Issue - meetings

The Portfolio Holder for Corporate Finance and Resources to submit a report advising Members of the financial position and year end forecast on the Housing Revenue Account at 30 June 2020.

Cabinet NOTED the financial position on the Housing Revenue Account (HRA) at 30 June 2020 and the year end forecast.

Dawn Garton, Director for Corporate Services introduced the report, the purpose of which was to advise Members of the financial position and year end forecast on the Housing Revenue Account (HRA) at 30 June 2020.

Mrs. Garton advised that the forecast indicated a £110k overspend, whilst maintaining the minimum agreed working balance of £750k.  This would result in a reduced transfer to the Council reserves at the year end to support expenditure on regeneration projects.

Mrs. Garton highlighted the key reasons for the overspend (direct Covid-19 expenditure on staffing and cleaning, reduced income due to voids being higher than budget leading to additional council tax expenditure, withdrawal of the health and safety service charge resulting in reduced income).  Some additional costs were being offset by vacancy savings and an underspend on repairs and maintenance.

Mrs. Garton advised that the forecast had not taken in to account the risk of increased bad debts as a result of Covid-19 and tenants struggling to pay rents.  To date, there had been no Government grants to support the HRA.  The Council reported on the financial impact to Government monthly and would continue to lobby to get Government support.

During discussion the following points were noted:

·         As a result of the underspend at the end of last year, the regeneration re-development reserve was at a slightly higher level than in the Housing Improvement Plan (HIP).  The Council had provided support to additional priorities from the reserve and the overspend would reduce the reserve further.

·         The additional expenditure relating to cleaning was for additional and specific Covid-19 related cleaning at sheltered schemes.  This was good work and it would be useful if the report provided these details to highlight that the health of the tenants and staff was a Council priority.

Cabinet NOTED the financial position on the HRA at 30 June 2020 and the year end forecast.

Reason for the decision

The Council, having set an agreed budget at the start of the financial year needs to ensure that the delivery of this budget is achieved.  Consequently, there is a requirement to regularly monitor progress so that corrective action can be taken when required, which is enhanced with the regular reporting of the financial position.