Decision

RESOLVED:

Cabinet is recommended to:

1. 1.  To approve the HRA budget proposals as set out in Section 6 and Appendix 1.
2. 2.  To approve the increase in rent of 7.7% in line with the Social Housing Regulator’s rent ceiling and agree that rents will increase on average by £8.91 from £115.68 per week to £124.59 per week with effect from Monday 1st April 2024.
3. 3.  To approve the increase in HRA fees and charges as set out in Appendix 2.
4. 4.  To approve the increase in tenant service charges as set out in paragraph 6.14; and the service charges for the Concierge service as set out in paragraph 6.16.
5. 5.  To approve the increase in Travellers charges at 7.7% as set out in paragraph 6.21.
6. 6.  To approve the increase in Shared Ownership rent at 7.7% as set out in paragraph 6.22.
7. 7.  To delegate to the Group Director of Finance and Corporate Resources in consultation with the Cabinet Member for Housing Services and Resident Participation and Cabinet Member for Finance, Insourcing and Customer Services the setting of communal heating charges to reflect the unit costs of utilities.
8. 8.  To agree the Housing Capital Programme budget as set out in paragraph 6.33 to be included in the overall Council Capital budget for approval as part of the Council Budget and Council Tax Setting Report to be approved at February 2024 Cabinet.

REASONS FOR DECISION

Section 76 of the Local Government and Housing Act 1989 requires Local Authorities with a Housing Revenue Account (HRA) to set a budget for the account that avoids a deficit, whilst using robust and valid assumptions.

Furthermore, there is a statutory requirement for the Council to prepare a 30 Year Business Plan for the HRA on an annual basis. The purpose of this exercise is to keep the long-term financial viability of the HRA under regular review.

The report also provides the approval needed to set HRA tenant rents and other charges for the financial year 2024/25. The Council is required by law to give tenants at least 28 days’ notice of any variation to the rent charged.

DETAILS OF ALTERNATIVE OPTIONS CONSIDERED AND REJECTED

The HRA covers all income and expenditure relating to the portfolio of housing stock owned by the Council. It is required by the Local Government and Housing Act 1989 to be ring-fenced from the Council’s General Fund. The legislation specifies that only expenditure relating to the Council’s landlord role can be charged to the HRA and, by extension, funded by the rents charged to tenants. The Council has a legal duty to ensure that the account remains solvent and to prepare a long-term business plan annually that keeps this under regular review.

Preparing the 30-year HRA Business Plan involves a long-term assessment of the funding needed to deliver landlord duties alongside wider strategic housing objectives. This involves detailed modelling of operating resource requirements, capital investment plans and external funding streams against wider environmental factors such as macroeconomic assumptions and potential legislative changes.

The  2024/25 budget has been built from the 30 Year HRA Business Plan and reviewing the base budget, including current forecasts of items of essential expenditure, maintenance and investment to preserve the housing service and its assets.

Alternative rent increases were considered in setting the budget, but any reduction to the rent rise as set by the Regulator of Social Housing in the Rent Standard would result in additional savings that would impact on services to tenants, and substantial savings for the Government in the subsidy of Housing Benefit. A reduction in income would also have a long term impact on future rent levels and income and the ability to deliver front line services and invest in the Housing stock.