PPENDIX A

Item No. 6 EXECUTIVE

26 NOVEMBER 2012

SUBJECT:

FINANCIAL PERFORMANCE (DETAILED) – QUARTERLY MONITORING

REPORT BY:

DIRECTOR OF RESOURCES

LEAD OFFICER:

JACLYN GIBSON, ASSISTANT DIRECTOR - BUSINESS DEVELOPMENT & FINANCE

1. Purpose of Report

1.1 To present to the Executive the second quarter’s performance (up to 30th

September) on the Council’s:

General Fund

Housing Revenue Account

City Maintenance Services

Capital Programmes And, to provide a review of the key budget risk assessments.

1.2 Financial Procedure Rules require the Executive to receive, on a quarterly basis, a report prepared jointly by the Director of Resources and the other Directors commenting on financial performance to date. This report if designed to meet this requirement.

1.3 Paragraph 2 provides an executive summary, paragraphs 3 – 5 cover revenue monitoring outcomes, paragraph 6 outlines capital monitoring outcomes, paragraph 7 details movements on earmarked reserves and paragraph 8 highlights key issues from the budget risk assessments.

2. 2.1

Executive Summary

This section of the report provides a summary briefing on the financial position of the Council for the second quarter (up to 30

th September). The detailed financial

position is shown in sections 3 -

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Management of Resources

2011/12 2012/13

Actual Budget/

Target

Forecast

at Q2

£000 £000 £000

General Fund

Total Expenditure (£’000) 14,173 14,125 14,201

Housing Revenue Account

(Surplus)/Deficit in year (£’000) (89) (142) (467)

City Maintenance Service (Surplus)/Deficit in year (£’000) (139) 0 (68)

Balances General Fund (£’000)

2,137 1,606 1,530

Housing Revenue Account (£’000) 1,272 1,324 1,739

Capital Receipts

General Fund (£’000)

3,817 614 614

HRA (exc. RTB) (£’000)

0 0 63

HRA RTB’s (£’000)

69 81 81

Capital Expenditure

General Fund Investment Programme (£’000)

4,351 6,704 6,704

Housing Investment Programme (£’000)

31,598 8,140 8,140

Treasury Management

2011/12 2012/13

Actual Target/limit

(full year)

Actual to

Q2

Average Borrowing Rate (%)

4.48% 4.75% 4.14%

Maximum external debt (£m)

75.4m 93.0m 75.4m

Operational Level of external debt (£m)

75.4m 92.3m 75.4m

Average Investment Rate (%) 1.20% 0.88% 0.85%

Average level of investments (£m) 24.4m 20.1m 23.5m

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3. General Fund Revenue Account

3.1 For 2012/13 the Council’s net General Fund revenue budget was set at

£13,594,750, including a planned contribution from balances of £530,540.

3.2 A summary monitoring position for the nine months of the financial year, for all General Fund Services, is provided below. This has been prepared on a Service Reporting Code of Practice (SeRCOP) basis whereby Central Support Services are shown net of their recharges to services, hence why some service areas have a nil budget.

3.3 The Executive should be aware that this forecast outturn will be subject to the effect of Financial Procedure Rules, i.e Officers authorisation to action budget virements and to request carry forwards to future financial years. Any actions taken by Officers in accordance with the Financial Procedure Rules may alter the year-end position.

3.4 Many items of income and expenditure are demand led and difficult to predict. Consequently, judgement has been applied in order to provide the most realistic indication of the financial position at the year-end. Figures in brackets indicate an underspend of expenditure or additional income

3.5 The table below provides a summary of the current position.

PPENDIX A

GENERAL FUND SUMMARY - AS AT 30 SEPTEMBER 2012

Service Area Ref Revised Projected

Budget Out Turn Variance

£'000 £'000 £'000

Chief Executive and Town Clerk A 694 661 (33)

Corporate Review and Development B 0 2 2 Director of Development & Environmental Services C (18) (8) 10

Planning and Regeneration D 2,501 2,716 216

Health and Environmental Services E 4,463 4,475 13

Director of Resources F 855 808 (47)

Business Development & Finance G 410 377 (33)

Legal and Corporate Support Services H 401 417 16

Housing I 360 394 34

Communities and Street Scene J 4,201 4,322 121

13,867 14,164 297

Corporate Expenditure K 2,382 2,359 (24)

TOTAL SERVICE EXPENDITURE 16,249 16,523 274

Capital Accounting Adjustment L (513) (513) 0

Specific Grants M (1,590) (1,590) 0

Contingencies N 810 310 (500)

Savings Targets O (123) (146) (23)

Earmarked Reserves P (748) (422) 325

Insurance Reserve Q 40 40 0

TOTAL EXPENDITURE 14,125 14,201 76

USE OF BALANCES (531) (607) (76)

NET REQUIREMENT 13,595 13,595 (0)

3.6 The General Fund Summary is currently projecting a forecast overspend of £76,010. A summary of the main forecast year-end variations in income and expenditure against the approved budget is shown below.

