To enable the Committee to review the report of the Corporate Finance and Governance portfolio holder to Cabinet in relation to the Housing Revenue Account budget proposals 2021/2022.
The Committee received the report submitted to Cabinet on 18 December 2020 on the HRA Budget for 2021/22 including the movement in Housing Revenue Account (HRA) Balances, the level of fees and charges for 2021/22 and the HRA Capital Programme. In particular, the attention of Members was drawn to:
· Only limited changes to the HRA budget were proposed in 2021/22, pending a longer-term review of the HRA business plan during 2021.
· 2020/21 was the first year that the Government allowed rents to be increased following a 4-year period where they were required to be reduced by 1% each year.
· In-line with rent setting guidance issued by the Regulator for Social Housing, rents are proposed to be increased by the Consumer Price Index plus 1% in 2021/22 (a 1.5% increase) to continue the recovery from the 4 years of rent reductions mentioned above.
· The average weekly rent proposed for 2021/22 is £84.10 (£82.42 in 2020/21)
· Although the above increase in rents generates additional income of £0.193m, other changes to the budget have more than offset this position with an overall deficit of £0.012m forecast for 2021/22.
· It was proposed to fund this relatively small deficit by drawing money down from the HRA General Balance, which was estimated to total £5.257m at the end of 2021/22 after taking into account this adjustment.
· The proposed HRA Capital Programme for 2021/22 totals £3.457m and continued to provide for a range of schemes and projects.
· The Capital programme included a revenue contribution of £0.281m to support new build and acquisition projects. This on-going budget could either support the direct cost of projects within the capital programme or meet the borrowing costs that were likely to be required to deliver the 200 new properties the Cabinet had committed to provide.
· Relevant matters in respect of the potential to fund an increase in the level of borrowing required to deliver the new build projects at the speed and scale committed too.
· The HRA general balance was forecast to total £5.257m at the end of 2021/22, which retained a strong financial position against which the HRA 30 year Business Plan could be further developed.
· ‘Old’ HRA debt continued to reduce year on year as principal is repaid with a total debt position at the end of 2021/22 forecast to be £36.777m (A reduction of £1.664m compared with the figure at the end of this year).
The Committee thereupon undertook its scrutiny of the HRA Budget Proposals for 2021/22.
Prior to the meeting, questions were submitted to the Housing Portfolio Holder in respect of the HRA and these are set out in the Appendix to these Minutes together with the responses provided.
The Housing Portfolio Holder, Councillor P B Honeywood, accompanied by the appropriate Senior Officer, attended the meeting and assisted the Committee in its enquiry of the matters put to him in respect of the HRA budget position.
Having considered all of the information that had been provided and acknowledging the measures to address the costs to the Housing Revenue Account of unrented Council housing (‘voids'):
It was RESOLVED that CABINET be RECOMMENDED to set a target level for reducing void periods in 2021/22 in the housing stock with a view to providing specific focus to those measures.