Milton Keynes council has an £83million fortune sitting in the bank from last year just waiting to be spent on projects that include improving council housing.
A committee was told that super-keen council officers had been over-ambitious in their project planning for the year 2018-19 and they are trying to learn lessons in being more realistic.
“It can be difficult to spend money when the resources to spend it aren’t there,” said Cllr Peter Geary (Cons, Olney) at Wednesday’s Budget and Resources Scrutiny Committee.
“We need to consider doing something about this, there is obviously a problem and it needs to be addressed.”
The issue had been identified by Cllr Charlie Wilson (Lab, Stony Stratford) who spotted in background papers that £56 million of money earmarked for housing and other projects had not been spent in the council’s £164 million capital budget. The total identified underspend was £83.116 million.
“It is not good enough,” said Cllr Wilson. “I am concerned that the money needs to be spent in a timely manner or the delay could add to costs.”
He added that in addition to the unspent money, there is a sum of £26million that has been received from developers but had not been committed for spending. He was told that the so-called Section 106 developer money has to be tied to specific projects.
The council’s head of finance, Anna Rulton, said that £20million of the underspend was to do with the Housing Revenue Account. “Project planning has not been adequately looked at, and we are having to look at that,” she said.
And Steve Richardson, the council’s director of finance and resources, said that councillors were “right to be raising the issue.” He said the council’s leadership team were being advised on setting reasonable “timeframes”.
“We will be going through that with the team,” he said. “The capital budget is a significant part of what we do.
“New ways of working are being embedded in the council but there is still work to do. This includes better warning signs being identified earlier in the process.
“Some items of spending are being put into the capital programme too early, and were never going to get spent.”
Anna Rulton said £20m of the unspent money had been earmarked for either new build houses or for the buying of homes on the market. But the projects have not come through on time.
Cllr Peter Geary said in view of the council’s plan to eventually build 2,000 council houses “some of the items in the budget look like pie in the sky. Are we able to build 2,000 houses?”
Steve Richardson said some of the building is “in the pipeline” but that councillors were “right to challenge in that area”.
In the Housing Revenue Account (HRA) he said that MK had, over time, not been spending on planned maintenance of council-owned homes. This had been coming back to haunt them in the form of rising costs of “responsive maintenance.” But this year’s HRA included planned maintenance, he said.
Committee chairman Cllr Robin Bradburn proposed that the committee request the ruling Cabinet to look at the £80 million underspend.
“We should find ways of ensuring they are delivered and put forward on time,” he said.
The committee will also be recommending that Cllr Rob Middleton, the council’s Cabinet member for Resources and Innovation looks into the issue as soon as possible.
