Issue - meetings

RECOMMENDATIONS:

1.   That the HRA Financial Plan operating account extract, including annual working balances be noted, as detailed in Appendix 6 of report CAB3445.

2.    That the 2024-25 Housing Revenue Account budget be approved as detailed in Appendices 1 and 2 to the report. 

3.    That the 10-year indicative HRA capital programme be approved as set out in appendices 3 and 4 of the report.

4.    That capital expenditure in 2024-25 of £18.649m for the Maintenance, Improvement and Renewal programme be approved as detailed in Appendix 3 of the report in accordance with Financial Procedure Rule 7.4.

5.    That the proposed budget in 2024-25 for new homes of £15.524m be approved as detailed in Appendix 4 of the report subject to individual scheme approvals.

6.    That the proposed indicative funding for the HRA Capital Programme be approved as detailed in Appendix 5 of the report.

7.    That the proposed additional investment in the council housing stock of £30m over the next eight years to 2030-31 to retrofit properties on a fabric first basis to help improve their energy efficiency and reduce energy costs for tenants be noted. This additional annual investment brings the total annual investment here to £5.6m a year and £45m in total (see paragraph 12.5 of the report).

8.    That the proposed strategic change in direction moving from a plan based upon direct delivery of new homes to one based upon a mixture of actively acquiring s106 affordable housing directly from developers alongside future development with grant funding and using Right to Buy resources be approved (see paragraph 13.7 of the report), including the continuing commitment to rural housing, including through rural exception sites.

9.    That the current financial viability assessment for new build be noted and that at present all potential development sites based on current assumptions evaluated this year have not been assessed as being financially viable within the existing viability model (see paragraphs 13.1-13.10 of the report).

10.That the proposed move to 80% market rent to help improve the viability of new homes development and to mitigate the increasing cost of delivery be approved (see paragraph 13.5 of the report).

11.That a revenue savings target of £400k over two years to assist with bridging the forecast gap in financing future capital expenditure be approved (see paragraph 14.2 of the report).

12.That the disposal in principle of Barnes house in 2024-25 be approved, and in addition the disposal of £0.500m of surplus HRA property per year over the next eight years to generate additional capital receipts to help fund the increased investment requirement over these years be approved (see paragraph 14.3 of the report).

13.That the average formula rent increase for 2024-25 for all affordable and social housing of 7.7% based on the September 2023 CPI figure of 6.7% +1% be approved (see paragraphs 15.1-15.4 of the report).

14.That the proposed move from RPI+0.5% to CPI+1% for existing council shared owners in the HRA from 2024-25 onwards, as well as  ...  view the full agenda text for item 5

Councillor Becker left the meeting before consideration of this item and took no part in the discussion or decision.

Councillor Westwood (Cabinet Member for Housing) moved that the recommended minute of Cabinet be approved and adopted (seconded by Councillor Tod, Leader and Cabinet Member for Asset Management).

Council noted that due to an administrative error, an incorrect version of the minute extract of Cabinet had been included in the agenda pack for the meeting.  The Recommendations for Council on the agenda front sheet were correct.  The correct version of the minute extract of Cabinet had been distributed in a supplementary agenda to Council in advance of the meeting.

Council proceeded to ask questions and then debate the matters in the recommended minute and report.

RESOLVED:

That the recommended minute of Cabinet held 8 February 2024 (as follows) be approved and adopted:

1.That the HRA Financial Plan operating account extract, including annual working balances be noted, as detailed in Appendix 6 of report CAB3445.

2. That the 2024-25 Housing Revenue Account budget be approved as detailed in Appendices 1 and 2 to the report.

3. That the 10-year indicative HRA capital programme be approved as set out in appendices 3 and 4 of the report.

4. That capital expenditure in 2024-25 of £18.649m for the Maintenance, Improvement and Renewal programme be approved as detailed in Appendix 3 of the report in accordance with Financial Procedure Rule 7.4.

5. That the proposed budget in 2024-25 for new homes of £15.524m be approved as detailed in Appendix 4 of the report subject to individual scheme approvals.

6. That the proposed indicative funding for the HRA Capital Programme be approved as detailed in Appendix 5 of the report.

7. That the proposed additional investment in the council housing stock of £30m over the next eight years to 2030-31 to retrofit properties on a fabric first basis to help improve their energy efficiency and reduce energy costs for tenants be noted. This additional annual investment brings the total annual investment here to £5.6m a year and £45m in total (see paragraph 12.5 of the report).

