Agenda item

Recommendation

That the Policy O&S Committee consider the draft Housing Revenue Account Business Plan – Revenue Budget and Capital programme 2022/23 and pass comments and observations to the Executive.

The Head of Finance and Property will lead this agenda item.

It was stated that the housing revenue account was a new addition to the Committee’s remit.  The item was introduced by the Head of Housing Operations.  Officers were looking to resolve the challenges that the housing service was currently facing but it was also a budget that looked to the long term.  Officers had a housing revenue account 30-year business plan and they were in a period where they were paying the interest.  A few years ago the Council had four years of rent reduction.  Officers were assuming they were going have a rent rise with above inflation which would have significant impact on the business plan and in addition to that the Covid pandemic resulted in lost income.  The Council continued to have contractual issues where staff focus was on dealing with the contract issues rather than improving services and bringing efficiencies.  Additional pressures had arisen from inflation and the decarbonisation agenda.  Eight hundred properties had been built before 1945, and therefore it would be challenging to bring these properties up to the desired standard.  There were other challenges with new building standards, especially around health and safety, and making the senior living schemes safe would involve significant expenditure over the next couple of years.  

The report recognised that because of the changing environment the Council needed to do a strategic review.  On the rent rise, the report put forward the argument that the Council’s tenants had generally managed to cope with the last year's rent rise but some individuals had struggled.  Therefore, a hardship fund was proposed to help those people.  He stated that the rent increase needed to be seen in context of the 30-year plan and consider the effect the rent rise had on future rent streams.  The 4.1% increase would enable the Council to deliver services and it equated to £1.61 per week average across all the Council’s tenancies. The Landlord Services Advisory Board and the Tenants Panel had been consulted on the rent rise and they understood the need for it but wanted to ensure that the additional money was invested in Waverley Homes and the building of new homes and that the Council delivered value for money.

Councillor Seaborne spoke on this item as Chairman of the former Housing Overview and Scrutiny Committee.  He sought clarification on the accuracy of the figures in Annex Three and Four and asked that they be corrected as appropriate prior to Council consideration.

Councillor Seaborne expressed disappointment that the forecast out-turns for 2021 and 2022 were not available.  They were shown the out turns but not the original budget figures.  He felt that this would enable members to make a judgment on the council's recent performance and ability to deliver a capital programme.  The 2021/22 anticipated out turn for the HRA development capital programme was £2.4 million whilst the budget approved in February 21 was for £18.3 million so there was a large underspend.  It was acknowledged that this had been influenced by the Covid pandemic.  He also noted that there had been planning issues and he asked whether these factors had been taken into account when budgeting for the next four years and if so whether they had been mitigated against to ensure a reasonable budget for the following year.

Councillor Seaborne stated that £6.7 million had been allocated over the next three years for purchasing new builds from developers, which would yield around 20 houses.  He sought clarification on what provision had been made to decarbonise those properties.

The Head of Housing Delivery and Communities advised that the numbers in the report would be checked.

Annex Four was a complete restatement of the schedule that Councillors had seen in previous years, to give a whole life picture of the schemes in progress over the next four years and that was showing through with the commitment of £32 million.  Last year’s budget only included one year of the new build programme.  Officers needed to indicate not just what they would be spending but what they might need to carry the schemes forward.   He stated that Covid had an impact in terms of capacity to deliver the core program and responsive repairs.  It had been possible to access void properties but not occupied properties during lockdown, so this had affected the budget for 21/22.

Officers acknowledged the inflationary pressure in respect of the build costs for the schemes currently in progress.  Asset advisors Montagu Evans had been engaged to carry out a review of the schemes in progress to understand the potential liabilities so that they could make some informed decisions on how best to complete them even if it meant a longer time frame.  It was noted that delaying also had risks.

It was stated that Waverley were letting homes at the energy standard EPC D but the majority were already at C.  The Committee asked whether they wanted to get to standard A for all the Council’s houses by 2030, as in order to do so two houses would need to be converted per day.  It was further noted that the Government's own targets for EPC were C by 2030 and EPC A for 2050. 

The Committee felt the rent rise was quite steep given all the other pressures on tenants. 

            RESOLVED

The Committee NOTED recommendations #1-9 to the Executive in para 3.1 and felt they should set up a working group of the two Scrutiny committees.