Issue - meetings

Further to discussion at Cabinet on the 15 November 2022, the committee are asked to note the following:

1.    A clarification to the following paragraph. “13.8         The large increase in costs and in current PWLB interest rates will likely affect the potential viability of individual new build schemes when they are financially evaluated and members may want to consider the trade-off between delivering new Passive House plus developments and rent levels in order to deliver these schemes.

Clarification. This referred to the fact that the funding level of new unidentified schemes was based on this investment level, it did not mean to imply that the council had any agreed policy of future Passive House development.

2.    An amendment to the following paragraph. “13.7 This has resulted in a significant increase in the investment requirement within the HRA 30-year Business Plan to deliver the same quantity of new homes as last year. The budgeted cost has increased from £536m to £719m within the plan, an overall increase of £182m or 34%. Table 12.6 over shows the forecast overall change in investment required and how this is to be funded. This shows that a significant part of the funding for this increased cost is coming from increased HRA borrowing, compared to last year there is an increase of 70% or £122m in the borrowing required to fund the programme.”

Amendment. The reference should be to table 13.8 not 12.6

RECOMMENDATIONS:

That:

1.         It is recommended that the committee comment on the proposals within the attached Cabinet Committee: Housing report, ref CAB3365.

2.         It is noted that the committee will be presented with the detailed Housing Revenue Account report at its meeting on the 7th February 2023 prior to Full Council on the 23rd February 2023.

Councillor Paula Ferguson, Deputy Leader and Cabinet Member for Community and Housing; introduced the report, ref SC078, and CAB3365 which set out proposals for the Housing Revenue Account (HRA) Business Plan And Budget Options, (available here).  Councillor Ferguson updated the committee regarding the following:

1.         The latest position regarding the Government’s position on the rent setting ceiling.

2.         The current and future cost pressures within the HRA and the impact on tenants from the cost-of-living rises

3.         Clarification that section 7.4 on page 28 should read that all new homes should be built to high energy efficiency standards and not to “high energy Passivhaus Plus standard”

The committee was recommended to comment on the proposals within the attached cabinet report whilst noting that they would be presented with the detailed Housing Revenue Account report at its meeting on 7 February 2023 before Full Council on 23 February 2023.

The committee proceeded to ask questions and debate the report. In summary, the following matters were raised:

1.         Would the potential additional staffing resource referred to on page 27, be agency staff or directly employed by the council, and would these be full-time or part-time roles?

2.         What was the impact on the council's ambition of building 1,000 homes over the 10-year period from the need to mitigate the impact of phosphates and were there other agencies that could assist in resolving the issue that weren’t already engaged?

3.         Could the meeting calendar for 2023/24 be adjusted to allow scrutiny of this paper before it was agreed by the cabinet?

4.         Now that the details of the rent ceiling were known, would there be significant changes to the proposals in the paper? If additional modelling did take place, would members be further engaged in the discussions and future proposals?

5.         Was there a need to allocate more funds in the budget to the retrofit programme

6.         Was there an inconsistency in the numbers used in the general assumptions within this paper and the General Fund report, ref CAB 3374

7.         Would a 6% rise in rents enable the council to expand the retrofitting programme?

8.         Could a discussion be held on the retrofit programme and new build standards at a future meeting of the Cabinet Housing Committee?

9.         Regarding the reserves within the HRA, what was the right approach to the use of these reserves during this unsettled period to maintain the level of activity required?

10.       If there was a desire for a greater level of energy efficiency measures and/or higher quality standards, could reserves be used to bring this forward?

These points were responded to by Councillor Paula Ferguson, Councillor Martin Tod, Gillian Knight, Corporate Head of Housing, Richard Botham, Strategic Director and Laura Taylor, Chief Executive accordingly and were noted by Councillor Ferguson, Deputy Leader and Cabinet Member for Community and Housing.

RESOLVED:

1.         That officers review the draft 2023/24 calendar of meetings to determine whether in future years this paper could be subject to cross-party review before the  ...  view the full minutes text for item 6

Councillor Tod welcomed to the meeting David Light and Lyn Mellish from TACT who confirmed that they did not wish to make any comments or ask any questions on the report.

Councillor Ferguson introduced the report and highlighted that Cabinet was being requested to note the proposals at this stage as  Government confirmation regarding possible rent setting ceilings was awaited.

At the invitation of the Leader, Councillors Horrill and Wallace addressed Cabinet as summarised briefly below.

Councillor Horrill

She acknowledged that it was not possible to agree a business plan at this time but welcomed the preparation outlined in the report.  However, she queried why the report had not been discussed in another forum to allow wider councillor input, such as the Cabinet Committee: Housing.  She raised a number of detailed questions on the proposals outlined in the report, including querying when the commitment to build new council homes at Passivhaus plus standard had been made?

Councillor Wallace

He queried why some of the assumptions adopted by the council differed between this report and CAB3374 considered above.  He suggested that a chart indicating housing asset value alongside borrowing costs would be useful.  He also suggested that a future meeting consider in detail the business case for building to the Passivhaus plus standard.

Councillor Ferguson and the Chief Executive responded to comments raised by Councillor Horrill, explaining that due to the significance of the report it had been decided it required consideration by full Cabinet rather than Cabinet Committee and emphasising that the report would also be considered at Scrutiny Committee on 23 November 2022.  Councillor Ferguson and the Finance Manager: Housing also provided responses to the detailed queries raised by Councillor Horrill.

As chairperson of the Committee, Councillor Ferguson agreed that the topic of Passivhaus plus homes be considered at a future Cabinet Committee: Housing.

Cabinet agreed to the following for the reasons set out above and outlined in the report.

RESOLVED:

1.            That, in light of the absence of any Government confirmation regarding possible rent setting ceilings and the proposed changes to the rent setting mechanism identified elsewhere within the report, it be noted that at present it is not possible to approve a draft 30-year HRA Business Plan.

2.            That the draft HRA Business 30-year Plan for 2022-23 to 2051-52 as summarised in the Operating Account included as Appendix 1 be noted, based upon an assumed 5% rent increase in 2023-24.

3.            That the latest forecast 30-year HRA capital investment programme of £1.086m, an increase of £212m on the present plan be noted, subject to the approval of individual schemes; and subject to the final detailed HRA budget and the 10-year Capital Investment Strategy being approved by Council in February 2022.

4.            That the impact of different rent assumptions upon the viability of the HRA Business Plan be noted as set out in section 16 of the report and that the final rent decision will be subject to the results of the Government consultation on Rent  ...  view the full minutes text for item 8