Agenda item

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 and still 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 would be fully developed in order to meet carbon targets and expected regulatory changes, and work on these continued. They were not, however, fully reflected within the current plan, but they would be considered in future reviews.

This report had also been considered by the Joint Executive Advisory Board at its meeting on 24 January 2023, and their comments had been included therein. At its meeting on 26 January 2023, the Executive had also considered the report and had endorsed the recommendations to Council.

Upon the motion of the Leader of the Council and Lead Councillor for Housing and Community, Councillor Julia McShane, seconded by the Deputy Leader of the Council, and Lead Councillor for Finance and Planning Policy, Councillor Joss Bigmore, the Council

RESOLVED:

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