Agenda item

Housing Revenue Account and Capital Programme

(Cabinet Member with Special Responsibility Councillor Matthews)


Report of Director for Communities and the Environment and the Chief Finance Officer


(Cabinet Member with Special Responsibility Councillor Matthews)


Cabinet received a report from the Director for Communities and the Environment and the Chief Finance Officer that sought Cabinet decisions on Council Housing rent setting proposals and HRA revenue and capital budget proposals.


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


The options with regards to rent setting were set out under section 4 of the report, the maximum permitted increase for existing tenants being 7.0% for 2023/24. By applying this increase, it allowed for a budget that could 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 freeze rents for 2022/23. In order to protect current occupancy and income levels, and in line with sector benchmarking, a further 12-month freeze was recommended. Garage rents and occupancy would remain under review.


With regard to the revenue budget generally, Cabinet could consider other proposals that might influence spending in current and future years, as long as their financing was considered and addressed and coherent with the legislative and regulatory requirements of a Registered Provider.


The options available in respect of the minimum level of HRA balances were to increase the level to £750K 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.


The options available in respect of the Capital Programme were:

i)                 To approve the programme in full, with the financing as set out;

ii)                 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 were known, and Officers might require more time in order to do this.



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

Option 2: To propose alternatives to those outlined in Section 11 above.


Increased rental income allows the Council to deliver towards its climate ambitions and provide an ambitious housing service which places people and place at the heart of its offer.



Increased rent levels for tenants.

Would require further options analysis


The HRA budget set out in this

report is sustainable in the long term. The risks associated with Option 1 are outlined in Appendix F – Risks and Assumptions. To offset challenging increases in rent and service charges the team have a high performing Income Management Team providing dedicated one to one support to those who need it, alongside additional support officers such as Energy Support Officer, Household Intervention Team and Independent Living Team.


Impact on housing service and council housing tenants unknown. Potential for housing service to fall foul of legislative and regulatory requirements, leading to unlimited fines and being ‘named and shamed’ by government.


The 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 additional budget proposals as set out.


A consultation meeting was held with the District Wide Tenants’ Forum on 19th January 2023, where the Neighbourhood and Support Services Manager presented the headlines of the report and answered questions from tenants and councillors. The group agreed that they were broadly supportive of the rent increase of 7%, while recognising the challenge this poses to residents in the current economic climate. It was noted that financial and other support was a central part of housing service delivery. The group commented that they felt rents were accountable and transparent, and noted that it was important that rental income was being spent to ensure homes were maintained to a high standard. The group gave positive feedback about the council housing response to the climate emergency, particularly around plans to tackle energy efficiency within housing stock.


Whilst the report highlighted challenges faced within the current economic environment, Lancaster City Council’s Housing Service continued to operate a sensible but forward-looking approach, developing and adopting best practice to deliver high quality homes and services to residents whilst being mindful of future legislation and regulation requirements, preparing accordingly.


Councillor Caroline Jackson proposed, seconded by Councillor Hamilton-Cox:-


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


Councillors then voted:-


Resolved unanimously:


(1)        That the use of the latest projected Housing Revenue Account revenue outturn figures, as set out at Appendix A to the report, to provide a mid-year reviewed budget position which will form the basis of future monitoring and outturn within 2022/23, be referred on to full Council for noting.


(2)        That the latest projected Housing Revenue Account Capital Programme outturn figures for 2022/23, as set out at Appendix C to the report, be referred on to Council for approval.


(3)        That the minimum level of HRA unallocated balances be increased to £750,000 from 01 April 2023, 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.


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

 · for existing tenancies, rents will increase by 7.0% from 3 April 2023

 · for new tenancies within 2023/24, rents will be set at ‘formula rent’


(5)        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 order to protect income levels currently achieved, and in line with benchmarking across the sector.


(6)        That a delegated decision to approve the tender of four programmes of work (over £200K and key decisions over £250K) during 2023/24 can be made by the Chief Executive and in line with procurement rules.

·        Reroofing of properties on Ryelands estate

·        Re-rendering works to properties at Hala

·        Whole House Major Voids works and refurbishment

·        1a Alder Grove – demolition of existing scheme managers property and construction of 4 flats (if contract not awarded within 2022/23)


(7)        That subject to the above, the resulting Housing Revenue Account budget for 2023/24 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 for Communities & the Environment

Head of Housing

Chief Finance Officer


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.


The budget represents, in financial terms, what the Council is seeking to achieve through its approved Housing Strategy in relation to council housing and the proposals set out in the report will have positive impacts on residents within Council Housing dwellings specifically in relation to climate change, wellbeing / social value, health and safety and community safety.


Supporting documents: