CABINET: 7 MAY 2008

Cabinet – 18 February 2026

Housing Revenue Account Budget and Housing Public Sector Capital Expenditure Programme 2026/27

Purpose	For Decision
Classification	Public
Executive Summary	The report sets out a proposed balanced HRA budget for 2026/27, including decisions to be taken on dwelling rents, garage rents, shared ownership rents and service charges. The proposed budget includes uplifted maintenance budgets, meaning that a total of £19.293 million will be spent on maintaining tenants’ properties in 2026/27. This proposal supports the Council’s Corporate Plan commitments and responsibilities to its tenants. Budgets of £1.300 million and £3.000 million are proposed for Fire Safety & Statutory compliance, and Home Energy Improvement programmes respectively. The proposed Capital Programme totals £31.550 million, including spend of £15.200 million on the continued development and acquisition of new Council dwellings. The Capital programme requires external loan finance of £14.045 million, with the cost of this borrowing covered in the medium-long term through the rents’ payable. The budget is supported by a 30-year business plan forecast and spending decisions taken within this proposed budget support the financial sustainability of the HRA over this longer-term period through the protection of the minimum reserve balance and an appropriate level of interest cover.
Recommendations	That Cabinet recommend approval of the following to Council: 1. that from 06 April 2026, an increase in dwelling rents of 4.8% from the 2025/26 weekly rent level, in accordance with Government guidelines, be agreed; 2. that from 06 April 2026, an increase in garage rents of 4.8% from the 2025/26 weekly rent level be agreed; 3. that from 06 April 2026, shared ownership property rents be increased in line with the applicable rent review provisions within each lease. For the eight properties held under leases allowing RPI+0.5%, an increase of 5.00% from the 2025/26 weekly rent level be agreed, for all properties which are subject to CPI+1% under the current model lease, an increase of 4.8% be agreed and the weekly rent of one property sold under previous legislation be agreed to increase by 4.8%; 4. that from 06 April 2026 Service Charges will continue to reflect actual charges; 5. that the HRA budget, as set out in Appendix 1 of this report, be agreed; and 6. that a Housing Capital Programme to 2028/29, as set out in Appendix 4, be agreed.
Reasons for recommendation(s)	The Current National agreed Rent Settlement allows for social housing rents to be increased by up to CPI +1%. To maximise rental income to continue to afford and provide energy efficient, safe and quality housing to our tenants, and to continue to provide new affordable housing it is recommended to set the rent increase to the maximum allowable and to confirm the capital programme to comply with statutory compliance regulations, the Social Housing Regulation Act 2023 and the Council’s Corporate Plan commitments.
Ward(s)	All
Portfolio Holder(s)	Cllr Steve Davies – Housing and Homelessness
Strategic Director(s)	Richard Knott – Chief Operations Officer (Deputy Chief Executive)
Officer Contact	Alan Bethune Strategic Director Corporate Resources (Section 151 Officer) 023 8028 5001 Email: alan.bethune@nfdc.gov.uk Peter Matthew Interim Strategic Director Housing and Communities 023 8028 5729 Email: peter.matthew@nfdc.gov.uk Kevin Green Principal Service Accountant 023 8028 5067 Email: kevin.green@nfdc.gov.uk

Introduction and background

1. This report sets out the proposed Housing Revenue Account (HRA) budget, the proposed rent levels and other charges, the maintenance programme and a proposed Housing Public Sector Capital Programme for 2026/27 – 2028/29.

2. The proposed budgets for 2026/27 were considered by tenants on the Tenants’ Involvement Group on 15 January 2026 and by the Housing and Communities Overview and Scrutiny Panel on 21 January 2026. Their comments are included in paragraphs 73-78 of this report.

3. The proposed HRA budget is attached as Appendix 1, the detailed maintenance programme at Appendix 2, the 3-year forecast medium term financial position at Appendix 3, the proposed Capital programme at Appendix 4 and a 30-year business plan briefing document at Appendix 5.

