Agenda item

(a)The reasons for the net revenue budget end of year projected overspend of £1.1m be considered;

(b)The capital programme forecast outturn of £50k be considered.

The Executive Member for Financial Sustainability presented the financial forecast for 2024/25 at the conclusion of Q1. He said that the council were currently predicting a £1.1 million overspend in the revenue budget with a £50,000 underspend in the capital programme. He said the values presented were disappointing but said that efforts were being made to reduce the impact of the additional costs. He said that the circumstances that have led to a projected overspend were unforeseen at the time of budgeting and for reasons outside the council’s control.

Councillor Brittain proposed that the recommendations in the report be supported. Councillor Daar seconded the proposal.

Councillor Deering referred to paragraph 2.7 of the report and asked for clarification about the council’s intentions with Charrington’s House as the report seemed to suggest it would be disposed of.

Councillor Brittain said that the paragraph related to business rates on Charrington’s House. He said if it was demolished, the rate liability would go away.

Councillor Deering said the position was confusing because the council could not afford to demolish it but would not be disposing of it.

Councillor Brittain said the report was highlighting that it had been considered as an option.

The Head of Housing and Health clarified and said that if it was disposed of before the end of the year, the business rate liability would fall away. He said demolishing it was another way of potentially getting rid of the business rate liability.

Councillor Jacobs asked at which point did Charringtons House move from council ownership into developer ownership.

Councillor Brittain said it would transfer on the signing of the Development Agreement.

Councillor Estop asked if the developer disposed of it once it had ownership would it reduce the income to the council.

The Head of Strategic Finance and Property said that the Development Agreement would contain a Section 123 agreement. It would not affect the development value of the capital receipt.

Councillor Daar asked the value of the loan that the council had borrowed to fund the capital programme and what the interest rate was.

Councillor Brittain replied that £36million was the current value of council borrowing. He said this was funded from short term finance with various packages of loans with differing interest rates.

Councillor Jacobs referred to page 13 of the supplementary agenda and questioned why the £170,000 forecast on the United Reform Church Hall had not been spent.

The Head of Strategic Finance and Property explained that the £170,000 was to complete works on the hall. The council had expected the lease with the church to have ended but the works to the building had been delayed due to a land dispute. He expected the church to continue with the lease until March 2025 and the £170,000 expenditure would move into the 2025/26 financial year.

Councillor McAndrew asked about the bad debt arrangements at paragraph 2.5. He said the issue had been discussed for a number of years and the outstanding debt had actually increased since 2021. He asked why this debt had not been tackled previously.

The Head of Strategic Finance and Property said the restructure of the finance team was complete with all staff in post at the end of the 2023/24 financial year. He said they had commissioned the Credit Protection Association to purge the old debt and were hoping for a 40-50% recovery rate. He said the team were concentrating on debt that came onto books immediately. He said he was confident that there would be a significant decrease in the debt at the end of this financial year.

Councillor Deering said that bad debt should always be managed and said the number might decrease but it would be useful to know if this debt had been collected or written off.

The motion to support the recommendations having been proposed and seconded was put to the meeting and upon a vote being taken, was declared CARRIED.

RESOLVED – That (A) the reasons for the net revenue budget end of year projected overspend of £1.1m be considered; and

(B)       The capital programme forecast outturn of £50k be considered.