Agenda item

Report of the Executive Director of Community and Children’s Services.

The Committee received a report of The Executive Director of Community & Children’s Services in respect of the original budget for 2024/25 and 2025/26 for revenue expenditure included within the service charge in respect of dwellings.

The Assistant Director advised the Committee that the report detailed budget costs for the period 2025/26 and the variance against 2024/25 was a reduction of £2.4 Million. The three main reasons for this decrease were:

·       Repairs and Maintenance now being restructured into two new workstreams (waterproofing and repairs) and this amounted to approx. £1.1 Million under new contracts with tighter terms, kpis and penalty clauses.

·       Utilities – through the projections of kilowatt per hour usage, cost, and the approximate amount of energy expected to be sold back to National Grid via PPA. This amounted to approx. £500,000.

·       Projects – project budget reduced by £850,000 as there had been a ‘pause’ so that the BEO could deliver a 25-year Capital Expenditure Plan.

The Assistant Director highlighted appendix two of the report which displayed support services and capital charges and costs included to support departments such as Chamberlain’s, Comptrollers, Town Clerk’s and Corporate Services equalling £1.3mn. He stated  that the percentage allocations and rationale for these figures were not provided but the Chamberlain’s Department were undergoing a full review which would be submitted to the Service Charge Working Party and then the RCC.

Whilst discussing details of appendix 3 of the report, the Assistant Director highlighted staff costs and supervision of management in relation to the Barbican Estate Office and a document shared with the SCWP which summarised staffing costs of employees of the BEO. The new staffing structure contributed to less reliance on some of their support teams through dedicated posts such as Project Manager. The Assistant Director informed the Committee that their actual staffing budget was approximately £3.2 Million and the bottom line was £4.8 Million with the discrepancy being attributed to overheads, and confirmed that the bottom line figure of £4.8 Million was correct.

The Assistant Director advised the Committee that the actual energy spend for the period 2023/24 was £4.297 Million. He reminded Members that the energy market during this period underwent some turbulence therefore the City Corporation was able to generate a large sum of money from selling excess energy back to the National Grid which explained the significant underspend against the budget listed in the report. However, the Assistant Director did not expect this to happen again due to the stability of the energy market at the time of this meeting with it being noted energy was not expected to be sold at 72p per kilowatt per hour as had been done so previously.

A Member asked if there in any contingencies (i.e. missed projects) in relation to the capital expenditure plan and what procedure would be undertaken to introduce a new project. The Assistant Director confirmed that contingencies were in place and explained that the basis of the plan was to encompass, understand and assess every asset and its cyclical life cycle, and understanding the future repairs and maintenance expected of the asset. The plan shall inform the BEO of its 25-year obligations and a Plan Preventive Maintenance Programme was expected to be in place also. A new project manager  had been appointed to lead the Capital Expenditure Programme and Dan Castle will lead the Plan Preventive Maintenance Programme, with both documents to be made publicly available to leaseholders.

A Member noted work an asset survey conducted by Savill’s in the past and wondered if the Capital Expenditure Programme was building on this. The Assistant Director confirmed that the BEO would review all surveys conducted and the Savill’s Stocks and Condition Survey was included, however the reliability and age of surveys must be considered.

The Assistant Director maintained his confidence that repairs were expected to cost less and advised the Committee of a document provide to the SCWP which listed the detail surrounding repairs such as fluctuations of orders and first-time repair rates, and suggested that a public version of this document be made available. A Member asked for confirmation that there would be cost savings from structure changes. The Assistant Director was prepared to commit to pre-Altair cost assessment but was of the view that the new structure would be cost-beneficial. A granular level of breakdown of costs was to be expected be presented at a later date.

The Chair raised a concern about the unexplained £1.3 Million and noted the commitment given by the Chamberlain’s Department in January 24 to assist with a full review of the service charge budget, however this had not been forthcoming. The Chair expected further details of the budget from the Chamberlain’s Department at the next meeting. The Assistant Director admitted that the report was not the “finished article” and not having resource locally had made an impact, however those involved were committed and further resource was being implemented to support this. The Deputy Chair noted appendix 1 of the report and asked the Assistant Director to advise the origins of the extra £240,000 attributed to consultancy fees to which he agreed to provide an update post-meeting.

The Assistant Director informed the Committee that work had been conducted concerning the management and oversight of repair works on the estate from the BEO, and that the quality of management oversight and initial repairs shall be greater which would overall reduce costs.

RESOLVED, that – the report and its contents be noted.</AI23>

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