Key Issues

4. Housing Authorities and Registered Providers face on-going challenges to maintain the continuation of high-quality services to their tenants, ensuring that buildings are safe and free from hazards and delivering greater energy efficiency measures in the retrofitting of their stock, as well as delivering more affordable homes. Tenants, too, are facing challenges over rises in the cost of living. The proposal set out below to increase rents in line with the Government’s current recommendation is considered to strike the right balance to ensure that the Council continues to provide high quality services to tenants and that the necessary programmes of maintenance and repairs to council housing stock are undertaken, as well as delivering Home Energy Improvement targets (EPC C and above) and new affordable council homes in the district.

5. Members are asked to consider a number of financial issues for 2026/27.

Housing Rents

6. The proposed budget identifies a social rent increase of 4.8%, in line with the Government’s policy rent increase guidelines. It is the seventh increase, following a previous four-year social rent reduction programme.

7. Following the rent increase, average weekly rents will be £133.36 for 2026/27. The actual increase will vary by property but will amount to an average increase of £6.10 per week. Approximately two thirds of tenants are in receipt of benefits to help pay rent costs.

8. In 2023/24 the Government restricted rent increases to 7% rather than the 11.1% that would have applied under the policy of CPI+1%. This meant that actual rents have since that time been lower than formula rent levels, and income fell behind the inflationary costs to the service. The formula rent is still calculated per property and is a guideline figure to show what the rent would have been had there been no rent restrictions in place.

9. The Government has been considering allowing Councils to increase rents by an amount greater than the standard 4.8%, in order to move back towards formula rent levels, using rent convergence – the act of closing the gap between actual rents and formula rents over a period of time. The Housing Minister has now announced that convergence will not be implemented for the 2026/27 financial year but that 2027/28 weekly rents will be permitted to rise by £1 over and above CPI+1% and then by £2 above CPI+1% from 2028, until formula rent is reached.

10. This approach to rent setting enables the council to continue to provide homes that are safe, warm, and attractive places to live for our tenants. For example, the extra rental income allows stable long-term investment in our housing stock to deliver our ambition of improving the energy efficiency of over 3,200 homes to at least EPC C or above by 2030 (Corporate plan 2024 to 2028).

11. The recognised benefits to tenants and their households include better health outcomes, and homes that are cheaper to keep warm. Warmer homes are also better for the environment and for the council in meeting its housing energy efficiency targets.

12. We have a total housing stock of 5,275 well-maintained homes with 98.8% meeting the current Decent Homes Standard. Whilst we do not have any high-rise building, included in our housing stock and requiring on-going capital investment to ensure specific health and safety requirements such as enhanced fire remediation works are met due to vulnerabilities are:

· 3 Extra Care Schemes

· 81 units of HRA owned Temporary Accommodation comprising 101 bedrooms

· 1 Scheme for ex-rough sleepers

13. The previous, current and proposed HRA budget allows for around 20,000 responsive repairs each year and the works to relet 250 empty properties per year. This has been reflective of demand, though it continues to increase and tenant expectations continue to rise. From the 01 April – 31 December 2025 the housing landlord service has attended 26,063 repairs which demonstrates a demand increase of 30.3%, with the potential to rise by the end of the financial year 2025-26. In addition, social mobility is increasing with over 400 empty properties requiring relet works.

14. It is worth noting that 1,185 of these repairs were classed as Emergency repairs requiring 3 hours attendance anywhere within the large geography of the New Forest, in turn creating operational delivery pressures for the teams involved to meet the response times.

15. Despite this spike in demand, performance in November 2025 against SLA timeframes is recorded as:

Urgent Jobs	Priority Jobs	Routine Jobs	Programmes works
97.89%	96.28%	93.89%	98.72%

16. Our tenant data and insight reports demonstrate that complaints have clustered around damp/mould and repeated access arrangements; and expectation of scope of repairs continue to rise locally and nationally. The introduction of the Hazards in Social Housing (Prescribed Requirements) (England) Regulations 2025 which came into force 27 October 2025 commonly known as “Awaab’s Law”; plus, the national publicity campaigns are seen as a contributing factor around the surge in repairs demand and associated complaints regarding damp and mould. This should not by proxy be taken that properties are in poor condition, more so that tenants are more aware of their responsibilities, of the implications on their health for not reporting repairs and the ease of reporting repairs to the council.

