Issue - meetings

The Economy and Housing Policy Committee are asked to comment on the proposals contained within the attached Cabinet Report, ref CAB 3523

1. That the draft HRA Business 30-year Plan for 2025-26 to 2055-56 metrics shown in Appendix 3 and current 5 year projection at Appendix 1 of report CAB3523 be noted.

2. That the business plan pressures identified in the 2025/26 business planning exercise as outlined in paragraphs 11.41 to 11.51 of the report be noted, totalling £1.26m one off pressures and £1.2m ongoing pressures.

3. That the budget options outlined within the report and detailed at Appendix 2 be approved, as a basis for consultation to inform the February budget setting, including potential options for rent convergence in line with government proposals.

4. That the allocation of £0.12m per annum to support upgrades to the asset and property management systems be approved, including reprofiling £0.02m from the one-off investment budget set in the 2023/24 business plan to cover initial preparatory costs in 2025/26, with clearer estimates of project management costs for 2026/27 to be included in the February budget report.

5. That a change in the calculation of interest on internal borrowing and lending between the General Fund and HRA be approved, namely to equalise the interest rate at the PWLB 3 month variable loan rate for both borrowing and lending as outlined at paragraphs 11.34 to 11.36 of the report.

6. That the assumption in the business plan for New homes to be aligned to the Housing Development Strategy be noted.

7. That the current financial viability assessment for new build from paragraph 11.16 to 11.22 of the report be noted.

8. That it be noted that quantified revenue savings of £0.892m, and capital savings of £0.25m outlined in Appendix 2 of the report, have been identified to assist with bridging the forecast gap in annual HRA budgets.

9. That the proposed assumptions and timescale for asset disposals outlined in paragraphs 11.62 to 11.64 of the report be noted.

10.  That it be noted that based on the September 2025 CPI figure of 3.8% that the average formula rent increase for 2025-26 for all affordable and social housing will be 4.8%.

11.  That it be noted that the government is consulting on rent convergence criteria which indicates preference to increase rents above CPI+1% for social rent tenants below formula rent levels, with announcement expected as part of the wider Budget on 26 November 2025.

12.  That the principle of full cost recovery in tenant service charges (other than sewage treatment works) in 2026/27 be approved.

13.  That it be noted that following implementation of options, the draft HRA Business 30-year Plan is viable and sustainable and has the capacity to support the council’s ambitious delivery of 1,000 new affordable homes by the end of 2031/32

RECOMMENDATION:

It is recommended that the committee scrutinise and comment on the proposals within the attached draft cabinet report, ref CAB3523 which is to be considered by cabinet at its meeting on the 19 November 2025.

Councillor Mark Reach, Cabinet Member for Good Homes, introduced the report, which set out the 30-year Housing Revenue Account (HRA) business plan. The introduction included the following points:

1. The proposals were designed to ensure a sustainable HRA for the next 30 years and deliver the best value for tenants.
2. The main pressures on the HRA related to macroeconomic factors, particularly higher than expected interest rates for the Public Works Loan Board, which were linked to volatile gilt markets. A prudent assumption on future rates had been made.
3. The HRA had a significant level of borrowing, amounting to around £200 million, making it sensitive to interest rate changes.
4. The report included proposed savings, which would be discussed with the Tenants and Councils Together (TACT) Board before being presented to Cabinet.

Councillor Caroline Horrill addressed the committee and raised several points for the committee to consider which could be summarised as follows. She requested details on asset disposals achieved and planned, and how the capital would be allocated between new homes and the upkeep of current stock. She asked if the business plan could be amended to continue building council properties beyond 2032-33. Further questions were raised regarding the estimated cost of repairing poor retrofit work, the provisional nature of new affordable rent levels, the scope of the £41.9 million for capital works, an update regarding void properties and the expected time frame for cost recovery on sewerage charges. Finally, she enquired how tenant input on the proposed savings would be gathered before the February 2026 budget.

Councillor Danny Lee addressed the committee and raised several points for the committee to consider which could be summarised as follows Heexpressed concern about how well the HRA business plan was future proofed against rising costs and climate change. He highlighted the impact on the built environment on carbon emissions and the financial pressures from new regulations and high-emission materials. He recommended the council to be more forthright in adopting Modern Methods of Construction (MMC) and other energy-efficient, low-impact approaches to eliminate the housing performance gap and reduce long-term costs. He also questioned whether the proposed 10% rent increase for five-bedroom social homes was fair and proportionate and asked what mitigation might be considered.

Ian Tait addressed the committee and raised several points regarding the disposal of surplus HRA assets for the committee to consider. He asked for the current criteria used to determine whether an asset was surplus and should be sold. He questioned whether the policy focused on strips of land or properties, citing the examples of Barnes House and The Corner House. He requested clarity on the rationale behind these disposals and asked if a list of surplus HRA properties existed.

The committee was asked to scrutinise and comment on the proposals within the attached draft cabinet report, Ref. CAB3523, which was to be considered by Cabinet at its meeting on the 19 November 2025. The committee proceeded to ask questions and debate the report.  ...  view the full minutes text for item 7