Minutes:
(Cabinet Member with Special Responsibility Councillor Leytham)
Cabinet received a joint report from the Head of Resources and Head of Health & Housing which provided an update on the council housing budgetary position and sought Cabinet’s decisions on council housing rent levels for 2013/14 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 2013/14.
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 might influence spending in current and future years, as long their financing was considered and addressed.
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 it could have implications for the Council’s financial standing, as assessed by its external auditors.
The most obvious options available in respect of the 2013/14 rent increase were set out in section 6 of the supplementary report. That section also highlighted the intrinsic link between rent levels and scope for future investment.
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 their impact on the council housing service and its tenants. As such, a full options analysis could only be undertaken once any alternative proposals were known, and Officers might require more time in order to do this.
The Officer preferred options were to:
- approve/ refer on the provisions, reserves and balances position as set out;
- set rent levels that would provide sufficient flexibility for future investment, as well as sufficient headroom to address any future accounting / regulatory / welfare reform changes. Officers would advise against longer term rent freezes or below inflation increases, for these reasons. If future investment opportunity was to be maximised, then the Officer preferred option would be for a 3% annual increase.
- approve / refer on the revenue and capital budget proposals as set out, as adjusted to fit with rents levels mentioned above.
Councillor Leytham proposed, seconded by Councillor Hamilton-Cox:-
“(1) That the recommendations, as set out in the report, be approved.”
Councillors then voted:-
Resolved unanimously:
(1) That the Housing Revenue Account Revised Budget for 2012/13, 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 01 April 2013, and that the full Statement on Reserves and Balances be endorsed and referred on to Council for approval, taking into account the changes as outlined in section 3 of the report.
(3) That Option 5 be adopted as rent setting policy for the medium term, in that:
- an average rent of £69.22 for 2013/14 be approved, representing an increase of 0%, and the resulting Housing Revenue Account budget for 2013/14 be recommended to Council for approval; and
- for years 2014/15 to 2016/17 target rent increases be set at 1%, 2% and 3% respectively, and the revenue budget forecasts be updated accordingly.
(4) That the Capital Programme as set out at Appendix D to the report be referred on to Council for approval and in addition:
- Cabinet approves in principle to invest in new one-bedroom accommodation within the district using funding from the Business Support Reserve, and that detailed proposals be brought back to Cabinet following input from the Housing Regeneration Cabinet Liaison Group.
(5) That the above recommendations for the Housing Revenue Account be reflected within the Council’s draft Medium Term Financial Strategy as appropriate, ensuring clarity in Cabinet’s responsibilities regarding the setting of rent levels.
Officers responsible for effecting the decision:
Head of Resources
Head of Health & Housing
Reasons for making the decision:
The Council was 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 covered the maintenance and management of the Council’s housing stock. It was 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 2013. The decision to set the rent increase for 2013/14 enables the deadline to be met, and enables Cabinet to recommend a balanced budget and fully financed Capital Programme for referral on to Council.