Minutes:
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(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 2010/11 and future years. The report also set out the updated Capital Programme for 2009/10 and a proposed programme to 2014/15.
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 2010/11 rent increase are to:
i) Set the average housing rent at £60.06, ie an increase of 2.75% as proposed in paragraph 3.3.1 of the report;
ii) Set the rent increase at a higher level of 3.1% in line with the Government’s Guideline Rent increase. This would result in an actual average rent of £60.26. This would further increase rental income available to the Housing Revenue Account by £40K in 2010, but even though this increase is within the Limit Rent, there would be a £ for £ reduction in the caps and limits adjustment, resulting in a net nil impact on the HRA.
iii) Set the rent increase in line with the Councils existing policy of 5%, making the actual average rent £61.37. This is also within the Limit Rent and would generate further rental income of £257K, but the same adjustment in caps and limits would apply and would result in a net nil impact on the HRA. The benefit of this option (and option (ii) above) would be that the Authority would enhance the rate at which it would achieve convergence, with no negative financial implications to the HRA but at the expense of housing tenants.
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 2010/11 to 2012/13 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 in the report;
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 risks attached to the provisional nature of current subsidy determinations will be managed through future reporting arrangements, as set out in the report.
The Officer Preferred options are to:
- approve the 2009/10 revised Revenue Budget as set out in the report; - approve the provisions, reserves and balances positions as set out in the report; - set a 2.75% increase in average rents, and to approve the draft revenue and capital budgets as set out in the appendices to the report, as amended for any revenue growth supported by Cabinet, for referral on to Council as appropriate.
It was moved by Councillor Kerr and seconded by Councillor Bryning:-
“That the recommendations, as set out in the report, be approved.”
Members then voted:-
Resolved unanimously:
(1) That the Housing Revenue Account Revised Budget for 2009/10, as set out at Appendix A of the report, be recommended to Council for approval.
(2) That the revenue growth bids, as set out at Appendix B of the report, be supported to be funded by reductions in the contributions into the Major Repairs Reserve.
(3) That the Housing Revenue Account Budget for 2010/11, as set out at Appendix A of the report, as amended for growth above, be recommended to Council for approval, subject to there being no major changes arising from the final housing subsidy determination.
(4) That Cabinet recommends to Council that the minimum level of HRA unallocated balances be retained at £350,000 from 01 April 2010, 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 2010 be set at £60.06, representing an increase of 2.75%.
(6) That at present future year budget projections continue to assume a 5% year on year increase in average rents, with this being reviewed once the final outcome of Government’s reform of council housing finance is known.
(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 and that any issues arising are planned to be fed directly into Council.
Officers responsible for effecting the decision:
Corporate Director (Community Services) Head of Financial Services
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 account includes all transactions relating to the maintenance and management of the Council’s housing stock.
It is therefore 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 by 01 March. In order to meet this deadline, Cabinet set the rent increase for 2010/11 at this meeting, to recommend a balanced budget and fully financed Capital Programme for referral on to Council. |