Agenda item

To update Members on the final proposals on the Housing Revenue Account (HRA) budget and rent setting for 2024/25, to be considered by Council on 24 January 2024.

The Executive considered a report in respect of the final Housing Revenue Account (HRA) Budget and Rent Setting for 2024/25.

It was RESOLVED that the following proposals be recommended to Council on 24 January 2024:

1.          That Housing Revenue Account (HRA) dwelling rents be increased (week commencing 1 April 2024) by 7.7%.  This equates to an average increase of £8.56 for social rents, £13.30 for affordable rents and £10.09 for Low Start Shared Ownership homes per week (based on a 52-week year).

2.          That the 2024/25 service charges be approved, as set out in Paragraph 4.2 of the report.

3.          That the HRA budget for 2024/25, as set out in Appendix A to the report and as revised from the January 2024 draft budget report (as explained in Paragraph 4.8.1 of the report), be approved.

4.          That the 2024/25 growth options, as set out in Section 4.4 of the report, be approved.

5.          That the 2024/25 Fees and Charges, as set out in Appendix B to the report, be approved.

6.          That the minimum levels of balances for 2024/25, 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 contingency sum of £400,000, within which the Executive can approve supplementary estimates, for 2024/25 (unchanged from 2023/24) be approved.

9.          That the comments from the Overview and Scrutiny Committee, as set out in Paragraph 4.10.2 of the report, be noted.

10.      That key partners and other stakeholders be consulted and their views considered as part of the 2024/25 budget setting process.

Reason for Decision:  As contained in report.

Other Options considered:  As contained in report.

The Executive considered a report in respect of the final Housing Revenue Account (HRA) Budget and Rent Setting for 2024/25.

The Chair (Deputy Leader and Portfolio Holder for Housing & Housing Development) advised that a draft HRA budget report was presented to the December 2023 Executive meeting, and had also been considered by the Overview and Scrutiny Committee.  The comments of that Committee were included within the report.  Since the December draft report was approved by the Executive there had been a net increase in recharges from the General Fund, which were not concluded in time for that report, but were now summarised in this one.

The Chair stated that the HRA budget had been set in line with the assumptions used in the revised 30-year Business Plan that was approved by the Executive in November 2023.  The aim of the budget was to balance the needs of the existing housing stock, while allowing investment in new replacement homes for those lost under the Right to Buy system.  The budget included funding for £37Million on revenue and capital works to existing homes and £29Million of investment in new housing stock for residents which would be welcomed by existing and future tenants.  These investments are part of the Council’s ten-year plan to improve the maintenance of its homes and ensure that tenants had good quality, safe and sustainable homes to live-in, particularly in response to the climate crisis.

The Chair explained that in the next 5 years the budget would contribute towards the delivery of 447 new homes in line with the Council’s 5 Star promise. This was on top of the over 500 homes that the Council had delivered to date.  Maintaining full compliance with all statutory and regulatory requirements to ensure tenants homes remained safe would continue to be a key priority for the Executive.

The Chair commented that the Council would further progress its low to medium rise flat block refurbishment programmes and would undertake further building safety and refurbishment works to the Council’s five high rise flat blocks.  Over the next three years of the Council’s decent homes programme, 995 new kitchens or bathrooms would be installed, there would be 1,875 heating upgrades, 1,500 window or door upgrades and 1,400 properties would receive works to improve their energy efficiency with the aim for all properties to be at an energy performance rating of C by 2030.

The Executive noted that the revenue growth included within the 2024/25 budget would enable the Council to meet additional costs relating to void properties and support the work in clearing the current backlog of fencing repairs and replacements. Work would continue to implement improvements to the Council’s Repairs and Voids service, to ensure it offered choices to tenants and delivered cost-effective repairs and improvements. Further proposals in this regard would be presented to the Executive in due course.

The Chair advised that additional resources had also been allocated in response to new and ongoing operational challenges, including higher levels of arrears, and the introduction of new and revised social housing standards and regulations.  There would be increased spending on housing management services, including the undertaking of more tenancy audits, so that tenants could have regular access to Housing Staff, in order that issues could be reported and mitigated earlier, whilst also supporting vulnerable tenants when necessary.  These investments would be made alongside the delivery of transformation projects, which would deliver service improvements and help offset pay awards and IT related pressures.  As part of the Council’s climate change commitment, the vehicle fleet would be switching (where possible) to Hydrotreated Vegetable Oil fuel from October 2024.                                         

The Chair commented that, as always, rent provided the main source of funding for the HRA and these had been increased by 7.7%, in line with the Government’s rent setting guidelines, using September CPI plus 1%.  This meant that average weekly rents would increase by £8.56 for social rents, £10.09 for Low Start Shared Ownership homes and £13.30 for affordable rents.  However, due to a large reduction in utility costs, some tenants in the Council’s flat blocks would see an overall reduction in their combined rent and service charges next year.

The Chair stated that, since the draft budget was presented to Members in December 2023, recharges between the HRA and the General Fund had been finalised.  Overall, this had increased costs to the HRA by £179,000 and the HRA deficit for the year by £261,000.  This would be funded from balances and adjusted in future revisions of the Medium Term Financial Strategy.

It was RESOLVED that the following proposals be recommended to Council on 24 January 2024:

1.          That Housing Revenue Account (HRA) dwelling rents be increased (week commencing 1 April 2024) by 7.7%.  This equates to an average increase of £8.56 for social rents, £13.30 for affordable rents and £10.09 for Low Start Shared Ownership homes per week (based on a 52-week year).

2.          That the 2024/25 service charges be approved, as set out in Paragraph 4.2 of the report.

3.          That the HRA budget for 2024/25, as set out in Appendix A to the report and as revised from the January 2024 draft budget report (as explained in Paragraph 4.8.1 of the report), be approved.

4.          That the 2024/25 growth options, as set out in Section 4.4 of the report, be approved.

5.          That the 2024/25 Fees and Charges, as set out in Appendix B to the report, be approved.

6.          That the minimum levels of balances for 2024/25, 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 contingency sum of £400,000, within which the Executive can approve supplementary estimates, for 2024/25 (unchanged from 2023/24) be approved.

9.          That the comments from the Overview and Scrutiny Committee, as set out in Paragraph 4.10.2 of the report, be noted.

10.       That key partners and other stakeholders be consulted and their views considered as part of the 2024/25 budget setting process.

Reason for Decision:  As contained in report.

Other Options considered:  As contained in report.