Agenda item

The Financial Services Manager presented the Housing Revenue Account (HRA) Initial Budget 2018/19 to 2020/21.  Members were advised that £5.1 million had been allocated to the Housing Repairs Account for 2018/19.  A total of £600k remained in balances within the HRA.

In 2017/18 to date 41 Council houses had been sold under right to buy.  The Council’s budget and three year forecast had assumed that the Council would sell 75 properties over a three year period.  This trajectory in right to buy sales had financial implications for the Council in terms of lost revenue from rents.  Members questioned the number of houses that had been sold during the past three years and Officers were asked to provide this information after the meeting.

The Committee was advised that 2018/19 was the third year in which rents for tenants in the social housing sector would be reducing by 1 per cent a year.  It was uncertain whether the Government would continue to impose this after 2019/20 or introduce alternative arrangements.  However, the reduction in rent had significant financial implications for the Council; the authority would otherwise have increased rents at the CPI rate of four per cent per annum.  This equated to a loss of £900k in income.

Following the presentation Members discussed the report in detail and noted that the Council was responding to the increase in Right to Buy sales by investing in the Housing Growth Programme and Mortgage Rescue Scheme.  The Council was also commissioning a Stock Condition Survey so that the authority could take a more proactive approach to managing the housing stock. 

Members noted that they had recently received through a Tenancy booklet which stated that total spend on repairs was £4.89 million rather than the £5.1 detailed in the report.  Officers agreed to get back to Members to clarify this matter further. 

Questions were also raised about the increase in funding for Supervision and Management when compared to the previous year.  Officers advised that this increase was due to a range of factors including an increase in maintenance charges, the additional support for housing staff that had been required during the year and an increase in staffing costs.  Officers agreed to provide a breakdown of the costs for Members’ consideration after the meeting.

Capital spending was discussed by the Committee with questions being raised about the use of reserves.  Officers explained that £12 million of reserves were earmarked for expenditure on the Housing Growth Programme.  In addition, funding would need to be used to help pay the government back for the purchase of the Council’s Housing Stock some years ago.

RECOMMENDED that

1)        the draft 2018/2019 Budget for the Housing Revenue Account attached to the report at Appendix A be approved;

2)        the budget projection for 2018/19 incorporating the 1% rent reduction be approved;

3)        the actual average rent decrease for 2018/2019 be 1%;

4)        that a capital budget of £150k be approved for a stock condition survey to be carried out

5)        that £0.876k be transferred from the general reserve in 2018/19 to fund the future HRA revenue budgets

6)        that £5.1m be transferred from the Major Repairs Reserve to fund the HRA capital programme.