Minutes:
(Cabinet Member with Special Responsibility Councillor Kerr)
The Corporate Director (Community Services) and Head of Financial Services submitted a joint report updating the Housing Revenue Account (HRA) revised budget position for the current year and setting out the recommended budget for 2009/10 and future years. It also set out the updated Capital Programme for 2008/9 and the proposed programme to 2013/14.
The options and options analysis including risk assessment 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 options available in respect of the 2009/10 rent increase are to:
i) Set the average housing rent at 5% as proposed in paragraph 2.3.1 to the report;
ii) Set the rent at a lower level: this would reduce the income available to the Housing Revenue Account. For example a 1% change in the rent equates to a change of around 59 pence per week per property and a £111K change in annual income for the HRA.
iii) Set the rent increase at a higher level, up to 5.9%, i.e. within the Limit Rent
iv) Set the rent increase at a level higher than 5.9%, i.e. above the Limit Rent. Although this would generate additional income, around 60% of that income would have to be paid over to the Government through Rent Rebate Subsidy Limitation.
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 could have implications for the Council’s financial standing, as assessed by its external auditors.
The options available in respect of the revenue budgets for 2009/10 to 2011/12 are to recommend the budget as set out to Council for approval, or to consider other proposals for incorporation.
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. As such, a full options analysis could only be undertaken once any alternative proposals are known. It should be noted that Officers may require more time in order to do this.
The Officer Preferred options are to:
· approve the 2008/09 revised Revenue Budget as set out;
· approve the provisions, reserves and balances positions as set out;
· set a 5% increase in average rents, and to approve the draft revenue and capital budgets as set out in the appendices to the report, and as amended for any revenue growth supported by Cabinet, for referral on to Council as appropriate.
These are as reflected in the Member recommendations.
It was moved by Councillor Barry and seconded by Councillor Bryning:-
“That this agenda item be deferred until 28th January when additional information required to make a decision will be available.”
2 Members (Councillors Barry and Bryning) voted in favour of the proposal, 4 Members (Councillors Blamire, Burns, Gilbert and Kerr) voted against and 3 Members (Councillors Archer, Charles and Mace) abstained, whereupon the Chairman declared the motion to be lost.
It was moved by Councillor Kerr and seconded by Councillor Burns:
“That the recommendations, as set out in the report, be approved.”
Members then voted as follows:
Resolved:
(6 Members (Councillors Archer, Blamire, Burns, Gilbert, Kerr and Mace) voted in favour of the proposal, 2 Members (Councillors Barry and Bryning) voted against and 1 Member (Councillor Charles) abstained)
(1) That the Housing Revenue Account Revised Budget for 2008/09, as set out at Appendix A to the report, be recommended to Council for approval.
(2) That the revenue growth bids as set out at Appendix B be supported, to be funded by reductions in the contributions into the Major Repairs Reserve.
(3) That the Housing Revenue Account Budget for 2009/10 as set out at Appendix A to the report, as amended for growth above, be recommended to Council for approval.
(4) That Cabinet recommend to Council that the minimum level of HRA unallocated balances be retained at £350,000 from 01 April 2009, and that the Statement on Reserves and Balances be noted and referred to Council for information.
(5) That average council housing rents for the year commencing 01 April 2009 be set at £59.56, representing an increase of 5%.
(6) That future year budget projections continue to assume a 5% year on year increase in average rents.
(7) That the Capital Programme as set out at Appendix E of the report be referred on to Council for approval.
(8) That Cabinet notes that the proposed revenue budgets and capital programme will be referred to the District Wide Tenants Forum on 28 January 2009, and that any issues arising will be fed directly into Council.
Officers responsible for effecting the decision:
Corporate Director (Finance and Performance)
Head of Financial Services
Reason for making the decision:
The City 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 account includes all transactions relating to the maintenance and management of the Council’s housing stock. The decision to set the rent levels for 2009/10 at this meeting meets the deadline to notify tenants of the rent variation by 1st March 2009. The decisions to recommend a balanced budget and fully financed Capital Programme to Council for agreement on 4th February 2009 is in line with the budget timescale.