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

·  There was an adverse variance overspend of around £440,000, largely due to temporary accommodation and a reduction in rental income from Maidstone House.

·  Projected adverse variance across the financial year was estimated to reduce to £274,000 due to increase in investment income and reduction in the maximum revenue provision.

·  Two permanent virements had occurred between the Marden Caravan Site to the Traveller Site Manager and between the Homeless Prevention and Temporary Accommodation Reserve to the Housing Inclusion account.

·  Key Performance Indicator targets under Corporate Services portfolio were met, but not all targets in other services were met.

·  Reserves remain strong with £90.8 million in specific allocated reserves and £11.6 million in general reserves.

The Cabinet emphasised the risk in temporary accommodation and that the cost of living crisis was continuing but that inflation rates may not increase which would benefit residents. Concerns were also raised regarding the drop in rental income from Maidstone House and a projected overspend at Lockmeadow.

In response to concerns on temporary accommodation, the Director of Regeneration and Place stated that the Council had a portfolio of over 100 homes for temporary accommodation, that another 60 would be added in the next two years, and that he was exploring a leasing scheme for landlords that could be used for temporary accommodation.

In response to questions regarding Maidstone House, the Director of Finance, Resources and Business Improvement stated that plans to let out the vacant floors in Maidstone House had taken longer than anticipated but prospective tenants were ready to move into the second floor of the building. It was also stated that the charge for tenants at Lockmeadow included utilities which was appropriate for small businesses but that as utility costs had increased the Council had spent more on Lockmeadow than expected.

RESOLVED: That the Cabinet note:

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;

2.  That the Capital position at the end of Quarter 1 for 2023/24;

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

4.  The Recovery & Renewal Update, attached at Appendix 3 to the report;

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

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

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  ...  view the full minutes text for item 41