The Housing and Environment Scrutiny Committee were scheduled to receive updates on the projected revenue expenditure for the Housing and Environment Directorate, and the Housing Revenue Account (HRA). The report pack included details of the budget monitoring projections for 2025/26, based on financial information available as of 30 June 2025. It also contained commentary on variations against the budget.

Housing and Environment Budget Monitoring

The Housing and Environment 2025/2026 Budget Monitoring Report (Quarter 1) was produced by the Executive Director of Housing and Environment, Marcus Lloyd. It summarised the budget monitoring projections for 2025/26, based on financial information available on 30 June 2025.

The report pack stated that the Housing and Environment Directorate was forecasting an overall overspend of £0.542m.

The report pack broke down the projected net year-end revenue position by service:

• Waste and Infrastructure was reporting a net overspend of £0.172m, with Building Cleaning and Catering being the most significant areas of overspending at £0.371m and £0.102m respectively.
• Environment and Regulatory Services was projecting a net overspend of £0.054m.
• There was a projected net overspend of £0.268m on Housing Services (excluding HRA).

The report pack stated that the 2025/26 budget included savings totalling £4.787m for the services covered in the report. These savings were reflected in the budgets and monitoring positions detailed in the report.

The report pack included a table summarising the assessment of savings delivery for 2025/26 as of 30 June 2025.

Savings were assessed based on the following criteria:

• Blue – The element of saving fully achieved already at this point in the year.
• Red – The element of saving containing significant deliverability risk and therefore forecast to not be achieved this financial year and reported as an overspend.
• Amber - The element of saving considered to have some deliverability risk but is still forecast to be achieved this financial year.
• Green – The element of saving that is forecast to be achieved by year end but has not been achieved yet.

Waste and Infrastructure

Waste and Infrastructure was reporting a net overspend of £0.172m. The most significant areas of overspending were Building Cleaning (£0.371m) and Catering (£0.102m).

Highway Services was reporting an underspend of £0.126m. It was stated in the report pack that winter maintenance costs are difficult to predict, and it was assumed the full budget would be spent. There were projected underspends on staffing due to vacant posts, delays in recruitment, supplies, services, and admin costs of £0.356m, and over achievement of income of £0.158m. These were being offset by overspends in property costs and payments to agencies of £0.388m.

The Engineering Projects Group (EPG) was reporting an underspend of £0.141m, due to vacant posts and delays in recruitment, with some offsetting overspend on underachieved income, transport and supplies and services.

Passenger Transport was reporting a small overspend of £0.003m with offsetting over and under spends on areas.

Network Contracting Services (NCS) was anticipating a small underspend of £0.017m, as this area is fee generating to cover its costs.

The report pack noted that on 18 September 2024, the cabinet approved the Waste Strategy¹, and as part of these recommendations it was also approved that any in year Waste Service revenue underspend would be ringfenced to smooth revenue operations variations as the strategy is implemented. Overall, at period 3 Waste Management was projecting an underspend of £0.041m, and if achieved, this underspend would be transferred to the Waste Strategy reserve.

Residual Waste was projecting an underspend of £0.069m due to the project Gain share £0.279m from Project Gwyrdd². There were off setting overspends with additional salary costs due to staff covering absence of £0.170m, additional vehicle costs for the aging fleet of £0.045m, supplies and services and payments to agencies and other projects of £0.006m. Income budgets were projected to overachieve by £0.011m relating to replacement bin income.

Organic recycling was projecting a £0.234m overspend due in the main to additional salary costs of £0.077m to cover absence and additional hours being required to complete rounds, together with additional vehicle costs for the aging fleet of £0.138m, supplies and services of £0.021m for additional recycling containers, offset by a projected overachievement in income of £0.003m relating to replacement bin income.

Civic Amenity sites were projecting a £0.193m underspend after an agreed drawdown from reserves. This was due to reduced supplies, services and property costs of £0.063m mainly as a result of site plan improvements, and vehicle and plant costs of £0.194m, offset by additional staff costs of £0.019m, contractor costs of £0.043m and reduced income from scrap of £0.002m.

Waste Transfer Station was projecting a £0.129m overspend due to additional costs for the maintenance of the site with additional Health and Safety works required of £0.126m and salary costs £0.017m with an underspend on vehicle costs £0.014m.

Dry Recycling was forecasting a £0.149m overspend due to increased vehicle costs of £0.201m due to ageing vehicles and employee costs of £0.035m, with an underspend on contractor costs £0.045m and increased income from replacement bins £0.041m.

