Agenda item

Housing Revenue Account and Capital Programme

(Cabinet Member with Special Responsibility Councillor Caroline Jackson)


Report of Chief Officer for Housing & Property and the Chief Officer Resources (Section 151 Officer)   (report published on 2 February 2024)



(Cabinet Member with Special Responsibility Councillor Caroline Jackson)


Cabinet received a joint report from the Chief Officer for Housing & Property and the Chief Officer Resources (Section 151 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 are set out under section 4, 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 freeze rents for 2023/24. In order to protect current occupancy and income levels, and in line with sector benchmarking, a further 12-month freeze is recommended. Garage rents and occupancy will remain under review.


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 and coherent with the legislative and regulatory requirements of a Registered Provider.


The options available in respect of the minimum level of HRA balances are to retain the level at £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 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.



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 to the report.


Increased rental income supports the Council to deliver against its Regulatory requirements and ensuring homes are safe and decent.



Increased rent levels for tenants.

Would require further options analysis

Risks/ Mitigation

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.

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 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 additional budget proposals as set out.


The Tenant Voice group were consulted on 1st February at their bi-monthly meeting, where budget headlines, including the proposed rent increase and significant areas of spend and investment, were presented by the Neighbourhood and Support Services Manager.


The Tenant Voice expressed their concern about the impact of the rent increase on tenants but understood and agreed that this was appropriate in order for continued delivery of services and future ambitions. They endorsed the rent setting proposal and other key areas within the budget.


Councillor Caroline Jackson proposed, seconded by Councillor Wood:-


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


Councillors then voted:-


Resolved unanimously:


(1)             That the minimum level of HRA unallocated balances be retained at £750,000 from 01 April 2024, 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.


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

· for existing tenancies, rents will increase by 7.7% from 3 April 2024

· for new tenancies within 2024/25, rents will be set at ‘formula rent’


(3)        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.


(4)             That a delegated decision to approve the tender of five programmes of work (over £200K and key decisions over £250K) during 2024/25 can be made by the Chief Executive (as detailed below) and in line with procurement rules.

·        Energy efficiency improvement works

·        Re-rendering works to properties at Hala

·        Whole House Major Voids works and refurbishment

·        External door replacement

·        Re-roofing of properties on Ryelands Estate (phase 2)


(5)        That subject to the above, the resulting Housing Revenue Account budget for 2024/25 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 considered by Cabinet, ahead of final presentation on 20th February.


Officers responsible for effecting the decision:


Chief Officer Housing & Property

Chief Officer Resources (Section 151 Officer)


Reasons for making the decision:


The budget represents, in financial terms, what the Council is seeking to achieve through its approved Housing Strategy in relation to council housing.Whilst the report highlights challenges faced within the current economic environment, Lancaster City Council’s Housing Service continues to operate a sensible but forward-looking approach, seeking to meet Regulatory requirements and deliver safe and decent homes.


The proposals set out in the report will have positive impacts residents within Council Housing dwellings specifically climate change, wellbeing / social value, health and safety and community safety.

Supporting documents: