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Appendix 1


Second Quarter Financial Update 2021/22
Policy & Resources Committee
24th November 2021
Lead Officer:  Mark Green
Report Authors: Ellie Dunnet/Paul Holland





Part A: Executive Summary & Overview                                     Page 2

Part B: Second Quarter Revenue Budget 2021/22      

B1)    Revenue Budget: Council                                                      Page 6 

B2)    Revenue Budget: Policy & Resources (PRC)                             Page 7 

B3)    PRC Revenue Budget: Significant Variances                            Page 9

B4)    Other Revenue Budgets: Significant Variances                          Page 10

B5)    Virements                                                                          Page 13

Part C: Second Quarter Capital Budget 2021/22     

C1)    Capital Budget: Council                                                        Page 15

C2)    Capital Budget: Policy & Resources (PRC)                               Page 15

C3)    Capital Budget Variances                                                     Page 17

Part D: Second Quarter Local Tax Collection 2021/22    

D1)    Collection Fund                                                                   Page 20

D2)    Collection Rates                                                                  Page 20    

D3)    Business Rates Retention (BRR)                                            Page 21

Part E: Reserves & Balances 2021/22 

E1)    Reserves & Balances                                                           Page 23

Part F: Treasury Management 2021/22          

F1)     Introduction                                                                       Page 25

F2)     Economic Headlines                                                            Page 25    

F3)     Council Investments                                                            Page 25

F4)     Council Borrowing                                                               Page 26

Part G: Maidstone Property Holdings      

G1)    Maidstone Property Holdings Ltd. (MPH)                                 Page 28    

G2)    MPH Headlines                                                                    Page 28


Part Aart A




Executive Summary & Overview


This report provides members with the financial position as at 30 September 2021, covering activity for both the Council as a whole and this committee’s revenue and capital accounts for the first two quarters of 2021/22.

Members will be aware of the significant uncertainty in the 2021/22 budget estimates arising from the ongoing impact of the Covid-19 pandemic, both in relation to demands on the Council to respond and the speed of local economic recovery.  Financial support from central government received during 2020/21 continues to support specific activities, and the unringfenced Covid-19 grant of £860,000 will be used to support recovery and renewal activities.

In addition, the Council has recently applied for the final round of funding under the government’s sales, fees and charges compensation scheme covering income losses between April – June 2021 measured against the 2020/21 income budget.  The value of this claim is estimated at £0.4m and is expected to be the final allocation of unringfenced Covid-19 funding from central government.

The second quarter monitoring report provides the forecast year end position for revenue and capital and updates the Committee on a range of other inter-related financial matters including Local Tax Collection, Reserves and Balances, Treasury Management and Maidstone Property Holdings.

The headlines for Quarter 2 are as follows:

Part B:   Revenue Budget – Q2 2021/22

·         At the Quarter 2 stage, the Council has incurred net expenditure of £2.335m against a profiled budget of £4.500m, representing an underspend of £2.165m.

·         For the services reporting directly to PRC, net expenditure of £0.490m has been incurred against a profiled budget of £1.711m, representing an underspend of £1.221m. The large underspends for the year to date arise mainly from timing differences, principally receipt of government grants which have not yet been spent.  The projected out-turn for the Council for the year as a whole as at the end of Quarter 2 is an underspend of £0.265m.

Part C:   Capital Budget – Q2 2021/22

·         At the Quarter 2 stage, the Council has incurred overall expenditure of £7.255m against a budget allocation within the Capital Programme of £54.600m.

·         Expenditure for services reporting directly to PRC of £3.303m has been incurred against the budget of £22.850m.

Part D:   Local Tax Collection 2021/22

·         Adjusted target collection rates have been met for Council Tax but missed for Business Rates. 


·         It is anticipated that the Council will retain £0.35m through the Kent Business Rates Pool in 2021/22.

Part E:   Reserves & Balances 2021/22

·         The unallocated balance on the General Fund at 1 April 2021 was £9.2m. It is anticipated that balances will remain above the minimum level set by Council.


Part F:   Treasury Management 2021/22

·         The Council held short-term investments of £16.16m and had £11.0m in outstanding borrowing as at 31st March 2021.

·         Balances as at 30th September 2021 are £45.19m in short-term investments and £9m of short term local authority borrowing.


Part G:   Maidstone Property Holdings Ltd. (MPH)

·         MPH net rental income for the second quarter of 2021/22 was £236,000.  Rent arrears as at 30 September totalled £9,000.

Part B
Second Quarter Revenue Budget 2021/22

B1)  Revenue Budget: Council

B1.1  At the Quarter 2 stage, the Council has incurred net expenditure of £2.335m against a profiled budget of £4.500m, representing an underspend of £2.165m.

B1.2  Tables 1, 2 and 3 below provide further insight into the Council’s income and expenditure position for Quarter 2 2021/22 by providing alternative analyses: by Committee, Priority and Subjective Heading.

Table 1: Net Expenditure 2021/22 (@ 2nd Quarter): Analysis by COMMITTEE

Table 2: Net Expenditure 2021/22 (@ 2nd Quarter): Analysis by PRIORITY

Table 3: Net Expenditure 2021/22 (@ 2nd Quarter): Analysis by SUBJECTIVE SPEND


B2)  Revenue Budget: Policy & Resources (PRC)

B2.1  Table 4 below provides a detailed summary of the budgeted net expenditure position for the services reporting directly into PRC at the end of Quarter 2. The financial figures are presented on an accruals basis (i.e. expenditure for goods and services received, but not yet paid for, is included). 

Table 4: PRC Revenue Budget: NET EXPENDITURE (@ 2nd Quarter 2021/22)


B2.2  The table shows that, at the Quarter 2 stage, for the services reporting directly to PRC, net expenditure of £0.490m has been incurred against a profiled budget of £1.711m, representing an underspend of £1.221m. The large underspends for the year to date arise mainly from timing differences, principally receipt of government grants which have not yet been spent.  The projected out-turn for the Council for the year as a whole as at the end of Quarter 2 is an underspend of £0.265m.

B3)  PRC Revenue Budget: Significant Variances

B3.1  Within the headline figures, there are a number of both adverse and favourable net expenditure variances for individual cost centres. It is important that the implications of variances are considered at an early stage, so that contingency plans can be put in place and, if necessary, be used to inform future financial planning.  Variances will be reported to each of the service committees on a quarterly basis throughout 2021/22.

B3.2  Table 5 below highlights and provides further detail on the most significant variances at the end of Quarter 2.



















Table 5: PRC Variances (@ 2nd Quarter 2021/22)


Positive Variance





Year End Forecast Variance

Policy & Resources Committee


Contingency - The various grants received for Covid-19 are held in this budget, and it is anticipated that they will be utilised over the remainder of the year.




Unapportionable Central Overheads – Payments in respect of pensions back funding are lower than estimated.




NNDR Collection – The overspend is for work done on business rates reviews, but funding has now been identified for this.




Interest & Investment Income - Interest rates continue to be lower than forecast and are projected to stay low for the remainder of the year.




Sundry Corporate Properties - There is an income target of £0.440m in the Medium-Term Financial Strategy from the acquisition of new properties. There have not been any acquisitions yet in the current financial year but this position is expected to change.




MPH Residential Properties – The budget included a provision for a major property acquisition that is no longer proceeding, and it also appears that the income forecasts for two other properties are also too high. There is also a need to fund an Accommodation Officer post for MPH.




Lockmeadow Complex – The current variance reflects units that are currently vacant. However, the budgets are being reviewed and will be updated when the new food hall is opened.




Rent Allowances & Rent Rebates - The variances are due to the rent allowances/rebates awarded and the income received from the government. These are an estimated cost until the year-end subsidy claim is submitted.




Innovation Centre Section – The budgets are in the process of being reviewed and updated as the centre is due to open shortly, and this will deal with the current variance.




South Maidstone Depot – This variance has arisen from an increased level of spend on maintenance and the servicing of equipment.




Maidstone House - This variance reflects additional income received from the sub-letting of the 4th floor.







