Agenda item

To consider and comment on a month 5 Budget Monitoring update for Community Services, from the Strategic Manager Finance Business Partnering, Somerset Council. 

The Chair welcomed Christian Evans, Strategic Manager Finance and Business Partnering and Kerry Prisco Management Accounting and Reporting Lead to give a presentation to the committee. He invited comments and questions from the committee and the committee noted the report.  

The Chair welcomed Christian Evans, Strategic Manager Finance and Business Partnering and Kerry Prisco, Management Accounting and Reporting Lead to give the Scrutiny Committee – Communities an update on the Community Services budget position, at the request of the Executive committee. 

The Strategic Manager Finance and Business Partnering talked members through the key findings for the general fund, concluding that the majority of overspend is in Adults and Childrens services, and that there are no major concerns regarding the Community Services budget position. 

The Management Accounting and Reporting Lead then presented the Council’s Housing Revenue Account (HRA) to members, with the following key points highlighted to the committee: -    

This is about how the Council manages its own housing stock.

The HRA is a ring fenced, self-financing account since April 2012

One off Payment to the Govt of £132.5m (£85.2m TDBC and £47.3m SDC)

A 30-Year Business Plan is required 

There are financial benefits because all of the rental income is retained. 

The borrowing cap was removed in Oct 2018 giving more flexibility to borrow for new builds.

The Public Works Loan Board (PWLB) discount rate is now 0.6%, since 15 June 2023.

The Councils own housing stock is heavily regulated in terms of:

Compliance – providing a decent standard of homes  

Rent Standard – restricting rent increases 

Cross subsidy 

She talked members through the key risks, future issues and opportunities of the Housing Revenue Account, and the following comments and questions were received and discussed with members: -                                                 

Regarding the PWLB interest rate 0.6%, is this for new or existing loans? The Management Accounting and Accounting Lead advised that this is for new borrowing.  

Regarding the risks around homelessness and the rising costs of temporary housing, can more money be spent on self-catering multi occupancy units? The Service Manager Housing advised that there are ongoing discussions regarding options for this including looking at models such as the Rochester Road Modular Scheme and other bespoke homes models.   

Regarding Right to Buy Receipts, how much of this is retained by the Council? - The Management Accounting and Accounting Lead advised that the breakdown of money from Right to Buy Receipts is as follows: 

14% Treasury Contribution

2% Transaction fee

48% one for one 

36% Un adjustable allowable debt 

A member raised a specific case where residents were struggling with heavy fire doors that had been installed in a Somerset Council maintained communal housing premises, and the Service Manager Housing advised that work was being undertaken to electrify the fire doors in that particular premises.   

A non-committee member online asked if the Council is working with Community Land Trusts regarding buying land for new homes and he was advised that it is.

Regarding Right to Buy Receipts, what happens if these are not spent? The Management Accounting and Reporting Lead advised that these become payable to The Treasury, but that this has not happened before. 

A member asked that all presentations be shared with the committee in advance.

The Chair thanked all three of the officers for the update.

Resolved 

The Scrutiny Committee – Communities noted the Community Services Budget Monitoring Update report.