Agenda item

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 build projects in smaller communities and the Council's ability for building projects on rural exception sites.

10.The use and impact of the estate improvement program.

11.Budget allocations for major repairs and climate change emergency work for 2024/25, balancing property standards and climate goals.

12.Future plans and legislative compliance for fire safety provision work beyond 2026.

These points were responded to by Simon Hendey, (Strategic Director), Councillor Westwood (Cabinet Member for Housing) Liz Keys, (Chief Financial Officer), and Gillian Knight,(Corporate Head of Housing), accordingly.

RESOLVED

1.    That the report be noted.

2.    That clarification be provided regarding the financial arrangements for fire safety provision beyond 2026.

3.    That the implementation of the 80% rent strategy for new affordable rent tenants if the property met the required minimum energy efficiency requirements be clarified.

That cabinet considers all the committee’s comments raised during the discussion of the item.