Ref £ Reason for variance

Additional Income

H Lincoln Properties (25,260) The service is currently forecasting a low level of void properties. The ongoing void allowance will be reviewed as part of the MTFS.

C Concessionary Fares (29,250) Prudent estimate built into MTFS for income from the County Council for the administration of the county wide concessionary travel scheme.

(54,510)

PPENDIX A

Ref £ Reason for variance

Reduced Income

D Town Planning 123,920 Income from Planning applications continues to be down against target reflecting the current economic position in the development and housing markets, however this has improved by £58k against the forecast reported at Q1. The situation is monitored monthly and the targets are being reviewed as part of the MTFS. A revised staffing structure is currently being developed as part of a transformational lean review in this area which is expected to reduce costs.

D Building Regulations 119,910 Income from Building Regulations is down against target reflecting the current economic position in the development and housing markets, the situation is monitored monthly and the targets are being reviewed as part of the MTFS. The projected income loss is in line with income expectations reported to the Executive in April 2012. Members are reminded that Building Regulations have already contributed £80k towards the Next Steps savings target through reduced costs and as reported to the Executive in April action plans are being developed to realise a further £70k cost savings.

D The Terrace (net position) 25,630 Net forecast reduction in income due to a number of the larger units being vacant. Officers are currently reviewing options to increase the occupancy of un-let units.

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Ref £ Reason for variance J Car Parking 328,920 Car parking income is depressed due to the

ongoing downturn in the wider economy and increased price competition within the city. In particular, season ticket income is seeing the greatest downward pressure, due to business re-location, loss of city centre jobs, competition from NCP through the Lincoln BIG scheme, former customers seeking free parking opportunities or switching to other options such as the public transport. The forecast includes income loss of £130k resulting from the planned closure of Lucy Tower for February and March for essential works. As previously reported to members CMT have commissioned a mitigation strategy. The draft strategy is due to be considered by the Car Parking Strategy

Group mid November. Income forecasts for

Lucy Tower are based on worst case

scenario and don’t account for mitigation

plans or displacement of cars into other

Council car parks. Action plans will be

developed to address this potential

shortfall.

H The Lawn (net position) 53,420 Net forecast reduction in income due to a number of units being vacant in addition to over spends on utilities.

651,800

Additional Spending

I Homeless Bed & Breakfast 39,530 The use of bed and breakfast accommodation has risen sharply this year, in part due to the current difficult national economic conditions and the expected 'lag' of homelessness applications. It should be noted that bed and breakfast is used only in an emergency, and for the shortest possible time, when all other options have been exhausted. Officers are currently exploring alternative options to using bed and breakfast accommodation, however these are likely to be longer term solutions and will not quickly ease the current situation. For context the budget is £7,970.

39,530

Reduced Spending

C Revenues Local Taxation (Lincoln only)

(18,000) Forecast under spends on giro payments and legal expenses budgets.

PPENDIX A

Ref £ Reason for variance G Corporate Management (15,320) Reduction in audit fees payable for external

audit following the outsourcing of the Audit Commission’s in house audit practice to private firms.

D Industrial Promotion (25,630) Planned management of the budget to offset anticipated over spends within DDES.

J Car Parking (56,070) It is anticipated that current levels of usage at Lucy Tower car park will result in reduced payments under the Stargas agreement of approximately £46k. In addition to other savings on supplies and services budgets.

J Residents Parking Scheme (net)

(34,510) Income this year is anticipated to exceed the budget. Furthermore, expenditure on patrols is under-spending because whilst there is a budget for two wardens only one is being provided. In addition, there are no plans to spend the advertising budget this year

N City Hall Improvement (65,000) Release of a contingency budget to cover capital financing costs of essential works to City Hall following the Council’s purchase of the building. The current year works to the building are being funded from existing capital budgets.

N Pay Inflation (30,000) Residual element of pay inflation budget built into the MTFS for 2012/13 to fund the potential public sector £250 annual increase for all staff under £21k, in line with NJC terms and conditions this is not payable, therefore this budget will not be required.

N Strategic Priority Programme

(98,970) Forecast under spend of the strategic priority programme in 2012/13, due to a combination of phasing and revised estimates for scheme expenditure.

