Agenda item

Quarterly Performance Report Q4 2019/20 and Provisional Budget Outturn Report Q4 2019/20

To consider progress in the Council’s performance for the fourth quarter in the year 2019/20, including KPIs and risk management, and make any observations to the Executive.


Members considered progress in the Council’s performance for the fourth quarter in the year 2019/20, including Key Performance Indicators (KPIs) and risk management. Cllr V. Lewanski, Portfolio Holder for Corporate Direction and Governance, gave an overview of the report to the Committee. It noted that this was the last quarter 4 performance report based on the current KPIs and next quarter will have the new KPIs. 

Members made the following observations and comments on the following areas:

·         Risk management   strategic risks covered medium to long term impacts on the Council and it was not fully understood in Quarter 4 what impact Covid-19 would impose on the Council as an organisation (due to the timeline surrounding Covid-19). The new strategic risks for 2020-21 have been updated to reflect the impact of Covid-19.

·         Welfare reform and homelessness –Strategic Risk 6 was on welfare reform. Members asked that given the Covid-19 response and the additional resources needed to accommodate homeless people in temporary accommodation, such as temporary units in Donyngs car park, would the Council have a moral responsibility for homeless people and the extra costs incurred? The Leader responded that it was following government guidance. It was a combined effort with the Council and the health authority to not only find accommodation for homeless people but deal with the issues that led to people becoming homeless such as addiction and mental health problems. The Director of People said a written update would be given to the Committee to give more detailed costs.  Since lockdown on 23 March up to 5 June, the Council had placed 66 households in emergency accommodation and 35 directly due to government directives to house people due to Covid-19. Thirty-one of those were as a result of the Homelessness Reduction Act. There were significantly more single people than families with 17 families in total. However, with the courts closed and evictions stopped until August there were fewer families coming to the Council for help. There had been some successes with more difficult cases of rough sleepers. Members asked what the Council was doing to prepare once evictions restarted after 23 August when quite a few families could come to the Council for help. the Council was preparing for this scenario. Massetts Road at the moment was for families only but only at half occupancy to avoid the need of having shared bathrooms. The August extension enabled the Council to get Massetts Road to full occupancy by September and also increase work with local Housing Associations. It was also working with landlords to try and prevent eviction in the first place.

·         Financial sustainability and new commercial revenue – Members had asked via the Advance Questions process to confirm the level of new commercial revenue targets (net of costs) included in the 2020/21 Plan. The Interim Head of Finance said that the 2020/21 Budget that was approved in February this year by Full Council included continuation of rental income from its property portfolio only. There is not forecast to be any new sources of commercial income. The Medium-Term Financial Plan in July will consider income targets for future years. It was noted that the rental income from Council properties was targeted to be £1.753m in 2020/21. Members asked if that income was on track. The Interim Head of Finance said that the new Property Services manager had been contacting all tenants to discuss options for deferring rent payments if needed. Negotiations continued with the Council’s hotel tenant which was part of a national chain. Other areas of risk relating to income receipts that are under pressure due to Covid-19 were being addressed.

·         2019/20 Financial Outturn – Revenue Budget – Members discussed this report. It was noted that the overall provisional outturn including Central items was £2.09m (11.9% lower than budget) and Service budgets were £470 (3.5%) higher than the management budget. Suspension/cessation of court hearings had led to a drop in income but this was expected to be recoverable over time once courts re-open. The Benefits paid and subsidy received budget was £573k over budget due £250k reduction in DWP grant over the last couple of years. The Finance service was £640k over budget due to additional work required during the 2018/19 audit of the Statement of Accounts, additional work relating to projects such as Project Baseball, Marketfield Way and Horley Business Park and the use of interim staff to cover permanent vacancies and to improve finance processes. As recruitment was now underway this cost should reduce later in the year. The fleet outturn was £221k over budget due to expenditure on spare parts to keep the ageing fleet running and high cost of repairs. Car parking was £170k under budget due to the reduced number of season ticket renewals tickets in March as a consequence of Covid-19. The delayed opening of the cinema and subsequent closure of the Harlequin theatre in late March due to Covid-19 meant it was £221k over budget. The Refuse and Recycling income was £703k higher than Budget for the year

·         Provisional Outturn for Central items – this was £2.56m lower than budget due to a £1.212m lower than budget on pensions, unspent contingency budgets and the release of sums set aside in previous years that are no longer required. The underspend will be transferred to a reserve to help address unfunded Covid-19 budget pressure initially and any unspent balance will be used to rebuild reserves ready for the next pension fund revaluation in 2022. Interest on investments was higher than budgeted at £626k due to the £385k Greensands loan advanced during the year for purchase of land at Horley, and £240k interest from other combined investments. The Headroom Contingency budget showed an underspend of £737k lower than budget because funds had not been required during the year.


The Portfolio Holder for Finance said the Finance team was now constantly monitoring the impact of Covid-19 on the Council’s finances and by year end something like normality may have returned. Members asked about the recovery plan to reinstate income where receipts had dropped from services such as the Harlequin and leisure centres. It was noted that these areas were being monitored very closely but that lockdown plans remain in place. Additional costs are also being incurred to deliver the Council’s response to the pandemic. Nevertheless, the substantial underspend from 2019/20 meant that the Council starts the year in a strong position. Members had asked before the meeting for more detail on the 2019/20 outturn figures for Revenues and Benefits and for Finance. A written answer would also be provided with a breakdown of the forecast financial implications of the Covid-19 crisis. The Committee was informed that the Recovery Scrutiny Panel would be looking into the financial implications in more depth and report back to the Committee.


·         Air Quality Monitoring capital budget – Members asked for more information on the reasons why the unspent capital allocation for Air Quality Monitoring had been used to fund electric vehicle installation points. A written answer would be provided.

The Chief Executive said the report which looked back at 2019/20 showed a good performance by the Council in revenue and capital spending and the quality of service. It reflected a strong political leadership with the Leader now in the second year of office and ensured the Council performed to a higher standard. It was also a credit to the staff at the Council who had worked hard to deliver services and bring about a good financial outcome.


RESOLVED that the Committee’s comments and observations regarding the Quarterly Performance Report Q4 2019/20 and Provisional Budget Outturn Report Q4 2019/20 be noted.


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