Agenda item

(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 latest position regarding the options for setting rents for supported housing for 2016/17 and sought Cabinet’s decision on the rent level to be set for 2016/17.  The report also picked up on relevant feedback from the February Council meeting.

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

For now it is assumed that rents will still be reduced from 2017/18 to 2019/20 by -1% year on year following the 1 year exception, with 2% increases per annum thereafter, as reported in January. Given these temporary changes in the Government’s position, it is being recommended that the Council increase all supported housing rents to the 2016/17 formula rent (option 1) as this would establish supported housing properties, including sheltered housing, at their formula rent base and provide a greater level of income to support the HRA Business Plan, whilst remaining affordable.  

Marsh Community Centre

There is one other matter for consideration as part of the HRA budget.  At Council on 3 February, Cabinet was asked to consider grant funding the Marsh Community Centre from the Housing Revenue Account budget instead of the General Fund.  The current grant level assumed in 2016/17 is £13,700, with inflationary increases thereafter.

Officer advice on this matter is that should Cabinet be minded to support this, then there would need to be some modifications to the Service Level Agreement (to give clearer benefit to council housing tenants) to ensure that it could be properly charged to the HRA.  Furthermore, a one year funding is advisable, ahead of the wider review of funding for the Voluntary, Faith and Community sectors.  The cost of providing grant funding would, in effect be met from the HRA’s general resources, including rental income changes as highlighted above.  In summary therefore, options on this matter are to not incorporate it into Cabinet’s budget proposals, or incorporate it on either a one year or a permanent basis.

Cabinet is recommended to refer the HRA budget for 2016/17 to Council as set out in Appendix A for approval, subject to any amendments in connection with rents or with the Marsh Community Centre.  A provisionally updated Statement on reserves is attached at Appendix B and Cabinet is asked to endorse this information with the Statement also being referred on to Council as part of the updated HRA budget proposals.

The Government’s evolving policies on social rent are extremely challenging, and are a significant move away from the principles established under the Self-Financing Regime introduced by Government in April 2012. The Council needs to ensure that the HRA remains financially sound, and that it can meet the investment needs of its housing stock. To ensure this the Council needs to make prudent decisions in relation to setting rents in support of this.

Councillor Leytham proposed, seconded by Councillor Hanson:-

“That the recommendations, as set out in the report, be approved with the following wording inserted at the end of recommendation (2): ‘Cabinet agrees to one year funding of £13,700 subject to a modified SLA to reflect the benefit to council housing tenants’.

Councillors then voted:-

Resolved unanimously:

(1)             That it be noted that Government has issued revised statutory draft legislation for supported housing rents including sheltered housing and that associated rents therefore be increased to “formula rent” from 1 April 2016 (Option1) and that the revenue budget forecasts be updated accordingly.

(2)             That having considered feedback from Council and associated options regarding funding for the Marsh Community Centre, Cabinet agrees to one year funding of £13,700 subject to a modified SLA to reflect the benefit to council housing tenants.

(3)             That the resulting Housing Revenue Account budget for 2016/17 as currently set out at Appendix A to the report, and subject to any changes arising from the above, be referred on to Council for approval.

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, and to set the level of housing rents in sufficient time for the statutory notice of rent variations to be issued to tenants.  The decision enables Cabinet to recommend a balanced budget and fully financed capital programme for referral on to Council.  In addition the decision to allocate funding from the HRA account to support the Marsh Community Centre will, through a modified SLA, ensure that council housing tenants benefit from the Community Centre.