Agenda item

To update Members on the proposals for the Housing Revenue Account (HRA) budgets and rent setting for 2026/27.

The Council considered a report seeking approval to the Housing Revenue Account (HRA) Budget and Rent Setting for 2026/27.

In moving the motion, Councillor Jackie Hollywell, Cabinet Member for Housing advised that the Council had taken major strides in strengthening the foundations of the Housing Revenue Account and improving its housing services.  Stock?condition surveys had been undertaken covering nearly 97% of homes and non?decency reduced to just 1.5%.  The data had shaped a clear investment pathway that would maintain 100% decent homes standard in 2026/27. 

The Portfolio Holder informed Council that by the end of this financial year, the Council would have delivered 623 new homes since 2014, with a further 281 homes currently under construction.  With substantial grant funding secured of over £40Million including Homes England funding of £38million, the target of delivering 1,000 new homes by 2029/2030 was being worked towards ensuring that more families in Stevenage could have access to safe, secure and affordable homes.

It was noted that the Business Plan committed £138million over the next five years, and £745 million over the next 30 years to maintain and improve homes including major investment in building safety, fire compliance, and energy efficiency, with firm commitments to deliver an energy or EPC?C rating across all council homes by 2030.

In relation to rents for next year, in line with the Government’s 10?year rent policy, rents would increase from April by 4.8%, equating to average weekly rises of £5.89 for social rent, £8.85 for affordable rent, and £7.26 for shared ownership.  The increases would provide essential income required to maintain homes, support compliance programmes, and invest in measures reducing living costs for tenants.

In relation to service charges, it was noted that only the actual cost of providing services would be recharged.  Two?thirds of tenants would pay no service charge at all; and for most who did, the increase would be less than 50p per week.

The Portfolio Holder advised that the 2026/27 HRA Capital Programme proposed £75.6 million of investment, including £35.6 million of borrowing, to support major works, to existing and delivery of new homes.  The capital programme also supported progress toward delivering the EPC?C energy rating by 2030, maintaining momentum on the Warm Homes retrofit programme, and continuing new?build delivery.

In respect of revenue, the budget included £700,000 of targeted growth for service improvements and regulatory compliance, alongside £496,000 of identified efficiencies across staffing structures, ICT licensing, cleaning and support costs.

In seconding the motion, Councillor Jeannette Thomas, Portfolio Holder for Resources and Performance and Deputy Leader advised that the budget made five clear promises:

·         Safety - The budget included programmed door, lift inspection and repair, water?system checks; targeted fire remedials; and the operational changes required by Awaab’s Law so damp and mould cases were dealt appropriately to support the Council’s improvement journey towards securing a C1 grading with the Regulator of Social Housing.

·         Warmer homes at lower running costs.  The worst?performing stock would be prioritised with accelerated retrofits to help tackle fuel poverty sustainably.

·         An improved day?to?day service.  The budget backed the booking hub and service redesign which would enable residents to get clearer appointments, fewer repeat visits, and faster communication.  Tenant engagement would be strengthened to informs priorities and standards.

·         The Council would deliver many more homes.

·         Finances - a £10Million minimum level of balance would be retained as risk had not gone away — interest?rates remained relatively higher than in recent years and compliance demands were rising. 

The Portfolio Holder advised Council that this was a budget and plan that would keep homes safe and maintain homes while building new ones and would protect the HRA’s financial and operational resilience.

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

1.         That HRA dwelling rents be increased (week commencing 1 April 2026) by 4.8%. This equates to an average increase of £5.89 for social rents, £8.85 for affordable rents and £7.29 for Low Start Shared Ownership homes per week (based on a 52-week year), subject to the Government not publishing rent regulations on rent convergence allowing an additional £1 per week for un-converged homes.

2.         That the implementation of rent convergence for 2026/27 rents (as set out in the December Draft Budget report and paragraph 4.1.6 of this report), if regulations are published by the date of the Full Council meeting in January 2026 be approved.

3.         That the 2026/27 service charges be approved as set out in paragraph 4.2.

4.         That the HRA budget for 2026/27, set out in Appendix A, be approved.

5.         The 2026/27 growth options as set out in section 4.4 be approved.

6.         That the changes from the draft budget in section 4.6 be approved.

7.         That the 2026/27 Fees and Charges as set out in Appendix B be noted.

8.         That the revised minimum levels of balances for 2026/27 shown in Appendix C be approved.

9.         That the Rent Increase Equalities Impact Assessments (EqIA) appended to this report in Appendix D be approved.

10.      That the Capital Strategy detailed in Appendix E be approved, including total spend for 2026/27 of £75.6Million and borrowing to finance capital schemes of £35.6Million.

11.       That an additional £1.5Million budget be added to the 2025/26 capital programme, detailed in section 4.8.3, to enable the purchase of 5 additional homes in the Shephall View scheme, to be funded by a budget virement of £330K from the Oval scheme and the remainder from grant from Homes England.

12.       That delegated authority be given to the Strategic Director (RP), following consultation with the Portfolio Holders for Housing and Housing Development and Resources & Performance, to complete final negotiations for the purchase of the additional properties, within the agreed total budget.

13.       That the contingency sum of £500K, within which the Cabinet can approve supplementary estimates, be approved for 2026/27.

14.       That Members note the comments made by the overview and Scrutiny Committee as part of its work in accordance with the Budget and Policy Framework rules in the Council’s Constitution.