Harbours Advisory Committee

25 September 2024

Harbours Budget Monitoring Report 2024/25

For Review and Consultation

Cabinet Member:

Cllr J Andrews, Place Commissioned Services

Local Councillor(s):

All Councillors

Executive Director:

Jan Britton, Executive Lead for Place

Report Author: James Radcliffe (Bridport and Lyme Regis), Ed Carter (Weymouth) Claire Connolly (Weymouth),

Job Title: Harbour Masters, Business Manager

Tel: 01308 423222, 01305 838423

Email:	James.radcliffe@dorsetcouncil.gov.uk, ed.carter@dorsetcouncil.gov.uk

claire.connolly@dorsetcouncil.gov.uk

Report Status: Public Choose an item.

Brief Summary: The purpose of the report is to set out the current budget forecasts and reserve balances for Bridport, Lyme Regis and Weymouth Harbours 2024/25. The financial summaries are given in the appendices.

Recommendation: To note the current budget monitoring figures for 2024/25 as at the end of August:

Note the budget forecast 2024/25 for Bridport Harbour

Note the budget forecast 2024/25 for Lyme Regis Harbour

Note the budget forecast 2024/25 for Weymouth Harbour

Reason for Recommendation; The Dorset Council Harbour Strategy, Strategic Goal number four is to have a balanced budget whilst building the ability for investment into the harbours. It is intended for harbours to become financially self-sufficient and be able to manage any reserves to ensure that the harbours see reinvestment to support strategic goals and objectives from the Business Plan.

The Harbours’ budget monitoring and regular reporting to the Harbours Advisory Committee helps manage the risks of under or overspending the budget and review income against financial expectations.

Bridport Harbour 2024/25 Budget:

1.1	The Bridport Harbour budget forecast figures are given at appendix 2.

Expenditure overall: £103,072 favourable

1.3 The main variances to the budget predictions are as follows:

Pay £13,000 (F). Underspend forecast mainly due to vacant Harbour Assistant / Mechanic post

Premises £4,241 (A). Minor overspend due to increased NNDR (Business Rates) charges, mainly on the car parks.

Supplies & Services £94,418 (F). Significant underspend due to savings on dredging budget. No dredge due until April 2025, and last dredge was split March / April 2024 so no full year costs this financial year.

Income - £39,111 adverse

£18,937 (A). Shortfall of boat repair income due to vacant mechanic post

Fees & Charges £20,174 (A). Minor income shortfalls projected across a range of streams including car parks, launching and overnight stays. In addition, almost £8,000 of bad debt charges in year to date in the accounts.

Budgeted surplus to reserve was £91,895, but overall surplus is forecast at £155,855, a net favourable surplus of £63,960. Overriding factor is the anticipated saving on dredging budget.

Reserve Movements

The budgeted transfer to reserves is currently predicted to be £155,121

Predicted year-end balance £282,977

Lyme Regis Harbour 2024/25 Budget:

2.1	The Lyme Regis budget forecast figures are given at appendix 3.

2.2	Expenditure £95,913 Favourable

2.3	The main variances to the budget predictions are as follows:

Internal Charges £1,436 (A). Minor excess costs due to DHO (Highways) recharges.

Pay 7,500 (A). Overspend anticipated due to increased casual hours / pay costs over the summer period.

Premises £3,352 (A). Minor overspend on NNDR due to the Fishermen’s Association and Traders Car Park being taken back under Dorset Council control.

Supplies & Services £108,239 (F). Significant underspend due to savings on dredging budget. No dredge due until April 2025, and last dredge was split March / April 2024 so no full year costs this financial year. In addition, no mobilisation dredging costs due to dispute with contractors

2.4	Income - £83,003 Adverse

Fees & Charges £17,103 (A). Shortfall of fees & charges income across visiting craft, launching and concessions.

