Agenda item

The Portfolio Holders for Housing and Communities and for Corporate Finance and Resources to submit a report updating Members on the financial position of the Housing Revenue Account (HRA), setting the rents of Council dwellings, approving the HRA budget estimates for 2021-22 and setting the working balance for 2021-22.

Cabinet

1)    NOTED the new service charge elements for Health & Safety works and Grounds Maintenance works in line with the Rent and Service Charge Policy;

2)    RECOMMENDED to Council that:

                     i.        The budget estimates for 2021-22 be approved;

                    ii.        An average rent increase of 1.49% for all Council dwellings for 2021-22 be approved with effect from 1 April 2021;

                   iii.        The working balance is maintained at the approved minimum balance of £750,000 and any residual amounts be transferred to the Regeneration & Development Reserve as approved in February 2020 for the current year.

Dawn Garton, Director for Corporate Services introduced the report, the purpose of which was to update Members on the financial position of the Housing Revenue Account (HRA), set the rents of Council dwellings (being an average of 1.49%, in line with the Government’s policy of Consumer Prices Index plus 1%) approve the HRA budget estimates for 2021-22 and set the working balance for 2021-22.

Mrs. Garton advised that  the current year showed a forecast underspend, due to vacant posts and delays to repairs and maintenance projects (which would be carried forward into the next financial year to enable the works to proceed).  This underspend was offset by reduced income, due to the proposed service charges not being implemented this financial year and reduced voids income.

Mrs. Garton highlighted the new service charge elements for Health & Safety works and Grounds Maintenance works, in line with the Rent and Service Charge Policy.  The working balance was maintained at £750k (as previously approved) with additional spending, in line with the Housing Improvement Programme (HIP) being met form reserves.  The projected reserves were set out at paragraph 5.7 of the report and there were currently no concerns regarding the level of reserves.  However, this would be re-assessed as stock condition surveys were undertaken and the resulting financial implications were assessed and fed into the updated 30 year business plan.

Councillor Joe Orson, Leader of the Council highlighted that the HRA was a ring-fenced landlord account, which recorded certain defined transactions.  The Council had a duty to maintain the HRA in accordance with accounting practices and to produce and publish the annual budget.  He noted the estimated year end position for the current financial year, as detailed at paragraph 5.1 of the report.

During discussion the following points were noted:

·         The Council’s effective and transparent engagement with the Tenants Forum Executive Committee (TFEC) had been vital  in gaining feedback from tenants on the Council’s Housing service.

·         The work of the Housing Improvement Board had been essential to delivering improvements in the Housing service.

·         Members noted the good work undertaken by the Chief Executive and the Director for Housing and Communities, which had resulted in significant improvements in Housing service.

·         Members thanked the Leader for his work to implement and Chair the Housing Improvement Board and Councillor Pearson for his continuous work.

·         Members thanked TFEC for their engagement and feedback.

·         Capital works, such as the repair and maintenance of windows and bathrooms etc. had been delayed due to Covid-19 but works would be undertaken as soon as possible.

·         Periodic (every 5 years) review of the 30 year business plan was noted.

·         The Council would need to focus on the energy efficiency of its housing stock, which would result in work such as replacing boilers etc.

·         Providing good quality social housing was a core Council priority.  Affordable housing helped people to reduce housing and fuel costs, resulting in more disposable income to spend in the local economy.

·         Concerning the average rent increase of 1.49%.  Members noted that this represented the Council’s second rent increase and that it had previously made rent reductions over a 4 year period.

·         The Council was committed to the work yet to be undertaken, to fully deliver its aims and aspirations tenants.

DECISIONS (NON-KEY)

Cabinet:

1)    NOTED the new service charge elements for Health & Safety works and Grounds Maintenance works in line with the Rent and Service Charge Policy;

2)    RECOMMENDED to Council that:

                     i.        The budget estimates for 2021-22 be approved;

                    ii.        An average rent increase of 1.49% for all Council dwellings for 2021-22 be approved with effect from 1 April 2021;

                   iii.        The working balance is maintained at the approved minimum balance of £750,000 and any residual amounts be transferred to the Regeneration & Development Reserve as approved in February 2020 for the current year.

Reason for the decisions

The Local Government and Housing Act 1989 requires the Council to produce and publish an annual budget, including the setting of rents, for the HRA which avoids a deficit.  It is a requirement that this be scrutinised prior to its submission which falls within the Cabinet’s remit.