17. NFDC prepared well for the new legislation and went a step further in planning to address all the 28 hazards contained within the legislation (currently with different implementation dates through 2026) in its current operating procedures, not just damp and mould. This has included faster triage and better resident liaison reduce re visits, speed access, and to cut avoidable costs. It also means maintaining uplifted responsive repairs budgets including funding new Resident Liaison Compliance Officer capacity to unblock access and meet statutory health and safety compliance cycles including gas, electrical, and water hygiene etc.

18. A key driver therefore of HRA costs remains cyclical/responsive repairs, where there is less opportunity to control the increasing demand pressures as indicated. It is also the priority landlord service needed and requested by our tenants and leaseholders to keep them safe and satisfied within their own homes and communities.

19. The Major Repairs programme is also a significant proposed programme which includes an increase in gas boiler replacements, and a replacement windows and doors programme to keep on track for the Council’s ambition to have all its homes certified EPC C by 2030.

20. This ambition has been demonstrated in our housing service always seeking to pro-actively achieve excellence in how we have supported our tenants and their homes. The results of 81% tenant satisfaction for this service, and the high performing service KPIs which demonstrate that despite the increasing service pressures, including costs of employees and materials that continue to rise above inflation, we can demonstrate and provide assurance of our good performance through our performance data and governance.

21. This includes working with our housing tenants to understand their needs and provide high quality service standards in line with the government's regulatory regime.

22. Whilst we welcome the opportunities and challenges provided by new legislation and improved standards the proposal to rent setting enables the council to continue to deliver to required standards and maintain its current high levels of regulatory compliance, health and safety, and tenant satisfaction over the medium term.

23. The additional rental income will also fund significant Home Energy Improvement programmes and carbon reduction impacts as costs are likely to be higher at the outset of the programme.

24. Improvements targeted in specific areas, where more challenging to improve property types are difficult to improve, such as non-traditional properties given our generally aged housing stock which puts pressure on the HRA in the medium term and longer term. Due to the geographical spread and type of housing stock with mixed fuel types including oil burning technologies where certain rural areas are off-gas and in a few cases off-grid adding complexity and cost to planned improvements

25. There are on-going cost pressures in labour and materials which outstrip inflation targets and remain volatile within the economy. The continued support for the funding of Disabled Facilities Grants in the Council Owned stock to support vulnerable and disabled tenants to remain in their own homes is one example where the service has reported an average of 30% cost increases over the last year by specialist contractors and the price of equipment and building works etc. The council nevertheless remains committed to providing this service for the reasons mentioned.

Service Charges – Hostels & Flat Accommodation

26. Service Charges are currently used by the Council as a method to recover Council Tax and domestic and communal energy costs from tenants where their personal usage costs are charged directly to the Council by the respective billing organisations. Service Charges are also used to recover some aspects of equipment provision, cleaning and communal heating and lighting costs from tenants, which are also incurred in their respective properties.

27. Around 1,300 tenants and leaseholders pay service charges to the Council and a review of costs and rates commences at the end of each calendar year. All service charges are revised and disaggregated each year to reflect accurate charges for tenants and leaseholders based on actual costs, and this year’s exercise has been used to inform this report, and service charges are then adjusted flexibly each year in line with these changes.

28. For 2026/27 total service charge income will increase by £69,000, largely reflecting additional properties arising from the Development Programme.

Garage Rents

29. It is proposed that garage rent charges are increased in 2026/27 by 4.8% (£0.68 per week) to £14.93 per week, plus VAT where applicable.

Planned Maintenance & Improvement Works

30. The report proposes total budgetary provision of £13.657 million for planned maintenance and improvement works to houses and estates. This, together with budgetary provision of £5.636 million for reactive maintenance works means that, in total, £19.293 million will be spent on tenants’ properties in 2026/27. Details of the proposed works for 2026/27 and an indication of proposals for the following two years are set out in Appendix 2.

Fire Risk Assessment Works

31. Between 2022/23 and 2025/26 the Council will have spent £6.8 million on fire safety and statutory compliance matters. Funding of £1.3 million has been allocated for 2026/27, including £850,000 rephased from 2025/26, to continue the requirements to address identified actions from Fire Risk Assessments (FRAs) in flat blocks.

