Issue - meetings

Report of the Director of Finance

The report and the forecast overspend of £1,323k on the Net Cost of Services are noted.

Councillor Clarke addressed Cabinet warning that officer action would need to be taken to avoid the predicted overspend against the set budget projections.  He expressed concern about the council’s continued inability to address the problems of rent income. He then mentioned that many of the council’s tenants were already struggling to pay their entire rent owing to unemployment.  He predicted that if the recession hit further, rent income would continue to be reduced.

Councillor Mildren addressed Cabinet and enquired as to the base budget after the change of the rental formula.  He pointed out that a negative subsidy was charged on the rental billings and not on the cash received.  This meant that in normal circumstances, if rent was unpaid, the council would still be paying a negative subsidy.

As the relevant Portfolio Holder, Councillor Perkins presented the report to Cabinet.  He explained that even if the overspend was to continue, it would simply mean a reduction in reserves.  He further explained that the apparent variance in rent income was as a result of a change in rents that was made after the budget had been set.  Councillor Beardsworth clarified that the budget had been set on the assumption of a rental increase that was subsequently reduced by central Government directive.  Councillor Perkins referred to Councillor Clark’s comments and pointed out that rent collection was in fact at a high level and that the credit crunch did not appear to be affecting collection.  He went on to expresse his confidence that, with ongoing work on the Repairs and Maintenance budget and continued input from officers, the overspend should be greatly reduced, if not eliminated.

Councillor Beardsworth commended officers for their team working and their constant monitoring of the issues.  It was also made clear that the directorate was performing better than last year and staff were working hard to successfully collect rents, with collection currently on target.

RESOLVED

That the report and the forecast overspend of £1,323k on the Net Cost of Services be noted.