The Committee noted the draft Housing Revenue Account (HRA) budget and that the Planning Group would agree the agenda items for the January budget challenge meetings.

The Housing Revenue Account Draft Budget

The Assistant Director of Finance introduced the HRA slides and reminded the Committee that the Housing Revenue Account is a ringfenced account¹ used to manage all costs associated with the council's duty as a social landlord.

It was confirmed that the vast majority of the HRA’s revenue income is from rents paid by council tenants, and that the draft budget assumed that rent charges for 2025/26 would be increased by the maximum amount permissible under the Rent Standard, which is 2.7% for tenants and 7.7% for shared owners. The Committee were told that this would result in an average increase of £2.85 per week for tenants and £7.35 per week for shared owners.

The Assistant Director of Finance confirmed that the budget for the next financial year was still a draft, and that proposals could be amended to reflect changes in government policy. In particular, she noted potential changes for Right To Buy and the National Insurance threshold for employers. She also noted that the council was still waiting for the Government to release the Local Government Finance Settlement, which would confirm funding for local government.

The Director of Finance and Resources elaborated, saying:

The full impact of the national insurance threshold change for employers on the HRA was not yet fully known as it was likely that contractors might need to increase prices to cover this additional cost and the council may have to absorb those extra costs as often the works conducted are part of the council’s duties and therefore could not be postponed/cancelled.

Committee members asked questions about the properties due to be demolished and how they would be replaced. The Assistant Director of Finance responded that there were many proposals under consideration, but that due to the limited financial capacity of the HRA, the council would need to decide which sites were the priority for development. She said that the council might also need to sell some sites. The Assistant Director of Finance was then asked if any of the properties or sites could be considered for use as in-house provision of residential homes for children. She replied that this could be considered where possible, but that there would be limits to what could be achieved, as the capital program was ringfenced.

When asked about the council’s approach to maintaining its stock, the Assistant Director of Finance said that compliance with the council’s landlord duties was the main priority, but that the council hoped to be able to use any remaining funds to undertake preventative works to ensure that the quality of the housing stock remained as high as possible.

On the issue of supporting tenants who are struggling to pay their rent, the Assistant Director of Finance said that tenants were encouraged to check their eligibility for benefits and the Council Tax Reduction Scheme with the Revenue and Benefits team. She also noted that there was a Support Fund within the HRA that could be used to help tenants experiencing financial difficulties.

Review of Budget Reductions and Income Proposals

The Committee noted the draft council budget for 2025/26 that had been presented to the Cabinet at their meeting on 3 December 2024. They acknowledged that they would shortly receive the supporting business cases for the proposed reductions and income increases, and that this would allow them to select proposals for further discussion during the January challenge meetings.

The Chair told the Committee that, as the council would probably not have received and been able to fully assess the impact of the Local Government Finance Settlement in time for the meeting on 18 December 2024, he proposed that the committee use that meeting for the first of the January budget challenge sessions, and that the Settlement and its implications for the Draft Budget be discussed on 2 January 2025. The Committee agreed with this approach by acclamation.

Committee members discussed several budget reductions and income proposals that were of initial interest to them. They agreed that following consultation with the Committee, the Planning Group would agree the agenda items for the challenge meetings.