8. That the proposed strategic change in direction moving from a plan based upon direct delivery of new homes to one based upon a mixture of actively acquiring s106 affordable housing directly from developers alongside future development with grant funding and using Right to Buy resources be approved (see paragraph 13.7 of the report), including the continuing commitment to rural housing, including through rural exception sites.

9. That the current financial viability assessment for new build be noted and that at present all potential development sites based on current assumptions evaluated this year have not been assessed as being financially viable within the existing viability model (see paragraphs 13.1-13.10 of the report).

10.That the proposed move to 80% market rent to help improve the viability of new homes development and to mitigate the increasing cost of delivery be approved (see paragraph 13.5 of the report).

11. That a revenue savings  ...  view the full minutes text for item 5

That Cabinet recommend that Council*:-

1.       Note the HRA Financial Plan operating account extract, including annual working balances, as detailed in Appendix 6 of report CAB3445.

2.       Approve the 2024-25 Housing Revenue Account budget as detailed in Appendices 1 and 2 to the report. 

3.       Approve the 10-year indicative HRA capital programme as set out in appendices 3 and 4 of the report.

4.       Approve capital expenditure in 2024-25 of £18.649m for the Maintenance, Improvement and Renewal programme as detailed in Appendix 3 of the report in accordance with Financial Procedure Rule 7.4.

5.       Approve the proposed budget in 2024-25 for new homes of £15.524m as detailed in Appendix 4 of the report subject to individual scheme approvals.

6.       Approve the proposed indicative funding for the HRA Capital Programme as detailed in Appendix 5.

7.       Note the proposed additional investment in the council housing stock of £30m over the next eight years to 2030-31 to retrofit properties on a fabric first basis to help improve their energy efficiency and reduce energy costs for tenants. This additional annual investment brings the total annual investment here to £5.6m a year and £45m in total (see paragraph 12.5 of the report).

8.       Approve the proposed strategic change in direction moving from a plan based upon direct delivery of new homes to one based upon a mixture of actively acquiring s106 affordable housing directly from developers alongside future development with grant funding and using Right to Buy resources (see paragraph 13.7 of the report), including the continuing commitment to rural housing, including through rural exception sites.

9.       Note the current financial viability assessment for new build and that at present all potential development sites based on current assumptions evaluated this year have not been assessed as being financially viable within the existing viability model (see paragraphs 13.1-13.10 of the report).

10.   Approve the proposed move to 80% market rent to help improve the viability of new homes development and to mitigate the increasing cost of delivery (see paragraph 13.5 of the report).

11.   Approve a revenue savings target of £400k over two years to assist with bridging the forecast gap in financing future capital expenditure (see paragraph 14.2 of the report).

12.   Approve the disposal in principle of Barnes house in 2024-25, and in addition the disposal of £0.500m of surplus HRA property per year over the next eight years to generate additional capital receipts to help fund the increased investment requirement over these years (see paragraph 14.3 of the report).

13.   Approve the average formula rent increase for 2024-25 for all affordable and social housing of 7.7% based on the September 2023 CPI figure of 6.7% +1% (see paragraphs 15.1-15.4 of the report).

14.   Approve the proposed move from RPI+0.5% to CPI+1% for existing council shared owners in the HRA from 2024-25 onwards, as well as in all future HRA shared ownership leases. Note that the impact of this in 2024-25 will be a reduction in rent rises this year from 9.4% to  ...  view the full decision text for item 8

Councillor Westwood responded to comments made, including confirming that all the comments made by Scrutiny Committee could be supported.  He drew attention to the presentation received at the Cabinet Committee: Housing on 5 February regarding the selection of materials for the retrofit programme. He confirmed that the review of the service charges would be undertaken by September 2024.  He reiterated comments made earlier regarding the disposal of Barnes House only being agreed in principle at this stage, but highlighted if it was not sold, the council would need to consider other properties to dispose of in order to balance the budget.  He emphasised that the commitment to provide affordable housing in rural areas was part of the agreed Housing Strategy, but that  ...  view the full minutes text for item 8

RECOMMENDATION:

It is recommended that scrutiny committee comment on the proposals within the attached cabinet report, ref CAB 3445 which is to be considered by cabinet at its meeting on the 8 February 2024.

Councillor Westwood introduced the report, ref CAB3445 which set out proposals for the Housing Revenue Account (HRA) Budget 2024/25, (available here).  The introduction included the following points.

