Agenda item

To consider and approve the final proposals for the Housing Revenue Account (HRA) budget and rent setting for 2024/25.

The Council considered a report seeking approval to the Housing Revenue Account (HRA) Budget and Rent Setting for 2024/25.

In moving the motion, the Executive Member for Housing & Housing Development (Councillor Jeannette Thomas) advised 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.  These investments were 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 Executive Member for Housing & Housing Development stated a key priority would be to maintain full compliance with all statutory and regulatory requirements to ensure that tenants’ homes remained safe.  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 Member for Housing & Housing Development commented 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.

The Executive Member for Housing & Housing Development explained that the revenue growth included within the 2024/25 budget totalling £2.4Million 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 Portfolio Holder for Housing & Housing Development 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.  This would be alongside growth of £419,000 that would enable 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 Portfolio Holder for Housing & Housing Development 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 Portfolio Holder for Housing & Housing Development explained that new loans totalling £37.6Million and £18.8Million were expected to be taken in the current and next financial year.  However, the timing of this borrowing would be reviewed weighing up the cost and the Public Works Loan Board interest rates.  The interest payable in 2023/24 and 2024/25 was estimated to be £8.9Million and £9.4Million, respectively.

The Portfolio Holder for Housing & Housing Development 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.

The motion was seconded by the Executive Member for Culture, Leisure & Information Technology (Councillor Loraine Rossati).

In response to various questions raised during the debate on the motion, the Portfolio Holder for Housing & Housing Development stated:

·     in relation to the decarbonisation of the Council’s housing stock, the Council had to bid each time for Government funding for these works.  SBC had been successful in two such bids, and work was ongoing in some of the Council’s older housing stock;

·     the Council did not currently benchmark its services against Housing Associations nor other local authorities with their own housing stock, although this could be looked at in the future; and

·     the corporate and democratic costs allocated to the HRA was its proportion re-charged to the General Fund.

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

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.

The Council considered a report seeking approval to the Housing Revenue Account (HRA) Budget and Rent Setting for 2024/25.

In moving the motion, the Executive Member for Housing & Housing Development (Councillor Jeannette Thomas) advised 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.  These investments were 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 Executive Member for Housing & Housing Development stated a key priority would be to maintain full compliance with all statutory and regulatory requirements to ensure that tenants’ homes remained safe.  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 Member for Housing & Housing Development commented 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.

The Executive Member for Housing & Housing Development explained that the revenue growth included within the 2024/25 budget totalling £2.4Million 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 Portfolio Holder for Housing & Housing Development 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.  This would be alongside growth of £419,000 that would enable 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 Portfolio Holder for Housing & Housing Development 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 Portfolio Holder for Housing & Housing Development explained that new loans totalling £37.6Million and £18.8Million were expected to be taken in the current and next financial year.  However, the timing of this borrowing would be reviewed weighing up the cost and the Public Works Loan Board interest rates.  The interest payable in 2023/24 and 2024/25 was estimated to be £8.9Million and £9.4Million, respectively.

The Portfolio Holder for Housing & Housing Development 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.

The motion was seconded by the Executive Member for Culture, Leisure & Information Technology (Councillor Loraine Rossati).

In response to various questions raised during the debate on the motion, the Portfolio Holder for Housing & Housing Development stated:

·     in relation to the decarbonisation of the Council’s housing stock, the Council had to bid each time for Government funding for these works.  SBC had been successful in two such bids, and work was ongoing in some of the Council’s older housing stock;

·     the Council did not currently benchmark its services against Housing Associations nor other local authorities with their own housing stock, although this could be looked at in the future; and

·     the corporate and democratic costs allocated to the HRA was its proportion re-charged to the General Fund.

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

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.