32. Rephasing includes two existing buildings covered within the scope of project work which met the requirements of Building Regulations at the time of construction. These buildings have been assessed by our commissioned fire engineer with new fire safety strategies devised to support the continuation of ‘defend in place’. The scope of work is intended to support fire safety improvements as a betterment to those in place at the time of construction, alongside wider modernisation improvements to common space, external façade and roof covering replacement which have come to the end of their serviceable life. More urgent work to deal with risk mitigation has already taken place. These buildings are inspected weekly by our building safety officers.

Home Energy Improvement Programme

33. In 2023/24 work to establish the future upgrade programmes to deliver all homes to EPC C by 2030, and net zero carbon by 2050 were established. Measures required to each home within the Council stock to meet these targets is known and estimated costs applied up to 2050. 2024/25 was considered a transition year where planning the upgrade strategy began to be overtaken by the delivery of increased retrofit activity. Funding of £3 million is proposed for 2026/27, but total expenditure up to 2030 is likely to be £15 million, with a further £115 million required to meet net zero targets by 2050.

34. Expenditure in the next 3 years will likely be offset by securing a grant of up to £824,000 million from the Social Housing Decarbonisation Fund (SHDF).

HRA Income 2026/27

35. Estimated total income for 2026/27 is £1.851 million higher than the original budget for 2025/26. The income variations from the 2025/26 approved budget are set out below:

Change

	£000	Paragraph
Dwelling Rents	(1,929)	36
Non – Dwelling Rents	10	37
Service Charges	(69)	38
Contributions to Expenditure	51	39
Other Income	86	40
Total	(1,851)

36. Dwelling Rents (£1.929 million increase) – The proposed budget for 2026/27 includes the benefits of £1.640 million arising from the proposed 4.8% rent increase, £267,000 from a net increase in property numbers from the development programme, including new shared ownership properties, offset by Right to Buy Sales and £22,000 from flexible rent and capped rent changes.

37. Non - Dwelling Rents (£10,000 reduction)– This income is derived from garages and rents of other housing land. The overall reduction reflects a £74,000 impact of reduced lettings due to voids and an ongoing project to provide a full options appraisal of all sites, offset by a £34,000 benefit arising from the proposed 4.8% increase in charges and increased non garage rent income of £30,000.

38. Service Charges (£69,000 increase) – The service charges proposals detailed in Section 3 will result in increased income of £69,000 largely due to additional properties arising from the Development Programme.

39. Contributions to Expenditure (£51,000 reduction) – This reduced income reflects the removal of specific Government grant that was provided in 2025/26 as a contribution towards the estimated £200,000 additional costs arising from the National Insurance changes announced in the 2025/26 Budget.

40. Other Income (£86,000 reduction) – Interest earnings are anticipated to reduce by £114,000 due to lower interest rates and the use of capital receipts to fund the capital programme. Administration income has reduced by £20,000 due to lower predicted numbers of Right to Buy Sales. These reductions are offset by an increase of £48,000 in the Shared Amenities contribution from the General Fund, to cover inflationary increases in costs and increases in expenditure on grounds maintenance budgets, as detailed in paragraph 43.

HRA Expenditure 2026/27

41. Budgeted operating expenditure for 2026/27 is £957,000 higher than the approved budget for 2025/26. After allowing for depreciation charges and the removal of the non-recurring 2025/26 transfer of £150,000 from reserves for specific earmarked projects, surplus resources available for making principal repayments on borrowing have increased by £744,000 to maintain a balanced Housing Revenue Account for the year. The major variations are set out below:


	Change	Paragraph
	£000
Cyclical/Reactive Maintenance	554	42
General Management	179	43
Grounds Maintenance and Trees	176	44
Housing Schemes and Temporary Accommodation	106	45
Capital Financing Costs - Interest	(58)	46
Operating Expenditure	957

Contribution to Capital – Supporting Housing Strategy	0	47
	957

Capital Financing Costs – Principal	744	48
Total	1,701

42. Cyclical/Reactive Maintenance (£554,000 increase)– Increased maintenance budgets are principally due to pay and prices increases of £225,000 and an increase of £211,000 on cyclical maintenance, due to the expansion of lead/legionella testing (£131,000), increased stock condition surveys (£45,000) and additional window cleaning costs (£35,000). In addition, a review of the Vehicles programme has increased allocations by £123,000.

