Issue - meetings

Councillors noted that the Council owned and managed over 5,200 Council Houses which it rented to tenants who qualified for social housing or for which it held the freehold.  The Housing Revenue Account (HRA) was the ring-fenced account within which the Council recorded the income and expenditure for its operations as landlord to its residents and for the day-to-day management, repairs and maintenance of the council housing stock.

The Council considered a report on the proposed Housing Revenue Account (HRA) budget for 2023-24, which had been built on the estimates and assumptions in the updated 2023 HRA Business Plan. The business plan had been reviewed to reflect changes in relevant legislation and guidance, along with consideration of the Council’s declaration of a Climate Emergency and the ongoing challenges of the pandemic as it affected the Council’s operating environment. 

The Direction on the Rent Standard 2019 had required the Regulator of Social Housing to set a rent standard for social housing which came into effect from 2020, which would have been CPI +1% from the preceding September rate. This would have resulted in a rent cap of 11.1%. However, a new Direction was issued on 12 December 2022 which stated that rents should be capped at 7%.

However, it was proposed that rather than adopting the directed cap, the Council should adopt a 5% rent cap, which would mean that, on average, households in a 1 bedroomed property would save £8.84 a month compared to the Government cap, and £10.22 for those in a 2 bed and £11.70 for those in a 3 bedroomed property. This below cap level was a recognition of the challenging wider climate faced by residents and had been achievable due to the ongoing prudential management of the overall HRA Account to provide households with some additional assistance at this time.

For those in shared ownership, the Government had not introduced a cap and so rent increases could be set at up to 11.1%; however, the Council was proposing to cap these rents in line with rented homes at 5%.

A 3% increase in garage rents was proposed for 2023-24, which was in line with the wider Council policy on fees and charges.

The report included overall details of the proposed investment programme for the properties that were managed within the HRA, additional details of this work had also been set out within the item on the Capital and Investment Strategy. 

The HRA annual budget and HRA business plan had assumed that any surpluses on the HRA were used to invest in redevelopment and upgrading of the existing stock, invest in new build affordable housing to be retained and rented by the Council within the HRA and then if there were sufficient monies available, the repayment of debt taken on under HRA self-financing. 

The 30-year business plan had shown that there were sufficient resources within the HRA to carry out the Council’s investment plans as well as repay the debt over the 30-year business plan period  ...  view the full minutes text for item 119

Decision:

Recommended to Council (8 February 2023):

(1)  That the proposed HRA revenue budget for 2023-24, as set out in Appendix 1 to the report, be approved.

(2)  That a rent increase of 5%, be implemented.

(3)  That the fees and charges for HRA services for 2023-24, as set out in Appendix 2 to the report, be approved.

(4)  That a 3% increase be applied to garage rents, which is in line with the wider Council policy on fees and charges.

Reason(s):

To enable the Council to set the rent charges for HRA property and associated fees and charges, along with authorising the necessary 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 Leader or lead councillors and any dispensation granted:

None.

The Chairman reminded the meeting that the report had been considered by the Joint Executive Advisory Board on 24 January 2023 and the comments arising from that meeting were set out in the Supplementary Information Sheet.

The Chairman, in her capacity as Lead Councillor for Housing and Community, introduced the report.

The Council owned and managed over 5,200 houses that were rented to tenants who qualified for social housing or for which it held the freehold. It was the Council’s priority that those properties were well-maintained and safe for tenants.

The Government had set a rent increase cap of up to 7%, but given the cost-of- living crisis, the Council was proposing a lower increase of 5%. The lower increase was due to the Council’s careful management of the Housing Revenue Account (HRA). Although those tenants in arrears was low at 1%, the Council was mindful that tenants could find managing finances challenging under the current economic circumstances. Consequently, alongside wider improvements to the properties, the Council would employ two additional officers who would provide benefits and financial advice.

The Council would be providing a programme of improvements to communal areas and landscaping where it held responsibility for the wider estate.