N Vacancy Savings (183,670) Over achievement of the 1% vacancy target (£129,350) as at quarter 2 (£83,670), due to proactive vacancy management and a number of posts being held vacancy subject to reviews as part of the Next Steps Programme. In addition a prudent forecast of savings for Q3 & Q4 (£100,000) has been made. It is recommended that the over achievement of £83,670 as at Q2 is contributed to the Next Steps savings target. The annual vacancy savings target is under review part of the MTFS and CMT will continue to closely monitor the position.

PPENDIX A

Ref £ Reason for variance (527,170)

Total all significant

variances

109,650

3.7 Included within the forecast outturn in paragraph 3.5 are a number of additional contributions that the Director of Resources (in accordance with Financial Procedure Rules) has identified as being required. The Executive are asked to approve these transfers listed below;

A transfer of £32,850 relating to Local Authority Mortgage Scheme (LAMS) interest receivable be made into an earmarked reserve to ensure adequate budget provision is made to fund any future potential liabilities in the event of mortgage default in the scheme and the indemnity being called upon, in accordance with the 16

th April Executive report.

The over achievement of the vacancy savings target at quarter 2 of £83,670 be used to offset against the annual savings target. This will result in a forecast overachievement of the £1.5m annual savings target by £40,670.

.

A contingency of £405,270 funded from the residual of year 2 New Homes Bonus that was not set aside to fund strategic priorities has been reviewed and can be released. It is proposed that subject to final outturn this balance be transferred to the Invest to Save Reserve.

4. Housing Revenue Account

4.1 For 2012/13 the Council’s Housing Revenue Account (HRA) gross expenditure

budget was set at £21,209,760 and the gross income budget at £26,988,350. After allowing for capital accounting adjustments and transfers to/from earmarked reserves, a planned contribution to balances of £142,440 was budgeted for, resulting in an estimated level of General Balances at the year-end of £1,324,008.

4.2 The HRA is currently projecting an in-year underspend of £324,620, which would increase General Balances to £1,739,354 at the end of 2012/13, which is significantly above the assessed minimum of £1,000,000. The table below provides a summary of the current forecast outturn position for the HRA:

PPENDIX A

HOUSING REVENUE ACCOUNT FUND SUMMARY - AS AT 30 SEPTEMBER 2012

Ref Budget Forecast

Outturn

Variance

£’000 £’000 £’000

Rental Income A (26,179) (26,305) (126)

Supporting People Grant B (340) (340) -

Charges for Services & Facilities C (443) (407) 36

Contributions towards Expenditure D (26) (21) 5

Repairs & Maintenance E 7,610 7,610 -

Supervision & Management: F 5,619 5,538 (81)

Rents, Rates and Other Premises G 11 11 -

Increase in Bad Debt Provisions H 221 221 -

Subsidy Limitation Transfer I 282 282 -

Contingencies J 188 188 -

Depreciation K 7,260 7,260 -

Impairments L - - -

Debt Management Expenses M 45 45 -

Net Cost of Service (5,752) (5,918) (166)

Loan Charges Interest N 2,540 2,389 (151)

Investment/Mortgage Interest O (54) (62) (8)

Net Operating Inc/Exp (3,266) (3,591) (325)

Premiums & Discounts P 216 216 -

Capital Accounting Adjustments Q 22 22 -

DRF/MRR contribution R 2,807 2,807 -

CMS Pension/Insurance Repatriation S - - -

Insurance Reserve T 112 112 -

Transfers to/(from) reserves U (33) (33) -

(Surplus)/Deficit in Year (142) (467) (325)

Balances b/f @ 1st April (1,182) (1,272) (90)

(Increase)/Decrease in Balances (142) (467) (325)

Balances c/f @ 31st March (1,324) (1,739) (415)

4.3

The main budget variations in income and expenditure are shown below (figures in brackets indicate an underspend of expenditure or additional income):

Ref £ Reason for variance

Additional Income

A Rental Income (125,980) Garage rents, as reported in Q1 (£38,810) As a result of improved performance on Dwelling Voids management, rent loss is expected to be substantially below the 1.1% budget (£87,170).

Reduced Income

PPENDIX A

C Charges for Services & Facilities

36,600 Continued reductions in connections to the Alarm System, £23,100. This will reviewed as part of the MTFS. On-going, Service Charge income through rents has fallen behind applied budget increases, £13,500. This will reviewed as part of the MTFS

Reduced Spending

F General S&M (69,680) Saving on Legal Fees associated with less arrears cases etc going to court (£35,000) Vacancy savings achieved to date of £73,770 are well in excess of the annual target of £43,960.

