and interest received, would result in an overall surplus of £0.369M to be transferred to Working Balances.

Expenditure

Based upon expenditure and commitments to date, total expenditure was forecast to outturn at £71.232M compared to a budget provision of £73.091M, a reduction in spend of £1.859M.  The main variations were:-

Contributions to Housing Repairs

-          Repairs and Maintenance – Currently forecast to underspend £756,000 against budget at £17.966M.  The Empty Homes budget was difficult to forecast given it being a responsive service.  At the end of January there had been 256 more void completions than budgeted, the main reason being the impact of the Welfare Reform as more tenants requested a transfer to smaller properties.  Within the Housing Repairs budgets there was an overall forecast overspend on Empty Homes due to increase in minor voids offset by a forecast underspend on overheads within revenue schemes plus shared savings now agreed with both contractors

Supervision and Management

-          Forecast to outturn at £19.072M, overall underspend of £993k.  The main reason for the variation was lower than expected staff turnover including delays in implementing the review of structures across a number of teams.  This was reduced by an additional contribution to the Furnished Homes reserve due to additional income as more clients used the Scheme

-          Forecast cost of Capital Charge was £200k less than budgeted due to lower than anticipated interest rates

-          Forecast overspend of £40k due to the increase in number of void properties for Rents, Rates and Taxes

-          Forecast increase to the provision for bad debts to reflect the increase in number of current and former tenant arrears and outstanding income from rechargeable repairs

Income

-          Total forecast income collectable was £80.013M, an increase of £1.109M above the approved budget of £78.904M

-          Dwelling rental income was projected to over-recover by £274k.  However,  non-dwelling rents was forecast to under-recover against budget by £51k due to a review and reclassification of a small number of properties to General Fund resulting in less income due to the HRA

-          Income from charges for services and facilities were forecasting an outturn of £4.342M, an over-recovery of £740k mainly as a result of additional income on Furnished Homes due to increase in the number of clients, additional fee income from Right to Buy sales plus one off income from prior year charges for District Heating.   However, there was a forecast under-recovery of income from clients using Sheltered Neighbourhood Centres services as tenants opted out of the laundry charge

-          Other fees and charges were forecasting an over-recovery of income of £147k which included additional income in respect of the sale of tenants contents insurance, recovery of Court costs, income from second hand furniture and income from utility companies for the use of solar panels

Resolved:-  That the latest financial projection against budget for 2013/14 be noted.