Agenda item

The Executive Director for Environment and Communities presented the HRA Business Plan Update to Enhance the Delivery of the Housing Improvement Plan report.

The Committee was reminded that the Housing Revenue Account (HRA) was a ring-fenced account, primarily funded through rental income and associated service charges. In February 2023, the Executive had approved a thirty-year HRA Business Plan which established the long-term framework for managing and investing in social housing stock. The long-term capital forecasts within the plan had been informed by an independent Stock Condition Survey.

It was reported that Redditch Borough Council had received its regulatory judgement in July 2025 and had been issued with a C3 rating, indicating that substantial improvements were required. The judgement identified significant areas of weakness, including outstanding fire safety remedial actions, backlogs in repairs, gaps in transparency and oversight of performance reporting, and the absence of effective tenant scrutiny arrangements. Officers explained that these findings demonstrated the need for an accelerated approach to delivering the Council’s Housing Improvement Plan.

Members were updated that Savills UK Limited had been commissioned to review the HRA Business Plan to identify any immediate headroom for additional investment, with a focus on expediting high?priority safety works, and to explore options for future growth.

Officers expressed the view that refreshing the Business Plan, followed by annual reviews, would provide the opportunity to increase investment. It was explained that income growth remained dependent on effective rent policy implementation, rent collection and the management of voids and arrears, all of which would be key considerations in future reviews of the Business Plan.

Members were also advised that refreshed data from rolling stock condition surveys would inform future planning. Given that a number of HRA loans were due to mature in the near future, scenario planning was required to manage these risks effectively.

The Committee was then informed of the next steps moving forward. Savills UK Limited would use a revised financial modelling tool to optimise affordable borrowing in order to accelerate delivery of the plan, expedite fire remediation works, and increase the size of the HRA’s housing portfolio. A review of options would be undertaken to identify headroom and capacity to respond to repairs and maintenance demands. The aim was to accelerate the delivery of affordable social housing while maintaining regulatory compliance.

Once the report had been presented, Members discussed the following points in detail:

• The Portfolio Holder for Housing thanked the Executive Director for Environment and Communities for securing the value for money report from Savills UK Limited and welcomed the measures being taken to protect the HRA. It was noted that the Council held a unanimous position in support of the HRA and that Redditch Borough Council was the only authority in the county to have one.
• Members discussed the key highlights of the report.
• It was noted that a loan repayment of fifteen million pounds was due in 2027, reinforcing the need to invest in property acquisition to generate additional income. This would also increase the supply of homes for residents on the housing register, with Members emphasising the importance of providing long?term, safe and warm housing for residents.
• Members highlighted the need for wider education to improve understanding of the HRA and the associated debt position. While the level of borrowing could appear high, it was noted that the HRA generated approximately twenty-six million pounds in income annually.
• Members welcomed the standard of the report from Savills UK Limited.
• It was noted that the Council would need to report to the Strategic Authority that it had a clear plan for delivering new homes.
• Members queried whether officers felt there was flexibility in the local housing market to act quickly. Officers stated that the Strategic Housing team believed this was the best approach to increase housing stock.
• Members expressed the view that the Regulator would regard the report positively, particularly in terms of strengthened governance arrangements.
• Members asked how costs would be controlled and how capacity would be increased to secure external funding. Officers confirmed that robust budget management was in place and acknowledged wider sector pressures, particularly rising repair costs.
• Further questions were raised regarding internal cost?control mechanisms and the identification of potential “quick wins”. Officers advised that an Internal Audit review of the Housing service was scheduled for later in 2026 and that this issue could be included within its scope. It was also noted that the Total Mobile system would provide improved data, including schedules of rates and quantities, to support stronger oversight.
• Clarification was sought on assumptions within the thirty?year plan regarding roof replacements. Officers confirmed that survey work had been undertaken and that the majority of roofs were identified to require repair or no work rather than complete replacement. This work formed part of the rolling stock condition survey programme, which would provide improved insight into future maintenance requirements.
• Members queried the robustness and flexibility of the financial modelling. Assurance was provided that officers were confident in the work undertaken by Savills UK Limited, although flexibility within the model would be reviewed further, particularly in light of the current geopolitical and economic climate.
• Members requested clarification as to why HRA debt could be viewed positively. Officers explained that HRA borrowing funded asset acquisition or creation, enabling the Council to grow both its housing stock and income. New properties were expected to have lower maintenance costs, while additional rental income would enable further investment in existing stock. The Section 151 Officer added that the durability of the income stream offset the associated borrowing risk, highlighting the balance between risk and opportunity.
• Changes to the Right to Buy scheme were discussed, with Members noting that lower discounts and longer qualifying periods were likely to reduce future applications. The Council had received an initial increase in requests following the announcement of the changes.
• Members commented that significant changes had occurred since the original Business Plan was approved and welcomed the proposed review as a positive step toward achieving objectives more quickly.
• Members queried progress in relation to Energy Performance Certificate (EPC) standards. Officers advised that an ongoing programme of improvement was in place, with progress being made, and that external funding was being sought to accelerate delivery where possible.
• The Committee welcomed the review of the Business Plan, noting that it was particularly appropriate given the C3 regulatory judgement, the Housing Improvement Plan, staffing changes, and increased investment. Members agreed that this represented a further step toward ensuring tenants lived in safe, high?quality homes.

RECOMMENDED that

1) The 30 year HRA Business Plan and associated Financial Model are reviewed, updated and as appropriate recalculated utilising modelling that ensures the Council’s Housing Stock Portfolio is able to benefit from and perform to the highest standards possible;

2) The high-level findings and risks identified in the report are reviewed and a revised HRA Business Plan is included in a future report; and

3) An annual review of the HRA Business Plan is undertaken and reported to Council.

(During the consideration of this item, Members discussed matters that necessitated the disclosure of exempt information. It was therefore agreed to move to exclude the press and public prior to any debate on the grounds that information would be revealed relating to the financial and business affairs of any particular person (including the authority holding that information).