The Cabinet Member for Corporate Services introduced the report, and stated that:

·  The Council had a projected revenue overspend of just over £250, 000 for the financial year, with an £800,000 overspend being offset by savings elsewhere in the budget. The overspend was mainly due to the cost of temporary accommodation (TA).

·  Effective monitoring of the Council’s finances was important, with further savings likely required to eliminate the potential £270,000 end of year deficit.

·  There had been slippage to the capital programme, including to the 1,000 Affordable Homes Programme, with the variances and virements contained within Appendix 1 to the report briefly outlined. The Key Performance Indicators had achieved the targets set.

The Cabinet Member reiterated the Council’s difficult financial situation, stating that it was important to retain a strong balance sheet. The allocated and unallocated reserves were £19.8 million and £11.6 million respectively, with the latter representing 22% of the Council’s total expenditure. The Council was not at risk of issuing a Section 114 notice.

In response to questions, the Director of Finance, Resources and Business Improvement stated that:

·  The variances relating to the Sandling Road Site were mainly due to a delay in billing tenants for utilities, with it unlikely that all costs could be recovered through service charges;

·  There should not be a variance arising from the transfer of 50% ownership to the Council from Kent County Council, with the matter likely a timing issue. Further information would be provided outside of the meeting;

·  The rental income from Maidstone House had been less than projected. This was due to the market demand being for smaller units, requiring work to alter the spaces available and cater to the market. It was expected that the space would be leased following the work’s completion; 

·  The funding used to secure the Traveller Site Manager and Housing and Inclusion roles was delivered through virements rather than increasing the budget. The former had been supported through the funds previously paid to KCC when that authority managed the site, to support the responsibility being brought in-house. The Housing and Inclusion roles had been supported through previously unspent homelessness grant funding, which had been placed in the relevant reserve and had to be used to support the service. The funding provided would be sufficient to support the staff’s employment through the Medium Term Financial Strategy period;

·  The slippage relating to the 1,000 Affordable Homes Programme related to securing planning permissions and contractors for the sites purchased. The programme continued to progress, particularly at the Maidstone East and old Springfield Library sites;

·  The slippage relating to the Biodiversity and Climate Change Action Plan was to allow the Council to secure external match funding to support initiatives, such as the de-carbonisation of the Council’s buildings;

During the discussion, concerns were raised on the variances shown for the Archbishops Palace and Granada House sites, and the reduction in the numerical value given to the corporate risk for ‘Housing Pressures Increasing’, given the financial overspend forecast for TA, slippage to the affordable homes progress and that homelessness was not within the Council’s direct control.

In response, the Director of Finance, Resources and Business Improvement stated that Officers under-estimated the time required to generate income from both sites; there were plans in plans to achieve this through securing an operator and completing the refurbishment works to the sites respectively. The Emergency Planning and Resilience Manager stated that the relevant officers had agreed that the rating was suitable for the risk at the current time, with the difference between the risk generally and then the mitigating actions in response affecting the overall risk score. Further information on the reasoning for the risk reduction would be provided outside of the meeting.

It was requested that future reports contain additional explanation to support the information provided. This included splitting the earmarked reserves into categories to reflect whether the funding originated from central government funding or by other sources; the use of and reasoning behind virements, given the creation of additional roles in the Housing and Inclusion Team and the Traveller Site Manager; and providing explanation on the risk values given to corporate risks, following the concerns raised relating to the ‘Housing Pressures Increasing’ risk. 

In response to a comment on the provision of services through reserves, the Cabinet Member strongly emphasised that retaining a high level of reserves would support the Council retaining a robust financial position and securing the provision of good quality services for the borough. Support was expressed for advertising the services already being provided to residents, such as the ‘Roadshows’ taking place. 

RESOLVED: That

1.  The Revenue position as at the end of Quarter 1 for 2023/24, including the actions being taken or proposed to improve the position, where significant variances have been identified, be noted;

2.  The Capital position at the end of Quarter 1 for 2023/24 be noted;

3.  The Performance positions as at Quarter 1 for 2023/24, including the actions being taken or proposed to improve the position, where significant issues have been identified, be noted;

4.  The Recovery and Renewal update, attached at Appendix 3 to the report, be noted;

5.  The UK Shared Prosperity Fund update, attached at Appendix 4 to the report, be noted; and

6.  The Risk Update, attached at Appendix 5 to the report, be noted.

Note: Before the debate on the item, Councillor Cannon stated that he did not have any disclosures of interest or lobbying to declare.