B4)  Other Revenue Budgets: Significant Variances

B4.1  Tables 6, 7 and 8 below highlight and provide further detail on the most significant variances.

Table 6: SPI Variances (@ 2nd Quarter 2021/22)


Positive Variance





Year End Forecast Variance

Strategic Planning & Infrastructure Committee






Building Regulations Chargeable – The budget figure was reduced by 10% for this year, and income has been higher than expected so far, and is forecast to continue to be for the rest of the year.




Development Control Advice – The reduced level of income reflects a fall in the number of pre-planning agreements entered into so far this year. The position is not expected to improve.




Development Control (Majors) – The number of major applications remains low and is not expected to improve significantly for the remainder of the year.




Development Control (Minors) - The positive variance is due to a high level of income being generated coupled with the 10% decrease in income budget. The excess in income is due to a substantial increase in principally householder applications.





Local Plan Review


B4.1 The Local Plan Review (LPR) process is an important, high profile and continuous task

undertaken by the Planning Services team. The associated revenue spending profile however

is cyclical and does not fit the conventional 12-month financial planning process for general

revenue expenditure. Instead, spending tends to follow the five-year production period of

each Local Plan with various peaks and troughs over that time period.


B4.2 The LPR process is therefore funded through an annual £200,000 revenue contribution, in

addition to the existing service budget, with any remaining unspent balances at year end

automatically rolled forward into the following financial year. The table below shows the

available revenue resources currently allocated to fund LPR activities, and the spend as at 30th September 2021.






Opening Balance 01/04/2021 (including 2021/22 allocation)

Spending April - September 2021

Forecast Spending October - March 2022

Forecast Spending Balance 31/03/2022










Table 6a, Local Plan Review budget (Q2, 2021/22)


B4.3 The above forecast excludes expenditure on the Town Centre Strategy, which was covered by a previous separate report to this committee.


B4.4 The residual overspend, currently estimated to be £239,000 will be funded from corporate contingency budgets, as agreed by Policy and Resources Committee on 24 March 2021.


B4.5 In addition to the resources and planned expenditure outlined above, £140,000 was allocated from the 2020/21 underspend for non-spatial planning policy development. This will be overseen by the Interim Local Plan Review Director in consultation with the Chairman and Vice-Chairman of the Strategic Planning and Infrastructure Committee. Planned expenditure on these activities has not been included within the table above.




Positive Variance





Year End Forecast Variance

Strategic Planning & Infrastructure Committee






On Street Parking – Penalty Charge Notice (PCN) income is higher than forecast, and there are also reduced running costs, although spend is expected to increase for the remainder of the year.




Pay & Display Car Parks – Income levels continue to be low and with the continuation of home working are not expected to improve significantly. Lockmeadow income had recovered during Q1 but that trend has not been continued, although it is hoped that the opening of the food hall will have a positive impact.




Off Street Parking Enforcement – PCN income is higher than forecast due to a higher number of notices that have been issued.





Table 7: CHE Variances (@ 2nd Quarter 2021/22)


Positive Variance





Year End Forecast Variance

Communities, Housing & Environment Committee


Crematorium – Demand for the service continues to be high. This has led to the need to realign the cremator, and surplus income is being used to fund these works.




Homeless Temporary Accommodation – Costs have reduced due to the increase on the Council’s own properties that were specifically purchased to deal with homeless families. Use has also been made of other Council and Maidstone Property Holdings properties.




Homelessness Prevention – There are a number of budgets in this area that are not being fully utilised, the most significant ones being those for the guaranteed rent scheme and the homefinder scheme.




Food & Safety Section - A number of Covid-related grants are held in this section that have yet to be spent. These are Test & Trace Support, Compliance & Enforcement and Test & Trace Door Knocking Service.





Table 8: ERL Variances (@ 2nd Quarter 2021/22)


Positive Variance





Year End Forecast Variance

Economic Regeneration & Leisure Committee


Leisure Centre – As part of the management contract with Serco the council receives annual income of £0.2m. This has been on hold whilst negotiations with Serco over losses incurred during the pandemic have been taking place, but these payments are expected to resume shortly.




