Agenda item

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. In summary, the following matters were raised.

1. A question was asked about the scope to use alternative financing from financial markets for refinancing, rather than relying solely on the Public Works Loans Board, given the volatility of gilt yields.
2. Clarification was sought as to whether the housing element of Universal Credit would be increased in line with CPI.
3. A question was raised regarding the strategy for wastewater treatment plant upgrades, the use of internal versus outsourced project management, and the review of the current household charging system.
4. An explanation was requested for the proposed 10% rent increase for five-bedroom social homes.
5. A question was asked about the council's long-term plan for adding new homes to the HRA beyond 2031/32.
6. A query was raised concerning the measures being taken to manage and reduce the time properties remained void including details of the team undertaking the work.
7. Clarification was sought on the criteria used to determine that an HRA asset was surplus and ready for disposal.
8. A question was asked to confirm the forecast cost for repairing poor retrofit work.
9. Further information was requested on the expected timeframe to achieve full cost recovery for sewerage charges.
10. Further clarification was requested regarding the use of the word “provisionally” concerning rent increases.
11. A question was raised about how tenant views and priorities would be gathered for the savings proposals listed in Appendix 2.
12. Questions were asked regarding the risk profile and pressures of the HRA including the overall balance position and required savings over the full planning period.
13. It was asked whether the income from nutrient credits could be provided within the report.

These points were responded to by Liz Keys, Director (Finance), Simon Hendey, Strategic Director, and Councillor Mark Reach, Cabinet Member for Good Homes accordingly.

RESOLVED:

The committee agreed the following:

1.    That the following be provided to the committee:

a.    the methodology regarding wastewater charges including the issues raised regarding rateable values.

b.    the rationale for the proposed 10% rent increase for five-bedroom social homes

c.     the criteria for the disposal of HRA assets and a list of assets intended for disposal.

d.    Information regarding the income from the sale of nutrient credits.

2.    That the cabinet member note the comments of the committee.