Issue - meetings

A report updating on the financial position of the Housing Revenue Account (HRA) and in line with the parameters set by government, setting the rents of Council dwellings, with an increase of 7.70%, approving the HRA budget estimates for 2024-25 and continuing to set the working balance for 2024-25 at £1m.

Cabinet:

1)    NOTED the financial position on the HRA as at 30 November 2023 and the year-end forecast for both revenue and capital.

2)    RECOMMENED to Council:

2.1     The budget estimates for 2024-25 be approved.

2.2     An average rent increase of 7.70% for all Council dwellings be approved with effect from 1 April 2024. 

2.3     That Intensive Housing Management Service charges are not applied to rent accounts from 1 April 2024 pending the conclusion of the service review as referenced at paragraph 5.51.

2.4     The 2024-25 capital programme be approved.

2.5     That delegated authority be given to the Director for Housing and Communities, in consultation with the Director for Corporate Services and Portfolio Holder for Council Housing and Landlord Services, to approve virements within the HRA capital programme during the year, to provide flexibility to meet emerging needs and maintain decent homes.

The Portfolio Holder for Corporate Finance, Property and Resources introduced the report, the purpose of which provided an update on the financial position of the Housing Revenue Account (HRA) for 2023/24 as well as  the setting of the budget and rent increase for 2024/25 for Council dwellings. The recommendation was for  an increase of 7.7% in rents. The working balance for 2024-25 would remain at £1m.

The Director for Corporate Services advised that the proposals within the report are in line with both the HRA Business Plan and the Asset Management Plan.

The Director for Housing and Communities (Deputy Chief Executive) confirmed that the Intensive Housing Management review is ongoing, and proposals would be reviewed by Scrutiny ahead of Cabinet.

The Director for Housing and Communities (Deputy Chief Executive) advised that the Housing Assets Plan had recently been refreshed and would be kept under review.

The Director for Housing and Communities (Deputy Chief Executive) advised the forthcoming regulatory changes would place more focus and scrutiny on the housing sector. The Council has a clear and confident plan in place for any risks and would be undertaking surveys throughout the year which will be reflected in the budget setting process.

The Leader and Portfolio Holder for Housing and Landlord Services thanked officers for the report.

Cabinet:

1)    NOTED the financial position on the HRA as at 30 November 2023 and the year-end forecast for both revenue and capital.

2)    RECOMMENED to Council:

2.1     The budget estimates for 2024-25 be approved.

2.2     An average rent increase of 7.70% for all Council dwellings be approved with effect from 1 April 2024. 

2.3     That Intensive Housing Management Service charges are not applied to rent accounts from 1 April 2024 pending the conclusion of the service review as referenced at paragraph 5.51.

2.4     The 2024-25 capital programme be approved.

2.5     That delegated authority be given to the Director for Housing and Communities, in consultation with the Director for Corporate Services and Portfolio Holder for Council Housing and Landlord Services, to approve virements within the HRA capital programme during the year, to provide flexibility to meet emerging needs and maintain decent homes.

Reasons for Recommendations:

The Local Government and Housing Act 1989 (the 1989 Act) requires the Council to produce and publish an annual budget, including the setting of rents, for the HRA which avoids a deficit. This report sets out the detail for Cabinet to consider prior to making recommendations to Council.   It is a requirement that this be scrutinised prior to its submission which has been undertaken by the Scrutiny Committee in January 2024. The proposed rent increase is in line with Government policy and is the maximum increase allowed.

The Revenue Budget Proposals 2024/25 – Housing Revenue Account (HRA) is to be presented to the Committee, prior to final consideration by Cabinet and Council in February 2024.

The Director for Corporate Services (Section 151 Officer), Dawn Garton introduced the report with a presentation.

The comment was made that it is good to see current tenant rent arrears coming down but there are costs to consider, e.g. staffing cost, and legal capacity. It was explained that the expertise is employed on a temporary basis in order to work through the backlog but that the expertise is the correct expertise. It was confirmed that there is an exit plan and that there will be a continued resource of 1 full time officer. The issue of rent arrears does remain a high-risk area for the Council and remains under review.

A concern was raised on 'no win, no fee’ claims. In response, it was explained that it is important for the Council to know the stock and its condition and be able to evidence proactive action to any issues or repairs, so that claims can defended, and the work can be evidenced. The Council has a solicitor responsible for defending those claims.

Members were surprised at the £340k overspend on gas costs. It was explained that not recognising this earlier was an administrative error which has had to be corrected. Colleagues across the Council are looking at understanding some of these increases with expectation of meeting the relevant account manager.

Concern was raised that there had been a lot of fires within the housing stock. It was explained that the Council had worked with its insurer, and it was established that none of the fires have been the fault of the Council. They have either been accidental or a result of a failure of technology. It was recommended, by the insurer, that the Council should continue educating their residents in order to minimise the fire risk.

As the discussion was regarding the rent increase, Cllr Gordon left the meeting at 8:23pm and did not return.

The rent increase was discussed and it was commented that this could add to the pressure of arrears. It was explained that as the Council’s costs had increased, the rise has become a necessity but that the council will continue to support tenants and identify quickly if tenants are struggling to pay their rent so that they can be supported. Examples of support were provided.

Members queried whether expenses per property are logged and whether trends are assessed and acted upon. It was explained that capital improvements and revenue repairs per property are logged. It was explained that the Council are due to implement a recharge policy whereby it will charge tenants where they have intentionally caused damage. It was also explained that sometimes works for specific property types are undertaken in response to particular issues (for example, non-traditional homes).  

It was noted that the replacement of kitchens and bathrooms will peak in 2025/26. In response it was stated that this would have been profiled on age and condition of stock.

RESOLVED

That Members’ comments are presented to Cabinet at the next Cabinet meeting