Issue - meetings

To consider an officer report on the Housing Revenue Account (HRA) Budget and Rent Setting for 2023/24.

[REPORT TO FOLLOW]

The Council considered a report seeking approval to the Housing Revenue Account (HRA) Budget and Rent Setting for 2023/24.

In moving the motion, the Executive Member for Housing & Housing Development (Councillor Jeannette Thomas) advised that rent levels were usually set using the formula CPI +1%.  For 2023/24 this would have resulted in an increase of 11.1%.  However, along with other housing stock holding local authorities in Hertfordshire, the increase for 2023/24 would be 7%, in recognition of the current cost of living crisis and the cap set by the Government.

The Executive Member for Housing & Housing Development stated that the average 2023/24 rent for Low Start Shared Ownership (LSSO) properties would be £128.75; for social properties £110.78; and for affordable properties £180.65.  Comparing 3-bed Council properties with the private sector showed that private sector rents were on average 114% higher (£283.78 compared to Council rents of £122.41).

The Executive Member for Housing & Housing Development commented that, unlike rent levels, service charges were charged at actual or cost recovery levels.  For 2023/24, they would be increased based on higher inflationary figures and changes in usage.  61% of tenants would have no increase, as they did not use the services, and 29% would have increases of below £2.50 per week.  However, a significant minority were facing increases above this amount, with 6% facing an increase of over £20 per week.  This was mainly due for those that were part of communal heating schemes, and the consequent additional costs of utilities.  The current cost of living crisis and the increased cost of utility supplies had had a dramatic impact on services charges, and the Council would need to monitor/review these costs ongoing, and there remained the possibility of Government intervention as part of its Spring 2023 Budget

In seconding the motion, the Executive Member for Resources, Transformation & ICT (Councillor Mrs Joan Lloyd) advised that the 2023/24 projected HRA Budget would contain a surplus of £1.792Million.  At the end of that year, the HRA’s balance would be £29.170Million.  This balance needed to be held to repay the borrowing that was required when the Government offered the Council the opportunity to purchase its housing stock in 2012; and also for borrowing associated with the Council’s 30 year HRA Business Plan.

The Executive Member for Resources, Transformation & ICT advised that the utilities costs for 2022/23 had also risen, but were not known about when the budget was approved, and hence it was recommended that these increased costs/charges were passed on to tenants for the final 6 weeks of 2022/23.

The Executive Member for Resources, Transformation & ICT explained that borrowing of £10.2Million was planned for 2023/24 to fund the building of more new homes for those on the Council’s waiting list, with further borrowing of £32.4Million in subsequent years.  The borrowing would take place when the Chief Financial Officer considered the time would be right.  Total cost of interest on all loans for 2022/23 and 2023/24 was forecast to be £7.3Million and £8.6Million, respectively.  The growth and  ...  view the full decision text for item 4.