Agenda item

Revenue Management Report - Quarter 2

To consider and provide a recommendation to Cabinet on the proposals set out in the attached report.

Minutes:

Jane Fineman, Head of Finance, Procurement and Parking introduced the report that showed actual expenditure on services compared to the revised budget for the period ending 30 September 2020.

 

Discussion and responses to Members questions included the following:

 

-       Actual expenditure to the end of September was £11.685m, £2.6m over budget.

-       This consisted of a shortfall in income of £4m less a saving in cost of £1.4m. 

-       The forecast outturn for the year was £2.2m over budget. An increase since quarter 1 of £360k.

-       At quarter 1, the income from sales, fees and charges was forecast to be £6.8m under achieved for the year due to the impact of Covid-19.  This increased by £145k in quarter 2 to £6.945m. This was mainly due to the under achievement of £289k for the Fusion Leisure Centre management fee income, a reduction in Court income, £80k from revenues and benefits and a further reduction in planning income of £25k.  This was offset by additional income of £249k for the Assembly Hall Theatre. 

-       Government had offered some compensation to help with income losses.  The Council must bare the cost of the first 5% of the lost income, but then Government would then compensate for 0.75p in every £1 thereafter.  

-       The Council had estimated that the level of compensation would be around £3.725m and this had been provided for in the forecast. 

-       This was an increase of £177k from quarter 1 from the loss of income for the sports centres. 

-       Forecast cost savings were anticipated to be £602k for the year.  A decrease of £392k this quarter.  The main contributor was £420k for additional financial support for the sports centres.  Also, costs of £233k had been forecast back into the budget for the Assembly Hall as it had now reopened.

-       The remaining saving of £261k mainly consisted of savings from staff vacancies. 

-       A lower collection of £825k for Council Tax and Housing Rents had also been estimated.

-       It was anticipated that the level of bad debt would increase and the eligibility for Council Tax support would also increase.

-       It was also projected that there would be a decrease in investment and bank interest of £187k this year due to the drop in interest rates to 0.1%. 

-       It was also forecast that the £85k rent for the property in Monson Road would not be collected.

-       The Government had allocated some Covid-19 Support Grants through 3 tranches of funding so far.  This funding, along with a new Burdens Grant of £170k to meet delivery costs associated with grant funding schemes had all been included in the forecast. 

-       Cabinet approved the use of Council ear-marked reserves to fund the balance of £1.856m forecast at quarter 1.  It would now be asked to fund the additional £360k.

-       The Council had £21.2m of usable reserves as at 31 March 2020.  This included £4.09m in the General Fund and £11.26m in ear-marked reserves.

-       The reserves had been analysed and £6.6m had been identified that could be used to meet the budget gap cause by Covid-19.

-       The management fee which was due to be paid by Fusion to TWBC had been waived.  The payment of additional grant by TWBC to Fusion was subject to the condition of them being accepted for a CLBILS Loan (Corona Virus large Business Interruption Loan Scheme).  To date Fusion had not received that loan so TWBC had made no payments to them.  Confirmation that Fusion had received the CLBILS Loan would be required before TWBC would start making any payments.

-       TWBC were unaware of any redundancy notices being given at The Weald Leisure Centre in Cranbrook.

-       The company who had the lease for the property on Monson Road had gone into liquidation.  As such the income originally expected (£85k) would not be forthcoming.

-       TWBC had been in regular contact with the Finance Director at Fusion.  They were confident that the CLBILS Loan would be received.

-       The property on Monson Road was currently being marketed.  TWBC were pursuing the damage to the building with the company, albeit this was with the liquidators so the expectation of receiving any money for repairs was small.  There was no evidence that the damage was a result of any criminal intent.

-       TWBC were actively trying to get a new tenant (rental market) into the property in Monson Road. 

-       Any money that came from Government would now be included in the forecast outturn which in turn would reduce the transfer needed from reserves.

-       The issue of TWBC making up any lost profits for Fusion was not something that had been discussed to date.

 

RESOLVED – That the recommendations to Cabinet set out in the report be supported.

 

 

Supporting documents: