Agenda item

The Economy and Housing Policy Committee are asked to comment on the proposals contained within the attached Cabinet Report, ref CAB 3478.

Councillor Chris Westwood, Cabinet Member for Housing introduced the report, ref CAB 3478 which set out proposals for the Housing Revenue Account (HRA) Business Plan & Budget Options, (available here).

Councillor Westwood advised that the report had been reviewed by the Scrutiny Committee on 12 November 2024 and that the Cabinet had also reviewed the paper and approved the budget options detailed in Appendix 2 as a basis for consultation to inform the February 2025 budget setting. He advised that the Committee's views on the paper, including the budget options in Appendix 2, would be considered in preparing the February 2025 budget paper.

Councillor Westwood provided a brief introduction to the paper, which could be summarised as follows:

1.     The budget for 2024/25 was set against a backdrop of high interest rates and aimed to address inflationary pressures.

2.     Although CPI inflation had fallen to 1.7% in September 2024, below the Bank of England's target of 2%, key cost drivers for the HRA, such as energy and building materials, remained significantly high.

3.     The main cost pressures were identified as continuing inflationary pressures on building supplies, increased capital costs for maintaining existing housing stock, high capital financing interest rates, challenges in new homes viability due to high public works loan board interest rates and the recent agreement to purchase 146 affordable homes in Kings Barton.

4.     The Council had set rents in line with the rent standard and central government's guidelines, with the current basis being CPI plus 1% for 2025/26.

5.     The budget options supported the Council's commitment to increasing investment in customers' homes, delivering 1,000 new homes by 2032/33, and improving customer service for repairs and maintenance.

6.     Without addressing these pressures, there would have been insufficient resources to deliver a balanced budget over the 30-year planning period while meeting policy objectives.

7.     A savings target of £2 million per annum had been established, and officers had been working to identify potential opportunities for this.

8.     The approach to service charges would ensure that those who used the service paid for it, with measures to dampen any significant increases.

9.     Feedback from the TACT Board was broadly supportive of the proposed actions.

The committee was asked to comment on the proposals contained within the attached Cabinet Report, ref CAB 3478. The committee proceeded to ask questions and debate the report. In summary, the following matters were raised.

1. A question was asked regarding the impact on individuals of the CPI + 1% rent increase, specifically how it affected those who paid rent in full versus those on benefits, and the potential hardship it might cause.
2. Further clarification was sought on the proportion of people having their rents paid in full and those who might have been impacted by the rent increase.
3. A question was raised regarding page 28, particularly the impact of the rise in National Insurance on the cost of labour and prices for repairs and maintenance.
4. A further question was asked about the future pricing for repairs and maintenance and the potential savings from a new repairs and maintenance contract and its impact upon the budget.
5. A question was raised regarding the interest on borrowing, specifically the refinancing of £100 million and its impact on the total interest burden.
6. Clarification was requested on the acquisition strategy for new homes, particularly the variety of housing types being purchased and the provision for elderly or disabled residents.
7. A question was asked about the recovery of costs for sewerage works, specifically whether the full capital costs or just the ongoing running costs would be recovered.
8. Further clarification was sought on the service charges and the review process, including the potential for cost reduction and consultation with tenants.
9. A question was raised about the IT contingency budget and the integration of IT solutions with the Council's systems.
10. Clarification was requested regarding the vacant posts in the new homes team and the employment of quantity surveyors within the council.
11. A question was asked about the duration of the rebalancing of home acquisition from building to purchase and the potential recovery of the building programme.
12. Clarification was requested on the underspend in the training budget.
13. A question was asked about the change in the tenant involvement budget and its impact on tenant engagement activities.
14. Further clarification was sought on the new cost proposal for the damp and mould in-house service.
15. A question was raised about the termination of the contract for Voice Scale.

These points were responded to by Councillor Chris Westwood, Cabinet Member for Housing, Simon Hendey, Strategic Director and Gilly Knight, Corporate Head of Housing accordingly.

RESOLVED:

The committee noted the following points for further consideration by the Cabinet Member:

1.    The committee noted the ongoing efforts to identify additional savings opportunities.

2.    The committee wished to highlight the importance of policy reviews, particularly in areas such as the repairs recharge policy, voids, and the repair process review.

3.    The committee was reassured to note that officers were also considering other ways to add value, for example, addressing damp and mould issues as a non-financial benefit of the proposed changes.

4.    That the Cabinet Member consider the committee's comments raised during the discussion of the item.