Commercial Waste was currently projecting an overspend of £0.225m with an underspend on contractor costs £0.264m, employee costs £0.198m, supplies and services £0.086m off set by an under achievement of income £0.768m and vehicle costs £0.005m. The report pack stated that the service went through changes due to the new Welsh Government legislation last November, and that the budgets for this area may need adjusting going forward when the first full year of data is obtained.

Other Waste was projecting a £0.024m underspend due to no anticipated expenditure on property supplies and services this year as a result of external funding being secured which wasn't anticipated at budget setting.

Tre-hir was projecting a £0.049m underspend due to reduced maintenance costs as a result of a reduction of trade effluent water charges due to improved infrastructure.

HQ staff was forecasting an underspend of £0.162m after an agreed drawdown from reserves. The main variances were staff underspends from holding vacant posts of £0.196m. A further underspend was anticipated of £0.024m from supplies and services due to efficiency savings, and also internal recharges which has reduced due to focus on the waste project . These were being offset by overspends on vehicles of £0.024m, payments to agencies and others of £0.010m and administrative costs of £0.024m

Public Conveniences was projecting an overspend of £0.002m, as there are standing costs for these buildings even though they are no longer open, this will continue until they are completely decommissioned.

Street Cleansing service was reporting a net underspend of £0.293m. This was largely due to an underspend on staffing of £0.327m from staff vacancies and staff covering frontline services, an overachievement of income of £0.081m due to additional duties for cleansing of car parks and bus stops that was previously provided by external contractors and £0.038m supplies and services. This was being offset by additional transport costs for new vehicle hire which has replaced previously owned aging fleet of £0.112m and material purchases that have been purchased in bulk to maximise the value for money of £0.041m.

Building Cleaning services, has this year implemented a full cost recovery recharge rate following after being reviewed under the transformation programme. It was anticipated that all corporate buildings and non-school sites would have the new rates implemented from 1 April 2025. This would then be followed by the schools with a split charge for the year meaning a charge from 1 April to 31 July at old rates and the new rates implemented and charged from 1 September 2025. Due to the complexities with staffing this has now been delayed with an anticipated implementation date of 1 January 2026. This results in the anticipated savings will not be fully realised in 2025/26, resulting in a projected overspend of £0.371m.

Catering is currently being reviewed under the transformation programme. The service shows a net overspend of £0.102m. Due to the current information available, food and meal sales and income projections have been calculated at a high-level forecast, with spend based on average cost to date, plus an estimate for potential outstanding payments. The service has flagged a risk regarding food prices, which will need to be monitored closely throughout the financial year. It is anticipated that food prices will remain high, and the new Welsh Government Legislation being introduced this year will affect Secondary Schools, Primaries and Breakfast Clubs. This legislation is expected to result in increased prices due to the requirement to provide more locally sourced foods, with healthier eating options. Also as a result of new Welsh Government Legislation around the separation of commercial waste, prices have increased. Income forecasts are currently showing the service as exceeding the budgeted income targets for 2025/26, achieved through higher than anticipated Welsh Government funding regarding Universal Primary Free School Meals, and additional higher anticipated income through school meals sales in Comprehensive schools. The service has flagged a risk to these income forecasts because income can easily be affected by school closures resulting from adverse weather, inset days and any planned school trips.

Environment and Regulatory Services

Environment and Regulatory Services was projecting a net overspend of £0.054m.

Trading Standards was forecasting a £0.080m underspend. CCTV has a pressure on their budget for enhanced payments for night allowances and bank holiday cover. This is currently offset by an underspend on staffing from holding vacant posts within the wider service area. Based on current bookings registrars are indicating they will be delivering the service within budget.

Environmental Health was forecasting a £0.019m overspend. Pest control is forecasting an underachievement against income budgets of £0.061m due to delays in setting up the system for fee income. This pressure has been alleviated by SPF funding for Community Safety Partnerships and delays in recruitment within the pollution team.

Cemeteries is expecting to realise an overspend on their budget of £0.042m as a result of additional staff costs for acting up to cover absence and vacancy management of £0.020m and potential increased spend of hire of equipment and contractor payments.

Allotments are currently forecasting to deliver the service within the allocated budget.

