Agenda item

The Executive Member for Corporate Policy and Resources, and the Deputy Leader and Executive Member for Finance, Governance and Organisation.

The Portfolio Holder for Corporate Policy and Resources, Councillor James King, introduced the quarterly performance report up to the end of quarter 3 2023/24. Of the 10 Key Performance Indicators (KPIs) reported on in quarter 3, eight were on target or within the agreed tolerance. Two indicators were off-target and outside the agreed tolerance.

The red-rated indicators were:

·        KPI 1 – Council Tax collection, and

·        KPI 7 – affordable housing completions.

Additional detail was set out in Annex 1.

Annex 1.1 set out the proposed KPIs to be reported on in 2024/25. These are consistent with those reported on this year and continue to reflect the Council’s corporate objectives as set out in the current Corporate Plan.

An updated set of KPIs will be developed for reporting from 2025/26 onwards. A Member task and finish group will be set up to inform this review process which will take place later this year.

The report was considered by Overview and Scrutiny Committee on 14 March 2024. They made no formal observations to the Executive but some comments on the content were captured in the draft Minute of the meeting which was published as an Addendum to the Executive agenda earlier in the week.

Chair of Overview and Scrutiny Committee, Councillor Harrison, noted that the Council tax collection KPI was red-rated which was potentially worrying but the economic climate was picking up, so this should improve. He referred to the new Annex 6 – Housing Focus on Homelessness 2023/24 which set out the rise in the number of homelessness cases. This was a risk that Members should continue to monitor. O&S Members also discussed affordable housing.

Managing Director, Mari Roberts-Wood, commented that the homelessness issue was one of the most significant challenges that the Council and residents face. The new annex accompanied the performance reports set out these challenges and highlighted the increase in the number of cases. This was due to a reduction of private rental sector accommodation, alongside the cost of living and general housing challenges. This was to be considered at both Overview and Scrutiny Committee and Executive meetings. Reigate and Banstead Borough Council was not alone in facing these challenges. It was an important issue and important that Members and officers gave it due attention.

There were no further comments from Executive Members.

Visiting Members made the following observations:

·        KPI 7 Affordable housing completions – Members noted that the Council had delivered affordable housing in the planned period, and it was on track. However, delivery was low this current year with a lower percentage of affordable homes as a proportion of all homes than in previous years.

The Leader, Councillor Biggs, highlighted the slowdown in building generally which was happening nationally. There were fewer larger sites as Westvale Park and other sites in Redhill were nearly completed. It was important to note that the Council was still on target, overdelivering on the 15-year target while retaining the borough’s open spaces that were important to residents, businesses and visitors. He was proud of the Council’s record and delivery of affordable homes with 500 delivered last year.

Managing Director, Mari Roberts-Wood, noted that the Council spent a lot of time and effort discussing viability of schemes with developers to produce affordable homes. Nationally, registered providers were also slowing down building programmes as they concentrated on upgrading existing stock rather than building new homes.

Members noted that the KPI measured something that the Council could not influence. Developers were affected by high interest rates. A Member also suggested that the target affordable housing figure should be 20 per cent of homes on larger developments being affordable rather than 30 per cent.

Portfolio Holder, Councillor James King, agreed the Council could not control these national measures. They would be reviewing KPIs in the next year to take account of this issue. The Leader, Councillor Biggs, commented that the Planning team and Planning Committee Chairman scrutinise the viability studies in this area and try and negotiate as high a number of affordable housing as they can. Developers then must justify why they cannot meet the target. Councillor Biggs said he would not want to reduce the target from 30 per cent as then developers could negotiate on a lower target.

·        KPI 1 – Council Tax collection – a Visiting Member noted that the Council had had a fantastic record of collecting Council Tax and were now less than 1 per cent below target.

The Deputy Leader and Portfolio Holder for Finance, Governance and Organisation, Councillor Lewanski, then gave an overview of the Council’s Revenue and Capital Budget position and report for Quarter 3 to 31 December 2023. This included an update on the quarter’s treasury management activities.

Revenue Budget – at Quarter 3, the projected full year outturn is £21.847m against a management budget of £23.194m, resulting in a forecast underspend for the year of £1.347m (or 5.8%). Details of the more significant budget variants were set out in Annex 2. Services are forecast to be underspent at year end by £0.050m and Central Services are forecast to be underspend by £1.247m, with the main element in Treasury Management budgets of £1.297m under due to positive cash flow and favourable interest rates.

Annex 2 also includes the latest forecast for funding and spending to support Ukrainian refugees. A significant balance of forward-funding received from Surrey County Council was shown which anticipated ongoing demand for support over the coming 18 months following the recent announcement of the extension of the existing funding schemes.

It was noted that the new Annex 6 (as discussed earlier) had been included which showed the homelessness caseload information and the forecast impact on the budget should numbers increase.

Capital Programme – the forecast of £18.470m is 49% below the approved Capital Programme for the year of £36.033m. This variance is predominantly a result of £17.5m of capital slippage with details set out in Annex 3. This annex also includes forecasts for this year’s expenditure on The Rise development at Marketfield Way, Redhill, which follows approval of the final capital programme allocation to complete the development by Council in February. Annex 3 also highlights the contribution of Strategic CIL Funding to delivery of the capital programme.

Treasury Management – Annex 5.1 confirms that treasury activities are in line with the Strategy that Council approved in June last year. The return on the Council’s investments and treasury activities continues to outperform similar authorities and this is a key factor contributing to the favourable revenue budget outturn forecasts.

Overview and Scrutiny Committee had submitted Advance Questions before this item was discussed at the meeting on 14 March 2024. The draft O&S Minute of the item had been published as an Addendum to the Executive agenda earlier in the week.

There were no further comments from Executive Members.

The Chair of Overview and Scrutiny Committee, Councillor Harrison, noted that the quarter 3 performance as noted on the Revenue Budget was very satisfactory with favourable treasury rates and funding. The Committee had spent more time looking at the Capital Programme. There had been questions about the Marketfield Way development, property and facilities budgets, Horley Business Park, Horley underpass refurbishment and Merstham recreation ground. He had discussed the presentation of the monthly dashboards with the Chief Finance Officer.

A Visiting Member noted that the slippage and variances in the Capital Programme had been set out on p373.

RESOLVED – that the Executive:

i)                 Notes the Key Performance Indicators for Q3 2023/24 as detailed in the report and Annex 1.

ii)               Approves the Key Performance Indicators to be reported on in 2024/25 as detailed in Annex 1.1.

iii)             Notes the Revenue Budget and Capital Programme forecasts for Q3 2023/24 as detailed in the report and Annexes 2, 3 and 4;

iv)             Notes the Q3 Treasury Management Performance and Prudential Indicator Updates for 2023/24 at Annex 5; and

v)               Notes the update on risks relating to Homelessness at Annex 6.