212 BC/19/36 HOUSING REVENUE ACCOUNT (HRA) BUDGET 2020/21 AND LONGER-TERM OUTLOOK PDF 851 KB
Cabinet Member for Finance
In accordance with Council Procedure Rule 19.3, immediately after any vote is taken at a budget decision meeting of the Council the names of Councillors who cast a vote for the decision or against the decision or who abstained from voting shall be recorded in the Minutes of that meeting.
At its meeting on 11 February 2020, Cabinet considered Paper BCa/19/35, together with amendments to the Housing Revenue Account. Paper BC/19/36 now includes all the relevant updated information, together with the necessary recommendations.
Minutes:
212.1 The Chair of the Council invited Councillor Ward, to introduce Paper BC/19/36 and to move the recommendations in the report.
212.2 Councillor Ward stated that the Council had a sound 30-year business plan, which had resulted in favourable positions for both revenue and capital for 2020/21. This had been helped by the ending of the annual 1% rent reduction imposed by the Welfare Reform and Work Act 2016. The act now allowed rents to be increased by CPI (currently 1.7%) +1% for five years from 2020-21. The remaining 25 years of the Business Plan were based on an annual rent increase of CPI only. The full 30-year Business Plan was attached at Appendix B.
212.3 A fundamental review of housing services had been undertaken during 2019/20 to identify savings, efficiencies and income generation opportunities to achieve a sustainable business plan into the future. The scope of this review was provided in section 7.1 of the report.
212.4 The Council was continuing with an aspiration to increase the housing stock. New homes of all types would provide the Council with New Homes Bonus and Council Tax income, whilst additional council housing would deliver rental income and wider financial and social benefits.
212.5 The table in section 10.1 of the report detailed the HRA budget for 2020/21, based on a 2.7% rent increase, and highlighted the movement from the 2019/20 budget.
212.6 A surplus position of £334k was forecast, which was a significant improvement on the 2019/20 position. This had been achieved by reducing both revenue and capital budgets (table in 10.1). He proposed to transfer this surplus to the HRA reserves.
212.7 He outlined the key adverse movements as:
· A reduction in income of £187k, primarily due to 2020/21 being a 52-week year whereas 2019/20 was 53 weeks, and delays in new builds.
· An increase of £189k in general management costs due to staff costs and the transfer of an ICT budget to the HRA.
· An increase of £56k for Repairs and Maintenance.
· An increase of £68k for Property Services.
212.8 Set against these were favourable variances, notably a reduction in Revenue Contribution to Capital of £1.047m due to the revised capital programme.
212.9 In addition to the rent increase, it was proposed to increase sheltered housing charges by £2 per week to ensure recovery of the actual cost, but that utility charges were kept at the same level as the current year. Garage rents would remain at the current level and work was continued to look for alternative uses for unviable garage sites.
212.10 Next year would see a focus on the terms of all contracts (those more than £50k) being reviewed, to identify savings opportunities, as well as a decision whether on the long-term future of Building Services was via a joint venture with Flagship Housing. A review of the HRA Business Plan will also be undertaken. Income increases or savings would continue to be reflected in the budget and would be monitored during the year.
212.11 The ... view the full minutes text for item 212
223 BCa/19/35 HOUSING REVENUE ACCOUNT (HRA) BUDGET 2020/21 AND LONGER-TERM OUTLOOK PDF 775 KB
Cabinet Member for Finance
Additional documents:
Decision:
It was RESOLVED:
1.1 That the HRA revenue budget proposals for 2020/21 and longer-term outlook set out in the report and the updates tabled at the meeting be endorsed for recommendation to Council on 26 February 2020 as detailed below.
1.2 That the HRA capital budget proposals for 2020/21 set out in Appendix A in the report be endorsed for recommendation to Council on 26 February 2020.
1.3 That the CPI + 1% increase of 2.7% in Council House rents, equivalent to an average rent increase of £2.38 a week be implemented.
1.4 That garage rents are kept at the same level as 2019/20.
1.5 That Sheltered Housing Service charges be increased by £2 per week to reduce the subsidy by £26k.
1.6 That Sheltered Housing utility charges are kept at the same level as 2019/20.
1.7 That the budgeted surplus of £334k be transferred to the HRA reserves in 2020/21.
1.8 That in principle, Right to Buy (RTB) receipts should be retained to enable continued development and acquisition of new council dwellings.
1.9 That the revised 30-year HRA Business Plan in Appendix B of the report be noted.
Reason for Decision: To bring together all the relevant information to enable Cabinet Members to review, consider and comment upon the Councils Housing Revenue Account budget before recommendations to Council.
Alternative Options Considered and Rejected: The Housing Revenue Account Budget for 2020/21 and longer-term outlook is an essential element in achieving a balanced budget and sustainable medium-term position, therefore no other options are appropriate in respect of this.
Any Declarations of Interests Declared: None
Any Dispensation Granted: None
Minutes:
The Cabinet Member for Finance introduced the report and highlighted the changes made since last presented to Cabinet.
The recommendations in the report were proposed by Councillor Ward.
In response to a query from Councillor Arthey, the Assistant Director for Corporate Resources confirmed the correct figure for the annual monetary increase in council house rents.
Councillor Arthey acknowledged the amount of work carried out in preparing this budget and seconded the recommendations in the report.
Councillor Busby enquired if there were plans to increase council house rents annually in future. The Assistant Director for Housing confirmed that this would be a decision to be made based on the HRA figures at the time of budget setting.
By a unanimous decision
It was RESOLVED:
1.1 That the HRA revenue budget proposals for 2020/21 and longer-term outlook set out in the report and the updates tabled at the meeting be endorsed for recommendation to Council on 26 February 2020 as detailed below.
1.2 That the HRA capital budget proposals for 2020/21 set out in Appendix A in the report be endorsed for recommendation to Council on 26 February 2020.
1.3 That the CPI + 1% increase of 2.7% in Council House rents, equivalent to an average rent increase of £2.38 a week be implemented.
1.4 That garage rents are kept at the same level as 2019/20.
1.5 That Sheltered Housing Service charges be increased by £2 per week to reduce the subsidy by £26k.
1.6 That Sheltered Housing utility charges are kept at the same level as 2019/20.
1.7 That the budgeted surplus of £334k be transferred to the HRA reserves in 2020/21.
1.8 That in principle, Right to Buy (RTB) receipts should be retained to enable continued development and acquisition of new council dwellings.
1.9 That the revised 30-year HRA Business Plan in Appendix B of the report be noted.
Reason for Decision: To bring together all the relevant information to enable Cabinet Members to review, consider and comment upon the Councils Housing Revenue Account budget before recommendations to Council.