The Council welcomed Government updates and standards with regard to tenants’ health and safety. The allocated spending for the forthcoming year would include improvements in fire alarms, new fire doors and smoke detection. In addition, with energy saving in mind, there would be a programme of replacing doors, windows, installing insulation and heating systems.

There were no further comments and the Executive,

RESOLVED:

To recommend to Council (8 February 2023):

(1)  That the proposed HRA revenue budget for 2023-24, as set out in Appendix 1 to the report, be approved.

(2)  That a rent increase of 5%, be implemented.

(3)  That the fees and charges for HRA services for 2023-24, as set out in Appendix 2 to the report, be approved.

(4)  That a 3% increase be applied to garage rents, which is in line with the wider Council policy on fees and charges.

Reason:

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

A report outlining the Housing Revenue Account (HRA) budget for 2023-24 was before the Joint Executive Advisory Board (JEAB) for consideration.

The Lead Specialist Finance and the Head of Housing jointly introduced the report, which provided a position statement on the 2023-24 draft budget and made recommendations to the Council in respect of the HRA revenue budget.  Details of the HRA capital programme were set out within the Capital and Investment Strategy, which had been considered as a separate agenda item at this meeting.

The JEAB was reminded that the Council owned the freehold and managed over 5,200 council homes which it rented to tenants who qualified for social housing. The HRA was a ring-fenced account within which the Council recorded the income and expenditure for its operations as landlord to its residents and for the day-to-day management, repairs and maintenance of the Council housing stock.

The report outlined the proposed HRA budget for 2023-24, which had been built upon the estimates and assumptions in the updated 2023 HRA Business Plan.  The annual budget and Business Plan assumed that any surpluses in the HRA would be used to invest in redevelopment and upgrading of the existing stock, invest in new build affordable housing to be retained and rented by the Council within the HRA and then, if sufficient monies were available, the repayment of debt taken on under HRA self-financing.  The Business Plan had been reviewed to reflect changes in relevant legislation and guidance, along with consideration of the Council’s declaration of a Climate Emergency and the ongoing challenges of the wider operating environment.  It showed that there were sufficient resources within the HRA to carry out the Council’s investment plans in addition to repaying the debt over the 30 year plan period and leave a healthy reserve balance at the end of the 30 years for further investment not yet identified.  There were further expected investment needs that were yet to be fully developed in order to meet carbon targets and expected regulatory changes, and work on these continued.  These factors were not fully reflected within the current Plan and would be considered in future reviews.

Although a new Direction issued by the Regulator of Social Housing on 12 December 2022 indicated that rents should be capped at 7%, the Council was proposing to adopt a 5% rent cap in respect of its housing stock in recognition of the challenging wider climate faced by residents.  This reduced cap was achievable due to the ongoing prudential management of the overall HRA to provide households with some additional financial assistance at this time.  Although the Government had not set a rent cap for those living in shared ownership properties, the Council was proposing to cap those rents in line with rented homes at 5%.  A 3% increase in garage rents was proposed to correspond with the wider Council policy concerning fees and charges.

The following points arose from the related discussion, comments and questions for forwarding to the Executive:

1.           Although  ...  view the full minutes text for item 61

The Council considered a detailed report on the proposed Housing Revenue Account (HRA) budget for 2022-23, which had been built on the estimates and assumptions in the updated 2022 HRA Business Plan appended to the report. The business plan had been reviewed to reflect changes in relevant legislation and guidance, along with consideration of the Council’s declaration of a Climate Emergency and the ongoing challenges of the pandemic as it affected the Council’s operating environment. 

It was proposed that the rents for 2022-23 should increase by 4.10% being the annual September 2020 to September 2021 Consumer Price Index (CPI) of 3.10% plus 1%.  This approach was in line with the Rent Standard set by the Regulator of Social Housing and the Direction made by the Secretary of State on 25 February 2019.  The Rent Standard had been introduced following a four year period (between April 2016 and April 2020) where rents were reduced by 1% per annum under the Welfare Reform and Work Act 2016.