Mote Park Adventure Zone – This variance is a provision that was raised in 2020/21 for the management fee which has been delayed due to Covid-19 issues.




Business Terrace Phase 3 – A number of offices remain vacant, and the Council also now has empty rates liability on some of these.




Market – Letting income for stalls and the hall have been lower than forecast for the first two quarters, but income is expected to recover to normal levels for the remainder of the year.





B5)  Virements

B5.1  In accordance with the Council’s commitment to transparency and recognised good practice, virements (the transfer of individual budgets between objectives after the overall budget has been agreed by full Council) are reported to the Policy & Resources Committee on a quarterly basis.

B5.2  Virements may be temporary, meaning that there has been a one-off transfer of budget to fund a discrete project or purchase, or permanent, meaning that the base budget has been altered and the change will continue to be reflected in the budget for subsequent years.

B5.3  The virements made in Quarter 2 are presented in Table 9 below. These were all temporary virements.

Table 9: Virements (@ 2nd Quarter 2021/22)




Part C
Second Quarter Capital Budget 2021/22
























C1)  Capital Budget: Council

C1.1  The overall five-year Capital Programme for 2021/22 to 2025/26 was approved by the Council on 24th February 2021. Some capital funding will now come from prudential borrowing as other sources of funding are not sufficient to cover the costs of the programme, although funding does continue to be available from the New Homes Bonus (NHB).

C1.2  The 2021/22 element of the Capital Programme (including unused resources brought forward from 2020/21) has a revised budget of £54.600m. At the Quarter 2 stage, capital expenditure of £7.255m had been incurred, with budget remaining of £47.302m.

C2)  Capital Budget: Policy & Resources Committee (PRC)

C2.1  Progress towards the delivery of the 2021/22 PRC element of the Capital Programme at the Quarter 2 stage is presented in Table 10 below.

C2.2  At the Quarter 2 stage, expenditure of £3.303m has been incurred against an adjusted budget of £22.850m million for PRC. This leaves a remaining budget of £19.548m.


















Table 10:   Capital Expenditure (@ 2nd Quarter 2021/22)

C3) Capital Budget Variances (@ 2nd Quarter 2021/22)


Policy and Resources Committee

C3.1  The most (financially) notable PRC items in the table above are as follows:

Infrastructure Delivery – At this stage there are no plans to spend this budget during 2021/22.   

Asset Management/Corporate Property – This is indicative spend for the year and is likely to change as further works are identified during the remainder of the year.                   

Communities, Housing and Environment Committee

C3.2  The most (financially) notable CHE items in the table above are as follows:

Granada House Extension and Refurbishment Works – The rooftop extension is no longer going ahead. Some of this budget may be required for the refurbishment works should the cost of the works be greater than currently anticipated. These works are not scheduled to commence until towards the end of the year.          

Private Rented Sector Housing and Affordable Housing Programmes – The housing team are working on various projects which are currently at different stages. Expenditure is very much indicative at this stage and expected to increase during the last two quarters of the year once schemes have progressed further and new ones are potentially secured.

Acquisitions Officer Social Housing Delivery Partnership – The overspend is due to an extra resource being required with two acquisition officers now being in post to help deliver the housing capital programme, both of which have had contract extensions. Furthermore, the Leader of the Council has recently proposed a scaling up of the Council’s investment in housing, and so this additional staffing capacity will support this ambition and will be feature in the imminent capital programme proposals for the next Medium-Term Financial Strategy.

Gypsy & Traveller Sites Refurbishment – The tenders for work have come in at £1.8m, which is significantly above the budget for the scheme. The additional funding for this work was approved by Policy & Resources Committee in October.

Economic Regeneration and Leisure Committee

C3.3  The most (financially) notable ERL items in the table above are as follows:

Mote Park Visitor Centre & Estate Services Building – Construction works are now underway, and the new centre will open in 2022.

Mote Park Lake Dam Works This scheme is now substantially complete, although some works to a sluice gate are yet to be completed. The figures in the appendix for these works are indicative pending an update on the actual costs of these works.                   

