Issue - meetings

This report advises Members of the latest position regarding the Housing Revenue Account (HRA) for 2020/21, the updated 30-year Business Plan and seeks approval of the 2020/21 budget.

The report contains the following Annexes:

Annexe 1 – Revised HRA Business Plan - 2020/21 to 2023/24

            Annexe 2 – Housing Fees and Charges

            Annexe 3 – Capital Programme comprising

·         Housing Core Programme

·         New Affordable Homes Programme

·         Stock Remodelling Programme

Annexe 4 – HRA Reserves Summary

Recommendation

The Executive makes the following recommendations to the Council, that:

1.    the rent level of Council dwellings be increased by 2.7% from the 2019/20 level with effect from 1 April 2020 in accordance with The Government’s permitted guidelines;

2.    the weekly charge for garages rented by both Council and non-Council tenants be increased by 25 pence per week excluding VAT from 1 April  2020;

3.    the service charge in sheltered accommodation be increased by 50 pence per week from 1 April 2020 to £19.50;

4.    the recharge for energy costs in sheltered accommodation (as appropriate) be increased by 50 pence per week from 1 April 2020;

5.    the revised HRA Business Plan for 2020/21 to 2023/24 as set out at Annexe 1 be approved;

6.    note the approval change for the fees and charges as set out in Annexe 2;

7.    the Housing Revenue Account Capital Programmes as shown at Annexe 3 be approved;

8.    the proposed use of the Working Balance Reserve and Contingency Reserves to fund Capital Programmes be approved; and,

9.    the financing of the capital programmes be approved in line with the resources shown in Annexe 4.

In accordance with the Local Authorities (Standing Orders) (England) (Amendment) Regulations 2014, a recorded vote will be taken on this item.

62.1    The Leader introduced the Housing Revenue Account (HRA) report, reminding Members that this was another area where the Council’s income stream and ability to provide services to residents was suffering from ill thought-out Central Government interference. The authority’s responsibility as a social landlord was with the management and maintenance of existing council homes, of which there were almost 5,000 rented and shared ownership homes in our Borough, and delivering housing by purchase or by building our own. Waverley was one of a dwindling number of councils still doing this.

62.2    The Right to Buy (RTB) scheme had seemed “a good idea at the time” but was not properly thought through. The Council was forced to sell houses at below market value and not even allowed to keep all the proceeds,resulting in a continued net loss of Social Housing. Even worse, national statistics showed that about 40% of social housing sold ended up being privately rented out at full market rates – a classic case of robbing the poorest to enrich those better off. There was little wonder that there is a nationally recognised crisis in available Social Housing.

62.3    The Government had also required Waverley to take £189 million of “assumed debt” by an enforced transfer of the HRA to a so-called “self-financing basis”; and a 4 year rent freeze; had robbed the council of badly needed income to maintain our current housing stock. Even applying the maximum rent increase now allowed by the Government, our tenants will be paying less in rent than 4 years ago

62.4    Waverley’s Corporate Strategy aimed to maximise the availability of housing that meets the needs of local people at all income levels and emphasised the value and worth of all residents. More and better affordable housing was needed for residents of the Borough in housing need, particularly the more vulnerable in our society. Despite the many difficulties outlined this Administration had put in place a viable business plan to aid delivery of these priorities.

62.5    The Council had to set a balanced HRA budget for 2020/21 in accordance with the updated 30-year Business Plan including the three-year Capital Programme. The plan which would be presented by Cllr Rosoman, the Housing Portfolio Holder, would provide the resources to fund the 30-year maintenance forecast and deliver proposals for building new quality affordable homes for those in need and investment in stock remodelling.

62.6    The Housing Portfolio Holder, Cllr Anne-Marie Rosoman outlined the detail of the proposed Housing Revenue Account Business Plan. In order to set a balanced HRA budget a combination of factors had to be considered, looking at statutory responsibilities, housing need and setting forward programmes within the Housing Strategy.

62.7    In 2012, Waverley had to take out £189m of borrowing to transfer the HRA to the new ‘self-financing’ basis.  This level of debt, and the cost of servicing it, could not be ignored. At the time the government allocated this debt to the Council, it was on the assumption that rents  ...  view the full minutes text for item 62

This report advises Members of the latest position regarding the Housing Revenue

Account (HRA) for 2020/21, the updated 30-year Business Plan and seeks approval of the 2020/21 budget.

Recommendation

It is recommended that the Executive, after considering comments from the Housing Overview and Scrutiny Committee, make the following recommendations to the Council, that:

1.    the rent level of Council dwellings be increased by 2.7% from the 2019/20 level with effect from 1 April 2020 in accordance with The Government’s permitted guidelines;

2.    the weekly charge for garages rented by both Council and non-Council tenants be increased by 25 pence per week excluding VAT from 1 April  2020;

3.    the service charge in sheltered accommodation be increased by 50 pence per week from 1 April 2020 to £19.50;

4.    the recharge for energy costs in sheltered accommodation (as appropriate) be increased by 50 pence per week from 1 April 2020;

5.    the revised HRA Business Plan for 2020/21 to 2023/24 as set out at Annexe 1 be approved;

6.    note the approval change for the fees and charges as set out in Annexe 2;

7.    the Housing Revenue Account Capital Programmes as shown at Annexe 3 be approved;

8.    the proposed use of the Working Balance Reserve and Contingency Reserves to fund Capital Programmes be approved; and,

9.    the financing of the capital programmes be approved in line with the resources shown in Annexe 4.

62.1     Cllr Anne-Marie Rosoman, Portfolio Holder for Housing and Community Safety, introduced the proposed Housing Revenue Account (HRA) Business Plan, Revenue Budget and Capital Programme for 2020/21. The proposals had been developed against a background of four years of mandatory rent reductions, with consequences for the Business Plan of the reduced income. The government was now allowing an increase in housing rents, and it was important to agree an increase for 2020/21 to enable the Council to maintain services, invest in its housing stock and continue the new affordable housing development programme.

62.2    After considering comments from the Housing Overview and Scrutiny Committee, the Executive RESOLVED to recommend to Council, that:

1.    the rent level of Council dwellings be increased by 2.7% from the 2019/20 level with effect from 1 April 2020 in accordance with The Government’s permitted guidelines;

2.    the weekly charge for garages rented by both Council and non-Council tenants be increased by 25 pence per week excluding VAT from 1 April  2020;

3.    the service charge in sheltered accommodation be increased by 50 pence per week from 1 April 2020 to £19.50;

4.    the recharge for energy costs in sheltered accommodation (as appropriate) be increased by 50 pence per week from 1 April 2020;

5.    the revised HRA Business Plan for 2020/21 to 2023/24 as set out at Annexe 1 to the report be approved;

6.    note the approval change for the fees and charges as set out in Annexe 2 to the report;

7.    the Housing Revenue Account Capital Programmes as shown at Annexe 3 to the report be approved;

8.    the proposed use of the Working Balance Reserve and Contingency Reserves to fund Capital Programmes be approved; and,

9.    the financing of the capital programmes be approved in line with the resources shown in Annexe 4 to the report.

Reason: In order to approve use of reserves and resources to fund Waverley Borough Councils Landlord Services, the 30 year maintenance programme and deliver proposals for building new affordable homes and investment stock remodelling.