Agenda item

(Cabinet Members with Special Responsibility Councillors Leytham & Whitehead)

Joint Report of Chief Officer (Resources) & Chief Officer (Health & Housing) – (Report to follow)

(Cabinet Member with Special Responsibility Councillor Leytham)

Cabinet received a joint report from the ChiefOfficer(Health andHousing) andChief Officer(Resources) which provided an updateon thecouncilhousingbudgetarypositionandsoughtCabinet’sdecisionson council housing rent levelsfor 2017/18andtargetsforfuture years. ItalsosoughtapprovalofCabinet’ssupportingrevenuebudgetandcapitalprogrammeproposalsforreferralon toBudgetCouncil,inorder tocomplete theHRAbudget settingprocess for2017/18.

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

There is currently no other alternative available in respect of 2017/18 housing rent setting, given legislative requirements.

In terms of garage rents, options are presented in order to be comparable with other providers whilst remaining competitive, as set out in section 2 of the report.  Cabinet may either choose to support the Officer preferred option for a phased increase to help smooth the impact, or retain existing rents, or introduce increases sooner, although the latter may generate more customer resistance.

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 £500,000 in line with the advice of the Section 151 Officer, retain at £350,000 or 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 auditor.

With regards to the growth proposals as set out in section 6 of the report, Cabinet should consider the costs and benefits of the proposals and whether they are affordable, in particular over the medium to longer term.

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:

-        Sethousingrentlevelsin linewithGovernment legislation.

-        Approve the changesto garagerents as proposed in the report.

-        Approve/ referon theprovisions,reserves and balances position assetout.

-        Use balances to help fund the ASB growth item, subject to the associated General Fund proposal being approved.

-        Approve / referon otherrevenue and capital budgetproposalsas setout.

Councillor Whitehead proposed, seconded by Councillor Clifford:-

“That the recommendations, as set out in the draft report, be approved.”

Councillors then voted:-

Resolved unanimously:

(1)        Thatthe HousingRevenueAccountRevisedBudgetfor 2016/17,as setoutat AppendixA to the report,be referred onto Council forapproval, with the net overspending of £143K being met from Balances.

(2)        That the minimum level of HRA unallocated balances be increased from £350,000 to £500,000 from 01 April 2017, and that the full Statement on Reserves and Balances as set out at Appendix C to the report (as updated to reflect Cabinet’s final budget proposals) be endorsed and referred on to Budget Council for approval.

(3)        Thatcouncilhousingrentsbe setin accordancewith statutoryrequirements asfollows:

-       forgeneral propertieslet asat 01April2017,averagerent besetat£71.69for2017/18, representinga reduction of 1% from the previous year;

-       for sheltered and supported housing properties let as at 01 April 2017, average rent be set at £66.97 for 2017/18, representing a reduction of 1% from the previous year,

-       for 2018/19to 2019/20furtheraveragerent reductionsbe setat 1%yearonyear; and

-       for any relevant property becoming void the following policy be re-affirmed,in that they continue to be re-letat ‘formularent’lessthe relevantcumulativeyearon year% reductionapplicable(i.e.generally 2%for 2017/18 risingto 4% in2019/20).

(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 for 2017/18, allgarage rents beincreasedby the ConsumerPrice Index(CPI)plus £1, with an additional CPI + £1 increase in each subsequent year until 2019/20, with CPI increases thereafter.

(6)       That subject to approval of a fixed term growth item for tackling anti-social behaviour, the associated HRA contribution be met from Balances.

(7)       Thatthe resultingHousingRevenueAccountbudgetfor 2017/18onwardsas currently setoutin AppendixA to the report, butsubjectto any changes arising from the above, be referred on to Budget Council for approval.

(8)       Thatthe CapitalProgrammeas setoutatAppendixD to the report bereferred onto BudgetCouncil forapproval.

(9)       Thatthe aboverecommendationsfor theHousingRevenueAccountbereflectedwithinthe Council’sdraftMediumTermFinancialStrategy (MTFS) asappropriate.

Officers responsible for effecting the decision:

Chief Officer (Resources)

Chief Officer (Health & Housing)

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.  The decision ensures there are sufficient resources to maintain and manage the Council’s Housing Revenue Account (HRA) assets.