To set out and seek approval of an updated HRA Business Plan, which includes proposed changes in 2022/23 along with budget proposals for 2023/24.

RESOLVED that Cabinet -

a)    approves the updated HRA 30 year Business Plan, which includes the proposed revised position for 2022/23 along with budget proposals for 2023/24;

b)    requests the Resources and Services Overview and Scrutiny Committee’s comments on this latest HRA financial forecast, including the proposed changes in 2022/23 and proposed position for 2023/24; and

c)    agrees to an exemption from the Procurement Procedure Rules along with the associated purchase of the Oneserve IT system covering a period of 3 years from January 2023 in order to support the effective administration of the housing repairs function.

Cabinet considered a joint report of the Housing Portfolio Holder and the Corporate Finance & Governance Portfolio Holder (A.6), which set out and sought its approval of an updated Housing Revenue Account HRA Business Plan, which included proposed changes in 2022/23 along with budget proposals for 2023/24.

Members were 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 2023/24 onwards that largely reflected increased inflationary pressures. Those pressures were also being experienced in 2022/23, with corresponding adjustments set out accordingly.

Cabinet was reminded that, as part of the existing guidance from the Regulator for Social Housing, rents were permitted to be increased by CPI + 1% each year. However, the Government had intervened for 2023/24 due to the significantly high CPI rate at the present time. To ‘protect’ existing tenants, whilst balancing the impact on Local Authorities, the Government had set a rent increase ‘cap’ of 7% for 2023/24. Although Councils could set lower increases, this would be a very difficult approach to adopt in terms of the future sustainability of the HRA business plan, given the ‘telescopic’ impact this would have. Such an impact had been previously experienced when the Government had required Councils to reduce rents by 1% over the 4 year period from 2016/17 to 2019/20 that continued to have an impact over the long-term life of the business plan.

Based on the above, the average weekly rent proposed for 2023/24 was £93.68(£87.55 in 2022/23).

Members were informed that after taking into account the various adjustments set out in Appendix A and discussed in more detail later on in this report, there were estimated budget deficits of £195,548 and £278,839 in 2022/23 and 2023/24 respectively.

Cabinet was advised that one approach to reduce those deficits to enable a balanced budget to be set would be to consider reducing an expenditure budget, such as the money that was used for capital investment. However, the Council remained focused on its overall commitment to balance the investment in the existing homes of tenants and building / acquiring homes for local people. It was also important to acknowledge that asking tenants to pay higher rents whilst reducing the investment in their homes would be a difficult balance to justify and should be avoided as far as was financially possible.

In light of the above, it was proposed by the Portfolio Holders to fund the estimated deficits for 2022/23 and 2023/24 by calling on money from HRA balances as an alternative to reducing expenditure.

It was reported that HRA General Balances were currently estimated to total £3.777m at the end of 2023/24 (after taking account of the use of balances highlighted above) that remained available to support the 30 year Business Plan and associated risks to the forecast. The proposed HRA Capital Programme for 2023/24 reflected the commitment to maintain the necessary investment in existing stock as mentioned above.

Members were advised that HRA debt continued to reduce year on year as principal was repaid with a total debt position at the end of 2023/24 forecast to be £33.949m,which also took into account the refinancing of an historic loan via an internal borrowing approach.

Cabinet was informed that, in addition to requesting comments from the Resources and Services Overview and Scrutiny Committee, it was also proposed to consult with the Tenant’s Panel during January 2023, with the outcome reported to Cabinet later that month, when the final HRA budget proposals would be considered for recommending onto to Full Council in February 2023.

In addition to the above, the Portfolio Holders’ recommendations also reflected the associated procurement decisions associated with the purchase of a new IT system that supports the efficient / effective administration of the in-house housing repairs function.

In order to enable Cabinet to propose the most up to date HRA Business Plan, which set out a revised position for 2022/23, along with the proposed HRA budget for 2023/24, for consultation with the Resources and Services Overview and Scrutiny Committee:-

It was moved by Councillor P B Honeywood, seconded by Councillor G V Guglielmi and:-

RESOLVED that Cabinet -

a)    approves the updated HRA 30 year Business Plan, which includes the proposed revised position for 2022/23 along with budget proposals for 2023/24;

b)    requests the Resources and Services Overview and Scrutiny Committee’s comments on this latest HRA financial forecast, including the proposed changes in 2022/23 and proposed position for 2023/24; and

c)    agrees to an exemption from the Procurement Procedure Rules along with the associated purchase of the Oneserve IT system covering a period of 3 years from January 2023 in order to support the effective administration of the housing repairs function.