To present to Council the Executive’s Housing Revenue Account (HRA) budget proposals for 2025/26 (including fees and charges, capital programme and movement in HRA Balances).

Earlier on in the meeting, as detailed under Minute 105 above, Councillor Bray had declared an 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 119 of the meeting of the Cabinet held on 31 January 2025, the Council considered the Executive’s Housing Revenue Account (HRA) budget proposals for 2025/26 (including fees and charges, capital programme and movement in HRA balances).

 

Members noted that there had only been a very limited number of changes since Cabinet had met on 31 January 2025, which had been reflected in Appendices A to E as necessary. The outcome of the changes required was a reduced deficit of £1.043m in 2025/26 compared with the figure of £1.131m reported to Cabinet on 31 January. It was proposed to fund this estimated deficit by calling on money from HRA balances as an alternative to potentially reducing expenditure.

 

Council was made aware that, as has 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.

 

Members were aware that the above challenge was recognised within Cabinet’s current initial highlight priorities for 2025/26.

 

It was reported that, for 2025/26, the Executive’s budget proposals set out an increase in dwelling rents of 2.7% along with a total HRA expenditure budget of £18.592m (net of indirect income / expenditure)and a capital programme totalling £5.106m.

 

The 2.7% increase in dwelling rents resulted in an average weekly rent of £103.49 in 2025/26 (£100.89 in 2024/25).

 

Council was informed that 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.

 

The proposed budget reflected the continued repayment of debt, with the total level of existing debt falling from £32.535m to £31.120m at the end of 2025/26.

 

The HRA general balance was forecast to total £2.683m at the end of 2025/26, which retained a strong financial position against which the associated HRA 30 Year Business Plan could continue to be delivered / developed.

 

Members recognised that the HRA balances, together with the proposed rent increase for 2025/26 were important elements of delivering a financially sustainable HRA in the longer term and that the HRA Business Plan and proposed budget played 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 / Social Housing Regulator.

 

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

 

“Before I talk about the proposed budget for 2025/26, it might be worth setting the scene in terms of the underlying principle that both my administration and the previous administration have applied to the Council’s important social housing landlord role.

 

And that is we want to make sure that as much of the rents we collect from our tenants is invested back into their homes and associated services. This continues to remain a fundamental premise of what a good social landlord should do, regardless of the social housing regulations that might require it. Good quality housing goes hand in hand with the quality of life of our tenants.

 

Effective Management of our tenants’ homes and the support we provide them are further cornerstones of our important landlord role, that we will be judged against by both our tenants and the Regulator.

 

As I mentioned last year, the Council 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. The outcome of the review was considered by our Audit Committee in April last year, where they heard how it had been a positive step in understanding the current policy and practice within the service and where further work was needed.

 

Set against the outcome of the review above and our key priority of providing decent housing that everyone deserves, 2024/25 has been a busy year, which has seen:

 

·      The initial outcomes from the stock condition surveys resulting in timely repairs and a refocusing of the housing investment programme to include energy efficiency and anti-condensation measures.

 

·      The recruitment of 4 tenant engagement officers providing valuable services through tenant engagement which includes general advice, debt management and maximising opportunities to access financial support. It is our aim that we visit all of our tenants on a regular basis via this additional resource.

 

·      The introduction of a number of policies such as:

 

o    A Tenant Involvement Policy

o    An Anti-social Behaviour Policy

o    A Reasonable Adjustment Policy

o    A Vulnerability Policy

o    An Acceptable Customer Behaviour Policy

o    A Housing Neighbourhood Management Policy

o    A Housing Rent Setting and Collection Policy

o    A Housing Allocations Policy for consultation

o    A Gas Safety Policy

o    An Electrical Safety Policy

o    A Fencing and Paving Policy

o    An Empty Homes Management Policy

 

We also considered at our last Cabinet our Housing Asset Management Plan which covers a number of important elements including the management of empty properties.

 

I think this ably demonstrates how serious we take our landlord role and how we are always striving to improve what we do. We may not always get things right, but we are never afraid to hear what our tenants or the Regulator have to say. We can then be judged on how we respond.

