Minutes:
(Cabinet Member with Special Responsibility Councillor Leytham)
Cabinet received a joint report from the Chief Officer (Health & 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 2016/17 and targets for future years. In addition, the report sought approval of Cabinet’s supporting revenue budget and capital programme proposals for referral on to Budget Council, in order to complete the HRA budget setting process for 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 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 currently no other alternative available in respect of the 2016/17 housing rent setting other than implementing Government draft legislation and this is set out in section 6 of the report. If the draft legislation appears not to be progressing through Parliament in a timely fashion, this will be addressed at Cabinet’s February meeting.
In terms of garage rents, an option is presented to gain consistency and Cabinet may either choose to support his, or retain existing rents but this would not address the inconsistencies.
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 housing rent levels in line with Government’s draft proposals, noting that this statutorily removes any freedom to set rent levels locally and that further savings may still be required to ensure that current stock levels continue to be maintained to required standards and that any detrimental impact associated with any future accounting / regulatory / welfare reform changes / actions associated with the high level review of RMS will need to be addressed at that time.
- Approve the changes to garage rents to gain consistency.
- Note that if future investment opportunities are to be considered, then as referred to in sections 3.3 and 5.5.2 of the report, these can only really be properly assessed once there is a better understanding of Government’s plans post implementation and in particular their 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 Newman-Thompson:-
“That the recommendations, as set out in the report, be approved.”
Councillors then voted:-
Resolved:
(7 Members (Councillors Blamire, Bryning, Hanson, Leytham, Newman-Thompson, Pattison & Smith) voted in favour. Councillor Clifford, having disclosed that Section 106 of the Local Government Finance Act 1992 applied to him, did not vote.)
(1) That the Housing Revenue Account Revised Budget for 2015/16, 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 2016, and that the full Statement on Reserves and Balances be endorsed and referred on to Budget Council for approval.
(3) That, subject to the enactment of the Welfare Reform and Work Bill currently passing through Parliament, council housing rents be set in accordance with draft statutory requirements as follows:
- For properties let as at 01 April 2016, average rent be set at £70.60 for 2016/17, representing a reduction of 1% from the previous year, and
- for 2017/18 to 2019/20 further average rent reductions be set at 1% year on year.
- That, following any property becoming void, it be re-let at ‘formula rent’ less the relevant cumulative year on year % reduction applicable (i.e. 1% for 2016/17 rising to 4% in 2019/20).
(4) That beyond 2019/20, it be noted that the HRA Business Plan forecasts assume that council housing rents revert to increasing by 2% year on year, but this is subject to annual review and any future determinations that may be issued by Government from time to time.
(5) That Cabinet approves charging a flat rate of £7.95 for all garages for 2016/17, with this being increased to cover estimated Consumer Price Index (CPI) inflation each year thereafter.
(6) That the resulting Housing Revenue Account budget for 2016/17 onwards, as set out in Appendix A to the report, be referred on to Budget Council for approval.
(7) That the Capital Programme, as set out at Appendix D to the report, be referred on to Budget Council for approval.
(8) That the above recommendations for the Housing Revenue Account be reflected within the Council’s draft Medium Term Financial Strategy as appropriate.
(9) That Cabinet notes that actions arising from the ongoing review of how council houses are to be repaired and maintained in the future are likely to have resource implications and once quantified, they will be reported on for consideration as necessary and fed into the Business Plan.
Officers responsible for effecting the decision:
Chief Officer (Health & Housing)
Chief Officer (Resources)
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. The decision enables sufficient time for the statutory notice of rent variations to be issued to tenants by 1st March 2016.