Agenda item

To set out and seek approval of the following for consultation with the Resources and Services Overview and Scrutiny Committee:

 

·           An HRA Budget for 2020/21 including the movement in HRA Balances;

·           The level of fees and charges for 2020/21; and

·           The HRA Capital Programme.

 

Decision:

RESOLVED that Cabinet -

 

(a)         approves a 2.7% increase in dwelling rents in 2020/21;

 

(b)         approves the 2020/21 Scale of Charges, as shown in Appendix B to the joint report;

 

(c)         approves the Housing Revenue Account (HRA) Budget for 2020/21, as set out in Appendix A, along with the HRA Capital Programme and the movement in HRA Balances / Reserves, as set out in Appendix C and Appendix D respectively;

 

(d)         requests the Resources and Services Overview and Scrutiny Committee’s formal comments on the HRA budget proposals for 2020/21; and

 

(e)        authorises the Corporate Director (Operational Services), in consultation with the Housing Portfolio Holder, to make the necessary adjustments to the budget to reflect the changes to the delivery of repairs and maintenance work that was previously undertaken by Roalco.

Minutes:

The Cabinet gave consideration to a detailed joint report of the Housing Portfolio Holder and the Corporate Finance & Governance Portfolio Holder (A.4) which sought its approval of the following in order that they could go out for consultation with the Resources and Services Overview and Scrutiny Committee:

 

·      an Housing Revenue Account (HRA) Budget for 2020/21 including the movement in HRA Balances;

·      the level of fees and charges for 2020/21; and

·      the HRA Capital Programme.

 

Members were informed that, pending agreement of the Council’s Housing Strategy and the long term impact on the 30 year business plan, only limited changes to the HRA budget were being proposed for 2020/21. In addition, 2019/20 was the fourth and final year of the required 1% reduction in rents. For a period of up to 5 years, starting on 1 April 2020, rent increases of CPI + 1% were now allowed. Rents had therefore been increased in 2020/21 by an average of 2.7% (based on a CPI figure of 1.7%).

 

Therefore, the average weekly rent proposed for 2020/21 was £82.42 (£80.25 in 2019/20). The total increase in income from the 2.7% rent increase would £0.340m.Although offset / complimented by other budget adjustments, this was the primary contributor to an overall HRA surplus for the year of £0.363m. 

 

It was proposed to contribute the estimated surplus for the year of £0.363m to the HRA Capital Programme in order to support investment in new homes. This would go some way to making good the reduced contributions to the Capital Programme necessitated by the Government’s 4 year 1% rent reduction policy.

 

It was reported that the proposed HRA Capital Programme for 2020/21 totalled £3.539m and continued to provide for a range of schemes and projects, as set out withinAppendix C to the Portfolio Holders’ report.

 

Cabinet was made aware that the HRA general balance was forecast to total £5.029m at the end of 2020/21, which remained a strong financial position against which the Housing Strategy and associated HRA 30 year Business Plan could be developed. The HRA debt continued to reduce year on year as principal was repaid with a total debt position at the end of 2020/21 forecast to be £38.442m. This was a reduction of £1.664m compared with the figure at the end of 2019/20.

 

Members were reminded that, as announced during the current financial year, the Government had confirmed the removal of the HRA debt cap. Any future borrowing decisions would therefore need to take account of existing prudential borrowing principles within a revised HRA Business Plan rather than be limited to that arbitrary cap, which for this Council was £60.285m.As set out earlier in the year, any borrowing decisions that might be required to support the building of new council houses would be subject to separate decisions as opportunities arose.

 

Cabinet was advised that, in prior years, the HRA budget had only been subject to its approval. However, from 2020/21 the approval of the HRA budget would follow the same process as the General Fund budget, which culminated in their consideration and approval at Full Council in February. Therefore, at this stage of the process, this report set out the proposed 2020/21 HRA budget for consultation with the Resources and Services Overview and Scrutiny Committee. The final budget proposals, including any comments from the Resources and Services Overview and Scrutiny Committee would be reported back to Cabinet at its January 2020 meeting before being recommended onto Full Council in February 2020.

 

Members were aware that, following the demise of Roalco (the Council’s primary housing repairs and maintenance contractor) earlier in the year, the work previously undertaken by that company was currently being delivered via a mix of the Council’s in-house Engineering Team, complimented by a range of external suppliers. A separate report was planned to be presented to Members in the first half of 2020/21 that would seek to formalise a longer term approach, but at this stage it was expected that this would continue to be based on using the in-house team along with external suppliers where appropriate. In the interim period it would be necessary to adjust the budget, as it currently reflected the old arrangements with Roalco. A delegation to the Corporate Director (Operational Services), in consultation with the Housing Portfolio Holder, had been therefore included in the joint report’s recommendations in order to provide the required budget flexibility.

 

Having considered all of the information and advice contained within the joint report and its appendices and in order to allow the Resources and Services Overview & Scrutiny Committee to be formally consulted as part of the budget setting process:-

 

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

 

RESOLVED that Cabinet -

 

(a)       approves a 2.7% increase in dwelling rents in 2020/21;

 

(b)       approves the 2020/21 Scale of Charges, as shown in Appendix B to the joint report;

 

(c)       approves the Housing Revenue Account (HRA) Budget for 2020/21, as set out in Appendix A, along with the HRA Capital Programme and the movement in HRA Balances / Reserves, as set out in Appendix C and Appendix D respectively;

 

(d)       requests the Resources and Services Overview and Scrutiny Committee’s formal comments on the HRA budget proposals for 2020/21; and

 

(e)       authorises the Corporate Director (Operational Services), in consultation with the Housing Portfolio Holder, to make the necessary adjustments to the budget to reflect the changes to the delivery of repairs and maintenance work that was previously undertaken by Roalco.

 

Supporting documents: