Agenda item

The Committee will scrutinise the 2021/22 budget.  This agenda item will be led by the Housing Finance Manager. 

Recommendation

This agenda item was presented by the Housing Finance Manager.  She said the Council had a 30 year rolling business plan.  The new Housing Budget assumed business as usual.  Voids had now come back down to normal levels.  Income would be £30.3 million with a proposed 1.25% rent rise.  A rent increase was needed for capital reinvestment.  Stock maintenance would cost £5.1 million.  The core capital programme would cost £5.8 million and would include heating upgrades and new kitchens.  There would be 153 new homes over the next 5 years, a net gain of 79.  The Right to Buy scheme meant that the Council were losing 15 homes per annum.  The opening reserves were £49 million.  There is a predicted underspend in 2020/21 due to Covid 19.

The maximum rent increase the Council were permitted under Government rules was 1.5%.  Even with the maximum rent increase the loss to Council reserves would be £ 2.86 million over 5 years.

Proportions of spending in the capital programme (excluding staff) would be as followed:

25% kitchens and bathrooms.  This would equate to 145 kitchens and 164 bathrooms.

17% safety and compliance.  This would equate to £845,000.

13% structural works – major refurbishment and internal remodelling.  This would equate to £660,000.

10% heating upgrades

10% aids and adaptations

9% roofing

9% doors and windows

4% energy efficiency

3% other

The proposed Housing delivery budget for 2021/22 is £18.3 million.  Capital budget estimates for 22/23 to 23/24 are £35.4 million.  The new build budget was much higher in 2022/23 at nearly £8000,000.  This was made up of Springfield at £3.4 million, Ockford Ridge Site E at £1.7 million and Turners Mead at £0.2 million.  In response to a question, councillors were told Turners Mead in Chiddingfold would see two new properties.

2021/22 total income would be £30.3 million.  Dwellings rent would be £28.8 million after the 1.25% increase.  The core budget was £5.8 million.

The budget assumed business as usual and that the service could go into people’s homes to carry out work.

Tenants’ Panel Representative Terry Daubney commented that many tenants struggled to pay their rents as it was so a 1.25% increase would be difficult for them.  He did however understand the need to plan for the future.

The Committee wanted to know where money was coming from for contingencies.  They were told that it would come from reserves.

Councillors were concerned about fire risks surrounding cladding due to the Grenfell Tower tragedy.  The Interim Asset Manager explained that for Waverley the issue was less about cladding and more about ensuring appropriate fire breaks and doors.  The Housing Development Manager stated that contractors had to demonstrate that the materials they were using were safe and the Council’s specifications ensured that.  The service were proactive in identifying risks and removing them.  The service were also considering the materials used in hard landscaping.

The Chairman stated that the Hackett Report was going to introduce new responsibilities and more staff would be needed.

It was noted that the HRA Business Plan was linked to other financial strategies.

The Committee were concerned that reserves would be minimal in four years time.  It was explained that this was because the Council were spending on their current stock.  Councillors noted that this left the Council with very little money with which to build houses by 2024/25.  The Committee wanted to know at what point officers would come to the Council with a proposal to refund the service, especially if it was losing 15 houses per year to the Right to Buy Scheme.  The Strategic Director explained that the loan structure was done in a way to allow reserves to be built up and then spent.  The Council would look at new borrowing rather than restructuring existing borrowing.  The Government had revised what was possible regarding investments and had taken down the borrowing rate.

Some members of the Committee were concerned that there did not appear to be any consideration of the effect of the climate change declaration on then housing budget.   It was explained that the Asset Management Strategy dealt with this.

RESOLVED

1.    The Committee accepted the proposal that the rent level for Council dwellings be increased by 1.25% from the 20/21 level with effect from 1 April 2021 within the permitted guidelines contained within the Government’s rent setting policy.

2.    The Committee accepted that the average weekly charge for garages rented by both Council and non-Council tenants be increased by 50 pence per week excluding VAT from 1 April 2021.

3.    The Committee accepted that the service charges in senior living accommodation be increased by 30 pence per week from 1 April 2021 to £19.80.

4.    The Committee accepted that the recharge for energy costs in senior living accommodation be increased by 50 pence from 1 April 2021.

5.    The Committee agreed that the revised HRA Business Plan for 2021/22 to 2024/25 should be approved.

6.    The Committee noted the approval charge for the fees and charges in Annexe 2 of the report

7.    The Committee agreed that the Housing Revenue Capital Programmes as shown in Annexe 3 of the report should be approved

8.    The Committee agreed that the financing of the capital programmes should be approved in line with the resources shown in annexe 4 of the report.

The Committee were happy with how the budget information had been presented to them.