Agenda item

(Cabinet Member with Special Responsibility Councillor Caroline Jackson)

Report of Director of Communities and the Environment

(Cabinet Member with Special Responsibility Councillor Caroline Jackson)

Cabinet received a report from the Director of Communities and the Environment, which provided an update on the council housing budgetary position and sought Cabinet’s decisions on council housing rent levels for 2020/21 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 2020/21. 

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

The options with regard to rent setting are set out under section 3 of the report, the maximum permitted increase being CPI+1%.  By applying this increase, it allows for a budget that can deliver on the Council’s ambitions on improving housing standards and addressing the climate change emergency, whilst adhering to the Rent Standard and legislative requirements. 

In relation to garage rents, the previous decision was to increase using CPI from 2020/21.  Occupancy levels suggest that this is not sustainable in the short term, therefore it is recommended to freeze rent levels for a 12-month period in order to protect the current income levels achieved, reverting to a CPI increase thereafter. 

With regard to the revenue budget generally, Cabinet could consider other proposals that may influence spending in current and future years, as long as 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 on 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 option is Option 1: Set housing and garage rent levels as set out in this report and approve the provisions, reserves and balances position (and their use); the revenue budgets and capital programme; and all growth proposals as set out.

Councillor Jackson proposed, seconded by Councillor Parr:-

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

Councillors then voted:-

Resolved unanimously:

(1)        That the Housing Revenue Account Budget for 2020-21, 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 £500,000      from 01 April 2020, and that the full Statement on Reserves and Balances as          set out at Appendix F to the report be endorsed and referred on to Budget        Council for approval. 

(3)        That council housing rents be set in accordance with statutory requirements          as follows:  

·         for general properties let as at 01 April 2020, average rent be set at £73.54 for 2020/21;  

·         for sheltered and supported housing properties let as at 01 April 2020, average rent be set at £68.64 for 2020/21;   

·         for any relevant property becoming vacant the following policy be reaffirmed: that they be re-let at the higher ‘formula rent’.  

(4)        That garage rents be frozen for a 12-month period (rather than increased by         CPI, as per the rent setting policy established by Cabinet in January 2017) in           the context of falling occupancy levels, and in order to protect income levels currently achieved.  

(5)        That the growth proposals as set out at Appendix E to the report, be included        in Cabinet’s budget proposals for referral on to Council, noting that any        approvals be met from unallocated balances. 

(6)        That subject to the above, the resulting Housing Revenue Account budget for       2020/21 onwards, as set out at Appendix A to the report, together with the             resulting Capital Programme as set out at Appendix C to the report, be referred       on to Budget Council for approval. 

Officers responsible for effecting the decision:

Director of Corporate Services

Director of Communities and the Environment

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.