Parks Operations is still under review as part of the Transformation programme. The team are moving forward with the agreed staged recovery of costs relating to bowling green maintenance, but this financial year will still place some pressure on the budget. The parks teams are working with various bowling green associations and clubs to minimise impact of the transfer of the maintenance costs. The grass pitch fee increases were agreed at budget setting process in February; however they have been reviewed and have now been reduced after considering the stakeholder's feedback. This has resulted in considerable pressure on achieving the income target in 25/26 which is resulting in outdoor facilities overspending by £0.155m. At period 3 this has been offset with potential underspends in HQ due to a review of the current staffing structure and reduced expenditure against supplies and services relating to plant and equipment hire and less horticultural maintenance. The Parks service will continue to work within their budget and the overall position at period 3 is a potential overspend of £0.034m.

Countryside are predicting a £0.058m underspend which is a result of vacant posts, this is being offset with increased spend on private contractors.

Leisure Services review as part of the Transformation programme is ongoing. For 25/26 Leisure services currently predict an overspend of £0.097m. There is an ongoing pressure with the athletics hub as they are struggling to generate income primarily due to the anticipated primary users fulfilling expected usage profiles. Also due to extended staff absences the salary costs in leisure centres currently project a £50k overspend.

General Fund and Private Sector Housing

There was a net overspend of £0.268m on Housing Services (excluding HRA).

General Fund Housing is projecting an overspend of £0.300m, which is mainly because of the increasing demand for temporary accommodation, along with the length of time of Bed and Breakfast placements due to lack of move on options, as well as increased costs by providers. This has been an ongoing issue for the past few years.

The report pack stated that this service area includes a statutory duty for Temporary Accommodation which is demand led and difficult to predict. As at the end of June 2025, 500 homeless people are in temporary accommodation of which 336 are placed in Bed and Breakfast (B&B) type accommodation. The demand and cost for B&B placements has been significant, together with accompanying security costs for the relevant establishments which are also increasing significantly. The placement length for single people is increasing as stock becomes depleted and the development of new sites becomes stagnant or is delayed. Even then the proportion of single person stock on those new build sites is minimal in comparison to the numbers placed and waiting in temporary accommodation. For the first quarter this year, 49 homeless people were received and placed in temporary accommodation, but for the same period only 20 were successfully moved into suitable long term accommodation. Temporary growth of £4.279m has been allocated to this budget over the past 3 years and demand is still increasing. £0.956m of homelessness grants has also been transferred into the revenue settlement directly to this service.

The report pack stated that securing permanent move on options for single people is a significant challenge as there is a significant shortage of 1 bed/single person accommodation and turnover is low in our existing single person accommodation. In addition, it is often this client group who has a higher level of support need and therefore due to the lack of suitable single person permanent housing, are not able to move on to the specialist supported housing provision within the Borough, and therefore this has an impact on the number of placements, length of placement and the cost of the placement. This is having a significant impact on the cost of our non-permanent housing as we owe a statutory duty to provide interim accommodation until a suitable offer of housing is made. Furthermore, there could be an increase and delay with placements as a result of the current Ukraine situation. It is important to note that for every temporary accommodation placement, the council has to fund on average 80% of the cost. The Department of Work and Pension (DWP) only funds on average 20% of the cost via housing benefits, which is contributing to the increasing overspend.

The report pack stated that whilst the council is in the process of establishing and developing alternative models, they are still required to provide interim housing and therefore are reliant on hotels and bed and breakfast establishments. Security provision is currently being reviewed with a view to reducing or withdrawing from some establishments as well as existing block booking arrangements. The Common Allocations Policy has been revised to help prioritise those in urgent housing need and to maximise best use of stock, and there are some new developments that will include 1 bed accommodations. The WG Leasing Scheme Wales policy recently launched with 2 properties currently online with a further 14 pending inspections.

The report pack stated that the new homelessness bill has expanded duties on councils to include increased duties around protection of personal items as well as additional duties around certain young people leaving care which will require additional staffing and training. Investment into early interventions and enhanced data collection will also increase costs in the short term. Long term the demand for Temporary Accommodation will reduce but the transition period will continue to see an increase as systems adapt, and new services embedded. WG predicts 2026-2028 as a gradual shift to prevention and 2028 being the goal for full implementation. Welsh Government are apparently releasing an additional grant to cover to 2029, but no details have been confirmed as yet.

Private Sector Housing is projecting an underspend of £0.032m. After receiving £0.635m growth in 2023/24, the budget no longer has to rely heavily on its fee income to be able to fund the service. However, some agency fee income is still being recovered, and the current underspend forecast is largely due to fee income generated from a backlog of Disabled Facilities Grants. This budget also received growth in year for the Empty Homes Team funded via the empty property council tax premiums which was introduced from 01/04/2025.