N Loan Charges Interest (151,395) As reported in Q1, shortly after the MTFS was agreed, CLG modified their debt calculations in respect of ‘Self-Financing’, lowering our liability by £731k. Furthermore, the Interest rates on the consequent borrowing of £24.931m were approx 0.4% lower than anticipated in the MTFS.

(221,075)

Total all significant

variances

(310,455)

4.4 As reported in Q1, there was a potential saving on the contribution to the Repairs

Reserve as last year’s underspend on the Repairs Account resulted in balances b/f in the Reserve being £163,853 above the agreed prudent level of balances. However, as previously reported there are pressures on the Aids and Adaptations budget and in addition significant catch up work on external decoration is putting additional pressure on the repairs account. It is proposed that the budgeted contribution to the Repairs Accounts be maintained subject to final outturn.

4.5 At the end of the second quarter expenditure in the HRA Repairs Account totalled £3,500,491, which represents 46% of the annual budget. This includes spend of 42% against the annual budget of £5,143,830 for Responsive Repairs.

5. City Maintenance Services

5.1 The City Maintenance Service is currently projecting a forecast surplus of

£67,970. The table below provides a summary of the provisional outturn position.

PPENDIX A

5.2 The main budget variations in income and expenditure forecasted for 2012/13

are shown below:

£ Reason for Variance

Increased Income

Income over recovery (709,100) The majority of the variance relates to the recharging of the

Woodco contract costs which are now being charged to the CMS account. This is in part offset by the reduction in income due to recharging the reduced cost for direct materials (see below), which is recharged on an actual cost basis.

Increased Spending

Sub-Contractors £763,000 Voids work contracted to Woodco. Previously works were

part carried out by Kiers and costs incurred directly in the HRA. Costs are now being paid from the CMS account and then subsequently recharged to the HRA (as highlighted in income over recovery above). All other types of Sub Contractor works are forecast to be within the current budget.

Reduced Spending

Direct Labour (59,970) There is currently one Bricklaying vacancy. It is anticipated

that this post will not be filled this financial year. As well as the vacancy, a member of staff has been on sick leave for the first half of this financial year (the employee has now returned to work on a full time basis). In addition, the Operatives overtime budget is forecast to be underspent.

Direct Materials

(£53,900) A more pro-active approach to reviewing material usage and prices.

CMS Forecast Outturn 2012/2013

Forecast

Outturn

£’000

Full Year

Budget

£’000

Variance

£’000

Employees 2,206 2,266 (60) Premises 36 36 0 Transport 411 419 (8) Materials 1,150 1,204 (54) Sub Contractors 1,200 437 763 Supplies & Services 87 87 0 Central Support Charges 550 550 0 Capital Charges 44 44 0

Total Expenditure 5,685 5,044 641 Income (5,753) (5,044) (709)

(Surplus)/Deficit (68) 0 (68)

PPENDIX A

(113,870)

Total all significant

variances

(59,970)

5.3 The repayment of the deficit of £69,085 on the Balance Sheet relating to the 2009/10 outturn will be the first call on any surplus made by CMS. Based on the forecast detailed on paragraph 5.1 it is envisaged that this will reduce the deficit to £9,115 in this financial year. This position will be monitored throughout the remainder of the year.

6. Capital Programme

6.1 General Investment Programme

6.2 The last quarterly report approved a General Fund Investment Programme for

2012/13 of £9,640,123. Following that the Executive on 10th

September 2012 approved a number of funding options for the General Investment Programme and also approved the rephrasing of a number of schemes into future years. The revised the approved programme for 2012/13 is £7,961,755. Movements in the programme since Executive on 10

th September have

decreased overall planned expenditure in 2012/13 to £6,703,911. A summary of the changes are shown below:

2012/13 2013/14 2014/15 2015/16 2016/17

£ 000 £ 000 £ 000 £ 000 £ 000

Revised Quarter 1 Budget 9,640 2,054 1,250 1,230 1,230

Budget agreed at Executive 10/09/12

7,962 2,405 1,579 1,230 1,230

Budget Changes (SPIT 29/10/12) (1,258) 1,180 0 0 0

Revised Budget 6,704 3,585 1,579 1,230 1,230

6.3 The Director of Resources has delegated authority to approve financial changes up to a maximum of 10% variance of the value of the project. All changes over 10% require approval by the Executive. Detailed at Appendix C, under the heading of ‘Approved under DOR Delegated Authority’ are the changes approved by the Director of Resources during the second quarter in conjunction with the Strategic Plan Implementation Team (SPIT). Changes that require Executive approval for the second quarter are also detailed at Appendix C, under the heading of ‘Approvals required from Executive’. The scheme changes requiring

PPENDIX A

Executive approval are:

Network Upgrade – Increase of budget by £55,000 (funded by Direct Revenue Financing from the IT Reserve) due to a change in the scope of works following the procurement process.

