Issue - meetings

The Council is recommended to make the resolutions set out in the report at agenda item 9. 

64.1    The Leader introduced and moved the Executive's recommendations, with Councillor Merryweather seconding and presenting details.

64.2    Councillor Paul Rivers, acknowledging market volatility, discussed the HRA midyear review's impact on the 30-year business plan. Factors affecting the HRA included both controllable and uncontrollable elements, such as inflation and interest rates. Councillor Paul Rivers raised concerns about potential government caps on rent increases and referenced the Social Housing Act. Despite an estimated net savings of £65,000 in the second quarter, increased housing void rent loss and associated costs amounted to £300,000 for the year.

64.3    Councillor Paul Rivers stated that an additional investment income of approximately £312,000 was achieved. The need for future borrowing remains, and Councillor Rivers highlighted potential strategies to reduce and delay borrowing costs based on current interest rates. In preparation for the HRA budget review in January, members of the Landlord Service Advisory Board would receive financial training. Councillor Paul Rivers emphasised that annual rent increases, capped at September CPI plus 1%, would be influenced by the recently released September CPI at 6.7%.

64.4    Councillor Paul Rivers emphasised that rent served as the primary income for the business plan. Changes in budget setting could significantly impact on overall affordability. Last year, £30 million was collected in rent, with 20p allocated to housing repairs, 16p to programmed maintenance, and 38p to financing for every pound collected. Continuing, Councillor Paul Rivers stressed the importance of collaboration with the tenants' panel, facilitated through the LSAB officers. The goal was to ensure tenants had a comprehensive understanding of how their rent contributions were allocated and the purpose they served.

The Mayor moved to a vote and it was RESOLVED:

To note the 2023/24 forecast outturn position for the Housing Revenue Account.

To note the emerging pressures and risks set out in the report.

To note the position regarding the HRA capital programme and New Development Scheme.

The Executive are recommended to make the resolutions set out in the report at agenda item 10.

Portfolio Holder for Finance, Assets and Property

Co-Portfolio Holder for Housing (Operations and Services)

The Executive RESOLVED to RECOMMEND that the Council:

      I.        Notes the 2023/24 forecast outturn position for the Housing Revenue Account;

    II.        Notes the emerging pressures and risks set out in the report;

   III.        Notes the position regarding the HRA capital programme and New Development Scheme.

Councillor Rivers explained that rising inflation and interest rates were challenging for the HRA Business Plan. Changes flowing from the Social Housing Regulation Act were expected to have a significant impact, together with the uncertainty as to whether the government would bring in a cap on rent increases. The Leader concurred that there would be a tension between making sure that rents were affordable for tenants but also having enough money to build new and maintain existing properties.

There being no further discussion, the Executive RESOLVED to RECOMMEND that the Council:

     I.        Notes the 2023/24 forecast outturn position for the Housing Revenue Account;

    II.        Notes the emerging pressures and risks set out in the report;

  III.        Notes the position regarding the HRA capital programme and New Development Scheme.

Reasons:

        I.            The annual Housing Revenue Account budget is a major decision for the Council. The uncertain economic climate necessitates a review of the HRA and Capital budget in the light of its financial impacts on the long term sustainability of the HRA Business Plan

    II.        Scrutiny of the HRA budget and capital budgets through a Mid-Year Review demonstrates transparency and good governance.