Agenda item

This report sets out the proposed Housing Revenue Account (HRA) Business Plan, Revenue Budget and Capital Programme for 2023/24.

The Overview & Scrutiny 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.

Candice Keet (Senior Accountant) introduced the item. She advised that the recommendation drawn out in the report was to:

-        Increase rents by 4%

-        Proposing to increase service charges by 4% for senior living

-        Increase fees and charges by 9% in line with inflation

Members discussed the pros and cons of different rent increase options and considered factors such as borrowing stress, inflation, and tenant impact. Councillor Martin expressed his opinion on the rent levels, he stated that he would prefer a 4% increase. He compared it to the inflation increases in the general fund and council taxes, which were going up by nearly 3%. However, he acknowledged that it was a difficult call, and he was not sure where the right balance lay.

Councillor Nicholson further added to the discussion by stating that if they could eliminate the borrowing stress, then he would consider r 4%. Councillor Edmonds also felt that with regard to the borrowing profile that the 5% increase was a reasonable option. He stated that councils had a legal obligation to keep track of borrowing. The chair asked if any other members wished to contribute, and Councillor Heagin noted that doing less than the maximum was a good thing for regulatory purposes and asked officers if there was any opportunity for advanced lobbying. She suggested that a gradual catch up should be allowed for councils who did not implement the full rent increase.

Candice Keet noted that within the papers, a proposal for additional borrowing was made in order to finance the capital program and debt repayments. She also noted that the debt repayments would be ramped up in the next few years and an additional £4.5 million would be borrowed over the next 12 years, totalling £26 million of additional borrowing based on a 4% rent increase in 2023-24. Members discussed the differences between a 4% and 5% rent increase, with the latter being preferred due to concerns about the debt profile. Members expressed concern about the impact on tenants, suggesting that a more gradual catch-up approach may be more appropriate. Overall, the committee concluded that the 4 or 5% rent increase discussion should be revisited by the Executive.

Councillor Heagin addressed the issue of rental increases and the recharge for energy costs in HRA properties in the context of the proposals. She went on to raise concerns that the recharge for energy costs for senior living accommodation was not fully recovering the energy costs, and it might be subsidising some residents to the tune of almost £300,000. Councillor Heagin questioned whether the energy costs were just for heating or the full-service charge cost and if any other groups of residents were receiving the same level of subsidy. Councillor Heagin also asked whether any senior living residents had gained anything from the energy support packages that were currently in place but likely to be less generous from April. Councillor Heagin suggested that the Executive should investigate it and that a 4% increase might not be enough to cover the costs proportionally.

Councillor Mulliner referenced recommendation 8 and recommended that the Cabinet Portfolio holder for Housing and the Section 151 Officer comments must be sought.

Members also discussed the possibility of reducing energy costs and reconsidering the target rate of return on HRA investments.

The Committee resolved to make the following recommendations to the Executive:

-        To include Cabinet Portfolio holder for Housing and the Section 151 Officer comments on recommendation 8.

-        To reconsider the possible 4 or 5% rent increase.

Members agreed to the recommendations and the motion was carried.