Agenda item

Dan Kennedy, Corporate Director of Residents’ Services, presented the Month 5 budget monitoring report, noting that the information had been drawn from the Cabinet report which was already in the public domain. It was stated that the Residents’ Services Directorate showed an £8.8 million overspend at Month 5, primarily due to temporary accommodation pressures amounting to £6.5 million. Additional pressures included underachievement of income from parking charges and the green waste subscription service, where the £2.5 million target was forecasted to achieve £1.6 million. The Housing Revenue Account was reported as breaking even.

Councillors queried the underperformance of parking income and whether this could be attributed to post-pandemic behavioural changes or pricing issues, as well as the availability of data to distinguish the causes. It was confirmed that significant work had been undertaken to strengthen data analysis, including detailed monitoring of car park payment machine usage. While charges were considered competitive compared to other boroughs, it was noted that it remained too early to confirm the reasons. Patterns of usage were being examined to inform proposals for the forthcoming budget.

Councillors enquired whether forecasts had accounted for potential income tax increases referenced in national budget speculation. Officers confirmed that predicting the effect on residents’ spending patterns—and consequently on Council income streams—was challenging. However, cost-of-living and wider socioeconomic impacts were being considered as part of the budget build for Cabinet consultation in December.

Councillors questioned why the purchase of 400 houses had not reduced temporary accommodation figures and whether this was linked to arrivals from the Chagos Islands. It was explained that demand had risen sharply, with 40 households presenting as UK nationals in one month, equating to over 150 individuals requiring support. Leased properties intended to reduce costs had either been delayed or offered at unaffordable prices, limiting supply. Negotiations continued, but these properties had been removed from forecasts until viable agreements were secured.

Members asked why the Council was not generating income from commercial trade waste when private companies were profiting. It was reported that competitors undercut Council prices and exploited published fees by offering special deals. A more agile pricing strategy was under review to ensure competitiveness. It was confirmed that commercial trade waste did generate income for the Council; however, the income was falling short of the target.

Councillors sought clarification on whether the report covered data up to September and raised concerns about unclear language in reports, noting previous commitments to improve transparency. Officers confirmed that the report covered August and welcomed feedback to enhance clarity in future reports.

Councillors queried why Table 1 appeared to add costs under “management action.” It was explained that managers reviewed budgets at their level, with subsequent adjustments made by senior officers based on additional information. These adjustments were aggregated, and detailed breakdowns could be provided if required.

The Select Committee questioned the £7.3 million overspend in planning, housing and growth, noting that Heathrow-related pressures could not account for the full variance. Officers responded that arrivals through Heathrow had spiked significantly since July 2024. UK nationals arriving without meeting habitual residency requirements required extended support, creating substantial costs. Government funding covered only the first ten days, leaving the Council to fund accommodation and essentials for weeks.

In response to questions about unchanged figures between February and March despite reported spikes, it was explained that the data represented net positions, which varied monthly depending on admissions, departures, and alternative housing solutions.

Councillors asked about contingency plans if providers exited the market following the introduction of price caps on nightly placements. Officers reported successful implementation of the cap by August, with most providers agreeing to reduced rates. It was noted that a few had withdrawn, but others had filled the gap. Negotiations continued to ensure security and quality for both parties.

Members sought clarification on the use of £1 million of capital receipts for transformation activity. It was confirmed that capital receipts from asset disposals could be used under government regulations to fund transformation projects that generated savings. Officers explained that the Council drew from a reserve built up over years, rather than linking specific disposals to individual projects.

On the subject of trade waste, the Select Committee asked whether the Council was obliged to provide the service and whether it represented value for money. It was clarified that the service generated £1.3 million in 2024/25 and remained profitable, though targets were under pressure. Operating costs were marginal, making the service financially beneficial.

Councillors asked about collaborations to reduce housing costs. Officers described lobbying efforts for fair government funding and collaborative procurement schemes across London to standardise rates and prevent boroughs from competing and inflating prices.

Members were informed that the strategy agreed in February had achieved reductions in new placements, averaging 55 per month compared to 62 last year, against a target of 50. Progress had been made on increasing private rented sector properties and implementing rate caps. Challenges remained due to persistent demand and difficulties securing affordable leased accommodation.

Councillors queried the £0.8 million shortfall in green waste subscription income and whether consultation results had predicted this. It was explained that setting accurate targets for new initiatives was challenging. Benchmarking had been used, and achieving £1.6 million income partway through the year was considered a success. The scheme would remain under review.

Members expressed concern that savings appeared to result from vacancies or reduced operational activities such as repairs and caretaking. In response it was confirmed that vacancy details could be provided, and that underspends in repairs reflected reduced need due to investment in property improvements, such as boiler replacements. It was highlighted that vacancies were managed carefully, with temporary redeployment used to address short-term demand spikes.

RESOLVED: That the Select Committee noted the 2025/26 Month 5 budget monitoring position.