Lyme is still in a net cost position, and as such as funded centrally by Dorset Council. Net budget is £32,927, and forecast is for an overall net cost of £20,017, so a declared underspend of £12,910. However, this would be returned to the corporate centre at year end. Only if the saving was above the net funding from Dorset Council would a surplus transfer to reserve

Government Grant £66,000 (A). Shortfall of budgeted grant income as this is linked to dredging. No dredging grant due now until next dredge in April 2025.

2.5	Reserve Movements

There will be no transfer to reserves as Lyme is funded centrally

Weymouth Harbour 2024/25 Budget: Overall £79,528 favourable

Dorset Councils Harbours Strategy and Business Plan, gives a 5-year financial and investment plan and will guide the future use of budgets. This has helped re-focus the priorities for the future.

The harbour reserves have been built up to enable the harbour to be financially self-sufficient. Weymouth harbour has been successful in continuing to achieve a balanced budget whilst building the ability to invest in the harbour (Strategic Goal 4).

The Weymouth harbour budget was approved with an expectation that there would be a surplus of £838,556 to be transferred in the reserve at year end. The financial picture for Weymouth remains healthy, forecast figures are given at appendix 3.

Income: £71,868 favourable

Variances relating to income are as follows:

An approved early release from a lease has resulted in reduced income whilst the site is being reviewed for future use.

During the pandemic, income from visitors using the slipway for daily launching and the purchasing water sports permits more than doubled. This continued for 4 years. Activity at the slipway has reduced this season and income in these areas is more comparable to pre-covid times.

Whilst occupancy in the marina does remain high, it is lower than the previous two years and it is likely that budgeted figures will not be achieved.

Income from commercial berthing both for annual berths and visitor berths are an improving picture.

Although there was a quiet start to the season, a really busy July has meant that income from visiting vessels is likely to be on target.

Parking income is expected to be similar to previous years as these car parks are not directly affected by the trial reduction in charges. August weather may have a further impact on revenue, but the August figures were not known at the time of writing this report.

Expenditure: £7,660 favourable

Variances relating to expenditure are as follows:

Utility companies have taken meter readings which has resulted in multiple credit notes and reinvoicing. These have crossed over two financial years. This does mean that costs are likely to be lower than budgeted, but the amount of energy used remains the same.

Initial projection to make savings on seasonal staff have not been achieved as long-term sickness that requires back-filling has increased costs

Targets will continue to be closely monitored through the year to ensure accurate and timely reporting and if required action can be taken to mitigate any shortfalls.

Weymouth Harbour Reserves:

The reserve balance carried forward is £3,595,310.

£400,000 is committed to fund works associated with the Weymouth Quay Regeneration Project.

The overall favourable prediction of £79,528 will be transferred into the reserves, leaving a predicted reserve balance of £3,438,294.

This balance is committed to carrying out a programme of works needed for maintaining and improving facilities to protect income streams and deliver on the priorities set out Dorset Harbours Strategy and Business Plan. Due to previous financial pressures, there is a back log of under investment that needs addressing.

For 2024, the harbour reserves is split it into separate reserves. This will give better financial clarity and show where and how the reserves are committed and to better identify funds for future projects and investments. The separate reserves are as follows:

Existing asset management fund

Development and project fund

Maintenance dredging fund

Pleasure Pier fund

Emergency Contingency fund

Details of how the reserve is split is shown on appendix 3 of this report.

Funding in these new reserves is not necessarily ringfenced. As spending fluctuates, surplus can be transferred between reserves if required.

The table below provides details of the replacement and maintenance plans for existing harbour assets over the next five years. This is under constant review both in the short and long term to review how assets are being used, to maximise the life of items and to review the priorities.

Existing Assets – Management Plan
Category	2024	2025	2026	2027	2028
Harbour Infrastructure	£222k	£110k	£74.5k	£37k	£24k
Moorings Infrastructure	£10k	£215k	£265k	£7.5k	£0
Operational / navigation	£37.5k	£14.5k	£32.5k	£47k	£10k
Total annual spend	£269.5k	£339.5k	£372k	£91.5k	£34k

Over the next five years, significant investment in the harbour is planned, with a full programme of inner harbour marina replacement and improvement works out lined in further detail in the Business Plan.