43. General Management (£179,000 increase)- Supervision and Management budgets will increase due to pay and prices increases of £85,000. Budget provision has been added for a Waste Advisor to support the waste roll out to tenants (£21,000), for additional cleaners for new properties provided by the Development Programme (£30,000) and for additional resources to deal with the impact of increased housing regulations (£120,000).These increases have been offset by various other net reductions, mainly staff allocations, of £77,000.

44. Grounds Maintenance and Trees (£176,000 increase) – An increase in budgets is due to pay and prices increases of £23,000 and an increase of £153,000 in charges from the Grounds Maintenance team, principally due to the outcome of a review of vehicle cost allocations. These increases are partially offset by an increase in the Shared Amenities Contribution from the General Fund.

45. Housing Schemes and Temporary Accommodation (£106,000 increase)– Additional costs are principally due to inflation of £15,000, an increase of £65,000 in the cleaning budget for additional properties arising from the Development Programme and increased allocations charges of £28,000, principally following a review of the Vehicle allocation methodology.

46. Capital Financing Costs Interest (£58,000 reduction) – Capital financing costs have reduced by £58,000. This is principally due to a reduction of £116,000 following the repayment of the next instalment of the settlement borrowing in March 2026. Additional interest costs of £337,000 are expected on forecast new borrowing for the proposed 2026/27 capital programme but these are largely offset by reduced costs due to less borrowing than expected in 2024/25 and 2025/26 and due to lower interest rates than budgeted on actual borrowing taken out during 2025/26.

47. Contribution to Capital - Supporting Housing Strategy (£0 increase)– This budget is the prescribed calculation of dwellings depreciation that needs to be charged to the Housing Revenue Account and is used to part fund the capital programme. The figure is based on a combination of factors including property valuation, component costs and remaining component life. While materials costs have increased this impact has been offset by a reduction in the property valuation element. The budget will remain at £10.2 million.

48. Capital Financing Costs – Principal (£744,000 increase)– After allowing for transfers from reserves of £150,000, the Council is required to set a balanced budget for the year. Increased operating income of £1.851 million exceeds estimated increased operating expenditure[AB1] of £957,000, increasing the annual amount available for repaying principal on borrowing by £744,000 This results in a total repayment amount available of £3.769 million, which means that there will not be sufficient resources to enable the maturing loan of £4.1 million to be repaid in full during 2026/27 [AB2] [KG3] [AB4] and therefore additional replacement borrowing of £331,000 will be required.

HRA Reserve Balance

49. The HRA Reserve balance as at 1 April 2025 was £1 million. This is a prudent level and meets with good governance practice.

50. The original 2025/26 HRA budget showed a break-even operating position, with no proposed reserves transfers. A financial update report for the year was presented to Cabinet on 4 February 2026, which included forecast variations to the year end. In accordance with current policy, any surplus or deficit for the year will be balanced by a transfer to or from the Acquisitions and Development Reserve, but assuming a break-even HRA position for the year 2025/26, this will result in a year-end balance of c£4.8 million as at 31 March 2026, after funding the capital programme.

51. The proposed HRA budget for 2026/27 currently shows a break-even position and therefore the estimated Housing Revenue Account balance (cash reserve) as at 31 March 2026 and 31 March 2027 will be £1 million.

30 Year Business Plan

52. In 2024/25 the Council, with the assistance of an external consultant produced an initial 30-year HRA business plan projection, a summary of which was included in the budget report last year. This projection was further refined during the last year which will inform a formal plan with an agreed strategic direction for stock investment and new housing development. A Briefing document is attached at Appendix 5.

Capital Programme

53. The proposed Housing Public Sector capital expenditure programme for 2026/27 totals £31.550 million. The detailed programme and anticipated funding are set out over the page with indicative details for future years in Appendix 4.

Proposed Expenditure	Original 2025/26 £000	Latest 2025/26 £000	Original 2026/27 £000
Fire Risk Assessment Works	1,500	650	1,300
Major Structural Refurbishments	0	921	0
Planned Maintenance & Improvements	11,100	10,752	10,700
Home Energy Improvement programmes	1,870	2,070	3,000
Estate Improvements	200	200	400
Disabled Facilities Adaptations	950	950	950
Development Strategy	15,200	15,200	15,200

TOTAL	30,820	30,743	31,550

Funded by
Revenue	10,200	10,000	10,200
Capital Receipts	4,000	7,200	6,080
Acquisitions and Dev. Reserve	950	950	950
Government Grant	2,805	4,326	275
External Borrowing	12,865	8,267	14,045
TOTAL	30,820	30,743	31,550

54. Significant works to properties, including mandatory compartmentation and new fire doors, are being carried out following detailed Fire Risk Assessment surveys. Funding of £1.3 million is proposed for 2026/27, but this includes £850,000 rephased from 2025/26.

