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Decision Maker: Executive Councillor for Housing
Decision status: Recommendations Approved
Is Key decision?: Yes
Is subject to call in?: No
To approve an update of the HRA Business Plan in preparation for the 2013/14 budget process.
Matter for Decision
The Officer’s report presented the Housing Revenue Account (HRA) budget
strategy for the 2013/14 budget cycle and specific implications, as outlined in
the HRA Mid-Year Business Plan Update document, which is to be agreed in future.
The recommended budget strategy is based on detailed financial modelling and projections of the HRA’s expenditure and
resources, in the light of local policies and priorities and national policy
and economic context. Service managers have identified financial and budget
issues and pressures and this information has been used to inform the HRA
Mid-Year Business Plan Update.
Decision of Executive Councillor
for Housing
The Executive Councillor
recommended to Council:
Revenue – HRA
(i)
To agree the HRA budget strategy, process and
timetable for the 2013/14 budget cycle as outlined in Section 9 of the Officer’s report and Business Manager & Principal Accountant’s addendum.
(ii)
To agree the revised HRA revenue, funding and
reserves projections as shown in Appendix E, and the associated decisions in
section 9 [of the Officer’s report and addendum], of the HRA
Mid-Year Business Plan Update document.
(iii)
To approve the mid-year unavoidable expenditure
items and savings, as detailed in Section 9 of the Officer’s
report and addendum.
(iv)
To authorise the
Director of Customer & Community Services, in consultation with the
Director of Resources, to calculate and communicate final cash limits or
savings targets based on the decisions taken in the report, as outlined in
Section 9 of the Officer’s report and addendum.
Treasury Management
(v)
To approve the approach to determining the most
appropriate borrowing route in respect of any additional HRA borrowing
requirement, as outlined in Section 8 of the HRA Mid-Year Business Plan Update,
delegating responsibility to the Director of Resources for the final decision,
in consultation with the Executive Councillor, Chair,
Vice Chair and Opposition Spokesperson for HMB.
Reason for the Decision
As set out in the
Officer’s report.
Any
Alternative Options Considered and Rejected
Not applicable.
Scrutiny Considerations
The Committee
received a report from the Business Manager & Principal Accountant regarding the Housing Revenue Account (HRA) Mid-Year Business
Plan Update.
The Business
Manager & Principal Accountant updated her report with an addendum tabled
at Committee amending HRA Mid-Year Business Plan section 9 details on pages
86, 88 and 91 (pages 116, 118 and 121 of the agenda).
The Committee made
the following comments in response to the report:
(i)
Expressed
concerns regarding the impact of changes to benefit payments that may affect
tenants when universal credit is introduced.
(ii)
Raising
rents above inflation could lead to more benefit claimants.
In response to
Members’ questions the Director of Customer &
Community Services, Head of City Homes plus Business Manager & Principal
Accountant confirmed the following:
(i)
A
report would be brought back to Housing Management Board (HMB) 8 January 2013
setting out support the City Council would give to tenants in light of changes
to the benefits system. The Council Business Plan relied on predicted income
from rent. Officers monitored levels of arrears. Housing Management plus
Revenues & Benefits staff were working together to identify those whose income
may be capped due to the changes to the benefits system; so the Council could
offer support to prevent arrears occurring. The intention was to take
preventative action before the benefits changes came into effect to mitigate
issues in advance as much as possible. The Council were funding Citizen’s
Advice Bureau to provide debt advice. Support was also provided through the
Council Customer Access Centre.
(ii)
The
Council has done little modelling of the impact that a lower rent increase may
have on rent arrears, as historically arrears have been very low and the
potential impact of the welfare benefit reforms is not yet quantifiable.
(iii)
Tenants
may wish to downsize properties due to the introduction of universal credit.
Alternatively, they could pay higher rent charges. This would be an individual
choice if they found the rent of larger properties exceeded capped benefits.
The Council had recently identified tenants who maybe
affected and would liaise with them about their future intentions well before
the changes come into force.
(iv)
The
Council had two methods of acquiring new housing stock. It could purchase new
build properties or exercise its option of first refusal to buy back former
‘right to buy’ properties (the latter has only been possible in recent years
due to the way that the legislation was implemented). The HRA budget had an
allocation of £300,000 that could be used to buy back former ‘right to buy’
properties. Officers used criteria to ascertain whether new build or buy back
properties offered better value for money. Market rates were paid for both
options.
(v)
The
Council’s level of borrowing was in-line with figures set out in the Business
Plan approved in February 2012. However, interest rates paid to the Public
Works Loans Board were higher than expected. Government consultation on
expected levels of borrowing may lead to a preferential rate reduction for
future borrowing, with a reduction of 0.2%.
(vi)
The HRA
self-financing model leads to a 1.6% saving target for management expenditure.
Officers pass cost savings onto tenants, where costs are fully recharged. The
HRA budget (including bids and savings targets) would be presented to HMB and
Community Services Committees for consideration in early 2013, prior to a
decision by the Executive Councillor.
(vii)
Appendix
D of the Officer’s report set out sensitivities to the financial modelling for illustartive purposes. Any additional budgets required
would form part of formal bids as part of the budget process. These would be
confirmed in the budget to presented in early 2013.
(viii)
The
Business Plan sets out information regarding projected levels of new build
property rates. Details from the February 2012 edition would be updated in
early 2013.
(ix)
The Director of Customer & Community Services
undertook to ask the Head of Strategic Housing to liaise with Councillor Blencowe regarding net
new affordable housing gain figures.
The Committee
resolved by 9 votes to 0 to endorse the recommendations as amended to include
the Business Manager & Principal Accountant’s addendum.
The Executive Councillor
approved the recommendations as amended.
Conflicts of Interest Declared by the Executive Councillor
(and any Dispensations Granted)
Not applicable.
***See below for record of delegated Officer’s
Decision***
Officer
Executive Decision - Record
Decision(s)
taken: |
Retain HRA revenue savings target at 1.6% for 2013/14 as indicated in
the HRA Mid-Year Business Plan Update, equating to £76,875 per annum, with
repairs reduction of £21,310. |
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Decision of: |
Director of Customer & Community Services, in consultation with
the Director of Resources, |
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Date of decision: |
8th November 2012 |
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Matter for Decision: |
To authorise the Director of Customer &
Community Services, in consultation with the Director of Resources, to
calculate and communicate final cash limits or savings targets based on the
decisions taken in the report, as outlined in Section 9 of the Officer’s
report and addendum. |
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Any alternative options considered and rejected:
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No changes were made to the HRA Mid-Year Business Plan Update at
Council and RPI for rents was as anticipated, so therefore consideration of
alternatives was not required. |
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Reason(s)
for the decision including any background papers considered: |
Delegated decision was made in consultation with
the Executive Councillor for Housing as part of a budget presentation. No
changes were made from the proposals made as part of the HRA Mid-Year
Business Plan Update. |
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Conflicts of
interest and dispensations granted by the Chief Executive: |
If you consider that any councillor consulted when being asked to
take a decision has a conflict of interest, you should consult Simon Pugh,
Head of Legal Services for advice as a dispensation granted by the Chief
Executive for the councillor may be arranged. |
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Other
Comments: |
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Reference: |
2/37/HMB Housing Revenue Account (HRA) Mid-Year Business Plan Update |
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Contact
for further information: |
Julia Hovells,
Business Manager / Principal Accountant |
Publication date: 09/11/2012
Date of decision: 18/09/2012