Issue - meetings

The Portfolio Holder for Corporate Finance and Resources to submit a report providing information on actual expenditure and income incurred on the Housing Revenue Account (HRA), compared to the latest approved budget for the period 1 April 2020 to 30 September 2020.

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

Dawn Garton, Director for Corporate Services introduced the report, the purpose of which was to provide information on actual expenditure and income incurred on the Housing Revenue Account (HRA), compared to the latest approved budget for the period 1 April 2020 to 30 September 2020.

Mrs Garton advised that an anticipated £30k overspend at year end, whilst maintaining the minimum agreed working balance of £750k.  This would result in a reduced transfer to the Council’s reserves at the year end to support expenditure on regeneration and development projects.

Mrs Garton confirmed the key reasons for the overspend (shortfall in income due to the withdrawal of the health and safety service charge and higher level of voids than anticipated.  This had been reduced  by underspends in a number of areas including employees, repairs and maintenance.

Mrs Garton highlighted the risk of increasing bad debt (not included in the report), due to Covid-19 and to date, no specific Government grants had been provided to the HRA.  The financial impact is reported to Government each month.

Councillor Ronnie de Burle, Portfolio Holder for Corporate Finance and Resources highlighted that at this stage in the financial year, there remained much uncertainty and whilst only a modest overspend had been forecast, it was important to keep focus on the potential for further challenges from Covid-19 and the risk of increasing rent arrears.  The Council needed to support its tenants during this difficult time and ensure effective debt management policies and practices were in place in order that the HRA remain financially stable.  Although the Government had done a great deal to help, it was disappointing that no specific support had been provided to councils managing housing stock.  It was hoped that this position would be remedied in the future.

During discussion the following points were noted:

• The Council was making progress on its voids properties, repairs and maintenance, with the aim of having very few void properties, which would assist the future balance of costs and income.
• Members noted the Local Governance Association announcement on 12 November inviting councils to bid for £20k funding to tackle pandemic related housing issues.
• It was too soon to understand the full impact of Covid-19, specifically due to the Furlough Scheme but unemployment was rising and other lag economic indicators needed to be taken into account.
• The Council needed to remain robust on debt management and it was vital to work with partners on provision of tailored support for those in need (how to budget and manage finances.

Cabinet NOTED the financial position on the HRA at 30 September 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.