Minutes:
The Joint Executive Advisory Board (JEAB) was invited to consider a report which provided a position statement in respect of the 2024/25 draft budget and made recommendations to the Council regarding the Housing Revenue Account (HRA) revenue budget.
The report was introduced and presented by the Lead Specialist for Finance who advised that the revenue budget covered the day to day management and maintenance of the Council’s housing stock which consisted of approximately 5,200 homes. The HRA was a ring-fenced account as its income was derived from its tenants and it was completely separate from the Council Tax element which supported the General Fund. The budget had been prepared based on the latest Business Plan. The report highlighted the key components of the Business Plan together with forthcoming risks and pressures and also set out the aims of the budget in terms of providing value for money. The debt during the year was estimated to be £157 million with an interest charge of £5.4 million. The Council was continuing with the theme that providing housing was more important than repaying the debt. The report also outlined how the budget would be spent with 51% being the direct costs of managing and maintaining the housing stock with a further 21% being put aside to cover depreciation for paying for major works. Thus the majority of expenditure was invested into the stock.
The Government set a direction for Council’s to increase rents by the Consumer Price Index (CPI) plus 1% based on the rate as at the previous September CPI level. For 2024/25, this equated to a rent increase of 7.7% which was the maximum amount by which rents could be increased and the figure recommended. It was also proposed to increase garage rents by 5% which was in line with the remainder of the Council’s fees and charges.
A £7.8 million surplus was being budgeted against the HRA as a whole which would be transferred to reserves. It was budgeted to have reserves at the end of the financial year of £97 million which were decreasing in line with the new developments in which the Council was investing. The Section 151 Chief Finance Officer’s statement in respect of the robustness and adequacy of the reserves was included in the report.
The Leader of the Council and Lead Councillor for Housing sought to reassure the JEAB that the recommended rent increase of 7.7% for 2024/2025 was in line with the rent standard for social housing set by the Regulator of Social Housing. 92% of the Council’s tenants paid a social rent, with approximately 60% of those being in receipt of Housing Benefit or Universal Credit. The level of rent arrears was low, indicating that for most families, their rent remained affordable.
The following points arose from the related discussion, comments and questions for forwarding to the Executive:
1. With regard to the proposed rent increase, it was noted that the Council’s costs associated with the operation of the Housing service were also increasing and that a minimal rent increase would have an ongoing impact upon the delivery of the HRA Business Plan. The Council was confident that it was in a position to support people on low incomes and those in need of extra support as a priority via the Community Services team.
2. Although expanding the shared ownership stock was not currently a priority for the Business Plan, this would be revisited when the opportunity arose to develop larger sites. The Council had purchased some shared ownership properties during the past year, however, these represented a small proportion of the housing portfolio. The inclusion of some further context in the report to explain the priorities in this area would add clarity.
3. Approximately 2% of the housing stock was currently in a void position owing to the need for repairs and refurbishment. Some of these properties were suffering from structural issues, such as subsidence, and thought was being given to formulating a plan to maximise the opportunities for regenerating some of them to create new homes. A portfolio of smaller development sites was also being progressed. It was unknown whether asylum seekers were eligible to join the Council’s Housing Register.
4. Issues associated with damp and mould were raised as several Council tenants had experienced this problem recently, including one housed in a Housing Association (HA) property, although they paid their rent to the Council. As there was thought to be some confusion around the differences between HRA and HA rentals and the responsibilities of HAs housing Council tenants, some wider communication in this regard would be beneficial. The Council’s Private Housing Team was able to assist private sector and HA tenants experiencing damp and mould issues in their homes. The Council had appointed a Damp and Mould Surveyor to whom such issues relating to HRA homes could be referred for attention. It was suggested that the budget should be expanded to include an entry in respect of damp and mould to raise its profile and show that the Council was taking related action.
The JEAB agreed that its comments be forwarded to the Executive.