 

As set out in the report, and similar to the General Fund, there are challenging times ahead and there will always be trade-offs in terms of balancing our aims and aspirations with the depth of our pockets. We acknowledge that the proposed use of reserves in 2025/26 and beyond is not a sustainable long-term solution, but in the more immediate term it strikes the necessary balance of ‘protecting’ the investment in tenants’ homes and enables the Council to meet its key priorities and regulatory responsibilities.

 

As part of our active management of the business plan, we will need to continue to keep a watching brief on potential cost pressures and other liabilities. As recognised within the report we have in front of us tonight, along with earlier reports, the cost of undertaking the required level of maintenance to our tenants’ homes continues to rise due to inflationary pressures. We are also required to meet a set of tenant satisfaction measures and are subject to an enhanced programme of regulation from the Regulator for Social Housing. Such a challenging background to our financial planning process will naturally limit options to rationalise resources across the various lines of the forecast.

 

However, we need to be up to the challenge of seeking efficiencies and exploring the prioritisation of resources without compromising our underlying principles or our ability to meet regulatory requirements.

 

As discussed at the recent Resources and Services Overview and Scrutiny Committee, a good example relates to properties that may be becoming costly to maintain and repair and use up a disproportionate amount of HRA resources. It may therefore be better to dispose of such properties in order that resources can be focussed elsewhere within the HRA.

 

That highlights another balance we have to make – if we dispose of properties, we then need to explore opportunities to replace them.

 

As summarised in the report, the Government have introduced a number of helpful flexibilities around the use of right to buy receipts that should support us in this endeavour.

 

However, as we have said before, adding homes to our existing stock of houses does not have to come from us directly building them. We have seen a number of homes given to the Council as part of planning obligations and hopefully you have all seen the recent press release relating to the 8 new homes handed to us by Matthew Homes, relating to their site in Meadow Gardens in Clacton with 10 more to come in the near future.

 

In terms of rental income, which clearly plays an important role in the stability and financial sustainability of the HRA, we are proposing a rent increase of 2.7% in 2025/26 in addition to taking the necessary and effective action to continue to bring the level of void losses down to match those levels achieved before COVID.

 

All the things I have talked about tonight have been drawn together within our Initial Highlight Properties for 2025/26 where we have set out our commitment to developing the long term HRA 30 Year Business Plan proposals to secure sustainability of the HRA, which will include the management of long term empty council properties and responding to the Government’s drive to increase the stock of social housing.

 

Councillor Baker and I will be undertaking a deep dive into numerous lines of the business plan, with not only a focus on managing our more difficult properties effectively, which includes any of our long-term empty homes, but also using data well to drive change and efficiency.

 

In terms of reserves, the estimated use of balances in 2025/26 is just over one million pounds. This has been partly offset by the estimated surplus in 2024/25 and the money that was transferred to reserves when the outturn position for 2023/24 was finalised last year. It is important to highlight that the money proposed to be drawn down from reserves is invested back into our tenants’ homes.

 

As I mentioned last year, we remain 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 housing stock. That brings me to the point I referred to when I introduced the General Fund Budget earlier tonight and that is the impact from Local Government devolution and reorganisation.

 

Ultimately our future is not necessarily in our hands in terms of LGR, but as we discussed at our Full Council meeting last month, work will continue to ensure that the District of Tendring is in the best possible position and that Members and Officers will continue to deliver this Council’s best value and other statutory duties for the benefit of its residents, businesses and communities every day that it exists, which will be applied to the HRA and our responsibilities as a social housing landlord. 

 

The budget we are considering tonight therefore continues to provide a sound basis for us to meet the various challenges I have outlined along with continuing to deliver a well-managed and financially sustainable housing revenue account on behalf of our tenants.”

 

In addition to Councillor Stephenson, Councillors P B Honeywood and Harris spokeon the subject matter of this item.

 

It was moved by Councillor M E Stephenson and unanimously:-

 

RESOLVED that Council approves:-

 

(a)     a 2.7% increase in dwelling rents in 2025/26; and

 

(b)     the Housing Revenue Account Budget for 2025/26, as set out in Appendix B to item A.2 of the Report of the Cabinet, along with the Fees and Charges, HRA Capital Programme and the movement in HRA Balances / Reserves, as set out respectively in Appendices C to E to item A.2 of the Report of the Cabinet.