Issue - meetings

(Cabinet Member with Special Responsibility Councillor Leytham)

Report of the Heads of Health & Housing and Financial Services.

(Cabinet Member with Special Responsibility Councillor Leytham)

Cabinet received a report from the Heads of Health & Housing and Financial Services which updated the Housing Revenue Account (HRA) revised budget position for the current year and set out the recommended budget for 2012/13 and future years under the new self-financing regime.  It also set out the updated Capital Programme for 2011/12 and a proposed programme to 2016/17.

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

With regard to the Revised Budget, Cabinet could consider other proposals that may influence the Revised Budget for the year and the call on revenue balances.

The most obvious options available in respect of the 2012/13 rent increase were to:

i)                    Set the average housing rent at £69.22 i.e. an increase of 7.82%.  The benefit of this option would be that the Authority would be in line with the Government’s proposals to achieve convergence with no negative financial implications to the HRA.  Whilst this increase may appear large, this is only because currently, average council housing rents are below those of other social housing providers.

ii)                   Set the rent increase at a minimum level of 4.75%, broadly in line with previous projections. This would mean an actual average rent of £67.25, which would result in a total loss of income of £1.67M, over 5 years, when compared with Option 1. With no other compensating factors from the Government to offset the loss of income, the shortfall would have to be met from savings within the HRA or funded from Reserves.  This option would also considerably delay the Authority in achieving convergence, and may not support sustainability of the HRA in the longer term.

iii)                 Set the rent increase different to either of the proposed options above.

The options available in respect of the minimum level of HRA balances were 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 could have implications for the Council’s financial standing, as assessed by its external auditors. 

The options available in respect of the revenue budget projections and assumed rent levels for 2013/14 to 2014/15 were to recommend those as set out, or to consider other proposals for incorporation.  It should be noted that if Cabinet did not go with option 1 and decided on option 2 or other alternative rent levels for 2012/13 or future years’, these would alter the budget projections.

The options available in respect of the Capital Programme were:

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  ...  view the full minutes text for item 80