Telephony/Unified Comms - Increase of budget by £55,000 (funded by Direct Revenue Financing from the IT Reserve) due to a change in the scope of works following the procurement process. Implementation of this scheme will produce revenue savings above those estimated prior to the procurement process.

The Terrace and SDO Contingency – Release of Contingency to General Investment Programme available resources following the progress made on resolving various issues on The Terrace and Public Realm schemes.

Wragby Road Playing Fields – Removal of the scheme from the programme following detailed officer investigation into the original funding. It is proposed that the resources allocated to this are redirected to the Allotments Strategy (releasing £75,000 to available resources) and to Planned Capital Works (£45,010) contribution towards the White Bridge at Hartsholme Country Park.

6.4 New projects agreed at SPIT are subject to Executive Approval. There have

been no new projects agreed at SPIT during the second quarter.

6.5 The table below provides a summary of the projected outturn position for the General Investment Programme at quarter 2:

Revised

Budget

£’000

Forecast

Outturn

£’000

Variance

£’000

Economic Sustainability 16 16 0

Environmental Sustainability 29 29 0

Business Development & Finance 1,170 1,170 0

Corporate Support Services 2,198 2,198 0

Housing 944 944 0

Community Services, Sports & Leisure 2,033 2,033 0

Contingency 314 314 0

Total Capital Programme 6,704 6,704 0

6.6 The overall spending on the General Fund Investment Programme for the first quarter is £1,997,384, which is 29.79% of the agreed programme. Although this appears to be a relatively low percentage of expenditure in the first half of the financial year there are a number large value capital schemes programmed to incur expenditure over the remaining half of the financial year, these schemes

PPENDIX A

include;

Mercury Abatement (remaining budget programmed to be expended in the third quarter)

Disabled Facilities Grants and Renovation Grants (remaining budget committed through various application approvals)

Land for the Provision of Burial Space (remaining budget programmed to be expended in the final two quarters)

Lucy Tower Structural Works (work expected to commence in January 2013)

In addition to the above the future of the Affordable Housing schemes in the current programme are currently being discussed by the Strategic Housing Theme Group and reported to CMT in early December.

6.7 Housing Investment Programme

6.8 The last approved Housing Investment Programme for 2012/13 amounted to

£9,017,245. Movements in the programme since the last approval have decreased overall planned expenditure in 2012/13 to £8,140,415. A summary of changes is shown below:

2012/13 2013/14 2014/15 2015/16 2016/17

£ 000 £ 000 £ 000 £ 000 £ 000

Revised Quarter 1 Budget 9,017 10,715 13,539 15,345 13,478

Budget Changes (SFIT 31/10/12) (877) 140 236 0 0

Revised Budget 8,140 11,205 13,775 15,345 13,478

6.9 The Director of Resources has delegated authority to approve financial changes up to a maximum of 10% variance of the value of the project. All changes over 10% require approval by the Executive. There were no changes approved for the second quarter.

6.10 All changes over 10% require approval by the Executive. Summarised at Appendix D is the revised programme for 2012/13 based on the revisions endorsed by the HRA Self Financing Implementation Team (S-FIT). The presentation of this programme different to previous programmes as a result of the base information now coming directly from the Estate-Pro database maintained by the Maintenance and Investment Team.

PPENDIX A

The revised programme for 2012/13 (detailed in appendix D) requires Executive approval and Executive are also asked to approve reprofiles totalling £876,830 from 2012/13 into future financial years as detailed at Appendix D.

6.11 The table below provides a summary of the projected outturn position:

Revised

Budget

£’000

Forecast

Outturn

£’000

Variance

£’000

Decent Homes 5,734 5,734 0

Exceptional Extensive Repair 347 347 0

Environmental Improvements 10 10 0

Health and Safety 1,009 1,009 0

Current Developments 802 802 0

Contingent Major Repairs/Works 142 142 0

Computer Fund 96 96 0

Total Capital Programme 8,140 8,140 0

6.12 Expenditure against HIP budget during the first six months was £2,877,576, which is 35.35% of the revised programme. Although this percentage would appear to be low at this stage of the financial year the following points should be taken into consideration:-

Due to the timing of the partnering invoices, only five months of invoices are included for the first half of the financial year,

Larger expenditure projects are programmed to start in future months, for example, Shuttleworth House improvement works, Jarvis House communal rewire, Newark Road structural works and balcony improvement works in the North of the City.

