Issue - meetings

The Council is recommended to make the resolutions set out in the report at agenda item 7.

Portfolio Holder for Finance, Assets and Property together with Co-Portfolio Holders for Housing.

The Leader of the Council moved the recommendations, and in so doing emphasised that the hardship fund would be increased to help support tenants on Universal Credit with mitigating the impact of proposed rent increase. Cllr Fairclough seconded the motion and Cllr Merryweather, Portfolio Holder for Finance, Assets and Property introduced the HRA Budget 2024/25 by summarising:

·       That the HRA operated in highly a regulated environment which governed how resources could be used

·       Inflationary cost pressures were apparent together with growth pressures including the need to invest in maintaining an adequate housing management IT system specific to the HRA

·       CPI in September 2023 was 6.7% plus the additional 1% which resulted in a maximum allowable rent increase of 7.7% for 2024/25as proposed

·       Alternative scenarios of 1%, 4% and 6% increases had been tested

·       The Hardship Fund would be increased to £200,000 from £30,000, and

·       A stepped approach to increasing energy service charges was proposed which would be reviewed annually when further stepped increases would be taken to take the recharges to the level of full recovery.

Councillor Paul Rivers, Co-Portfolio Holder for Housing, spoke to thank the Tenants Panel and Landlord Services Advisory Board for their engagement with the budget setting process. Cllr Rivers said that the Tenants Panel was right to have highlighted the decline in tenant satisfaction from 83% in 2017 to 68% in 2023; and concurred that tenants were not responsible for macro-economic conditions. Cllr Rivers emphasised that the Council was committed to providing an improved housing service and remarked that the recommendation for a 7.7% increase had been proposed with a heavy-heart. Contextually, the 4% rise in the previous year had been to shield residents during an inflationary peak. Councillor Palmer, Co-Portfolio Holder for Housing, urged that communications to tenants be improved to encourage awareness and take-up of available support, including discretionary relief.

Members’ statements in favour of the recommendations included:

·       The Council was committed to building quality Passivhaus standard energy efficient housing

·       Rental income was used to fund housing repairs and maintenance

·       A 7.7% increase would protect tenants in the longer term, whereas a smaller increase would have to be recovered in future years, and

·       An Executive Working Group would consider tenant satisfaction measures.

Members’ spoke against the recommendations as follows:

·       That the reasoning for the previous years’ 4.4% increase did not appear sound

·       The budget strategy indicated that there would be above inflation rent rises for the foreseeable future

·       In addition to the rent and energy increases, new services charges for cleaning communal areas were being proposed

The Leader of the Council countered that the proposed increases would be handled sensitively and fairly. The Council was committed to raising tenant satisfaction, delivering more and better contract management for responsive repairs, and the provision of good quality energy efficient housing as set out in the Corporate Strategy. 

In accordance with Procedure Rule 17.1, the Mayor called a vote on the recommendations which were taken en bloc. The vote was carried, with  ...  view the full minutes text for item 97

The Executive are recommended to make the resolutions set out in the report at agenda item 9.

Portfolio Holder for Finance, Assets and Property together with Co-Portfolio Holders for Housing.

The Executive RECOMMEND that the Council approves:

       I.          The weekly rent for Council dwellings to be increased by up to 7.7% from the 2023/24 weekly rent charges, effective from 1 April 2024, within the permitted guidelines contained within the Government’s rent setting policy

     II.          That service charges and utility charges at non senior living accommodation be increased by 7.7% per week

    III.          That the heating charges in senior living accommodation be increased by 20% per week from 1 April 2024 to £31.20

   IV.          The Service Charge in senior living accommodation be increased by 15% per week from 1 April 2024 to £24.04

     V.          The revised HRA Business Plan for 2024/25 to 2053/54 as set out in Annexe 1

   VI.          The approved change to the fees and charges as set out in Annexe 4 is noted;

 VII.          The HRA capital programmes as show in Annexe 5 and 6;

VIII.          The financing of the capital programmes in line with the resources as shown in Annexe 7

   IX.          To deliver the works identified in the maintenance budgets it is recommended that authority is delegated to the Executive Head of Housing, in consultation with the s151 Officer, to procure and enter contracts valued over £100,000 show in Annexe 8

     X.          An increase in inflation provision proposed within the Housing Revenue Account budget of £48,207 to be funded by the £159,459  increase in funding guarantee grant as confirmed by the Department of Levelling Up, Housing and Communities on 5 February 2024.

Cllr Merryweather, Portfolio Holder for Finance and Assets, advised that a replacement Annexe 5 had been circulated, and introduced the HRA Budget 2024/25 by summarising:

·       That the HRA operated in highly a regulated environment which governed how resources could be used

·       Inflationary cost pressures were apparent together with growth pressures including the need to invest in maintaining an adequate housing management IT system specific to the HRA

·       Funding for the entire service came from the rents and service charges paid by tenants

·       In 2019 the Government announced that providers of social housing would be permitted to increase average weekly rents by the previous September Consumer Price Index (CPI) plus an additional 1% for five years from April 2020.

·       For 2023/24 a CPI+1% rise would have been 11.1% which the government capped at 7%, and the Council contained to 4% in recognition of the economic situation to help protect tenants.

·       CPI in September 2023 was 6.7% plus the additional 1% which resulted in a maximum allowable rent increase of 7.7% for 2024/25as proposed

·       Alternative scenarios of 1%, 4% and 6% increases had been tested

·       2024/25 would be a 53 week rent year, for tenants not in receipt of Universal Credit (UC) there would be no adverse impact.  However, those receiving Universal Credit would be impacted

Councillor Paul Rivers, Co-Portfolio Holder for Housing, spoke to thank the Tenants Panel and Landlord Services Advisory Board for their engagement with the Budget setting process. Cllr Rivers said that the Tenants Panel was right to have highlighted the decline in tenant satisfaction from 83% in 2017 to 68% in 2023; and concurred that tenants were not responsible for macro-economic conditions. Cllr Rivers endorsed the recommendations with a heavy-heart and emphasised that the Council was committed to providing an improved housing service.

The Leader advised of an alteration to the recommendations to include recommendation X, duly supported by the Executive. 

Executive Members’ statements in support of the recommendations included:

·       That the 4% rise in the previous year was to shield residents during an inflationary peak

·       The Council was committed to improving the service, particularly repairs and maintenance

·       Communications to tenants would be improved to encourage awareness and take-up of available support, including discretionary relief; and

·       Acknowledgment of pressure on the supply of social housing stock, and that the Council was building high quality energy efficient homes for the future.

The Executive resolved unanimously to RECOMMEND that the Council approves:

       I.          The weekly rent for Council dwellings to be increased by up to 7.7% from the 2023/24 weekly rent charges, effective from 1 April 2024, within the permitted guidelines contained within the Government’s rent setting policy

     II.          That service charges and utility charges at non senior living accommodation be increased by 7.7% per week

   III.          That the heating charges in senior living accommodation be increased by 20% per week from 1 April 2024 to £31.20

  IV.          The Service Charge in senior living accommodation be increased by 15% per week from 1 April 2024 to  ...  view the full minutes text for item 137

The Board is asked to consider the HRA Budget 2024/25 and make any recommendations to the Executive.

The Senior Accountant addressed the Board and delivered a presentation of the proposed HRA Budget 2024/25 and highlighted some key points, including:

·       The impact of changes in demand, legislation, and regulation, particularly the Social Housing Regulation Act (2023) and from April 2024 the RSH will be regulating all Social Landlords to ensure adherence to Consumer Standards

·       CPI inflation at 4%, forecasting 4.5% for 2024/25 to cover inflation uncertainties, therefore calculating an estimated inflation impact on budgets of £1million for 2024/25.

·       Major repairs budget is at £9.6million for year 2024/25 with focus on heating upgrades and critical fire safety works.

·       Proposed rent increase of 7.7% for 2024/25, based on the official CPI figure in September + 1%, generating an additional income of £2.1million

·       The impact of a 53-week rent year in 2024/25 on tenants in receipt of Universal Credit. The HRA Budget 2024/25 proposes to increase the Hardship Fund to £200,000 to support tenants

·       Analysis of various rent increase scenarios (6%, 7%, and proposed 7.7%) and their impact on additional income and borrowing needs. There would be a borrowing Requirement of £23 million with a 7.7% rent increase while a 6% increase would see an additional borrowing requirement of £28million, and the substantial inflation implications on higher borrowing were noted. The 7.7% rent increase equate to an average increase of £11.40 per week.

