Agenda item

To update Members on the proposals for the Housing Revenue Account (HRA) budgets and rent setting for 2025/26.

The Council considered a report seeking approval to the Housing Revenue Account (HRA) Budget and Rent Setting for 2025/26.

In moving the motion, Councillor Jeannette Thomas, Deputy Leader and Cabinet Member for Resources and Transformation advised that the aim of the budget was to balance the Council’s money with the needs of the existing housing stock, while allowing investment in new homes to replace those lost under the Right to Buy system.  There was also an ongoing need to provide homes for residents on the council home waiting list.

She advised that the budget included funding of £39Million for revenue and capital works to existing council homes and £28Million of investment to enable the delivery of new social and affordable homes.  This was part of the ongoing plan over the next ten years to improve the maintenance of council homes, to ensure that tenants had the good quality, safe and sustainable homes they deserved.

The report set out the requirements for revenue growth for 2025/26 HRA totalling £4.8 Million.  The biggest area of growth was on responsive repairs, where the budget had been increased by over £2Million in response to increased demand for repairs and much higher costs.  Work was ongoing to contain this budget pressure, but nationally social housing providers had all been reporting much higher costs for repairs and maintenance partly due to an increase in service demand and additional regulatory burdens.

Council noted the continuing improvements to the Council’s Void Property Service, and a further budget of £704,000 which had been allocated to introduce an in-house team, to improve performance and the void turn-around time.

The Portfolio Holder informed Council that the local authority housing sector had come under increased regulation in recent years and that it was important to have the resources in place to meet those demands, manage the process and improve areas such as data quality, resident engagement and digital services.

The portfolio Holder advised that the medium term forecasts for the HRA showed that significant savings would have to be made in the coming years in order to balance the fund.  To help achieve those savings a further £200,000 had been added to next year’s budget to help identify and implement the major savings required.

Rental income provided the main source of funding for the HRA and it was recommended that rents should be increased by 2.7% for 2025/26, in line with the Government’s rent setting guidelines of September CPI figure plus 1%.

This would increase average weekly rents by £3.21 for social rents, £3.94 for Low Start Shared Ownership homes and £5.02 for affordable rents.  The net rental income increase for 2025/26 was estimated to be £1.9Million which would take into account the likely impact of future right to buys, the timing of new stock coming on stream and properties taken out of management that were awaiting redevelopment.

It was noted that for homes that had service charges, these would not be subject to the rental increase of 2.7% but were based on actual cost of the services provided.  Of the 2,757 properties that received service charges, 68% would see an increase of less than 50p per week.  The remaining properties would receive higher increases, due to utility cost increases which were still projected to be higher than general inflation.

Lastly, the Portfolio Holder for Resources advised that the cost to deliver services next year would result in a deficit for the year of £668,000 which would be funded from balances. 

In seconding the motion, Councillor Jackie Hollywell, Portfolio Holder for Housing advised that housing continued to be a top priority for the Council, as evidenced through the recent housing inspection where a C2 regulatory judgement from the Regulator for Social Housing had been awarded. 

Key priorities included maintaining full compliance with all statutory and regulatory requirements to ensure tenants’ homes remained safe and complied with the requirements of the Social Housing Regulations Act, Building Safety Act and the Fire Safety Act.

It was noted that the Council’s decent homes programme, would include installation of 1,316 new kitchens and bathrooms, 3,936 heating upgrades, 1,014 window or door upgrades and 500 properties would receive works to improve energy efficiency.

The 2025/26 budget would contribute towards the delivery of 341 new Council homes over the next 5 years in addition to the 497 new homes the council had already delivered to date.

The Portfolio Holder for Housing confirmed that the Chief Finance Officer was content with the projected level of balances, and that the budget proposed was robust, noting though that, for future years, the allocation of resources would be prioritised and service-related savings identified to reflect the level of funding available.

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

1.         That 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.         The 2024/25 service charges be approved as set out in paragraph 4.2.

3.         That the HRA budget for 2024/25 as set out inAppendix A and as revised from the January 2024 draft budget report (as set out in para. 4.8.1) be         approved.

4.               The 2024/25 growth options as set out in section 4.4 be approved.

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

6.               That the minimum levels of balances for 2024/25 as shown in Appendix C be approved.

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

8.                       That the contingency sum of £400K, within which the Cabinet can approve supplementary estimates, for 2024/25 (unchanged from 2023/24) be approved.

9.               That the comments from Overview and Scrutiny be noted

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