Agenda item

RECOMMENDATION:

It is recommended that the committee scrutinise and comment on the proposals within the attached draft cabinet report, ref CAB3478 which is to be considered by cabinet at its meeting on the 20 November 2024.

Councillor Chris Westwood Councillor, Cabinet Member for Housing introduced the report, ref CAB3478 which set out proposals for the HRA Business Plan and Budget Options, (available here).   The introduction included the following points.

1.             The budget for the previous financial year was set against a background of high interest rates and designed to tackle inflationary pressures.

2.             CPI inflation had since fallen to 1.7% in September 2024, below the Bank of England's target of 2%. However, costs had not fallen; the pace of increase had slowed, but key cost drivers such as energy and building materials remained significantly high.

3.             The main cost pressures came from five areas:

a.    Continuing inflationary pressures on building supplies and construction.

b.    The capital costs of maintaining the existing housing stock at the decent homes standard.

c.     Increased costs of repairs and maintenance.

d.    High capital financing interest rates.

e.    New homes viability challenges due to high Public Works Loan Board interest rates.

4.             The Council must set its rents in line with the rent standard and Central Government's Social Housing rent-setting guidelines, currently CPI plus 1% for 2025/26.

5.             The budget options supported the council's commitment to increase investment in homes, accelerate green initiatives, deliver the 1,000 New Homes programme by 2032/33, and improve customer service and experience for repairs and maintenance.

6.             A savings target of £2 million per annum had been established to mitigate these pressures, with officers meeting regularly to identify and quantify potential opportunities.

7.             The approach to service charges would ensure that those who use the services pay for them, but the council would seek to ensure that any increase in service charges would be dampened.

8.             The budget options would be further developed and subject to consultation to achieve a viable and sustainable HRA Business Plan.

9.             The Tenants and Council Together (TACT) Board had reviewed the budget options and was broadly supportive. Their feedback would be considered as part of the ongoing budget process.

Councillor Danny Lee addressed the committee and highlighted the following points. Councillor Lee raised concerns about the financial stress on the HRA and the need for clear sustainability goals. He emphasised the importance of adopting digital ways of working to improve efficiency and future-proof housing. He also questioned the shift from in-house construction to purchasing homes and the plan to address the energy performance gap.

Councillor Caroline Horrill addressed the committee and highlighted the following points. Councillor Horrill raised concerns about the lack of a rural housing programme and sought clarification on budget allocations and service charges. She also highlighted the risk of insufficient condition data on HRA assets and was concerned about any potential cuts to the tenant involvement budget as referenced in Appendix 2 of the report.

The committee was recommended to scrutinise and comment on the proposals within the attached draft cabinet report, ref CAB3478 which was to be considered by the cabinet at its meeting on 20 November 2024.

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

1.             Further information was requested about the potential reduction in the tenant involvement budget.

2.             Clarification was sought on the confidence in achieving the £2,000,000 savings target.

3.             A question was raised regarding the ongoing revenue pressures related to historic RPI adjustments relating to an existing repair and maintenance contract.

4.             Clarification was requested on the approach to sewage treatment works, particularly the cost recovery for services provided to private houses versus council tenants.

5.             Further information was sought on the strategy for delivering new homes in rural areas, especially through rural exception sites.

6.             A question was asked about the move towards full cost recovery for service charges and the implications for tenants.

7.             Clarification was requested on the significant increase in the number of repairs reported and whether this was a cause for concern.

8.             Further questions were raised about sewerage charges and separately the change in "One-off investments" in 2026/27.

These points were responded to by Councillor Chris Westwood Councillor, Cabinet Member for Housing, Liz Keys, Director (Finance), Simon Hendey, Strategic Director, and Kevin Harlow, Finance Manager: Housing accordingly.

RESOLVED:

1.             The committee scrutinised and commented upon the report.

The committee requested that the tenant service charge information and data, as referred to within the report be made available to committee members.