55. The Major Repairs budget has been set at £10.7 million. Details of the proposed programme are set out in Appendix 2 but include an increase in gas boiler replacements, and a catch-up programme of new window and door replacements which are required for the Council’s drive to have all its homes certified EPC C by 2030.

56. Funding of £3.000 million is proposed in 2026/27 to continue works for Home Energy Improvements to the Council’s housing stock and take advantage of any government grant funding available, as covered in more detail in paragraphs 31 and 32. Insulation programmes will be continued in 2026/27 to enhance the energy rating of properties and reduce fuel bills.

57. The Council’s current Housing Strategy and Corporate Plan prioritise the delivery of new affordable housing homes covering the period 2018 - 2026. The proposed capital programme for 2026/27 includes £15.200 million to be invested in additional homes. Expenditure is also expected over the period post 2026/27 through to the end of 2029, which has been accounted for in Appendix 3 with similar levels of proposed expenditure.

58. In summary, significant financial commitments are needed to deliver the Council’s priorities including our capability to deliver the HRA Business Plan:

· More affordable and sustainable homes

· Stronger and more resilient communities

· Changes to realise opportunities including IT Transformation and new asset management/repairs system (MARS)

· Maintaining high quality and value for money services, monitoring, scrutiny, and collaboration

· Mitigate Increasing Challenges and Risk in delivering Landlord services to vulnerable tenants with increased legislative requirements including building safety hazards and housing stock improvements with a focus on health and safety.

HRA Medium Term Financial Position

59. Attached at Appendix 3 is an indication of HRA budgets for two years post 2026/27 and is included to enable decisions for 2026/27 to be made in the context of affordability for the medium term. With the continuation of a significant Home Energy Improvement programme and the increasing expenditure required to maintain the aging stock the HRA is placed under continuing significant pressure.

60. Based on continuing rent increases of CPI+1% alone, it currently shows an estimated operating deficit of c£1.1 million in 2027/28 and £0.6 million in 2028/29. These figures exclude the impact of additional income from implementing rent convergence to close the gap over the medium term, whilst concurrently expenditure and income budgets will be reviewed for those years with a view to further reducing the gap, but any remaining deficit will be closed by reducing the loan principal amount repaid to the externally borrowed commitment level of £4.1 million. Significant future costs of the Major Repairs Programme and the Home Energy Improvement requirements will require both revenue and capital programme spend priorities to be reconsidered in accordance with the Corporate Plan priorities.

Section 25 Statement: Robustness of Estimates and Adequacy of Reserves

61. There are a range of safeguards in place to help prevent local authorities overcommitting themselves financially. These include the Chief Finance Officer’s duty to report on the robustness of estimates and adequacy of reserves (under section 25 of the Local Government Act 2003) when the authority is considering its budget requirement 41 (England and Wales).

Section 25 Statement from the Section 151 Officer

62. The 2026/27 budget has been constructed based on all latest information and considers all factors that will have an implication to 2026/27 that are in the council’s control. Budget variations in relation to levels of inflation have been considered and included within the budget where appropriate. Income projections are sensible and not overinflated, and the full cost of the council’s staffing establishment is based on latest pay assumptions and is calculated in an appropriate level of detail. Senior Housing Management across the council engage with the council’s central finance team on the preparation of the detailed budgets, and only budgets that have the backing of senior management make it through to this budget setting report for consideration by members of the Cabinet and ultimately Council.

63. There are areas of uncertainty that the council needs to be particularly mindful of, affecting the budget assumptions over the medium-term. These include (but are not entirely limited to) the following:

a. impact of resources required to support LGR preparations

b. pay award increases

c. materials and suppliers’ costs

64. In setting the Housing Revenue Account (HRA) Budget for 2026/27, the council is contributing to the financing of the capital programme. Use of reserves is supplemented where appropriate with borrowing, and an assessment is made on the affordability and proportionality of financing charges to the revenue budget.

