The Corporate Services and Economic Growth Overview and Scrutiny Committee (OSC) met on 30 September 2026 to discuss property transformation, financial performance, and the Housing Revenue Account. Key discussions included progress on the council's property rationalisation programme, a projected £7.9 million overspend on the general fund, and the financial position of the Housing Revenue Account.

Property Transformation

The committee received an update on the council's property transformation programme, which aims to optimise the use of council assets and reduce operating costs. David Walford, Head of Regeneration, presented the progress made in accordance with the Asset Management Framework 2023-26. Phase one of the property review, focusing on office accommodation in South East Northumberland, has been completed, resulting in savings of over £1 million and a reduced carbon footprint. Phases two and three are in progress, with a focus on a place-based approach in towns like Morpeth, Ashington, Alnwick, Berwick, Bedlington, Hexham, and Cramlington. A new corporate landlord approach is also being developed to improve property management and compliance across the entire estate.

Councillor Flower raised concerns about the cost of external consultants, with David Walford confirming that a facilities management consultancy had been appointed for £53,000. Councillor Austin questioned the evidence of improved customer service delivery, and David Walford cited the consolidation of housing teams in Blyth at Eddie Ferguson House as an example of improved facilities and customer experience. Councillor Robinson inquired about the process for identifying surplus assets and engaging local members, with officers explaining that local members are informed of activity within their wards and that a strategic approach to towns is being taken.

The committee also discussed the financial implications of property disposals, including the generation of capital receipts and the consideration of alternative uses for surplus sites, such as dementia care facilities and extra care housing. The challenges of managing vacant properties, including potential liabilities like asbestos, were also raised, with officers outlining plans for demolition or redevelopment of former council offices and libraries in Bedlington.

Financial Performance 2026-27

Nick Oliver, Cabinet Member for Finance and Value for Money, presented the financial performance report for the end of June 2026. The council is forecasting a projected overspend of £7.96 million on its general fund revenue budget. This is comparable to the position at the same point in the previous year, and officers expressed confidence that there is time to address the overspends. The primary drivers for the overspend are pressures in adult and children's services, accounting for £2.8 million and £1 million respectively. A further £3.6 million is attributed to corporate expenditure.

The report highlighted that the BEST savings programme is taking longer than anticipated to deliver, currently showing an achievement of £8.5 million against a target. There is also slippage in the capital programme, with £75 million reprofiled from 2026-27 to 2027-28. Despite these challenges, the council has invested £11 million in transport, £6 million in schools, and £3 million in fleet replacements in the first quarter. The council's treasury management continues to be sound, operating within authorised borrowing limits.

Councillor Flower inquired about the current level of debt, and it was explained that the figure fluctuates daily due to cash flow. Councillor Austin asked about what constitutes a good budget, and it was clarified that balancing the books at the end of each year is the primary goal, with a variance of 2-3% being manageable. Councillor Dunne raised concerns about delays in the implementation of the new CRM system, with a go-live date for the technology now estimated for November and the full customer experience transformation project aiming for January 28th. Councillor Robinson questioned the difference between authorised limits and operational boundaries for external debt, which was explained as a technical accounting measure.

Housing Revenue Account (HRA) Financial Performance 2026-27

The committee reviewed the financial performance of the Housing Revenue Account (HRA) for the end of June 2026. The HRA has a gross expenditure budget of £44.940 million and is a ring-fenced budget. The report indicated a projected outturn of £0.003 million, meaning the HRA is forecast to break even. Key areas of expenditure include £12.9 million on maintenance and capital expenditure on new housing.

Councillor Sam asked about the financial capacity to take over empty properties, as proposed by the Labour Party conference. It was noted that there is an existing, albeit complex and expensive, mechanism for this, and further details on any new government powers would be needed. Councillor Flower commented on the accuracy of the HRA budget, noting it was within £3,000 of the target. The report also detailed rent arrears, with current tenant rent arrears at £1.701 million and former tenant arrears at £0.349 million. The void property rate was reported at 259 properties, with an income loss of £0.363 million in the first quarter.

Councillor Dunne raised concerns about a scheme that was no longer progressing despite being in the Medium Term Financial Plan, and also questioned the sustainability of the HRA reserves. Councillor Robinson inquired about the use of the HRA for affordable homes, and it was confirmed that the council is building some homes directly. The committee also discussed the back-loaded nature of capital expenditure within the HRA, with officers explaining this is often due to invoicing and processing times. The issue of whether tenants in newly acquired council houses have an automatic right to buy was also raised, with the response that this is a government policy.

Work Programme

The committee reviewed its work programme for the remainder of the year and into the next. A recommendation was made to receive a report on performance data from the BEST system on an annual basis, with a proposal to receive this at the next meeting on 2 December. Concerns were raised about the readability of figures in the work programme documents, and this will be looked into. The forward plan of cabinet decisions was also discussed, with a note that an economic growth update would be included in the December meeting. The date of the next meeting was confirmed as Wednesday, 2 December 2026.