A 3% increase in garage rents was proposed for 2022-23, which was in line with the wider Council policy on fees and charges.

The report included overall details of the proposed investment programme for the properties that were managed within the HRA, additional details of this work had also been set out within the item on the Capital and Investment Strategy (see Minute CO97 above). 

The HRA annual budget and HRA business plan had assumed that any surpluses on the HRA were used to invest in redevelopment and upgrading of the existing stock, invest in new build affordable housing to be retained and rented by the Council within the HRA and then if there was sufficient monies available, the repayment of debt taken on under HRA self-financing.  The 30-year business plan appended to the report had shown that there were sufficient resources within the HRA to carry out the Council’s investment plans as well as repay the debt over the 30-year business plan period and still leave a healthy reserve balance of £340million at the end of the 30 years for further investment not yet identified.

This report has also been considered by the Joint Executive Advisory Board at its meeting on 10 January 2022, and their comments had been included therein. At its meeting on 25 January 2022, the Executive had also considered the report and had endorsed the recommendations to Council.

Upon the motion of the Deputy Leader of the Council and Lead Councillor for Community and Housing, Councillor Julia McShane, seconded by the Lead Councillor for Resources, Councillor Tim Anderson, the Council

RESOLVED:

(1)  That the proposed HRA revenue budget for 2022-23, as set out in Appendix 1 to the report submitted to the Council, be approved.

(2)    That a rent increase of 4.10%, comprising the September 2021 CPI (3.10%) plus 1%, in line with the Direction on the Rent Standard 2019 and as set out within Guidance provided by the Regulator of Social Housing, be implemented.

(3)    That the fees  ...  view the full minutes text for item 98

Decision:

1.     That the initiatives, services and budgets as set out in the report submitted to the Executive and Appendix 1 to the report, be approved.

2.     That the Director of Service Delivery be authorised, in consultation with the Lead Councillor for Community and Housing:

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

(b)   to set rents accordingly.

The Executive made the following recommendations to Council (9 February 2022):

1.     That the proposed HRA revenue budget for 2022-23, as set out in Appendix 1 to the report, be approved.

2.     That a rent increase of 4.10%, comprising the September 2021 CPI (3.10%) plus 1% in line with the Direction on the Rent Standard 2019 and as set out within Guidance provided by the Regulator of Social Housing, be implemented.

3.     That the fees and charges for HRA services for 2022-23, as set out in Appendix 2 to the report, be approved.

4.     That a 3% increase be applied to garage rents which is in line with the wider council policy on fees and charges.

Reasons:

To enable the Council to set the rent charges for HRA property and associated fees and charges, along with authorising the necessary 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 Leader or lead councillors and any dispensation granted:

None.

The Council owned over 5,200 council houses which it rented to tenants who qualified for social housing.  The Housing Revenue Account (HRA) was the ring-fenced account within which the Council recorded the rental income and expenditure for its operations as landlord to its tenants and for the day-to-day management, repairs and maintenance of the Council’s housing stock.

The Executive considered a report that outlined the proposed Housing Revenue Account (HRA) budget for 2022-23, which was built on the estimates and assumptions in the updated 2022 HRA Business Plan.  The business plan was drawn up in line with the relevant legislation and guidance along with consideration of the Council’s declaration of a Climate Emergency and the ongoing challenges of the pandemic as it affected the operating environment.  The Lead Councillor for Resources introduced the report.

Council rents were set by the Regulator of Social Housing in the form of the Rent Standard. The Rent Standard was set by the Secretary of State on the 25 February 2019 and introduced following a four year period between April 2016 and April 2020 where rents were reduced by 1% per annum under the Welfare Reform and Work Act 2016.  It was recommended to the Executive that rent for 2022-23 should increase by 4.10% which was the total of the annual September 2020 to September 2021 Consumer Price Index (CPI) of 3.10% plus 1%.  This approach was in line with the Rent Standard.

