Agenda item

(Cabinet Member with Special Responsibility Councillor Warriner)

 

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

(Cabinet Member with Special Responsibility Councillor Warriner)

 

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 2018/19 and targets for future years.  It also 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 2018/19.

 

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 2018/19 housing rent setting, given legislative requirements.

 

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 retain the level at £500,000 in line with the advice of the Section 151 Officer, 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 savings and growth proposals as set out in section 7 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 relevant Officer preferred options are to:

-                    Sethousingrentlevelsin linewithGovernment legislation.

-                    Approve/ referon theprovisions,reserves and balances position (and their use) assetout.

-                    Approve / referon the revenue budgets and capital programme, allowing for Cabinet’s recommendations regarding specific savings and growth proposals.

 

Councillor Warriner proposed, seconded by Councillor Pattison:-

 

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

 

Councillors then voted:-

 

Resolved unanimously:

 

(1)        Thatthe HousingRevenueAccountRevisedBudgetfor 2017/18,as setoutat AppendixA to the report,be referred onto Council forapproval, with the net overspending of £387K being met from Balances.

 

(2)        That the minimum level of HRA unallocated balances be retained at £500,000 from 01 April 2018, and that the full Statement on Reserves and Balances as set out at Appendix E to the report, be endorsed and referred on to Budget Council for approval.

 

(3)        Thatcouncilhousingrentsbe setin accordancewith statutoryrequirements asfollows:

 

-       forgeneral propertieslet asat 01April2018,averagerent besetat£71.27 for2018/19, representinga reduction of 1% from the previous year;

 

-       for sheltered and supported housing properties let as at 01 April 2018, average rent be set at £66.31 for 2018/19, representing a reduction of 1% from the previous year;

 

-       for 2019/20 for the above categories of properties, furtheraveragerent reductionsbe setat 1%; and

 

-       for any relevant property becoming vacant the following policy be re-affirmed,in that they be re-letat the higher ‘formularent’lessthe relevantcumulative% reductionapplicable(i.e.generally 3%for 2018/19 risingto 4% in2019/20).

 

(4)             That beyond 2019/20, it be noted that the HRA Business Plan forecasts assume that council housing rents will be increased by the Consumer Price Index (CPI) plus 1% year on year, in line with the announcement made by Government in October 2017, but that this is still subject to annual review and any future determinations that may be issued by Government from time to time.

 

(5)             That the Repairs and Maintenance Service (RMS) Development Plan (c£117K) as set out at Appendix B to the report, be funded from the HRA ICT Replacement Reserve during 2017/18 and 2018/19, subject to:

 

-       any ongoing annual software/mobile technology costs being funded from revenue efficiency savings, noting that the position is assumed to be (at least) cost neutral at this stage; and

 

-       a separate report being presented back to Cabinet in Autumn 2018 on the expected outcomes (including net efficiency savings) from the Plan, to inform the 2019/20 budget.

 

(6)             That the costs associated with the interim RMS Manager post (c£96K) be funded from the Business Support Reserve, and that delegated authority be granted to the Chief Officer (Environment), in consultation with the Chief Officer (Resources), to allocate up to a further £25,000 should there be a need for extension into 2018/19, prior to permanent recruitment.

 

(7)             That the savings and growth proposals as set out at Appendix C to the report, be included in Cabinet’s budget proposals for referral on to Council, subject to the following:

 

-       any future support to the Marsh Community Centre (beyond 2018/19) being determined as part of the ongoing Voluntary, Community and Faith Sector (VCFS) Commissioning of Service review alongside the Ridge Community Centre;

 

-       the capital investment for the conversion of redundant shops and former manager dwellings, together with the construction of new garages, being met from the Business Support Reserve; and

 

-       any other net costs associated with the savings and growth proposals being met from unallocated Balances during the period to 2020/21, ahead of the HRA moving into projected surplus in 2021/22.

 

(8)             Thatsubject to the above, theresultingHousingRevenueAccountbudgetfor 2018/19onwards,as setout atAppendixA to the report, together with the resulting Capital Programme as set out at AppendixF to the report, bereferred onto BudgetCouncil forapproval.

 

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

 

 

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