Appendix 11(c)
Major Variations between original budget of £89.4m and forecast of £88.2m for 2006/7
Stock options implementation costs - £0.9m reduction as costs have been re-profiled
based upon work with project leads and delays with announcements from DGLG. These
adjustments have been reflected into the 2007/8 budget.
Central Internal Recharges - £0.2m reduction reflects the proposed charges for insurance,
mainly as a consequence of reduced tripping claims on the highways.
Provision for Bad Debts - £0.3m reduced contribution to the bad debt provision is anticipated
based upon the level and age of debt outstanding.
Other Costs - £0.3m increase to reflect the continued contribution to the cost of the
Neighbourhood Warden service and the additional costs of council tax for service tenancies
and void properties.
Loan Charges - £0.1m reduced budget provision reflects the proposed interest charges to the
HRA.
Dwellings Rents - £0.3m additional income due to Right to Buy sales being lower than
anticipated within the original budget.
Other Income - £0.2m additional income due to variations arising across a number of service
charges, particularly, in respect of the recently de-pooled janitorial and shared area charges.
Additionally, the accounting treatment in respect of the recharge to Housing General Fund for
asylum services has now changed therefore increasing the other income budget.
Housing Subsidy - £0.1m the favourable variation relates to the introduction of the Rental
Constraint Allowance which provides in-year compensation due to the 5% cap on average
rents.
Recovery of Transfer Costs - £1.6m reduction based upon advice from the Council’s
financial advisors, it is anticipated that any recovery of transfer costs will be in future years, this
is similar to the expenditure on Stock Options and links to delays in announcements.
Contribution from Balances - £0.2m reduced contribution from balances is required as a
result of the variations identified above.
Appendix 11(c)
(continued)
Major Variations between 2006/7 forecast and 2007/8
Stock Options Implementation Costs - £0.8m increase budget provision in 2007/8 reflects
the work required to establish the new organisations and draw down the investment from the
DCLG.
NPHL Management Fee - £0.2m increase reflects the changes arising from fee-review
meetings with officers from NPHL and was approved by the Joint Lead Members for Housing
and Customer and Support Services on 5th February 2007.
Housing Repairs - £0.3m reduction because a one off virement of this amount to was
required to support the repairs programme in 2006/7, which is not required for 2007/8.
Provision for Bad Debts - £0.2m in order to be prudent, the budget for 2007/8 has been
reinstated to its original value. Collection rates will continue to be monitored with any potential
reduction to the budget being made during 2007/8.
Loan Charges - £0.2m increase budget provision reflects the anticipated increase in interest
rates during 2007/8.
Dwellings Income - £1.7m increase is based upon latest estimate of stock numbers and
incorporates rent increase as at 1st April 2007.
Other income - £0.2m increase reflects the impact of the inflationary increase on service
charges.
Housing Subsidy - £1.8m reduction, as detailed elsewhere in the report, an increase in
assumed rental income is the major factor in the reduction of housing subsidy.
Contribution from Balances - £0.5m increased contribution from balances is required as a
result of the variations identified above, primarily the implementation costs of Stock Options
required to draw down almost £0.5b of investment.