Mall Bus Station Redevelopment – Tender prices for the project came back higher than had been budgeted for. Rather than try and find a cost engineering solution that may have resulted in a reduced specification it was decided to use £0.3m additional funding from the Business Rates Pilot Projects Reserve to allow the project to proceed as planned.  

Part D
Second Quarter Local Tax Collection 2021/22


























D1)  Collection Fund


D1.1  A large proportion of the Council’s income is generated through local taxation (Council Tax and Business Rates), which is accounted for through the Collection Fund.


D1.2  Due to the risk in this area, including the risk of non-collection and the pooling arrangements in place for Business Rates growth, the Council monitors the Collection Fund very carefully.


D1.3  There are statutory accounting arrangements in place which minimise the in-year impact of collection fund losses on the general fund revenue budget, however, losses incurred in one year must be repaid in subsequent years so there is a consequential impact on future budgets and the medium-term financial strategy.


D2)  Collection Rates & Reliefs


D2.1  The collection rates achieved for local taxation are reported in the table below, alongside the target and the equivalent position for the previous financial year.


Table 11:   Local Tax Collection Rates (Q2 2021/22)


Target Q2


Actual Q2


Council Tax



Business Rates




D2.2  Targets have been adjusted in light of what is considered to be collectible.  The amount of Council Tax collected is in line with the revised targets. 

D2.3 The collection rate for business rates is still below target, although the gap is starting to close.    Underperformance can be attributed to the removal of the 100% reduction for retail, hospitality and leisure ratepayers, which was replaced with a 66% reduction from July, adding £8m to the net collectible debit.  During September, a large-scale re-addition (and respreading) of Expanded Discount back to the Net Collectible Debit has adversely impacted collection rates as a result of several major ratepayers choosing to opt out of the government scheme.

D3)  Kent Business Rates Pool


D3.1 The council has continued to participate with other Kent authorities during 2021/22 in order to maximise the proportion of business rates growth it is able to retain.  Forecast pooling gains for Maidstone Borough Council amount to £0.35m for 2021/22.  As in previous years, this funding is allocated to spending which supports the delivery of the council’s Economic Development Strategy.


D3.2 As part of the pooling arrangements, pool members share the risks, as well as the rewards of pool membership.  The eventual impact of Covid-19 on the business rates retention scheme is extremely difficult to forecast, due to the number of unknowns e.g. the impact of the removal of expanded reliefs to businesses affected by Covid-19, and the longer term impacts on local, national and global economies.


D4)  Write-Offs


D4.1 The Committee is asked to approve the write off of £13,887.12 in unpaid business rates debt for JB Global Ltd (trading as Oak Furniture Land) relating to the 2020/21 financial year.  This went into administration in June 2020, and there are insufficient funds for a dividend to be paid to unsecured creditors.


D4.2  As there is no prospect of collecting the outstanding amounts from the ratepayer, it is recommended that these amounts are written off to reflect this.  In accordance with the constitution, individual write offs exceeding £12,000 require the approval of Policy and Resources Committee.


D4.3  Notwithstanding the current hiatus on recovery action for business rates, the Council takes a robust approach to recovery of Business Rates. This involves progressive action which would typically include:


•       Reminder for non-payment

•       Final notice for non-payment

•       Summons for non-payment

•       Application to Magistrates Court for a Liability Order

•       Instruction of Enforcement Agent to recover

•       Bankruptcy or liquidation, where appropriate

•       Proceeding to seek committal to prison (individuals).


D4.4  However, throughout the process the Council actively encourages contact from any business experiencing difficulty in order to negotiate arrangement for payment.


D4.5  The Council could continue to hold these debts as outstanding, but this option is not recommended where there is no prospect of recovery as this would distort the financial position of the Council.  The Council maintains a provision for bad debts, and there is sufficient resource available within this balance to cover the value of the proposed write offs







Part E
Reserves & Balances 2021/22



E1) Reserves & Balances


E1.1  The combined total of the General Fund balance and Earmarked Reserves as at 1 April 2021 was £33.5 million, including £14.8 million set aside to fund future collection fund deficits.  The 2020/21 external audit has now been completed and these figures reflect what is in the Statement of Accounts.  The makeup of the balance, and the forecast movements during 2021/22 are presented in Table 13 below.