·       Following a service charge review as agreed in the 2023/4 budget process, an under-recovery of £388,000 was identified in service and utility charges for senior living facilities. Therefore, Utility charges are to increase by 20%, raising the weekly cost from £26 to £31.20.  Service charges to rise by 15%, from £20.90 to £24.40 per week. The service charge increase will relate to the year charged, no backdated payments are planned.

·        The minimum working balance requirement for the HRA is £2 million for emergency situations and the projected balances for 2024/25 are close to this minimum, for the first time since self-financing in 2012 which highlights limited funds and reserves.

The Tenants Panel Response

The Leader of the Tenants Panel, Terry Daubney, expressed his perspective as a tenant and on behalf of the Tenants Panel. He acknowledged the reasons for the proposed changes and the factors beyond Housing Services' control. He highlighted various reasons for the 7.7% rent increase related to government restrictions, failure to pay off loans, catch-up efforts, and the impact of new legislation addressing urgent needs such as the under-performance in compliance, failure of planned maintenance, stock management, dysfunctional IT systems and damp & mould issues; all of which are not the fault of the tenant. 

He mentioned that new legislation was the result of social landlords who were not performing adequately or achieving the Decent Homes Standard. Again, these cannot be attributed to the tenant and the Tenant’s Panel take the view that tenants are having to subsidise shortfalls in the system and inadequate performance of the Landlord.

Additionally, tenant satisfaction trends were referred to, indicating a decline in overall satisfaction from 83% in  ...  view the full minutes text for item 57

(Report and Annexes to follow)

This report sets out the proposed Housing Revenue Account (HRA) Business Plan, Revenue Budget, and Capital Programme for 2024/25.

The Overview & Scrutiny - Resources Committee is asked to consider the report and agree any comments or recommendations to be passed to the Executive on the proposed recommendations to Executive and Council as set out in the report.

67.1     The Senior Accountant introduced the report, highlighting the additional costs in Annexe 3, showing growth items amounting to £2 million. It was also noted that the borrowing requirement for 2024/25-2029/30 of £23 million to meet the Decent Homes Standard was another key driving factor for the proposed 7.7% increase.

The increase in service charges to the Senior Living Scheme facilities was also discussed, acknowledging that costs are higher than monies recovered. An error was noted at the table in paragraph 10.1 that displays under/over recovery of costs, though the figure of £388,000 found in the commentary is correct.

67.2     It was clarified that 4.6% is the assumed inflation rate for rent increases as with the General Fund, but acknowledged the need to revisit this figure given the latest CPI figure due to be released on 17 January. The Senior Accountant confirmed that the 30% of HRA tenants that are in receipt of full or partial Universal Credit and that potential tenant hardship due to the 53-week rent year is concerning. She confirmed that the Housing Support team are working toward publicising the discretionary housing payments, Household Support Fund and HRA Hardship Fund to tenants.

The Committee noted the increase of the Hardship Fund from £30k to £200k in 2024/25, intended to help support tenants in receipt of Universal Credit and mitigate the impact of the 53-week rent year. It was agreed that the Hardship Fund should be closely monitored.

67.3     The Senior Accountant confirmed that Waverley Borough Council conducts buy-backs on properties purchased by private owners under the Right-to-Buy scheme and that the council has first refusal here. She also confirmed that some open market purchases are currently underway to help provide housing for the homeless and refugees. These use the Local Authority Housing Fund, with central government providing 40% of the necessary funding.

67.4     Several members queried the rationale behind the rent increase rising from a capped 4% in 2023/24 to a proposed 7.7% for 2024/25, as well as the £2.1m in growth bids. It was noted that the decision to increase rent was influenced by this year’s growth bids and the need to balance financial demands caused by the debt profile and additional borrowing, while last year’s decision to cap the increase at 4% was primarily influenced by the cost-of-living crisis.

67.5     The Committee sought more clarity around the £2.1m in growth bids, particularly the proposal for 15 new positions under the HRA, asked how many staff presently work on the HRA and where the target collaboration savings are in this area. It was confirmed that there are around 100 staff members working on HRA and that some of the resources would be for longer-term projects. It was noted that the two Service Improvement Officers and one Complaints Officer posts were intended to address shortfalls in service delivery as evidenced in some of the key performance indicators that have come before this committee.

67.6     It was clarified that a higher spend around compliance is intended to secure  ...  view the full minutes text for item 67