To seek Cabinet’s approval of the updated HRA Business Plan for 2023/24 along with final HRA budget proposals 2025/26 (including fees and charges, capital programme and movement in HRA Balances) for recommendation to Council on 11 February 2025.

1.      RESOLVED that Cabinet -

(a)  approves the updated HRA Business Plan, which includes the proposed position for 2024/25 and 2025/26 as set out in Appendix A to the Portfolio Holders’ joint report (A.6); and

(b)  authorises the Director (Finance & IT) to adjust the forecast / budget, including the use of reserves, in consultation with the Portfolio Holder for Housing and Planning and the Portfolio Holder for Corporate Finance and Governance if the financial position changes prior to Full Council considering the HRA budget on 11 February 2025.

2.      RECOMMENDS TO COUNCIL that a 2.7% increase in dwelling rents in 2025/26 along with the detailed HRA Budget proposals for 2025/26, as set out in Appendices B to E of the Portfolio Holders’ joint report (A.6), be approved.

Earlier on in the meeting, as detailed under Minute 109 above, Councillor Bray had declared an Interest in this item insofar as he was a Housing Tenant of the Council. Councillor Bray therefore withdrew from the meeting at this juncture.

Cabinet considered a detailed joint report of the Housing and Planning Portfolio Holder and the Corporate Finance and Governance Portfolio Holder (A.6), which sought its approval of an updated Housing Revenue Account (HRA) Business Plan for 2024/25 and 2025/26, 26 along with the final HRA budget proposals for 2025/26 (including fees and charges, capital programme and movement in HRA Balances) for recommending to Full Council on 11 February 2025.

Cabinet recalled that at its meeting held on 20 December 2024, it had considered the HRA Business Plan and Budget Proposals for 2025/26. The updated HRA Business plan / budget proposals at that time had provided for a surplus of £0.418m in 2024/25 and a deficit of £1.170m in 2025/26. Those initial budget proposals had been subject to consultation with the Resources and Services Overview and Scrutiny Committee, which had met on 13 January 2025 to consider them, and their comments had been considered earlier on in the meeting under Minute 113 above.

It was reported that since Cabinet’s meeting on 20 December 2024, only one amendment to the proposed budget for 2025/26 had been required with 2024/25 remaining unchanged. The change required in 2025/26 had resulted in the overall deficit decreasing to £1.131m a change of £0.039m compared to the position reported to Cabinet in December as highlighted above. Appendix A to the Portfolio Holders’ joint report (A.6) set out the updated Business Plan, in terms of 2024/25 and 2025/26, with Appendix B setting out the proposed detailed budgets that reflected this latest position.

Members were made aware that it was proposed to fund the estimated deficit for 2025/26 by calling down money from HRA balances as an alternative to reducing expenditure. As had been the case in previous years, the use of reserves struck a necessary balance of ‘protecting’ the investment in tenants’ homes whilst recognising the need to use reserves to respond to the on-going financial challenges that the Council continued to face. It was however recognised that this was not a sustainable long-term solution, but it enabled the Council to meet its key priorities in the immediate term, which could be revisited as part of the HRA Business Plan in future years. This challenge had been recognised within Cabinet’s current initial highlight priorities for 2025/26.

Cabinet was informed that the proposed average weekly rent remained unchanged to the figure reported in December at £103.49, an increase of 2.7% over the comparable figure of £100.89 for 2024/25. Appendix C set out the proposed fees and charges for 2025/26, which broadly reflected inflationary uplifts of 2.7% where relevant or other inflationary changes to better reflect the cost of providing the associated service.

Members noted that the proposed HRA Capital Programme for 2025/26 was set out in Appendix D, which reflected the commitment to maintain the necessary investment in the existing homes of tenants.

It was drawn to Cabinet’s attention that the HRA general balance was forecast to total £2.595m at the end of 2025/26, which retained a relatively 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 2025/26 were important elements of delivering a sustainable HRA in the longer term.

Cabinet was cognisant that HRA debt continued to reduce year on year as principal was repaid with a total debt position at the end of 2025/26 forecast to be £31.120m (a reduction of £1.415m compared with the figure at the end of this financial year).

Members were reminded that the overall HRA position described above remained subject to further adjustments that were likely to be required as part of finalising the budget for presenting to Full Council on 11 February 2025, with a delegation included in the report’s recommendations to respond to that possibility.

It was recognised that the Tenants’ Panel played an important role in developing the HRA Business Plan and budget proposals and it was proposed to consult with them shortly, with any comments planned to be reported to Members either ahead of, or directly at, the Full Council meeting on 11 February 2025.

The Deputy Leader of the Council read out the following statement:-

“There has only been one relatively minor change to the budget since our meeting in December, which is set out in the report. The proposed rent increase remains the same at 2.7%, which results in an average weekly rent of £103.49 in 2025/26.

Similarly to the General Fund Position, there are a few budget adjustments that remain outstanding that will be finalised in readiness for reporting to Full Council on 11 February. Along with updated Business Plan figures, the report also sets out the proposed detailed HRA budget for 2025/26, fees and charges, capital programme and reserves.

The commitment to invest in the housing stock remains, with £9.453m included within the proposed budget for 2025/26 to meet the cost of major refurbishment and repairs to our tenants’ homes. As set out in the report, there is always a balance to strike between investing in our tenants’ homes whilst recognising the need to use reserves in the short term. Work will therefore remain on-going during 2025/26 to develop proposals to continue to secure the long-term sustainability of the Housing Revenue Account.

I understand that the Tenant’s Panel is meeting soon and I look forward to their comments which we will make available to Members ahead of the Full Council meeting on 11 February as necessary.

Having considered the most up to date HRA Business Plan which set out the position for 2024/25 and 2025/26 along with the proposed HRA budget for 2025/26, and in order to enable associated recommendations to be presented to Full Council on 11 February 2025:-

It was moved by Councillor I J Henderson, seconded by Councillor Baker and:-

1.       RESOLVED that Cabinet -

(a)     approves the updated HRA Business Plan, which includes the proposed position for 2024/25 and 2025/26 as set out in Appendix A to the Portfolio Holders’ joint report (A.6); and

(b)     authorises the Director (Finance & IT) to adjust the forecast / budget, including the use of reserves, in consultation with the Portfolio Holder for Housing and Planning and the Portfolio Holder for Corporate Finance and Governance if the financial position changes prior to Full Council considering the HRA budget on 11 February 2025.

2.       RECOMMENDS TO COUNCIL that a 2.7% increase in dwelling rents in 2025/26 along with the detailed HRA Budget proposals for 2025/26, as set out in Appendices B to E of the Portfolio Holders’ joint report (A.6), be approved.