 E1.2 The closing balance enables a minimum general fund balance of £4.0 million to be maintained, as agreed by full Council in February 2021.

Table 13:  Reserves & Balances Quarter 2 2021/22


Balance at 1 April 2021

Forecast movement in

Estimated Balance at 31 March 2022


General Fund




Unallocated balance












Earmarked Reserves




Local Plan




Neighbourhood Plans




Planning Appeals




Civil Parking Enforcement




Homelessness Prevention & Temporary Accommodation




Business Rates Earmarked Balances




Lockmeadow Complex




Future Funding Pressures




Trading Accounts




Future Capital Expenditure




Invest to Save Reserve




Commercial Risk Reserve




Funding for future collection fund deficits




Resources carried forward from 2020/21 to 2021/22












Total General Fund Balances




Total excluding collection fund deficits




    Table 13: General Fund and Earmarked Balances at Q2 2021/22





Part F
Treasury Management 2021/22

F1) Introduction

·           The Council has adopted and incorporated into its Financial Regulations, the Chartered Institute of Public Finance and Accountancy’s Treasury Management in the Public Services: Code of Practice (the CIPFA Code).

·           The CIPFA Code covers the principles and guidelines relating to borrowing and investment operations.  On 24th February 2021, the Council approved a Treasury Management Strategy for 2021/22 that was based on this code.  The strategy requires that Policy & Resources Committee should formally be informed of Treasury Management activities quarterly as part of budget monitoring.

F2) Economic Headlines


·           During the Quarter ended 30th September 2021, the Council’s Advisors, Link Asset Services, reported:      


•  The Monetary Policy Committee (MPC) voted unanimously, at the meeting on 24th September 2021, to leave Bank Rate unchanged at 0.10% and made no changes to its programme of quantitative easing purchases due to finish by the end of this year at a total of £895bn.


  • Large increases in prices, especially gas and electricity are likely to lead to faster and higher inflation expectations and underlying wage growth, which would in turn increase the risk that price pressures would prove more persistent next year than previously expected. Indeed, to emhasise its concern about inflationary pressures, the MPC pointedly chose to reaffirm its commitment to the 2% inflation target in its statement.


•  Financial markets are now pricing in a first increase in Bank Rate from 0.10% to 0.25% in February 2022, but this looks ambitious as the MPC has stated that it wants to see what happens to the economy, and particularly to employment once furlough ends at the end of September.


F3) Interest Rates

  • The Council has appointed Link Group as its treasury advisor and part of their service is to assist the Council to formulate a view on interest rates. The PWLB rate forecasts below are based on the Certainty Rate (the standard rate minus 20 bps) which has been accessible to most authorities since 1st November 2012.

  • Bank Rate is not expected to go up fast after the initial rate rise as the supply potential of the economy has not generally taken a major hit during the pandemic, so should be able to cope well with meeting demand without causing inflation to remain elevated in the medium-term, or to inhibit inflation from falling back towards the MPC’s 2% target after the surge to around 4% towards the end of 2021. Three increases in Bank rate are forecast in the period to March 2024, ending at 0.75%. However, these forecasts may well need changing within a relatively short time frame for the following reasons:


§  Economic recovery may be running out of steam during the Summer and now into Autumn season. 

§  Shortages like petrol and diesel may cause some sectors to take a hit.

§  Rising gas and electricity prices may deflate consumer spending which will cool inflation with MPC having to increase bank rate.

§  On the other hand, consumers are sitting on around £200bn of excess savings left over from the pandemic so when will they spend this sum.

§  There are 1.6 million people coming off furlough at the end of September; how many of those will not have jobs on 1st October and will, therefore, be available to fill labour shortages in many sectors of the economy? So, supply shortages which have been driving up both wages and costs, could reduce significantly within the next six months or so and alleviate the MPC’s current concerns.

§  Also, COVID issues may change which could depress economic activity.


