Stratford District Council: financial planning questioned amid chunky income shortfalls

The council’s latest financial reports and projections were examined at this week’s meeting of cabinet and while a £685,000 surplus is expected in the financial year 2024-25, that doesn’t paint the full picture.

As things stand, the authority has received nearly £1 million more than it had anticipated in interest payments on its balances, a figure that is expected to be £1.25 million by year end in March 2025.

Council budgets are made up of many moving parts with variances across departments commonplace. Reserves are held to stop authorities getting into trouble and that money is having the added benefit of yielding those crucial interest payments now.

However, there are gaps.

Parking income is £106,000 below the anticipated level so far, while the planning department is £131,000 short on fees for applications and community infrastructure levy (CIL) payments. Another £165,000 gap is created by the “under-recovery of housing benefit overpayments and a shortfall in housing benefit subsidy”.

The council predicts it will bring down those shortfalls to £85,000 for parking, £100,000 for planning and £75,000 for housing benefit but those and other matters were the subjects of scrutiny from opposition councillors.

Councillor David Curtis (Lib Dem, Stratford Shottery), who oversees work on the district’s resources, spoke of “continued improvement” when introducing the report.

“It is still relatively early days but I think it is more reassuring that it is a favourable estimated outturn rather than unfavourable,” he said before acknowledging some of the problem areas.

On parking, he said: “This is a significant income stream that is adversely affected by weather, which is beyond our control, and the roadworks earlier this year.

“As I have said before, it is perhaps an important indication of the wider economic climate, about which we have little control.”

Councillor Andy Crump (Con, Southam East, Central and Stockton) chairs the district’s scrutiny panel and referenced a 5.3 per cent increase in parking charges when it was last reviewed.

“With the benefit of hindsight, was that realistic? Particularly when looking at other factors in the economy,” he asked.

“Had it been a two per cent increase, we would probably have been on target on the outturn figures.

“That is quite a volatile one, as an accountant we like prudence and stability and that can be difficult to maintain sometimes but as it is a big budget – nearly £3.5 million – we really need to make sure we are looking at that properly.

"A two or three per cent variation on that is significant compared with a similar variance on a £1,000 budget.”

He also acknowledged other factors such as roadworks, weather and the availability of park and ride, something that Warwickshire County Council sees the financial benefits of, admitting that it was a “fine balance”.

Leader of the opposition Councillor Sarah Whalley-Hoggins (Con, Brailes & Compton) was “particularly concerned” by the “significant” volume of sections costing more or bringing in less than expected.

She queried “the message that gives regarding the prudent budget management" of the council, "and budget setting in the first place”.

Leader Councillor Susan Juned (Lib Dem, Alcester East) hit back.

“I have actually kept the revenue budget monitoring for previous years and it is not incomparable at all,” she said.

Cllr Curtis noted Cllr Whalley-Hoggins had made “valid points” but added that the council had shown a negative position overall this time last year.

“We can ask for further reports to examine in more detail what is making these variances but without being complacent, the outturn for year end is still on target.

“That said, these are important bellwether signs that we must not ignore so I accept your comments.”

Cllr Curtis also committed to a “deep dive into all the earmarked reserves” to check whether they are still required for their original purposes as part of the budget setting process which concludes in February 2025.