6.13 As at 31

st March 2012 the balance in the HRA Direct Revenue Financing (DRF)

Reserve was £3.529m. The HRA Business Plan assumes that this balance will be transferred into the Major Repairs Reserve (MRR) effective 1 April 2012 to be available to fund future capital spending plans. The Executive are asked to confirm approval for the transfer of the opening balance on the HRA DRF Reserve into the MRR.

7. Earmarked Reserves

7.1 The details of all the earmarked reserves and their forecast balance as at 31

st

March 2012 are attached in Appendix B.

8. Budget Risk Assessments

8.1 A review of the risks has been undertaken and any significant issues that have

arisen have been included within the forecast year-end variations above, (para’s

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3.5, 3.6, 4.3, 4.4 and 5.2). There are no other significant issues requiring further action at this stage.

8.2 Observations on a number of risks are highlighted for the attention of the

Executive:

Investment interest - The budgeted average interest rate for 2012/13 was set at 0.88%. The rate achieved in quarters 1 and 2 was 0.85%, however, a change to the group investment limit for part-government owned banks is proposed in the half yearly treasury management report. This will allow additional fixed term investments to be placed in the part-government owned banks thus improving the overall investment yield. If this change is approved, then it is expected that the budgeted average rate can be achieved for 2012/13. There remain limited opportunities to place longer term funds due to the unacceptable levels of risk inherent in longer term investments and so favourable fixed rates are unobtainable. The result is that lower interest rates are achieved on new short term investments placed. The requirement to keep investments short term in the current economic climate requires the authority to keep a large proportion of the investment portfolio in liquid funds. The impact of continued low interest rates on investment income is currently included in the review of the assumptions underpinning the MTFS.

Income from Fees and Charges/Rents – Significant forecast variances have been taken into account in the forecast outturns detailed above, ie o Building Regulations - £119,910 under achievement o Town Planning - £123,920 under achievement o Lincoln Properties - £25,260 over achievement o The Terrace - £25,630 net under achievement o The Lawn - £53,420 net under achievement o Car Parks - £328,920 under achievement

The impact of the current economic climate on income levels is being continually monitored by officers and quarter 2 forecast outturns reflect the anticipated impact in the current year. The ongoing impact of the economic slowdown on usage and voids level will be reviewed and reflected in the revised annual budget strategy.

Capital Expenditure – Executive on 10th

September 2012 approved total programmed expenditure of £1,524k on the GIP to be re-profiled into future years to reflect more realistic delivery timescales. The Strategic Plan Implementation Team (SPIT) have further considered and put forward to Executive for approval a total of £1.125m on the GIP and £877k on the HIP for re-profile into future years to reflect more realistic delivery timescales.

General Fund Capital Receipts – The original General Fund capital receipts target for 2012/13 was £2.716m. This has subsequently been

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re-profiled to the expected outturn of £613,812. Risk to the achievement of the capital receipts target remains in future years.

HRA Capital Receipts - The HRA Right to Buy (RTB) capital receipts target for 2012/13 has been set at £80,504 in the MTFS 2012-17. There was five completed RTB sale in the second quarter for which the proceeds (net of pooling) was £44k (£53k for the year to date). Due to the impact of the credit crunch and uncertainty in the economy, RTB receipts will be monitored throughout the year and targets will be revised if required. The target for this financial year and future years is 5 sales (with 6 achieved by the end of the second quarter). There is no target for HRA non-RTB receipts in 2012/13. There has been no receipts during the second quarter therefore the total for the financial year to date still stands at £63,000 as reported at Q1

9. Significant Policy Impacts

9.1 There are no direct policy implications arising from this report.

10. Organisational Impacts

10.1 There are no legal implications arising from this report.

10.2 There are no legal implications arising from this report.

11.

Recommendations

The Executive is recommended to:

11.1 Note the progress on the financial performance for the period 1st July to 30

th

September 2012 and the projected outturns for 2012/13.

11.2 Assess the underlying impact of the pressures and underspends identified in paras 3.5 - 3.6, 4.3 - 4.6.

11.3 Approve the contribution of the over achievement of the vacancy savings target at quarter 2 towards the annual Savings Target and the transfers to earmarked reserves detailed in paragraph 3.7.

11.4 Approve the financial changes to both the General Investment Programme and the Housing Investment Programme (paragraphs 6.3, and 6.10) that are above the 10% budget variance limit delegated to the Director of Resources.

11.5 Approve the transfer of the opening balance on the HRA DRF reserve into the Major Repairs Reserve to fund future housing capital spending plans (paragraph 6.13).

