Agenda item

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 services pressures for 2023/24 totalled £2.458Million, as set out in the report

The Executive Member for Resources, Transformation & ICT confirmed that the Chief Financial Officer was content with the projected level of balances, and that the budget proposed was robust, whilst noting that for future years an updated HRA Business Plan would be developed later in the year.

The following points/questions were raised during the debate on the motion:

·         a request for a report regarding the feasibility of a deposit scheme for tenants entering a new or refurbished Council property;

·         future HRA budget reports should set out a breakdown of the number and type of homes owned by the Council within the background section;

·         Paragraph 4.7.5 of the report – additional resource for fencing repairs and confirmation of what caused the backlog of works;

·         Paragraph 4.7.6 – Tree Surveys for Tenanted Gardens – who would pay (the Council or the tenant) if works were required to trees in tenants’ gardens?;

·         Paragraph 4.7.13 – Repairs Complaints Officer – who would respond to Members’ complaints on housing issues and how would the process operate?:

·         Paragraph 4.7.16 – Damp and Condensation Customer Support Officer – why was the officer only being employed for 18 months, and did the Council wait for Government advice and the tragic case in Rochdale before addressing this issue?; and

·         Paragraph 4.17 – Consultation – what consultation had happened or would happen with Council tenants?.

The Executive Member for Housing & Housing Development agreed to provide a full written reply to the points/questions raised, but responded initially as follows:

·         although she was unaware of such schemes being operated by any other social housing provider, she agreed to the request for a report on the feasibility of a tenants’ deposit scheme, and requested that this report be submitted to the Community Select Committee;

·         repairs on void properties were re-charged to the previous tenants, assuming that they could be found;

·         during the Covid-19 pandemic, the Council was undertaking emergency housing repairs only (which excluded fencing), and this had contributed to the backlog of fencing repairs;

·         No decision had yet been taken on the responsibility for paying for any work required to trees in gardens following the Tree Surveys;

·         Stock Condition Survey information was used to inform work on Decent Homes and the Council’s MRC Investment Programme;

·         Damp and Condensation Customer Support Officer – a Team was put in place in 2017 after a thorough review by the Community Select Committee.  Having attended a recent ARCH meeting, a significant number of other local authorities across the UK had damp and mould issues in their housing stock, and were struggling due to the lack of qualified staff available to cover all of the work required.  This was also an issue for the private sector.

In reply to a Member’s question regarding the £1.2Million figure for Corporate and Democratic Costs included in the Budget, the Strategic Director (CF) stated that these included the HRA’s contribution towards the holding and service of committee meetings, the cost of which was apportioned between the HRA and General Fund budgets.

Upon the motion being put to the vote, it was RESOLVED:

1.          That HRA rent on dwellings be increased, week commencing 3 April 2023 by 7%which is an average increase of £7.24 for social rents, £11.82 for affordable rents and £8.42 for Low Start Shared Ownership homes per week (based on a 52-week year).  This has been calculated in line with the Government’s change to rent policy announced in the Autumn Statement as set out in Paragraph 3.3 of the report.

2.          That the 2023/24 HRA budget set out in Appendix A to the report be approved.

3.          That the 2023/24 growth options, as set out in Section 4.7 of the report, be approved.

4.          That the 2023/24 Fees and Charges, as set out in Appendix B to the report, be approved.

5.          That the 2023/24 service charges be approved.

6.          That the minimum level of reserves for 2023/24, as shown in Appendix C to the report, be approved.

7.          That the Rent Increase Equalities Impact Assessments, appended to the report in Appendix D, be noted.

8.          That the increase to the 2022/23 Working Budget of £1,436,500 to fund the pressures detailed at Paragraph 4.3 of the report, be approved.

9.          That the increase in tenant service charges to recover increased utility costs for the last 6 weeks of 2022/23, as set out in Paragraph 4.3.5 of the report, be approved.

10.       That it be noted that, due to the current volatility of the market, utilities charges will be kept under close review throughout 2023/24.

11.       That the contingency sum of £400,000, within which the Executive can approve supplementary estimates, be approved for 2023/24 (increased from £250,000 for 2022/23), as detailed in Paragraph 4.16.5 of the report.