Agenda item

To present to Council the Executive’s Housing Revenue Account budget proposals for 2024/25.

Earlier on in the meeting, as detailed under Minute 115 above, Councillor Bray had declared a Personal Interest in relation to this item insofar as he was a housing tenant of Tendring District Council. He thereupon withdrew from the meeting whilst Council considered this item and reached its decision thereon.

Further to Minute 81 of the meeting of the Cabinet held on 26 January 2024, the Council considered the Executive’s Housing Revenue Account (HRA) budget proposals for 2024/25.

Council was made aware that there had been only a very limited number of changes made since Cabinet had met on 26 January 2024, which had been reflected in Appendices A to E as necessary. The outcome of the changes required had been an increased estimated surplus of £0.493m in 2024/25 compared with the figure of £0.300m reported to Cabinet in January. It was proposed to contribute that net surplus to general balances, which would partly offset the proposed use of the same reserve in 2023/24.

It was reported that for 2024/25, the Executive’s budget proposals set out an increase in dwelling rents of 7.7% along with a total HRA expenditure budget of £16.227m (net of indirect income / expenditure) and a capital programme totalling £3.928m. That 7.7% increase in dwelling rents would result in an average weekly rent of £100.89 in 2024/25. (£93.68 in 2023/24).

Council was advised that the proposed budget reflected the continued repayment of debt, with the total level of existing debt falling from £33.949m to £32.535m at the end of 2024/25. The HRA general balance was forecast to total £3.843m at the end of 2024/25, which retained a strong financial position against which the associated HRA 30 year Business Plan could continue to be delivered / developed. The HRA balances, together with the proposed rent increase for 2024/25 were important elements of delivering a financially sustainable HRA in the longer term.

Members were reminded that the HRA Business Plan and proposed budget would play a significant role in the delivery of affordable and decent housing in the District and the Council’s responsibilities as a landlord had direct implications for the Council's ability to deliver on its objectives and wider priorities. This recognised the socio-demographics of the area and the increased focus on housing standards by the Government.

The Leader of the Council (Councillor M E Stephenson) made the following budget statement:-

“It probably goes without saying but my Administration has also inherited a financially robust Housing Revenue Account.

Historically we have made sure that as much of the rents we collect from out tenants is invested into maintaining their homes and this remains our focus going forward. This is the fundamental premise of what a good social landlord should do, regardless of any social housing regulations that might require it.

We have looked to capture this hugely important issue in our vision and corporate priorities that we agreed on 28 November 2023. We are committed to providing decent housing that everyone deserves and I am sure we all recognise that good quality housing is at the heart of the quality of life of our residents. These two key issues will be a major consideration as we further develop our highlight priorities and significant objectives over the coming months.

However it is important to highlight the point I made earlier when introducing the General Fund Budget, life is always a series of trade-offs and we therefore have to strike the right balance between our aspirations, affordability and financial sustainability. This does not always mean walking away from something we want to do, but it might mean changing the scale and speed at which we do it.

Hopefully most people understand this balancing act as we all apply it to our own personal finances, in one way or another.

A good example of this was when the aspiration of building and acquiring more homes for local people was discussed at the Resources and Services Overview and Scrutiny Committee back in January. This aspiration has not necessarily been diluted, but we have to balance it with looking after the homes of our existing tenants and perhaps explore ways of achieving those aspirations differently. That is why we will be reviewing the existing Housing Strategy, this year, not necessarily to take us down a different path, but to reflect on where we are financially now and in the future.

I understand the meeting with our Tenant’s Panel went well last week, where a number of issues were discussed including the proposed rent increase of 7.7% that we are considering tonight.

They understood the points I have just made about the trade-offs we have to make and although no one is necessarily going to be happy to see their rent increase, I think there is a general acceptance that it is an important part of the financial puzzle we have to wrestle with to ensure the HRA has a long and financially stable future.

While I didn’t make this point when I was discussing council tax earlier in the meeting, I wanted to note that we should be aware of the significant ‘telescopic’ impacts on both council tax and housing rents if we took alternative short term decisions as they do not help in the longer term. 

Government has always interfered in housing matters. We will never forget the 1% reduction in rents over a previous four year period that was imposed by the Government. This took millions and millions of pounds out of the business plan that we can never get back. Thankfully the position has been managed well by this Council and along with the repayment of loans that we took on back in 2012 to effectively buy our own housing stock back, annual surpluses are estimated to be available in later years of the forecast.

Tendring District Council is a good landlord and I hope tenants see their future as having their homes owned and managed by us rather than the alternative that we have seen elsewhere in the country where Councils have sold off their entire housing stock.

In repeating a point I made earlier tonight, this Council did not rest on its laurels and it instigated its own peer review of our housing provision along with identifying additional capacity to support the work associated with this and the new era of Social Regulation.

Work also remains in progress on the comprehensive stock condition survey that will also help us plan for the future and better understand our stock of over 3,000 properties. This will also help inform our decisions around whether to retain some of our stock If, for example, it is challenging to repair and maintain.

We have to remain alert to such cost pressures and liabilities and we will not shy away from selling properties if necessary, rather than them potentially continuing to be a financial burden on the HRA business plan. We will however always look to replace any properties that we sell where we can.

The Portfolio Holder for Housing and Planning and I have also put lot of energy into working with officers to deliver projects started by the previous Administration. This includes Spendells House in Walton and the Honeycoft Scheme in Lawford. These schemes will see a positive impact on our overall financial position as well as our reputation.   

In terms of reserves, the estimated annual surplus in 2024/25 is £493k. This partly offsets the additional money that is planned to be drawn out of reserves in 2023/24. Whatever way you want to look at it, this money will go back into investing in the homes of our tenants as the extra money we are spending in 2023/24 relates to capital expenditure such as the replacement of boilers and heating systems with the most up to date equipment.

In repeating an earlier point, a good landlord makes sure that as much money as possible gets invested in the homes of its tenants which goes hand in hand with providing a decent management and responsive repairs service.

In bringing this statement to an end, the corporate priority we have agreed in terms of financial sustainability and openness again captures perfectly our intentions behind the financial management that goes into looking after our tenants’ homes.

The budget we are considering tonight therefore continues to provide a sound footing to help us steer our way through the challenging years ahead and to keep on delivering for our tenants who expect nothing less than a well-managed and financially sustainable Housing Revenue Account that underpins the future of their homes.

The proposed budget therefore puts us in a good position to confidently face the future, which includes entering the new era of Social Housing Regulation.”

In addition to Councillor Stephenson, Councillors Harris, P B Honeywood, Guglielmi and Platt addressed the Council on the subject matter of Councillor Stephenson’s motion.

It was moved by Councillor M E Stephenson and:-

RESOLVED that Council approves:-

(a)    a 7.7% increase in dwelling rents in 2024/25; and

(b)    the Housing Revenue Account Budget for 2024/25, as set out in Appendix B to item A.2 of the Report of the Cabinet, along with the Scale of Charges, HRA Capital Programme and the movement in HRA Balances / Reserves, as set out in Appendices C, D and E respectively, to the aforementioned report.