1.    That the HRA faced unprecedented financial challenges in ensuring rents and service charges covered operational and investment costs.

2.    The 30-year planning horizon necessitated an annual, viable business plan, highlighting the HRA's self-financing ability and commitment to developing new affordable housing.

3.    Economic challenges included high inflation and increased building costs, significantly impacting vulnerable tenants.

4.    A £45,000,000 investment was being made in retrofitting council homes to enhance energy efficiency and reduce tenants' living costs.

5.    A balance was being struck in recommending increasing rents by 7.7%, aligning with government policy, after extensive consultations, to maintain HRA stability and improve housing quality.

6.    The business plan included significant green investments and a flexible approach to deliver the 1,000 new homes programme.

7.    Strategic changes involved acquiring homes from developers, a £400,000 savings plan for housing services, asset disposals for capital investments, and digitalization for improved service accessibility.

8.    The council aimed to secure approval for the HRA 2024/25 plan, focusing on rent and service charge structures, asset disposal policies, and cost recovery measures for sewage treatment works connections.

David Chafe, Chair of Tenants and Council Together (TACT) addressed the committee and highlighted the following points.

1.    He acknowledged the council's response to TACT's request for detailed account information.

2.    He welcomed the use of display charts and the thorough explanations provided.

3.    He advised of TACT's support for the 7.7% rent increase and that TACT members understood the market and inflation effects on the HRA.

The committee was asked to comment on the proposals within the attached cabinet report, ref CAB 3445 which is to be considered by cabinet at its meeting on the 8 February 2024.

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

1.    Clarification was sought regarding the staff consultation processes within Housing Services and the potential impact on the staffing structure and ultimately on tenants.

2.    Discussion on maintaining investment levels in homes and services in relation to the proposed 7.7% rent increase (Section 6.1).

3.    Clarification on the council's adherence to regulatory standards for rent increases set by the central government.

4.    Clarification regarding the reconciliation of investment requirements and fund sufficiency for sewage treatment works, and the value assessment of credits from improvement works

5.    Clarification regarding the strategy for communication of overall costs for future homes set at 80% of market rent, ensuring transparency in rent and running costs.

6.    Regarding the disposal of Barnes House and any budgetary alternatives if it failed to meet the expected budgetary contribution.

7.    Assurance of diverse housing tenures in the Housing Improvement business plan, particularly for younger residents.

8.    Whether potential economies of scale existed in adopting hydrogenated vegetable oil vehicles across council services.

9.    The budget and strategy adequacy for supporting rural housing development and new  ...  view the full minutes text for item 6

Councillors and TACT representatives are asked to refer to report CAB3445 which will be published with the 6 February 2024 Scrutiny Committee agenda (to be published on 29 January 2024) and make any comments to the Cabinet Member for Housing to refer to Cabinet for consideration at its meeting on 8 February 2024.

Councillor Becker left the room during consideration of this item and took no part in the discussion or decision.

Councillor Westwood introduced the report and welcomed the support of TACT for the proposals.  The report was also being considered at Scrutiny Committee on 6 February, Cabinet on 8 February prior to decision at Council on 22 February 2024.

Councillor Westwood, the Housing Finance Manager and the Service Lead - Strategic Housing responded to questions and comments raised by councillors on the report as follows:

a)    The proposal that rent levels for future new homes be set at 80% of market rent.  Councillor Westwood explained that this was because the energy efficiency build of new homes resulted in significantly lower energy usage and the 80% also included service charges.  He confirmed that there was no intention to extend the 80% rate across existing homes, including those having retrofit improvements.

b)    A suggestion that evidence of the savings resulting from the increased energy efficiency of new homes compared to the 80% market rent for scheme viability should be brought back to the committee and then, subject to schemes progressing the information, shared with prospective future occupiers.  Councillor Westwood agreed to consider this proposal further with officers.

c)    The rationale behind the proposal to dispose of Barnes House at this time.

d)    The current annual levels of “right to buy” properties and the amount of each sale that was retained by the council.

e)    Confirmation that the new homes scheme would consider developments across the whole district, including in rural areas.

Mr Perkins (TACT) confirmed the support of TACT and expressed his gratitude for the additional explanation and information provided by officers at TACT meetings on the proposals.

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

RESOLVED:

          That the recommendations set out in the report be supported and the Cabinet Member for Housing forward the comments outlined above for consideration at the Cabinet meeting on 8 February 2024.