Issue - meetings

1.       That the HRA Outturn figures for 2023/24 be noted as detailed in Appendix 1 of the report CAB3465.

2.       That the Housing capital programme outturn for Major Works and New Build as detailed in Paragraphs 11.5 to 11.7 and Appendices 3 & 4 of the report.

3.       That the funding of the 2023/24 HRA capital programme be noted as detailed in paragraphs 11.8 to 11.11 and Appendix 5 of the report.

4.       That the reforecast capital programme budget of £24.057m for 2024/25 be approved as detailed in paragraphs 11.12 to 11.14 and Appendix 6 & 7 of the report that takes into account potential programme slippage and the reprofiling of expected spend.

RECOMMENDATION:

It is recommended that the committee scrutinise and comment on the proposals within the attached draft cabinet report, ref CAB3465 which is to be considered by cabinet at its meeting on the 11 September 2024.

Councillor Neil Cutler, Deputy Leader and Cabinet Member for Finance and Performance introduced the report, ref CAB3465 which set out proposals for the Housing Revenue Account (HRA) Outturn 2023/2024, (available here).

The introduction included the following points.

1. The HRA must be self-financing, ensuring that rents and service charges cover all expenditure.
2. Recent years have presented significant challenges due to economic and financial instability, affecting the HRA's cost base and borrowing costs.
3. Key achievements in 2023/24 included:
   1. Acquisition of numerous temporary accommodation units through the Local Authority Housing Fund.
   2. Significant progress in new builds at Winnall, Southbrook, and North Whiteley.
   3. Increased focus on retrofitting properties to improve energy efficiency.
4. A staffing structure review was conducted, resulting in ongoing savings as outlined in the previous budget report.
5. Overall, the year-end outturn saw an overspend of £350,000 against the agreed budget, with notable cost pressures, especially in repairs and maintenance.
6. Reactive repairs saw an 8% increase in demand, coupled with contract inflation issues, leading to a £2,000,000 overspend.
7. Savings were made through borrowing at lower interest rates, resulting in a £1.6 million saving in interest charges.
8. The report concluded with a mention that future detailed budget planning for the HRA, including addressing the overspend in repairs, and would be part of the November budget options report.

The committee was recommended to scrutinise and comment on the proposals within the attached draft cabinet report, ref CAB3465, which was to be considered by the cabinet at its meeting on the 11th of September 2024.

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

1.  Further clarification was sought regarding paragraph 11.2(b), specifically concerning the historic underpayment of cumulative inflation and its impact.

2.  Relating to 1 above, further questions were asked about the possibility of broader contract management issues and inflation underpayments and the timespan for potential claims to come forward.

3.  Clarification was sought on the status of fire safety provisions referenced in paragraph 11.6(c) of the report.

4.  A question was asked on how inflation increases had been addressed in the budget, seeking further information on the broader implications for future financial planning.

5.  A question was raised regarding external income, particularly how it was classified and what specific sources contributed to the £1.4 million positive variance.

6.  Further details were requested on the depreciation figure in paragraph 11.3(h), specifically why the depreciation charge had been significantly underbudgeted for.

7.  A question was raised about vacant staff posts and the progress in recruiting property professionals, especially considering the recruitment challenges mentioned in section 11.6(b).

These points were responded to by Simon Hendey, Strategic Director, Liz Keys Director (Finance), Neil Aitken, Service Lead: Finance, and Kevin Harlow, Finance Manager: Housing accordingly.

RESOLVED:

That the Cabinet Member and officers note the committee's comments.