65. The Housing Revenue Account reserve at £1 million and Acquisitions and Development Reserve, estimated at £4.8 million as at 31 March 2026, are considered to be adequate for 2026/27 considering the overall size of the council’s capital and revenue budgets. Variations in actual performance as compared to budget assumptions are inevitable in an organisation with a Housing turnover as large as the council’s, especially when also considering the diverse range and complexities of Housing services and differing levels of demand on those services throughout a fiscal period. Reserves exist to provide a cushion for these variations.

66. The proposal to use £950,000 of the Acquisitions and Development Reserve balance to support the delivery of the 2026/27 capital programme is considered appropriate and acceptable, both in the context of Local Government Reorganisation and the overall HRA business plan.

67. The council maintains a suitable level of liquidity regarding its overall cash balances in order to service the day-to-day requirements of the council. In order to maintain its professional investor status a minimum of £10 million must be available. Full details on how the council manages its borrowing, investments and risks can be found in the council’s Treasury Management Strategy 2026/27 report.

68. As the council’s Chief Finance Officer, I am satisfied on the robustness of the estimates as included in the budget for 2026/27 and MTFP to 2028/29 and I am able to provide assurance on the adequacy of reserves held by the council.

Corporate plan priorities

69. People Priority 1: Helping those in our community with the greatest need: Provide more quality, temporary accommodation for single people and families and work with our partners to tackle homelessness.

70. People Priority 3: Meeting housing needs: Provide increased numbers of affordable homes by 2026. Improve the energy efficiency of over 3,200 council houses by 2030. Work with our housing tenants to understand their needs and provide high quality service standards in line with the government’s new Social Housing Charter and regulatory regime.

Options appraisal

71. All spending options were considered, including postponing required capital works, but there is a risk that revenue spending will increase fixing end of life components.

72. Due to the age of a significant number of gas boilers, where parts are no longer available, there are very few alternative options to consider. Phasing of boiler replacements over a number of years has already taken place, following the obsoletion of major parts in October 2024.

Consultation undertaken

Tenants’ Views

73. The Tenant Involvement Group (TIG) recognise the Council are in a strong position with an appropriately considered and prudent Housing Revenue Account (HRA) report and budget for 2026/27. It’s important that the HRA is considered with tenants needs, desires and expectations in mind, and the TIG have been satisfied that the budget and associated report has given due consideration to this fact, having had the ability to review and scrutinise the report alongside senior officers of the Council.

74. The tenant’s view is that the proposed rent increase is reasonable, alongside the anticipated and proposed rent convergence levels that are being considered by Government. The TIG also support the continued service charge recommendations, with service charges apportioned to tenants based on actual charges incurred by the Council.

75. Tenants appreciate the Council’s commitment to our homes, specifically repairs and maintenance budgets, ensuring the safety and quality of homes, alongside the programme of improvements to homes including warmer, more energy efficient homes.

76. The TIG recognise the diverse tenant population and that the proposed rent increase will affect all tenants in different ways. Whilst the Council have given due consideration to this and are looking to ensure a balanced approach to tenants needs, communities and homes, the TIG noted concern about the impact of increased rents on those tenants affected by pressures on the cost of living. This is especially true for those whose income is not increasing in line with the proposed rent increase. The TIG noted that the council already offer a wide range of support and pointed to the Council’s publicised ‘cost of living’ help and support. However, the TIG also recommended a review of support that can be provided to our Housing Tenants, and consideration of a specific Poverty Strategy.

77. As a result of the TIGs scrutiny of the proposed budget, the TIG are able to agree with the proposals, and support the recommendations within this report.

Housing & Communities Overview and Scrutiny Panel Comments

78. The Housing and Communities Overview and Scrutiny Panel considered the proposed HRA budget and housing public sector capital programme for 2026/27 and supported the recommendations.

Financial and resource implications

79. Attached at Appendix 3 is an indication of HRA budgets for two years post 2026/27 and is included to enable decisions for 2026/27 to be made in the context of affordability for the medium term. With the onset of a significant Home Energy Improvementprogramme and the increasing expenditure required to maintain the aging stock the HRA is placed under continuing significant pressure. Whilst these budgets will be amended in future years, it shows an estimated operating deficit of c£1.1 million, before the calculation of any additional income achieved through rent convergence. Significant future costs of the Major Repairs Programme and the Home Energy Improvement requirements will require both revenue and capital programme spend priorities to be reconsidered in accordance with the Corporate Plan priorities.

