Agenda item

To present to Council the Cabinet’s Housing Revenue Account budget proposals for 2021/22 including the increase in dwelling rents for 2021/22.

The Council gave consideration to the Cabinet’s Housing Revenue Account (HRA) budget proposals for 2021/22, including the proposed increase in dwelling rents for 2021/22.

Members were aware from Minute 124 (A.9) of the meeting of the Cabinet held on 29 January 2021 that the Chief Executive, in consultation with the Housing Portfolio Holder, had been authorised to adjust the forecast / budget, including the use of reserves, if the financial position had changed prior to this Council meeting.

The Council was advised of all the resolutions and the recommendation made by the Cabinet on 24 January 2020, together with the additional recommendations necessary to set the HRA budget, fees and charges and dwelling rents for 2020/21. Those resolutions and recommendations were before the Council, as contained within item A.2 of the Report of the Cabinet.

The Portfolio Holders’ report submitted to Cabinet on 29 January 2021 had highlighted that further changes to the budget were expected that related to salary costs and recharges. Those two areas of the budget had now been finalised with the following changes made:

i)    Increase in salary costs - £0.025m

ii)   Increase in recharges from the General Fund - £0.009m

The above changes had resulted in a small deficit for the year of £0.022m, a change of £0.034m compared with the small surplus of £0.012mthat had been reported to Cabinet on 29 January 2021. That deficit was to be met by calling money from the HRA general balances.

Members were aware that the Cabinet’s proposed HRA budget had been subject to the Council’s Budget and Policy Framework Procedure Rules, which had included scrutiny by the Council’s Resources and Services Overview and Scrutiny Committee.

The Leader of the Council (Councillor Stock OBE) made the following budget statement:-

“All of the positive things I talked about earlier when introducing the General Fund budget equally apply when discussing the HRA.

Being recognised as one of the best landlords in the country is built on the back of a robust and strong financial position and business plan.

This springboard allows us to keep maintaining our tenants’ homes to an excellent standard, and it also allows us to embark on our house building plans.

This is in spite of the 1% reduction in rents that we saw over recent years. As I talked about earlier, we can only focus on what we can control rather than what we can’t, and we managed to ‘weather’ this rent reduction period without adversely affecting the services we provide to our tenants. Quite a tall order, as it is estimated that the combined effect of the 4-year period of rent reductions removed at least £30m from our HRA budget over the long term, given its telescopic effect.

Similarly to the argument about council tax increases, increasing rents is always a compromise and balance we need to strike with providing good quality homes in a sustainable and long term way.

We are recommending a 1.5% increase in rents in 2021/22, which I think helps us strike this balance. This enables us to not only meet our housebuilding commitments, which in the long run will make the HRA financially stronger, but we can still invest over £6m a year in our existing tenants’ homes.

As discussed earlier in the year, we have not seen a significant impact on the HRA from COVID 19. However, we are making improvements to a number of strands of work to reduce void periods, which have seen an indirect impact from the pandemic.

Taking a quick look back, hopefully you have now all had the chance to see the stunning new homes we have built in Jaywick Sands – they shatter the stereotypical view of what a Council house looks like. I have always said that council housing should never be seen as inferior to other forms of housing – well not here in Tendring any way and this applies to all our 3,000 plus homes not just these new ones.

I can never miss an opportunity to talk about right to buy. I am not going to go into its history but we need to keep pushing the Government to consider modernising the scheme. As I mentioned last year, we need to remove the associated risk from decisions about building or acquiring new homes. If we do not then we will need to accept the risk that we may lose money on every new property we build or acquire, which may have the unwanted impact of slowing us down in our ambition to provide new homes for local people. Having said that, this does not deter us from this important priority and we will find ways to achieve our goals and aspirations within the boundaries of our 30 year plan.

Looking a very short time ahead, it was welcome news to hear Councillor Honeywood introduce the scheme that looks to encourage small developers to build affordable homes in the District. We are just one of three authorities chosen as part of this pilot scheme and I am sure it is one we are all looking forward to seeing the outcome of in the not too distant future.

Looking further ahead, we will need to revisit the 30-year business plan in light of various strands of work either completed, on-going or planned, but we can do this in the knowledge that we continue to be able to operate from a really strong base both financially and reputationally.

In terms of our reputation, we will continue to make sure that our tenants live in safe, comfortable and quality housing, which will always be at the centre of how we manage the HRA.

The budget we are presenting tonight enables us to keep on the right tracks that I have just described, and therefore a budget I am proud to recommend to you all tonight.”

Councillors I J Henderson, Allen, Casey, P B Honeywood, G V Guglielmi and Miles addressed the Council on the subject matter of this item.

It was moved by Councillor Stock OBE, seconded by Councillor P B Honeywood and unanimously:-

RESOLVED that Council approves:-

(a)    a 1.5% increase in dwelling rents in 2021/22;

(b)    the 2021/22 Scale of Charges, as shown in Appendix B to item A.2 of the Report of the Cabinet; and

(c)     the Housing Revenue Account Budget for 2021/22 as set out in Appendix A to the above report, along with the HRA Capital Programme and the movement in HRA Balances / Reserves, as set out in Appendix C and Appendix D respectively, to the aforementioned report.