A 3% increase in garage rents was proposed which was in line with the wider Council policy on fees and charges set by the Executive in November 2021.

The significant expenditure budget for housing maintenance and housing stock was set out in Appendix 1 of the report. The investment followed the publication the government’s Charter for Social Housing that set out the standard that should be expected by tenants including strengthening communities and tenant involvement in decisions about their homes. There would be improved monitoring of aspects such as fire safety provision and efforts to reduce ant-social behaviour. There would be additional support for vulnerable tenants notably in terms of advice on matters such as benefits. There would be measures undertaken to equip the Council’s housing stock for the climate emergency included energy efficiency initiatives. Finally, the Council would invest in a new housing management software system.  

The proposed investment programme for the properties that were managed within the HRA were set out within the Capital and Investment Strategy. The investment would include fire safety work, the replacement of 600 kitchens and bathrooms together with electrical work to meet the Decent Homes Standard, a major refurbishment of void properties to bring them back into use, various structural and roofing work and central heating upgrades. 

The updated HRA business plan was set out in Appendix 3 projecting to the next 30 years.  The plan had set out the intention to repay and not re-finance that variable rate loan that would mature in 2022. The HRA would retain a significant amount of reserves over  ...  view the full minutes text for item 66

A report outlining the proposed Housing Revenue Account (HRA) budget for 2022-23 was before the Joint Executive Advisory Board (EAB) for consideration at its meeting held on 10 January 2022.

Following introductions by the Resources Director and Head of Housing, the Joint EAB considered the report and the ensuing points arose from related questions, comments and discussion for forwarding to the Executive:

1.           Some concern was expressed in relation to the comment in paragraph 5.5 of the report that the wider social housing sector was becoming increasingly commercial moving towards market rental levels.  However, the Council’s stock remained designated as social housing.  Approximately 97% of Council tenants were charged rent at social rent levels whilst the remainder paid affordable rent levels or were in a shared ownership arrangement.  Therefore the majority of Council rents were considerably lower than those charged by most housing associations, which limited the Council’s cashflow opportunities.  For those tenants in receipt of Housing Benefit, rent payments were covered up to the affordable level in accordance with the current Government framework.  There were no indications that this framework was likely to be amended in the near future.

2.           In terms of building cladding, fire risk assessments had been undertaken in respect of the Council’s entire housing stock following the Grenfell tragedy and the findings indicated that there was no cause for concern in this area as none of the stock was cladded with the type of cladding utilised at Grenfell Tower.  A recommendation arising from the Grenfell inquiry had been to review the manner in which fire risk assessments were undertaken resulting in the identification of new approaches and the issue of updated guidance.  The Council was therefore embarking on a fresh programme of assessments in line with this guidance.  This was one evolving area where the requirement for additional expenditure to remedy identified issues was anticipated and this had been factored into the budget.

3.           As the Government had not changed its stance in relation to the Right to Buy scheme, this initiative was continuing.  Where the Council sold residential units under this scheme, it received capital receipts and was working to ensure that the receipts were spent to enable new replacement properties to be added to its stock.

4.           Fees, Charges and Miscellaneous income predominantly related to service charges and rents associated with a number of HRA investment properties in the Council’s ownership.  Outstanding appendices would be added to the report when it was finalised and the amount of additional income referred to in paragraph 7.4 would be rounded to £2.7 million.

5.           There was currently no certainty with regard to the timescale for the full scale transition of recipients from Housing Benefit to Universal Credit.  Where tenants had transferred to date, they had been in receipt of advice and support from the Council and other agencies to assist with the process, which was particularly necessary in the case of vulnerable tenants.  The success of this was reflected in the low level of rent arrears,  ...  view the full minutes text for item 48