Legal implications

80. The recommended capital and revenue funding levels for 2026/27 ensure ongoing compliance with legislation and guidance set by central government. Maintaining good quality and safe housing mitigates housing disrepair claims and other health and safety related claims.

Risk assessment

81. Risks related to safety compliance, maintaining the decent homes standard and maintaining the momentum toward achieving EPC C and net zero have been addressed by the recommended revenue and capital programmes.

Environmental / Climate and nature implications

82. The capital works programme continues to provide more sustainable measures to improve the thermal efficiency of Council housing stock, through more efficient window replacement programmes, insulation, boiler replacements and air source heat pumps. Following the previous work of the Greener Housing Task and Finish Group and the Greener Housing Strategy, the Council is committed to undertaking more sustainable measures year on year to reach the target of all properties having a minimum energy efficiency rating of EPC C, which will require in excess of £6 million over the next 3 years to fund the initial phases of the work, and up to a further £9 million by 2030.

83. In the long-term, should decarbonisation of the entire stock still remain a priority it will require the HRA to fund an additional £115 million of expenditure. This will present significant challenges to the HRA, and future priorities and strategic choices will need to be carefully considered. Whilst meeting net zero will require some carbon off-setting in due course the programme will remove several thousand tonnes of carbon emissions each year.

84. Initially, we remain focussed on Home Energy Improvement programmes across the stock, targeting the worst performing properties, which are often off the gas network and in rural areas.

85. All products used in the repair, maintenance and improvement of Council homes are selected to ensure the minimum impact upon the environment, are sourced from recycled materials where possible and at the same time balance the need to improve the energy efficiency of tenants’ homes in order to meet the requirement for thermal efficiency under the Decent Homes Standard and meet specified and legal safety standards.

Equalities implications

86. All equality and diversity implications will be considered at every stage of the process of commissioning and carrying out planned maintenance, improvement and cyclical maintenance works. In addition, any contractor used for works will have been assessed, as part of the process in becoming an approved NFDC contractor, in respect of their adherence to equality and diversity principles.

87. The HRA funding priorities support the funding and commissioning of necessary works with a view to improving building quality and safety, and the energy efficiency performance of the council stock, which supports vulnerable people reduce household bills at a time of cost- of-living pressures, and which reduces disrepair and the exposure to damp and mould tackling health and housing inequalities.

88. The Tenancy Account Team, which incorporates a dedicated support worker, will continue to support and signpost tenants experiencing difficulties paying their rent, working collaboratively with community support networks.

89. The continued support for the development and acquisitions programme in 2026/27 addresses housing need issues and increases the supply of properties in areas where there is high demand for social housing, and which supports the Council’s aims of tackling homelessness in vulnerable communities.

90. The continued funding of Disabled Facilities Grants in the Council Owned stock supports vulnerable and disabled tenants to remain in their own homes or provides suitable alternative housing options for applicants and existing tenants whose needs cannot be met by their existing accommodation.

Crime and disorder implications

91. Many aspects of work identified within this report will improve the security of tenants’ homes and improve the condition and aesthetics of neighbourhoods.

Data protection / Information governance / ICT implications

92. There are significant IT systems and change projects to fund and implement in 2026-27 for housing services, including a new council wide customer service IT system as a part of the Transformation programme, and a new asset management/repairs system (MARS) project for housing fully funded by the HRA.

Conclusion

93. The proposed uplifted rent (in line with government guidelines) and service charges, as well as partial re-financing of the HRA settlement loan enable expenditure levels on housing maintenance and capital programmes to be maintained. This increased expenditure ensures compliance with Housing Regulatory Standards. The proposed budget is supported with 30-year projections and potential for fiscal borrowing and debt increases to accommodate the programme.

Appendices:

Background Papers:

Appendix 1 – Summary HRA

Appendix 2 – Maintenance Programme

Appendix 3 – 3 Year HRA MTFP

Appendix 4 – Capital Programme

Appendix 5 – 30 Year Business Plan Briefing Document.

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