Agenda item

To set out and seek Cabinet’s approval of:

·           A Revised Housing Revenue Account (HRA) budget for 2017/18 and Original HRA Budget for 2018/19, including the movement in HRA balances;

·           The level of fees and charges for 2018/19; and

·           The five-year HRA Capital Programme.

That Cabinet -

(a)  approves the 2018/19 Scale of Charges, as shown in Appendix B to item A.4 of theJoint Report of the Portfolio Holder for Housing and the Portfolio Holder for Finance and Corporate Resources;

(b)  notes the 1% reduction in actual rents / formula rents in 2018/19 in line with the Government’s imposed restrictions on rent setting policy; 

(c)  approves the Housing Revenue Account (HRA) revised estimates for 2017/18 and original estimates for 2018/19, 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 and;

(d)  agrees that, in respect of 2017/18, the corporate financial system be amended accordingly to reflect these changes along with any amendments arising from revised financial reporting requirements.

There was submitted a joint report by the Portfolio Holder for Housing and the Portfolio Holder for Finance and Corporate Resources, which sought seek Cabinet’s approval of:

·           a Revised Housing Revenue Account (HRA) budget for 2017/18 and Original HRA Budget for 2018/19, including the movement in HRA balances;

·           the level of fees and charges for 2018/19; and

·           the five-year HRA Capital Programme.

Cabinet was informed that the HRA budget had been calculated based on a number of limited changes. As reported in previous years, Local Authorities were required to reduce rents by 1% each year for 4 years, with 2018/19 being the third year of this approach. Unlike in previous years, given the on-going 1% reduction in rents and other changes, it was no longer possible to make an annual revenue contribution to HRA balances.  In fact, to accommodate the cost of the 1% reduction in rent and other changes, it had been necessary to reduce the revenue contribution to the new build and acquisition scheme within the HRA capital programme from £0.780m to £0.480m.

Members were made aware that HRA debt continued to reduce year-on-year as the principal debt was repaid with a total debt position at the end of 2018/19 forecast to be £41.770m. This provided borrowing ‘headroom’ of £18.515m against the HRA debt cap of £60.285m.

It was reported that the HRA general balance was forecast to total £4.362m at the end of 2018/19, which retained a strong financial position against which a revised HRA 30 year business plan could be considered. Work was underway to revise the HRA 30 year business plan alongside the Housing Strategy in 2018. However, in respect of forecasting over a long term period, significant uncertainty still remained around the Government’s policy on housing and the impact on Local Authorities, which would need to be taken into when finalising the revised business plan.

The Portfolio Holder for Housing read out the following statement on the HRA budget proposals –

“A balanced budget for 2018/19 is proposed without the need to call on general HRA reserves. Details around the limited changes to the budget are set out in the report. Although the Government has reversed a number of policies that would have adversely affected the financial position of the HRA, the 1% reduction in rents over a four year period remains in place, with 2018/19 being the third year of this Government requirement.

Although the HRA remains in a relatively strong position the rent reduction has resulted in less money being available to invest in the HRA capital programme in 2018/19. However, the capital programme for 2018/19 still totals £3.657million which allows for further significant investment in both tenants homes and also for new build and acquisition projects such as those supporting the wider regeneration of Jaywick Sands. When added to the £7.283million in the revised budget for 2017/18 a total of £10.940million has been made available for capital investment over the two year period.

Although subject to the impact of the last year of the 1% rent reduction it is forecast to maintain similar levels of investment going into 2019/20 and beyond. The revenue and capital positions are supported by reserves which are forecast to total £8.935million at the end of 2018/19.

The HRA budget continues to broadly reflect the thirty year business plan which will be revisited in 2018 to take account of the most up-to-date position and reflect any changes to the Government’s housing policies. Further changes to the budget may be required later in the year when the outcomes from the review of Honeycroft and Spendells Sheltered  Housing Schemes are finalised along with those that may be required in light of the Council’s Housing Strategy that is due to be presented to Members in 2018/19. Any such changes will be considered as part of separate reports and associated decisions.

The 2018/19 budget as set out in the report continues to provide the necessary financial foundations to enable to the same level of quality services to be provided to our tenants along with continuing investment in their properties.”

During consideration of this item the Leader of the Labour Group and the Leader of the Council both paid tribute to the hard work of Officers across the Council who continued to provide good quality services to residents with fewer resources.

The Leader of the Council also paid tribute to the hard work and dedicated service of Nigel Brown, the Council’s Communications and Public Relations Manager who was shortly to leave the Council’s employment.

Having considered the information in the report:

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

RESOLVED that Cabinet -

(a)    approves the 2018/19 Scale of Charges, as shown in Appendix B to item A.4 of theJoint Report of the Portfolio Holder for Housing and the Portfolio Holder for Finance and Corporate Resources;

(b)   notes the 1% reduction in actual rents / formula rents in 2018/19 in line with the Government’s imposed restrictions on rent setting policy; 

(c)   approves the Housing Revenue Account (HRA) revised estimates for 2017/18 and original estimates for 2018/19, 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 and;

(d)   agrees that, in respect of 2017/18, the corporate financial system be amended accordingly to reflect these changes along with any amendments arising from revised financial reporting requirements.