Agenda item

To consider the HRA budget and the housing public sector capital expenditure programme for 2024/25.

The Panel considered the Housing Revenue Account (HRA) budget and housing public sector capital expenditure programme for 2024/25. 

The Interim Strategic Director of Housing and Community Safety presented the report detailing the approach to raise income for the next financial year and the expenditure levels proposed, particularly in relation to housing maintenance.  This proposed to raise social rents by 7.7% in line with the Government guidelines and to increase garage rents by 15% in recognition that these had not been consistently increased over a number of years.  Shared ownership rents were also proposed to increase in accordance with the Government guidelines.  This affected three properties.

Service charges were proposed to increase. It was noted that the breakdown of service charges did not currently correlate to the cost of the actual fees and that 800 tenants did not currently contribute towards the cost of communal charges and therefore it was proposed introduce a charge for these tenants and provide the full breakdown on transparent charges to all 1,300 tenants receiving communal services.

The maintenance and improvement works budget was proposed to increase to £17.8m in recognition that investment was required, particularly with the aging stock and the requirements of the decarbonisation programme for all Council owned homes to have an EPC rating of C or above by 2030.

A Panel member questioned the current cost of the shared ownership property rents, noting the proposed increase of 9.4%.  Concern was expressed that the rise in rent, combined with the cost of living crisis and interest rate rises could have a negative effect on the affordability of these properties for those living in them.  The Interim Strategic Director of Housing and Community Safety reported that the rental amount differed amongst tenants / owners, depending on how much of the property they owned, however the range in weekly rent was between £90-£130 with the annual increase of 9.4% to be applied to this.  The rental increase would be kept under review and last year Shared Ownership tenants received a weekly increase of 7% due to the cost of living crisis, rather than the allowed 13.1%.

Members noted that approximately 75% of social rent tenants were in receipt of either Universal Credit or Housing Benefit and therefore would be protected from the proposed rent increase or any increase in service charges for communal areas for flats / hostels.

It was questioned how much of the maintenance budget would be spent on contractors rather than the work being carried out in house and whether this provided good value for money.  The Interim Strategic Director of Housing and Community Safety reported that a priority within housing services was to review the use of all external contractors and ensure that the works were carried out in the best way to provide value for money.  There was a huge pressure on the HRA and it was essential to maximise income and reduce costs.  External contracts were awarded following a rigorous procurement process and were monitored.  The breakdown of financial information relating to use of contractors was not available at the meeting but would be provided to the member separately.

RECOMMENDED:

The Panel considered the HRA budget and housing public sector capital expenditure programme for 2024/24 and supported the following recommendations:

i)                 that from 01 April 2024, an increase in rents of 7.7% from the 2023/24 weekly rent level, in accordance with Government guidelines, be agreed.

ii)               that from 01 April 2024, an increase in garage rents of 15% from the 2023/24 weekly rent level be agreed.

iii)              that from 01 April 2024, an increase in shared ownership property rents of 9.4% from the 2023/24 weekly rent level, in accordance with Government guidelines of RPI +0.5%, be agreed, and that the weekly rent of one additional property sold under previous legislation be increased by 7.7%.

iv)              that from 01 April 2024the new disaggregated approach to Service charges, which will reflect transparent and up to date annual charges for all eligible communal and domestic charges incurred by the Council, be agreed.

v)               that the HRA budget, as set out in Appendix 1 of this report, be agreed.

vi)              that a Housing Capital Programme to 2026/27, as set out in Appendix 4, be agreed.