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Key Decision

No

Key Decision Reference

No.

N/A

Do the Exempt

Information Categories

Apply

No

Call in and Urgency: Is the decision one to which Rule 15 of the Scrutiny Procedure Rules apply?

No

Does the report contain

Appendices?

Yes

List of Background

Papers:

Medium Term Financial Strategy 2012-2017

Lead Officer: Jaclyn Gibson, Assistant Director – Business Development & Finance Telephone 873258

Appendix A

Portfolio Holder Summary The table below summarises the service area budgets covered in the report by Portfolio Holder

Service Area Portfolio & Portfolio Holder

General Fund:

Chief Executive and Town Clerk

Corporate Management & Customer Services – Cllr R Metcalfe Social Inclusion & Community Cohesion – Cllr B Charlesworth

Corporate Review and Development Corporate Management & Customer Services – Cllr R Metcalfe

Director of Development & Environmental Services

Planning Policy & Economic Regeneration - Cllr N Murray

Planning and Regeneration Planning Policy & Economic Regeneration - Cllr N Murray

Health and Environmental Services Recreational Services & Health – Cllr D Nannestad

Director of Resources Corporate Management & Customer Services – Cllr R Metcalfe

Business Development & Finance Corporate Management & Customer Services – Cllr R Metcalfe

Legal and Corporate Support Services

Corporate Management & Customer Services – Cllr R Metcalfe

Housing

Housing - Cllr P West

Communities and Street Scene Environmental Services & Public Protection – Cllr F Smith

Housing Revenue Account Housing - Cllr P West

City Maintenance Service Housing - Cllr P West

Appendix B

EARMARKED RESERVES – Q2 MONITORING 2012/13

Opening

Balance

Contributions Actual

Q1–Q2

Forecast

Q3-Q4

Forecast

Balance 01/04/2012 31/03/2013 £’000 £’000 £’000 £’000 £’000

General Fund

Previous Year Budget Carry Forwards

(153) 0 21 113 (19)

Concessionary Fares (12) 0 0 12 0 Unused DRF (184) 0 0 162 (22) IT Reserve (376) (100) 0 75 (401) Invest to Save (GF) (2,048) (405) 223 241 (1,989) Mayoral car (24) (8) 0 0 (32) Member training (6) 0 0 6 0 Managed Workspace (70) 0 0 0 (70) Car Parking Strategy (25) 0 0 0 (25) Planning Delivery Grant (52) 0 0 0 (52) Private Sector Stock Condition Survey

(61) 0 0 9 (52)

Stronger, Safer Communities Fund

(67) 0 34 33 0

Uphill/ Downhill Bus (93) 0 0 0 (93) Mercury Abatement (222) (78) 0 7 (293) Leisure Debt Management (27) 0 0 27 0 Homelessness Case Worker

(4) 0 4 0 0

Boston Audit Contract (8) (5) 0 0 (13) Commons Parking (7) 0 0 0 (7) Backdated pay claim (140) 0 0 0 (140) Loss of income on asset Sales

(76) 0 0 0 (76)

Grants & Contributions (722) (130) 79 79 (694) Revenues & Benefits shared service

(50) 0 4 0 (46)

Recycling Reserve (15) 0 0 15 0 Tree Risk Assessment (110) 0 0 0 (110) Olympic Event (Infrastructure)

(103) 0 69 2 (32)

Backdated rent review (60) (40) 0 0 (100) Funding for Strategic Priorities

(126) 0 0 23 (103)

R&M Reserve (125) 0 0 0 (125) County Wide Broadband Initiative

(34) 0 0 0 (34)

MA Reserve (9) (16) 0 0 (25) LAMS 0 (33) 0 0 (33)

(5,009) (815) 434 804 (4,586)

Appendix B

Opening

Balance

Contributions Actual

Q1–Q2

Forecast

Q3-Q4

Forecast

Balance 01/04/2012 31/03/2013 £’000 £’000 £’000 £’000 £’000

HRA Unused DRF (3,529) 0 0 0 (3,529) HRA Invest to Save (500) 0 27 0 (473) HRA Repairs Account (914) (7,729) 1,523 6,206 (914) HRA Survey Works (136) (3) 0 9 (130) Stock Retention (22) 0 0 0 (22)

(5,101) (7,732) 1,550 6,215 (5,068)

Total Earmarked

Reserves

(10,110) (8,471) 1,984 7,019 (9,578)

