Decision details

(Cabinet Member with Special Responsibility Councillor Leytham)

Cabinet received a joint report from the Chief Officer (Health and Housing) and Chief Officer (Resources) which provided an update on the council housing budgetary position and sought Cabinet’s decisions on council housing rent levels for 2015/16 together with targets for future years.  It also sought approval of Cabinet’s supporting revenue budget and capital programme proposals for referral on to Council, in order to complete the HRA budget setting process for 2015/16.

The options, options analysis, including risk assessment and officer preferred option, were set out in the report as follows:

With regard to the revenue budget generally, Cabinet could consider other proposals that may influence spending in current and future years, as long their financing is considered and addressed.

The options available in respect of the minimum level of HRA balances are to set the level at £350,000 in line with the advice of the Section 151 Officer, or to adopt a different level. Should Members choose not to accept the advice on the level of balances, then this should be recorded formally in the minutes of the meeting and it could have implications for the Council’s financial standing, as assessed by its external auditors.

There is only one sustainable option available in respect of the 2015/16 rent increase and this is set out in section 6 of the report and is in line with the current rent setting policy. 

The options available in respect of the Capital Programme are:

i)              To approve the programme in full, with the financing as set out;

ii)             To incorporate other increases or reductions to the programme, with appropriate sources of funding being identified.

Any risks attached to the above would depend very much on what measures Members proposed, and their impact on the council housing service and its tenants.  As such, a full options analysis could only be undertaken once any alternative proposals are known, and Officers may require more time in order to do this.

The Officer preferred options are to:

-        Approve / refer on  the provisions, reserves and balances position as set out;

-        Set rent levels to ensure that current stock levels continue to be maintained to required standards, i.e. a 2% increase in 2015/16 and 3% thereafter, noting that any detrimental impact associated with any future accounting / regulatory / welfare reform changes will need to be addressed at that time;

-        Note that if future investment opportunity is to be maximised, then as referred to in section 6.3, this can only really be properly considered once there is a better understanding of the total maintenance requirements and its impact on the viability of the 30-year Business Plan.

-        Approve / refer on the revenue and capital budget proposals as set out.

Councillor Leytham proposed, seconded by Councillor Hanson:-

“That the recommendations, as set out in the report, be approved.”

Councillors then voted:-

Resolved:

(6 Members (Councillors Blamire, Bryning, Hanson, Leytham, Sands and Smith) voted in favour, and 2 Members (Councillors Barry and Hamilton-Cox) abstained.)

(1)          That the Housing Revenue Account Revised Budget for 2014/15, as set out at Appendix A to the report, be referred on to Council for approval.

(2)          That the minimum level of HRA unallocated balances be retained at £350,000 from 1st April 2015, and that the full Statement on Reserves and Balances be endorsed and referred on to Council for approval.

(3)          That the current rent setting policy be reaffirmed for the medium term, in that:

-       an average rent of £71.31 for 2015/16 be approved, representing an increase of 2%, and

-       for 2016/17 onwards target rent increases be set at 3% per annum, and the revenue budget forecasts be updated accordingly.

(4)          That the resulting Housing Revenue Account budget for 2015/16 be referred on to Council for approval.

(5)          That the Capital Programme as set out at Appendix D to the report, be referred on to Council for approval.

(6)          That the above recommendations for the Housing Revenue Account be reflected within the Council’s draft Medium Term Financial Strategy as appropriate.

Officers responsible for effecting the decision:

Chief Officer (Resources)

Chief Officer (Health & Housing)

Reasons for making the decision:

The Council is required under statutory provisions to maintain a separate ring-fenced account for all transactions relating to the provision of local authority housing, known as the Housing Revenue Account (HRA).  This covers the maintenance and management of the Council’s housing stock.  It is necessary to prepare separate revenue and capital budgets for the HRA each year, and to set the level of housing rents in sufficient time for the statutory notice of rent variations to be issued to tenants.  The decision to set the increase for 2015/16 enables the deadline to be met and enables Cabinet to recommend a balanced budget and fully financed capital programme for referral on to Council.