Cabinet Member for Housing
Decision:
MCa/18/38 – HOUSING REVENUE ACCOUNT (HRA) FINANCIAL MONITORING 2018/19 – APRIL TO AUGUST 2018
It was RESOLVED:-
1.1 That the potential or likely variations in relation to the HRA both Revenue and Capital compared to the Budget be noted.
1.2 That, subject to any further budget variations that arise during the rest of the financial year, the shortfall in funds of £555k, referred to in section 5.6 of the report, be noted;
1.3 That the revised 2018/19 Capital Programme referred to in Appendix A and section 5.10 be approved.
Reason for Decision: To ensure that Members are kept informed of the current budgetary position for both HRA Revenue and Capital Budgets.
Alternative Options Considered and Rejected:
a) Transfer funds of £555k from the Strategic Priorities reserve to support the deficit.
b) At this early stage in the year, make no recommendation for the transfer of funds from reserves.
Any Declarations of Interest declared: None
Any Dispensation Granted: None
Minutes:
75.1 Councillor Wilshaw introduced the report and informed Cabinet that the HRA was forecasting a deficit of £1.217K as at the end of August 2018 which was an adverse variance of £555k for the year.
75.2 The main reasons for the variance were planned maintenance – heating costs were £100k higher than budget mainly due to an increase in material costs, together with additional work identified during whole housing surveys. Void repairs were also reflecting a £177K adverse variance following the use of external contractors in order to reduce the let of empty properties by 23 days and BMBS reflected an adverse variance of £198k for the year - an improvement of £170k following the closure of 2000 outstanding jobs.
75.3 Further work will be undertaken following the recent announcement that the HRA debt cap will be abolished from the end of October. The outcome of this will be reported as part of the 2019-20 budget report.
75.4 Councillor Wilshaw then MOVED the recommendations which Councillor Whitehead SECONDED.
75.5 Councillor Whitehead asked a question relating to the work carried out by Blue Flame and the controls that the Council had in place to monitor this?
75.6 In response the Assistant Director for Housing confirmed that Blue Flame were a contractor that provided a whole house servicing contract. This would mean that a property would get an annual service where they were not just servicing and inspecting gas parts but also any electrical and mechanical items in the property at the same time. If they highlighted significant items to be replaced, then mechanical or electoral surveyors would consider whether or not those repairs or improvements were required either then or as part of a programme of activity in the future.
75.7 Councillor Gowrley sought confirmation that if there was significant cost this could be capitalised?
75.8 In response the Assistant Director for Housing confirmed that this was the case and presented some facts around Mid Suffolk housing stock including the fact the Council had completed 369 heating installations in the past 3 years with 37 being funded through “Warm Homes Funding” to provide air source heat pumps.
75.9 Councillor Otton asked why the decision was made to sell a high number of shared ownership housing and also asked how successful the installation of air sourced heating pumps had been?
75.10 The Assistant Director for Housing informed Cabinet that he would need to check the reasoning behind the decision to sell the shared ownership housing and report back to Cabinet. With regards to the air source heat pumps the Council endeavoured to fit air source heat pumps to all 1 and 2 bedroomed properties where mains gas was unavailable. Whilst it was desirable to fit sustainable heating to all properties it was not always possible due to the age and construction of the property. Air source heat pumps are not installed where the insulation values of a property cannot be raised to a sufficient level.
75.11 Councillor Morley raised concerns relating to the risk register and the references used for the risk numbers and asked that they were checked.
By a unanimous vote.
It was RESOLVED:-
(i) That the potential or likely variations in relation to the HRA both Revenue and Capital compared to the Budget be noted.
(ii) That, subject to any further budget variations that arise during the rest of the financial year, the shortfall in funds of £555k, referred to in section 5.6 of the report, be noted;
(iii) That the revised 2018/19 Capital Programme referred to in Appendix A and section 5.10 of the report be approved.
Reason for Decision:To ensure that Members are kept informed of the current budgetary position for both HRA Revenue and Capital Budgets.
Supporting documents: