Budget & Performance Task Group
Property
Ben Denton
Strategic Director, Housing, Regeneration & Property
Westminster City Council
Executive Summary
• Corporate Property manages the Council’s operational estate and asset
manages an investment portfolio to generate revenue for the Council.
• The Council intends to generate savings through rationalisation of the
operational footprint and growth of revenue from the investment portfolio
over time.
• In order to ensure that Corporate Property meets its financial targets next
year, it must determine savings through penalty payment, potential new
income from property acquisitions and rent increases.
• Lease renewals for approximately 7% of properties are due in 2014/15.
There is a risk of voids, but also an opportunity to renegotiate terms and
increase rents
• TFM ‘Costed Service Matrix’ is due for completion in late February, once
done the fixed price of the contract will be confirmed.
Westminster City Council
Property Budget
• Property was allocated an approved net budget surplus of (£1.86m) in 2013/14
• The projected outturn for 2013/14 is a net surplus of only (£0.43m) (ie an
overspend of £1.43m)
• The draft budget envelope for 2014/15 is net budget surplus of (£0.92m) ( a
net growth of £0.94m over 2013/14)
• The budget envelope for 2014/15 includes savings proposals
amounting to £1.06m and budget pressures of £2.0m
Westminster City Council
2014 /15 Key Issues/Projects
• Corporate Property originally had a structural deficit in 2014/15 of £5.5m and
this brought down to zero once the following changes were built into the
budget:
• Rent increases
£0.8m
• TFM / KF further Savings delivered
£0.8m
• Council House Running Costs
£0.4m
• Self Financing Schemes
£0.1m
• Estimated Inflation pressures
(£0.4m)
• Audley Square penalty payment
£2.6m
• Income from future Commercial property acquisition
c£1.5m
Westminster City Council
2014 / 15 Savings Proposals
• £0.48m Increased Rental Income due to Rent Reviews etc
• £0.58m Reduction in City Hall Business Rates
Westminster City Council
2014/15 Budget Pressures & Risks
Pressures
• £0.6m Inflationary pressures including R&M / Hard FM contract
• £0.9m Loss of Rental Income on Council House
• £0.4m Rental Costs for Tri- Borough Accommodation
Risks
• Rent voids as a result of lease renewals
• Car Park Disposals with £3.1m income creating a reduction of income
• Change in TFM Costed Service Matrix increasing fixed price contract
Westminster City Council
2014/15 Property Budget Composition
Property – Investments
Property – Operations
Housing & Property – Projects
Corporate Property Total
Income Expenditure
£M
£M
(27.45)
8.33
0.00
17.82
Net Budget
£M
(19.11)
17.82
0.00
0.38
0.38
(27.45)
26.53
(0.92)