Report - London Borough of Hillingdon

Reason for variance 2005/06
£5.3m overall additional spend due to:
• £1.5M reduction in the HLF grant for Hillingdon House
Farm and a further £2m predicted overspend.
• Awaiting formal approval of additional £2m budget for
Botwell Green Hayes Stadium by full Council (Feb 06)
• Primary expansions
• Seed Challenge Standards fund to Devolved Schools
• Other smaller variances
• Finance and property - reduction in capital
maintenance contingency in 2005/06.
• Other increases in estimated expenditure in 2005/06.
£000
-273
-18
3 Years
05/06-07/08
£000
+3,500
+2,000
-140
-170
+144
-273
+49
Programme Contingency not yet committed -388 -2,061
ECP - Reduction in ECP estimated expenditure in
2005/06 - £66K for Goulds Green toucan crossing, and
£31K for Highways Maintenance Programme. Other
-110 -110
£13K.
Risk re outstanding legal claims in 2006/07 0 +1,050
Total -6,190 +1,889
126 Although the estimated resources are expected to exceed estimated expenditure by
£15.1m in 2005/06, there are net predicted shortfalls in resources of £17.1m in 2006/07 and
£8.4m in 2007/08 (net programme total of £10.4m). The prediction of resources available for
financing in 2005/06 assumes that a further £20m of capital receipts will be achieved. This
represents officers’ best estimate, but there is always the risk that sales will not be
completed in the anticipated timescale. Given that a large proportion of the receipts are
predicated on the sale of one site, it is prudent to allow sufficient resource capacity so that
projects can continue even if the planned sale is not achieved within the current financial
year.
127 Funding for the £10.4m programme risk has not yet been identified, so maintaining
current spending plans would require additional prudential borrowing. This is illustrated by
the growth of the capital financing requirement (see Prudential Indicators at paragraph 141)
in each of the three years of the programme. This reflects the additional borrowing that
would be required to fund the programme and is the driver for finance costs. These revenue
costs would exceed those forecast in the current MTFF as illustrated in the table below.
Table C3: revenue impact of funding gap through unsupported borrowing
2006/07
£000
2007/08
£000
2008/09
£000
Current MTFF 2,139 4,700 6,558
Growth required 807 1,160 1,436
128 The additional finance costs would be unavoidable and displace any competing
pressures for service growth. However, officers anticipate that the actions outlined at the end
of paragraph 17 will resolve this problem with no impact beyond that in the current MTFF.
PART 1 – MEMBERS, PUBLIC AND PRESS
Cabinet report 10 th November 2005 Page 261