Issue - meetings

The Council considered a detailed report on the proposed Housing Revenue Account (HRA) budget for 2021-22, which had been built on the estimates and assumptions in the 2019-2049 HRA business plan approved by the Council in February 2019, which would be reviewed in the light of the current pandemic and Brexit as it affected the Council’s operating environment.

The Council noted the update information and corrections to the report which were set out in the Order Paper.  Councillors noted an error in the report on the calculation of HRA rents. The measure of CPI used in the calculation should be 0.5% (not 0.8%) representing the September CPI published by the Office for National Statistics, as set out in the April 2020 Rent Standard issued by the Regulator of Social housing.  This had resulted in a reduction in planned surplus on revenue by £91,480.  It was therefore proposed that the rents for 2021-22 should increase by 1.5% being the annual (0.5%) September 2019 to September 2020 Consumer Price Index (CPI) plus 1% prescription.

A 3.4% increase in garage rents was proposed from April 2021.

The HRA estimates had been drafted on the premise of a lower priority to the repayment of debt principal inherited as part of the self-financing HRA settlement as proposed in the business plan. 

The report, which included details of progress with the new build programme, together with the proposed investment programme in tenants’ homes, had also been considered by the Joint Executive Advisory Board at its meeting on 7 January 2021, whose comments were included therein. 

At its meeting held on 26 January 2021, the Executive had, subject to Council approving the budget at this meeting, approved the projects forming the HRA major repairs and improvement programme, as set out in Appendix 3 to the report and had authorised the Director of Service Delivery to reallocate funding between approved schemes to make best use of the available resources, and to set rents for new developments.

Upon the motion of the Lead Councillor for Housing and Development Control, Councillor Caroline Reeves, seconded by the Lead Councillor for Resources, Councillor Tim Anderson, the Council

RESOLVED:

(1)   That the revised HRA revenue budget for 2021-22, as set out in Appendix 1 to the Order Paper, be approved.

(2)   That a rent increase of 1.5%, comprising the September 2020 CPI (0.5%) plus 1%, as required by the Welfare Reform and Work Act 2016, be implemented.

(3)   That the fees and charges for HRA services for 2021-22, as set out in Appendix 2 to the report, be approved.

(4)   That a 3.4% increase in garage rents be approved for 2021-22.

(5)   That the Housing Investment Programme as shown in Appendix 4 to the report (current approved and provisional schemes), be approved.

Reasons:

To enable the Council to set the rent charges for HRA property and associated fees and charges, along with authorising the necessary revenue and capital expenditure to implement a budget, this is consistent with the objectives outlined in  ...  view the full minutes text for item 75

Decision:

Subject to Council approving the budget on 10 February 2021:

(1)   That the projects forming the HRA major repairs and improvement programme, as set out in Appendix 3 to the report submitted to the Executive, be approved.

(2)   That the Director of Service Delivery be authorised, in consultation with the Lead Councillor for Housing and Development Control:

(a)   to reallocate funding between approved schemes to make best use of the available resources; and

(b)   to set rents for new developments.

Executive recommended to Council:

(1)   That the proposed HRA revenue budget for 2021-22, as set out in Appendix 1 to the report, be approved.

(2)   That a rent increase of 1.8%, comprising the September 2020 CPI (0.8%) plus 1%, as required by the Welfare Reform and Work Act 2016, be implemented.

(3)   That the fees and charges for HRA services for 2021-22, as set out in Appendix 2 to the report, be approved.

(4)   That a 3.4% increase in garage rents be approved for 2021-22.

(5)   That the Housing Investment Programme as shown in the amended Appendix 4 as set out in the Supplementary Information Sheet (current approved and provisional schemes), be approved.

Reason(s):

To enable the Council to set the rent charges for HRA property and associated fees and charges, along with authorising the necessary revenue and capital expenditure to implement a budget, this is consistent with the objectives outlined in the HRA Business Plan.

Other options considered and rejected by the Executive:

None.

Details of any conflict of interest declared by the lead or lead councillors and any dispensation granted:

None.

The Executive considered a report on the proposed Housing Revenue Account (HRA) budget for 2021-22 which had been built on the estimates and assumptions set out in the HRA Business Plan 2019 - 2049. The business plan, which had been approved by Council in February 2019, was scheduled for review during the course of this year in the light of the COVID-19 pandemic and Brexit as those factors had impacted the Council’s operating environment.

It was proposed that rents for 2021-22 should increase by (1.8%) being the annual (0.8%) September 2019 to September 2020 Consumer Price Index (CPI) plus 1% prescription.  A 3.4% increase in garage rents was also proposed from April 2021.

There was a stock of 5,206 homes at the start of the year. It was noted that during 2020-21 there had been an increase in Right to Buy of 50%. The Government had extended the deadline to repay Right to Buy receipts and there were none to be repaid in the coming financial year. The Council had first refusal on any housing sold under Right to Buy that come on the open market and some properties had been repurchased.

Council continued with a policy not to repay debt to the HRA  but to use any surplus to invest to improve its housing stock and build new houses where possible.  Repayment of the debt remained at a stable interest rate. There had been an underspend of £2 million on the budget for 2020-21 due to an inability to undertake repairs due to the pandemic. This would be transferred to reserves. There was £122 million in reserves currently and the Council had active plans to utilise those reserves in providing additional housing. 

