Decision details

Councillor Damian White, Cabinet member for Housing, introduced the report

Members were reminded that the Housing Revenue Account (HRA) remained a ring-fenced account that was used to manage the Council’s own housing stock.  The proposed budget would enable the Council to manage the stock to a reasonable standard and to maintain the stock to the Decent Homes standard.  It furthermore set rents, service charges and other charges for Council tenants for the year 2016/17.

The report before Members was a follow-up report to the annual budget and rent setting report which had been presented to Cabinet on the 10 February this year.  One of the recommendations agreed in that report was for a full review of the HRA Business Plan (BP) to be carried out and an update provided to Cabinet by September 2016.  The report complied with that recommendation.  The reason for the review was to take account of various government initiatives announced since the General Election in May 2015 and up to the Comprehensive Spending Review announced in November 2015.  Officers had also taken account - where possible - of announcements made in the Chancellor’s Budget of March 2016.

Many of the initiatives which had emerged since May 2015 had been enshrined within the Housing and Planning Bill.  Royal Assent had been given on the 12 May 2016.  The Act had various commencement dates for the relevant clauses contained within it up to April 2017.  Prior to commencement, some of the clauses which impacted on the HRA BP would need to go through a period of “determination” involving formal consultation, or the drafting of Regulations.  Until this happened, the exact nature of the financial impact on the HRA finances will remain uncertain.  The Business Plan provided to Cabinet therefore provided a prudent assessment of the projected resources available and would undergo constant review and report back to Cabinet as details of changes became known.

The key changes impacting on the financial situation were:

•      Social rent setting policy in the years following the four years of 1% reduction.

•      Any capping of Local Housing Allowance (LHA) levels.

•      Rent policy regarding supported housing rents.

•      Higher value sales levy.

•      Pay to stay initiative.

Other expenditure areas had also been fully reviewed.  The key areas of expenditure were:

•      Planned maintenance to existing stock.

•      Responsive repairs costs to existing stock.

•      Staffing costs.

•      Financing costs of the borrowing in the HRA.

•      Losses from bad debts, voids etc.

The impact of each of the items detailed was identified in the body of the report and had been built into the 30 year Business Plan.  An update to the 10 year HRA Business Plan was provided in Appendix 1 to the report.

Reasons for the decision:

The Council was required to set the housing rent, service charges and a budget in accordance with the Local Government and Housing Act 1989.

Other options considered:

There were no alternative options in-so-far as setting a budget was concerned.  However there were options in respect of the various elements of the budget.  These were considered in preparing the budget and covered such areas as the rent and service charge increase, budget growth and major works programme proposals.

Cabinet:

1.            Approved the Housing Revenue Account Business Plan as detailed in Appendix 3 to the report. 

2.         Agreed the HRA Major Works Capital Programme, detailed in Appendix 2 to the report and referred it to full Council for final ratification.

3.         Agreed the proposed development of new council housing as detailed in Appendix 4to the report and instructed officers to start consultation and initiate the procurement of preferred partners for the delivery of the enhanced development programme and the service of demolition notices where appropriate.  All would be the subject of future reports to Cabinet as the detail of specific sites and sites included would change following detailed financial and planning feasibility.