Agenda item

The Committee received an update from the Interim Director of Finance with respect to the Housing Revenue Account (HRA). The following was highlighted for Members’ attention: 

·       Table at paragraph 2.2 of the report (page 72 of the agenda pack) set out the present monitoring position for revenue expenditure at Quarter 2 2022/23, with the projected variance at year end of £141k surplus, which was arrived as explained in paragraph 2.3 of the report.

·       The HRA capital budget was £14.180m with the expected spend during the year of £10.137m, resulting in slippage of £4.043m. The spend to Q2 stood at £6.724m against a pro rata budget of £7.090m, which was £0.366m below budget.

·       The main projected variances for the second half of the year were noted as internal refurbishments, Housing 1-4-1 replacements, HRA compartmental work, disabled adaptations new contract award and the High Trees project.

·       The Council’s HRA base plan assumptions indicated that the investment required in Council stock could be delivered from resources currently available to the Council and the base plan demonstrated the long-term financial viability of the HRA in Redditch. 

·       The Council had provided a response to the Department of Levelling Up, Housing and Communities (DLUHC) consultation on social housing rent increases. The Interim Director of Finance noted that the Council’s response was a preference for a 5 per cent rent increase as a 3 per cent increase would not be sufficient to cover inflationary and other costs incurred by the Council, whilst a 7 per cent increase was discarded as the Council tried to minimise cost increases to social tenants as far as possible.

·       It was noted that the Council had recently finalised a process of Tranche 1 of the budget for General Fund Services and a need for a 10 per cent increase in most Fees and Charges was identified, given the drastic rise in expenses as a result of likely increase in workforce costs due to pay awards, inflation at over 10 per cent, fuel inflation at over 100 per cent (up to 400%) and a limit on raising Council Tax of 1.99 per cent.

After the consideration of the report, the following issues were queried by Members:

·       Some Members judged the projected expenditure of £170k for Provision of Bad Debts as a modest figure given the total size of tenancies managed by Redditch Borough Council. It was explained that this figure was arrived at based on historical data.

·       It was added that the Council was proactive in helping social tenants. Examples of proactiveness in this regard included the distribution of the Discretionary Housing Payment Grant for 2022/23 by the end of August and the provision of leaflets to signpost people to help.

·       Officers undertook to provide Members with a figure for Recharges of Tenants’ Repairs which was not included in the report.

·       Members asked if the 40 year offset for Right to Buys was still a realistic figure and the Interim Director of Finance noted responded that the number of social tenants buying through the scheme had reduced over the last 8 years and this trend was likely to continue.

·       With regards to consultation on social housing rent increases, it was noted that local authorities would be free to raise the rent amount by up to the Government set figure of 7 per cent, if this was the figure set following the consultation. Some Members commented they were surprised to see the Council had not decided that a full 7 per cent increase would be necessary but expressed satisfaction that a 5 per cent increase would provide a good balance between allowing the Council to afford improvements to its social housing stock whilst easing the burden on the tenants.

RESOLVED that

the updates on the HRA Position and the response to the recent Consultation on proposed rent increase by the Government be noted.