The Council of the London Borough of Redbridge convened on Thursday, 24 February 2022, with its agenda primarily focused on the crucial task of setting the budget for the upcoming financial year and determining the Council Tax. Key discussions were scheduled around the Housing Revenue Account budget, the overall revenue and capital budget, and the appointment of an external auditor.

Housing Revenue Account Budget and Finance

A significant portion of the meeting was dedicated to the Review of Housing Revenue Account Finance and HRA Budget 2022/23 - 2026/27. This report, spanning pages 1 to 28 of the public reports pack¹, detailed the financial projections for the Housing Revenue Account (HRA) for the period 2021/22 through to 2026/27. It outlined proposals for changes in rents and other charges for HRA properties in 2022/23.

The report explained that the HRA is a statutory account for councils with over 50 council dwellings, covering income and expenditure related to managing and maintaining the housing stock, including major repairs and debt charges. As of April 1, 2021, Redbridge Council was responsible for 4,497 council homes. The report also addressed the 'Self-financing' regime, under which the Council retains rent income to manage its housing stock, and noted the removal of the HRA borrowing cap by the government in 2018, which has facilitated capital spending for objectives such as building new council homes.

Discussions were scheduled to cover rent levels, adhering to the Government's 'Policy statement on rent setting for social housing' and the 'Rent Standard 2020,' which permits annual rent increases of a maximum of CPI+1%. The report detailed the methodology for calculating Formula Rent, based on average local earnings and bedroom size, and property value. It also outlined Redbridge's Rent Policy, approved in December 2019, which applies to homes built or bought by the HRA and affordable rented homes completed after January 1, 2020, introducing London Affordable Rent.

The report also included projected outturn positions for the HRA in 2021/22 and the proposed HRA Revenue Budget for 2022/23, detailing expenditure and income. Recommendations were to be considered regarding tenant service charges, garage and car parking charges, and heating and hot water charges, with proposed increases for most of these. Other fees and charges, including those for leaseholders, were also scheduled for review and potential adjustment.

Furthermore, the report provided a detailed breakdown of the HRA Capital Programme, outlining movements and funding sources for new build programmes, works to existing stock, and the overall HRA capital programme. It detailed projected capital investment needs and proposed funding through revenue contributions, the Major Repairs Reserve, external funding (such as GLA Grant and Section 106 receipts), projected capital receipts, and borrowing. The report indicated a significant increase in the total amount borrowed by the HRA over the next five years.

Revenue and Capital Budget and Council Tax

The core of the meeting revolved around the Revenue and Capital Budget and Council Tax 2022/23 and MTFS 2022/23 - 2026/27 report, which spanned pages 29 to 240 of the public reports pack¹. This comprehensive report provided the Council with the necessary information to consider and approve its financial plans for the upcoming year and the medium term.

Key elements scheduled for discussion included:

• Robustness of the Proposed Budget and Medium Term Financial Strategy (MTFS): The Corporate Director of Resources, as the statutory Chief Finance Officer, was required to advise Members on the robustness of the proposed budget and MTFS, as well as the adequacy of the Council's Reserves and Reserves Strategy, in accordance with Section 25 of the Local Government Act 2003. The report noted significant budget pressures and risks, including the ongoing impact of the COVID-19 pandemic, the lack of long-term funding arrangements, and the challenge of balancing the budget with increasing demand for services.
• Capital Investment Programme 2022/23 to 2026/27: This section detailed the proposed Capital Investment Strategy, outlining the framework for funding and investment decisions. It included recommendations for new capital proposals totalling £193.500m, with £157.731m for the General Fund and £35.769m for the HRA. The report provided a revised capital programme of £872.174m and detailed the funding sources, including capital grants, capital receipts, CIL/Section 106, revenue contributions, and borrowing.
• Treasury Management Strategy and Prudential Indicators 2022/23: The meeting was to consider and approve the Treasury Management Strategy, Treasury Management Policy Statement, Minimum Revenue Provision (MRP) policy, Prudential Indicators, and the Annual Investment Strategy for 2022/23. These documents are crucial for managing the Council's financial assets and liabilities prudently.
• Fees, Charges and Rents for 2022/23: Recommendations were to be made regarding changes to fees and charges requiring Cabinet approval, noting the Parking Account, and approving increases to rents for housing properties held within the General Fund and let on secure tenancies. The proposed rent increase was in line with Government policy, based on September CPI inflation plus 1% (4.1%). Tenant service charges for General Fund housing properties were to be aligned with HRA tenant service charges.
• General Fund Budget 2022/23: The Council was to note that its budget for 2022/23 had been balanced, approving the Revenue Budget, including the proposed General Fund net budget requirement of £201.605m. This also included the approval of the Schools budget and noted the forecast collection fund deficit. Proposed savings and growth for 2022/23 and future years were to be approved, along with the Flexible Capital Receipts Efficiency Strategy. The report highlighted agreed ongoing budget savings and budget growth for investment in services.
• Council Tax Resolution: The meeting was to agree the calculations for 2022/23, determining the Council Tax requirement and the basic amount of council tax per Band D property. The report detailed the Council Tax bands for Redbridge services and the GLA precept, culminating in the approval of the total Council Tax for 2022/23 for each band of property. It was to be determined that the level of basic council tax was not excessive, thus avoiding the need for a referendum.

Appointment of External Auditor

As a matter required by law or the Constitution, the Council was scheduled to consider the Appointment of External Auditor (pages 241-255 of the public reports pack¹). This item addressed the process for appointing the Council's external auditor for the period from 2023/24 onwards. The report outlined three options: individual auditor procurement, joint auditor procurement, or opting into the national scheme managed by Public Sector Audit Appointments Limited (PSAA). The report recommended opting into the PSAA national scheme due to its potential for economies of scale, reduced administrative burden, and value for money, particularly in a challenging local audit market. The Council was required to formally respond to PSAA's invitation by March 11, 2022.