Appendix C

GENERAL INVESTMENT PROGRAMME 2012/13 to 2016/17 - CHANGES FOR APPROVAL AND NOTING

GIP Summary 2012/13 2013/14 2014/15 2015/16 2016/17 Comments

£ £ £ £ £

Budget Approved at Executive 10/09/12 7,961,755 2,405,078 1,578,503 1,230,000 1,230,000

Revised Budget as at Quarter 2 6,703,911 3,585,078 1,578,503 1,230,000 1,230,000

1,257,844 (1,180,000) 0 0 0

Approved under DOR delegated authority:

Mortgage Indemnity Scheme (1,000,000) 1,000,000

Homelessness Change Centre (125,000) 125,000

Approvals required from Executive:

The Terrace (45,000)

SDO Contingency (67,844)

Wragby Road Playing Fields (120,010)

Corporate Planned Maintenance 45,010

Network Upgrade 55,000

Telephony/Unified Comms 55,000

Total Budget Changes Q2 (1,257,844) 1,180,000 0 0 0

Movement in Available Resources 187,845

Increase in budget as a result of a change in

scope of works following procurement process.

Implementation of this scheme will produce

significant revenue savings.

Release of part of SDO Contingencies

Full or part of 2012/13 budget reprofiled

to/(from) 2013/14 to reflect more realistic

delivery timescales.

Increase in budget as a result of a change in

scope of works following procurement process.

Implementation of this scheme will produce

significant revenue savings.

Deletion of Wragby Road Playing Fields

scheme. Allocation of £75k to Allotments

Strategy (releasing £75k to available resources)

and the remainder towards the costs associated

with replacing the White Bridge at Hartsholme

Country Park

Appendix D

HOUSING INVESTMENT PROGRAMME 2012/13 - SUMMARY OF FINANCIAL CHANGES

2012/13 2012/13 2012/13 2012/13

HRA

SF RefHRA SF Project Name

Approved

Executive

18/06/12

New Budget

to be

approved

Variance

Movements

Within

Financial

Year

Reprofile to

a future

financial

year

£ £ £ £ £

DH Bathrooms and WCs 294,055 382,220 88,165 88,165 0

DH Decorations 0 10,500 10,500 10,500 0

DH Electrical Installation 442,432 521,156 78,724 78,724 0

DH Heating and Hot Water 735,029 735,029 0 0 0

DH Insulation 289,410 124,258 (165,152) (165,152) 0

DH Kitchens 547,911 986,691 438,780 438,780 0

DH Structural Defects 262,135 262,135 0 0 0

DH Roof Structure and Coverings 1,311,103 835,955 (475,148) 24,852 (500,000)£350k (2013/14) &

£150k (2017/18)

DH Services 109,515 109,515 0 0 0

DH Wall Structure and Finishes 248,921 12,426 (236,495) 0 (236,495) (2014/15)

DH Windows and Doors 536,909 536,909 0 0 0

DH Decent Homes Preliminaries 0 0 0 0 0

DH Landscaping and Boundaries 1,724,875 1,224,875 (500,000) (500,000) 0

Decent Homes Sub Total 6,502,295 5,741,669 (760,626) (24,131) (736,495)

HS Asbestos Removal 547,575 547,575 0 0 0

HS Major Aids and Adapts 0 72,737 72,737 72,737 0

HS Environmental Improvements 6,049 10,215 4,166 4,166 0

HS Paths and Pavings 0 0 0 0 0

HS Structural Defects 115,847 115,847 0 0 0

HS Works to Multi Storey Blocks 346,566 346,566 0 0 0

HS Security Works 191,069 25,314 (165,755) (165,755) 0

HS Plastering 109,515 195,213 85,698 85,698 0

HS Fire Safety Works 0 0 0 0 0

Health and Safety Sub Total 1,316,621 1,313,467 (3,154) (3,154) 0

OT Wellington Street Affordable Housing 417,857 417,857 0 0 0

OT Works to Improve Group Schemes 0 0 0 0 0

OT Transfer of Land 0 0 0 0 0

OT Other Schemes 115,251 173,875 58,624 58,624 0

OTEnergy Efficiency Works (Externally

Funded)141,700 1,365 (140,335) 0 (140,335) (2013/14)

OTHousing Support Services Computer

Fund217,566 96,010 (121,556) (121,556) 0

OT Servitor (Depot Master replacement) 0 253,990 253,990 253,990 0

OT Contingency Reserve 305,955 142,182 (163,773) (163,773) 0

Other Schemes Sub Total 1,198,329 1,085,279 (113,050) 27,285 (140,335)

Movement to Available Resources 0 0 0 150,000 0

TOTAL 9,017,245 8,140,415 (876,830) 150,000 (876,830)