Housing Revenue Account Budget Monitoring

The Housing Revenue Account Budget Monitoring – Quarter 1 report was produced by the Executive Director for Social Services and Housing. It informed members of the projected position for the Housing Revenue Account (HRA) for the 2025/26 financial year, based on the income and expenditure movements of the first 3 months of the year. The HRA capital programme which is predominantly funded by the HRA was also included within this report.

The report pack stated that the HRA has a projected underspend of £0.868m for the end of 2025/26 financial year, which represents about 1.4% of the total HRA budget. This was based on the income and expenditure patterns for the first 3 months of the year together with knowledge of the service from the respective managers. The surplus is split between general revenue underspends and capital related underspends.

The HRA budget for 2025/26 is £60.531m with its main components consisting of £25.497m of salaries, £8.285m of capital financing charges, £2.182m Housing Strategy - New Build (net of salaries) £3.566m of building maintenance and response repairs (net of salaries), £3.076m of SLA type internal service recharges, and £14.790m of revenue contributions to fund the PAMS (Post Asset Management Strategy) programme. There is also a budget of £15.268m for the PAMS programme which is recharged fully to the Capital Programme and predominantly covers the maintenance of the WHQS programme, voids and remodelling works. The spend on the HRA is self-financed mainly by the rental income collected from Council Tenants, of which about 78% is funded by Housing Benefits.

Salaries and associated costs within the HRA are currently expected to underspend by some £0.583m which represents about 2.5% of the salary budget. There are some offsetting over and under spends in this area given the volume of staff which includes sickness cover, requests for reduced hours and timing for filling vacant posts. Projections include an estimated pay award of 3% for 2025/26, although there has been a very recent announcement that the pay award has been agreed to be slightly higher at 3.2% so this will be factored in for the next report.

Non-Pay Related costs include a forecast overspend of £0.329m associated with costs such as landlord lighting and security on void properties. This also includes a forecast overspend of £0.108m related to SLA type costs as some services are being transferred from Housing into Corporate services eg Compliance and Health and Safety, but this is offset by an underspend in salaries. This is offset further by a forecast underspend across budgets that are service specific, such as, decoration allowances, housing strategy projects, and office related costs

Building Maintenance and Response Repairs is currently projecting an underspend of £0.169m. Expenditure on the Housing Response Operations (HRO) budget is anticipating a £0.0.59m overspend net of salaries and non-pay savings identified above. This includes a forecast reduced spend on plant, fleet and sub-contractors, offset by a forecast overspend regarding Insurance related works. There are also projected under spends of £0.228m within the cyclical and revenue projects, and statutory maintenance budgets.

A budget of £15.268m has been allocated for the In-House team who support the capital programme. The work involved includes the maintenance of the WHQS programme, including initial decarbonisation and void works. There is a nil cost to the HRA because the cost is fully recharged to the capital programme. However, there is a forecast underspend of £0.222m due to pay related savings identified above, also the reduction in the anticipated plant, fleet and sub-contractor spend highlighted above.

Borrowing levels reported in the 2025/26 Business Plan are expected to be lower than anticipated due to a higher level of balances being brought forward from 2024/25. This will impact the CFR requirement and will be revised once the Business Plan has been updated. The borrowing cap of £100m was agreed by Full Council on May 23rd 2023, which will cover anticipated borrowing up to 2025/26 to fund commitments for increasing housing supply.

Variations in Income represent approximately 0.4% of the total income budget

The HRA allows for £14.790m of revenue contributions towards the HRA Capital programme. The HRA RCCO allocation is expected to be utilised towards funding the capital spend this year in addition to the £7.3m Major Repairs Allowance (MRA) from Welsh Government. The MRA allowance will need to be utilised first as this funding does not carry over into financial years. Total capital spend to period 3 is £6.029m which is a combination of PAMS, Voids, Decarbonisation and the New Build Programme. Properties continue to be upgraded in accordance with WHQS standards when void. The specification on voids has also been increased to be in line with the new WHQS23 standard which started on April the 1st 2024. At this stage the full Capital budget is expected to be spent but is being closely monitored.

Working balances at the start of 2025/26 financial year were £26.682m. The majority of this is derived from underspends in previous years and is anticipated to be used to contribute towards the capital programme this year. Any funding not utilised will be carried forward into future years to reduce borrowing.