·           Gilt yields since the start of 2021, we have seen a lot of volatility and hence PWLB rates. During September, gilt yields from 5 – 50 years have steadily risen and rose further after the hawkish tone of the MPC’s minutes last week. The forecasts show a steady, but slow, rise in both Bank Rate and gilt yields during the forecast period to March 2024.


F4) Council Investments                                       

  • The council held investments totaling £16.16m at the start of the year, this has now risen to £45.19m at 30th September 2021. The reason the investment balance is at this level is due to left over business and COVID grant funding from the Government and the lower than expected Capital spend. However, grants will soon be repaid to Government and the capital programme will accelerate over the next few months, which in turn will reduce this balance.   

·         A full list of investments held at this time is shown at Table 14 below.  All investments are held in either short term notice accounts or money market funds, to be readily available to fund the Council’s liabilities, including the capital programme.






Table 14: Short-Term Investments (2nd Quarter 2021/22)

·         Investment income to 30th September 2021 totals £21k against a budget of £50k with an average rate of 0.13%.  As the interest rate table in F3 above shows, rates are at historically low levels and as the Council’s Treasury Management Strategy 2021/22 states investments will be kept short term to meet liabilities, these are kept in low yielding short term instruments.

F4) Council Borrowing

·         The Council held external borrowing amounting to £11m on 31st March 2021, all with Local Authorities, total borrowing as at 30th September 2021 was £9m. A list is shown at Table 15 below.   Short term borrowing rates have been extremely low and cash has been readily available from local authorities, which has been the preferred type of borrowing to date.  Interest paid on borrowing in 2021/22 has been £8k.  The Council is currently looking at other borrowing options such as UK Municipal Bonds Agency, PWLB and other financial institutions.  It is the Council’s aim to have a mixture of short and long term borrowing in order to spread the risks associated with interest rates and refinancing. At the beginning of November a £2 million first tranche of 50 year borrowing from the PWLB was obtained.


Table 15: Council Borrowing (2nd Quarter 2021/22)

Part G
Maidstone Property Holdings

G1)  Maidstone Property Holdings Ltd. (MPH)


G1.1  MPH is a wholly-owned subsidiary of the Council and was incorporated on 30th September 2016. It is primarily a vehicle for letting residential properties on assured short-hold tenancies. The company currently holds two properties on 22 year leases from the council.

G1.2  An Internal Audit review identified that there should be a mechanism in place to enable the company to formally report to the Council. Given the current level of activity within the company is relatively low, it was decided that this would be done via the quarterly budget monitoring process (to the Policy and Resources Committee). This section of the report provides an overview of the activity and performance of the company for the year to date.

G1.3  The MPH financial year-end was changed to 31 March, in order to align with the Council’s financial reporting period.  The external audit of the 2020/21 accounts is currently under way.


G1.4  On 18th December 2019, full Council accepted the Policy and Resources Committee recommendations and formally adopted the new Articles of Association, Operational Agreement, Services Agreement and Business Plan. The Services Agreement and Operational Agreement have subsequently been signed and sealed, and the amended Articles of Association submitted to Companies House. 

G2)  MPH Headlines


G2.1  Since the beginning of the financial year, management of residential accommodation has transferred from an external agent to the Council’s in-house accommodation team.  MPH also took on the lease of 54 new flats at Tower Hill (Brunswick Street), Tylers Place (Union Street) and Springfield Place.  All 54 flats have been let and tenants have moved in.

G2.2  Net rental income up to the end of the second quarter of 2021/22 totals £236,285 (2020/21 £72,577) This represents rent collected, less running costs, maintenance costs and recharges for staff time. 

G2.3  As at 30 September 2021, rent arrears were estimated at £9,000.  £5,500 of this total relates to a former tenant.  Officers are working to recover the amounts outstanding and to set up payment plans with other residents to reduce further debts. 

G2.5  The Council receives income from the company through charges made for services provided, and the property lease. After these charges and other expenses, it is expected that the company will achieve a breakeven position for 2021/22.

G2.6  As company activity increases over time, governance and reporting arrangements will be kept under review to ensure that they remain appropriate and commensurate with the scope of activity and associated risks.