A  bad-debt provision had been allowed for £500,000 for the year to come due to the ongoing impact of the pandemic on Council residents.

Having considered the report, the Executive

RESOLVED: Subject to Council approving the budget on 10 February 2021:

(1)   That the projects forming the HRA major repairs and improvement programme, as set out in Appendix 3 to the report submitted to the Executive, be approved.

(2)   That the Director of Service Delivery be authorised, in consultation with the Lead Councillor for Housing and Development Control:

(a)   to reallocate funding between approved schemes to make best use of the available resources; and

(b)   to set rents for new developments.

The Executive further

RECOMMEND:

(1)   That the proposed HRA revenue budget for 2021-22, as set out in Appendix 1 to the report, be approved.

(2)   That a rent increase of 1.8%, comprising the September 2020 CPI (0.8%) plus 1%, as required by the Welfare Reform and Work Act 2016, be implemented.

(3)   That the fees and charges for HRA services for 2021-22, as set out in Appendix 2 to the report, be approved.

(4)   That a 3.4% increase in garage rents be approved for 2021-22.

(5)   That the Housing Investment Programme as shown in the amended Appendix 4 as set out in the Supplementary  ...  view the full minutes text for item 74

Decision:

(1)   That the transfers to/from reserves as set out in Section 8 and Appendix 2 to the report submitted to the Executive be approved.

(2)   That the growth and savings items included in the General Fund Summary at Appendix 2 and set out in detail in Appendix 3, be approved.

(3)   That the financial risk register set out in Appendix 4 be approved and that it be noted that the level of reserves are currently sufficient to meet the Council’s risks.

(4)   That the findings of the consultation response set out in Appendix 5 be noted.

Executive recommended to Council:

(1)    That no changes be made to the Fees and Charges for General Fund services for 2021-22.

(2)    That the budget, as set out in the General Fund Summary in Appendix 2 be approved, and specifically that the Council Tax requirement for 2021-22 be set at £10,392,720.

(3)    That the Band D Council Tax for 2021-22 be set at £181.82, an increase of £5 (3.00%).

Reason(s):

To enable the Council to set the Council Tax requirement and council tax for the 2021-22 financial year.

Other options considered and rejected by the Executive:

None.

Details of any conflict of interest declared by the lead or lead councillors and any dispensation granted:

None.

The Executive considered a report which outlined the proposed budget for 2021-22, which included a Council Tax requirement of £10,392,720 and a Council Tax increase of £5 per year (2.83%) that resulted in a Band D charge of £181.82. As set out in the report, the Council was required to achieve a balanced budget for 2021-22.

The General Fund Summary showed a balanced budget for 2021-22 but forecast a budget gap of £1.6 million in 2022-23 rising to £5.9 million by 2025-26.

The Council received the provisional Local Government Finance Settlement (LGFS) for 2021-22 on 17 December 2020.  The figures included in the budget presented reflected the information contained in the settlement.

The Settlement Funding Assessment (SFA) consisted of the local share of business rates, and revenue support grant and was set out in the provisional LGFS.  The settlement was in line with the Council’s expectation which enabled it to retain £2.929 million of business rates in 2021-22, the same amount as retained in 2020-21.  Core Spending Power had also stayed the same as 2020-21 at £14.090m; however, within the core spending power calculation, the Government had assumed that Council Tax would be raised by the maximum amount (£5 or 3% whichever was the higher). 

Overall, the LGFS had been positive for the Council as it included additional funding of:

·       £153,000 grant to compensate the Council for the Business Rates Multiplier not increasing in line with inflation

·       £237,000 lower tier services grant (this was a one-off new grant to support services)

·       £623,000 additional COVID 19 funding to help fund the impact of COVID 19 into the new year

·       £100,000 Section 31 grant for local council tax support

·       £192,000 New Homes Bonus grant for 2021-22 only

·       The ability to raise council tax by a maximum of £5 (2.83%) rather than maximum of 2.0%, this additional increase would generate a further £90,000 in council tax income

The Joint Executive Advisory Board (JEAB) had considered the outline budget at its meeting held on 11 November 2020 and the Executive had approved the outline budget on 24 November 2020.

The Chief Finance Officer’s statutory report, which was appended to the main report, provided information about the strategic context within which the budget had been prepared, the medium-term financial plan, the robustness of the estimates, adequacy of reserves and budget risks. 

The financial monitoring report for the first eight months of 2020-21 had been reported to the Corporate Governance and Standards Committee on 14 January 2021.  The projected net expenditure on the General Fund for the current financial year was estimated to be £8.1million more than the original estimate due mainly to the COVID-19 pandemic.   Any ongoing variances between actual expenditure and budget identified in 2020-21 had been taken into account when preparing the budget for 2021-22. The deficit on the Collection Fund due to the pandemic would be spread over three years.

Following the Executive approval of the outline budget in November 2020, the Council had undertaken a public consultation exercise on its  ...  view the full minutes text for item 75