Issue - meetings

To set out and seek approval of the following for consultation with the Resources and Services Overview and Scrutiny Committee:-

•    an Housing Revenue Account (HRA) Budget for 2022/23 including the movement in HRA Balances;

•    the level of fees and charges for 2022/23; and

•    the HRA Capital Programme.

RESOLVED that Cabinet –

a)     approves the updated Housing Revenue Account (HRA) 30 year Business Plan and proposed position for  2022/23, as set out in the Portfolio Holders’ joint report and Appendix thereto; and

b)     requests the Resources and Services Overview and Scrutiny Committee’s comments on this latest HRA financial forecast and proposed position for 2022/23.

Cabinet had before it a joint report of the Housing Portfolio Holder and the Corporate Finance & Governance Portfolio Holder (A.6) which sought its approval of an updated 30 year Housing Revenue Account (HRA) Business Plan and budget proposals for 2022/23.

Cabinet was aware that, similarly to the General Fund’s long term forecast, a ‘live’ HRA Business Plan was maintained on an on-going basis, with the most up-to-date position in December each year being translated into the detailed budget for the following year for consultation with the Resources and Services Overview and Scrutiny Committee.

It was reported that a number of changes had been made to the business plan for 2022/23 onwards that largely reflected a ‘reset’ in terms of a number of budget lines in response to recent increases in costs / prices and demands on the service. A significant risk also remained in terms of the potential cost pressure relating to the major repairs contribution to the capital programme in response to expected changes to the ‘decent homes standard’ and recommendations that could emerge from the Hackett review that had followed the Grenfell Tower tragedy.

With the above in mind, a stock condition survey was planned on being undertaken during 2022/23 in order to inform the potential cost pressure involved, which needed to be reflected within the business plan before any future major investment decisions could be made to maintain the balance between the investment in existing tenant’s homes and the delivery of new affordable homes for local people.

Cabinet was informed that, as part of supporting the balance above and in-line with rent setting guidance issued by the Regulator for Social Housing, rents were proposed to be increased by CPI + 1% in 2022/23 (a 4.1% increase). This also allowed for the continued recovery from the 4 years of rent reductions from 2016/17 to 2019/20. Due to the relatively volatile CPI rates experienced since the start of the COVID-19 pandemic, if the proposed level of rent increase was taken together with relatively low figure of 1.5% last year, the average annual increase would be 2.8% over the two years, which broadly reflected the Bank of England’s longer term CPI rate. Based on the above, the average weekly rent proposed for 2022/23 was £87.55 (£84.10 in 2021/22).

Members were advised that the budget currently proposed for 2022/23 generated an overall surplus of £0.143m. This ‘base’ position provided a strong foundation against which to consider future risks to the forecast such as those mentioned above along with supporting the commitment to the on-going new build and acquisition policy. It was therefore proposed to ‘hold’ this surplus within the Capital Programme in order to support the on-going development of the new build and acquisition programme.

It was further reported that the HRA General Balances were currently estimated to total £4.325m at the end of 2022/23 that further supported the  30 year Business Plan and associated risks to the forecast. The proposed HRA Capital Programme for 2022/23 totalled £3.457m, the same level  ...  view the full minutes text for item 101