The table below details the proposed development and projects. Where projects have not been fully costed, an estimated figure has been used and this plan will be updated as projects take shape, and costings are finalised.

Development and Project Plan
Category	2024	2025	2026	2027	2028
Building D development	£60k
Commercial Area enhancements	£150k
Commercial Area slipway and scrubbing area design	£5k
The Cove – Navigational Risk Assessment and project design	£10k
Pleasure Pier, gate, fencing and improvements	£30k
The Cove – installation	£500k
Installation of extra pontoons on Custom House Quay	£140k
Inner harbour marina design	£10k
Commercial Area slipway and scrubbing area install	£500k
Inner harbour marina installation	£500k	£500k	£500k

Once the initial costs of the improvements have been met, payments will continue to be made into replacement funds, to cover future costs.

Financial Implications

The financial picture for all three harbours is an improving picture with all harbours expected to return surpluses.

Reserves exist for all three harbours which can be used to progress deliverables from the Business Plan.

There are however some budget risks. Poor weather and an early Easter have impacted income figures. Occupancy rates on marina berths are lower than the same period last year.

2024 will see the completion of Weymouth Quayside Regeneration Project. This will impact on the budget for Weymouth as we work to deliver the new service provisions and complete the finishing touches of the project.

The report covers the harbours’ budgets. The summary information is presented under the standard corporate headings.

The types of expenditure included within each heading are as follows:

Internal charges – this includes the “above the line” service recharges paid to Dorset Council.

Pay related costs- costs relating to staffing including basic pay, national insurance, pension contributions and training.

Premises related costs– utilities and rates, refuse, planned maintenance, surveys, response maintenance.

Transport related costs – fuel, travel and subsistence.

Supplies and services – Insurance, advertising, equipment, subscriptions, printing and stationery.

The income is made up of:

Commercial activities – income relating to annual commercial berths, visiting commercial vessels and visiting fishing vessels.

Leisure activities – marina berths, visiting yachts, use of slipway and PWC permits (PWC permits relate to Weymouth only).

Rents and licences – income relating to rental of property, vessel and operating licences.

Recoverable costs – where recharges are made to lease and licence holders for energy. Also includes electricity charged to annual berth holders and visiting vessels.

Natural Environment, Climate & Ecology Implications

The Harbours’ Budget funds items that have implications for sustainability and climate change. In utilising future budgets every effort will be made where possible to consider how carbon output can be minimised and operations made more sustainable. Below is the Decision wheel which shows the impacts of this proposal on the aims of our Natural Environment, Climate & Ecology Strategy.

Well-being and Health Implications

The Harbours’ Budgets fund items that have implications for voluntary organisations, community safety and physical activity. It is recognised that looking after the Harbour infrastructure is vital for the safe and efficient use of the Harbour for these purposes. The implications are considered for individual items when funding commitment is being approved.

Other Implications

Harbour issues are subject to regular consultation with customers, the Harbour Consultative Groups and the Harbours Advisory Committee.

The harbours’ accounts form part of the Council’s overall Statement of Accounts, which is considered and approved by the Audit Committee.

Risk Assessment

HAVING CONSIDERED: the risks associated with this decision; the level of risk has been identified as:

Current Risk: Low

Residual Risk: Low

The Harbours’ budget monitoring and regular reporting to the Harbours Advisory Committee helps manage the risks of under or overspending the budget. Many items of expenditure have a link to safety of customers and the public.

Equalities Impact Assessment

There are no equalities implications arising from this report.

Appendices

Appendix 1 Bridport Harbour Financial Summary

Appendix 2 Lyme Regis Harbour Financial Summary

Appendix 3 Weymouth Harbour Financial Summary

Background Papers

None

Report Sign Off

11.1	This report has been through the internal report clearance process and has been signed off by the Director for Legal and Democratic (Monitoring Officer), the Executive Director for Corporate Development (Section 151 Officer) and the appropriate Cabinet Member(s)