Decision details

(i) To recommend to the Executive that they recommend to Council budget proposals for the financial year ended 31 March 2018 in respect of revenue and capital, together with approval of the capital plan and its associated funding.
(ii) To agree revised charges, where appropriate, for the year ended 31 March 2018.
(iii) To approve remits of any earmarked funds proposed.
(iv) To approve any delegations arising from the above items.

Matter for Decision

 

     i.        The HRA Budget-Setting Report provided an overview of the review of the key assumptions. It set out the key parameters for the detailed recommendations and final budget proposals, and is the basis for the finalisation of the 2017/18 budgets.

 

Decision of Executive Councillor for Housing

 

Under Part 1 of the agenda, the Executive Councillor resolved  to:

 

Review of Rents and Charges

 

a)      Approve that council dwellings rents for all social housing properties be reduced by 1%, in line with legislative requirements, introduced as part of the Welfare Reform and Work Act, with effect from 3^rd April 2017. This equates to an average rent reduction at the time of writing this report of £1.00 per week on a 52 week basis.

 

b)      Approve that affordable rents are reviewed in line with rent legislation, to ensure that the rents charged are no more than 80% of market rent, with this figure then reduced by 1%, as with social housing. Local policy is to cap affordable rents at the Local Housing Allowance level, which will result in a rent freeze from 3^rd April 2017.

 

c)      Approve inflationary increases of 2.4% in garage and parking space rents for 2017/18, in line with the base rate of inflation for the year assumed in the HRA Budget Setting Report.

 

d)      Approve the proposed service charges for Housing Revenue Account services and facilities, as shown in Appendix B of the HRA Budget Setting Report.

 

e)      Approve the proposed leasehold administration charges for 2017, as detailed in Appendix B of the HRA Budget Setting Report.

 

f)       Approve that caretaking, building cleaning, estate services, grounds maintenance, temporary housing premises and utilities, sheltered scheme premises and utilities, digital television aerial, flat cleaning and catering charges continue to be recovered at full cost, as detailed in Appendix B of the HRA Budget Setting Report, recognising that local authorities should endeavour to limit increases to inflation as measured by CPI at September 2016 (1%) plus 1%, wherever possible.

 

g)      Approve that service charges for gas maintenance, door entry systems, lifts and electrical and mechanical maintenance are increased in an attempt recover full estimated costs, as detailed in Appendix B of the HRA Budget Setting Report, recognising that local authorities should endeavour to limit increases to inflation as measured by CPI at September 2016 (1%) plus 1%, equivalent to an increase of 2% in total, wherever possible.

 

h)      Approve the transfer of budgets for smoke detectors, fencing and third party professional fees to revenue, from capital, recognising the work being carried out in these areas in the future.

 

Revenue – HRA

 

Revised Budget 2016/17:

 

i)        Approve with any amendments, the Revised Budget identified in Section 4 of the HRA Budget Setting Report, which reflects a net reduction in the use of HRA reserves for 2016/17 of £229,650.

 

Budget 2017/18:

 

j)       Approve with any amendments, the Non-Cash Limit items shown in Appendix D (1) of the HRA Budget Setting Report.

 

k)       Approve with any amendments, the Savings, Increased Income, Unavoidable Revenue Pressures and Reduced Income proposals, shown in Appendix D (1) of the HRA Budget Setting Report.  

 

l)        Approve the resulting Housing Revenue Account revenue budget as summarised in the Housing Revenue Account Summary Forecast 2016/17 to 2021/22 shown in Appendix J of the HRA Budget Setting Report.

 

Under Part 2 of the agenda, the Executive Councillor for Housing, resolved to recommend to Council (following scrutiny and debate at Housing Scrutiny Committee):

 

Treasury Management

 

m)     Request that, in 2017/18, officers conclude a review of the existing approach to treasury management, which requires 25% of the value of the housing debt to be set-aside by the point at which the loan portfolio matures. The review will consider the risks associated with a recommendation to fully re-finance the loan portfolio, against the potential financial benefit to the business plan in the shorter term of investing the resource in income generating assets. A separate report will be brought back to Housing Scrutiny Committee in 2017/18 following this review.

 

Housing Capital

 

n)      Approval of capital bids, shown in Appendix D (2) of the HRA Budget Setting Report, to include balcony works at Kings Hedges and Arbury, additional investment in Disabled Facilities Grants, and replacement of the existing housing management information system, where the cost of the latter will be met from an existing repair and renewals fund for IT services.

 

o)      Approval of the transfer of budgets for smoke detectors, fencing and third party professional fees from capital to revenue, recognising the work being carried out in these areas in the future.

 

p)      Approval of the latest Decent Homes Programme, to include updated allocation of decent homes expenditure for new build dwellings, as detailed in Appendix E of the HRA Budget Setting Report.

 

q)      Approval of re-profiling of budget totalling £954,000 for the new build schemes at Water Lane, Hawkins Road and Fulbourn Road, where completion of dwellings is now anticipated in 2017/18, as detailed in Appendices E and H, and summarised in Appendix K, of the HRA Budget Setting Report

 

r)       Incorporation into the Housing Capital Investment Plan, of anticipated grant of £14,000,000 per annum for 5 years, in respect of devolution funding to assist in the delivery of 500 new affordable homes in the city.

  

s)      Approval of a £20,000,000 per annum, new build programme, for 5 years beginning in April 2017, recognising that devolution has been approved, that the authority will receive a grant of £14,000,000 per annum towards the delivery of new affordable homes and will utilise retained right to buy receipts and HRA resources to meet the balance of funding required. This programme will replace the previous RTB New Build Programme and the assumption that the authority may need to provide grants to registered providers when sufficient resource were no longer available to top up retained right to buy receipts.

 

t)       Approval to earmark additional resource of £1,740,000 towards the cost of the re-provision of the existing 23 socially rented homes at Anstey Way, allowing a revised scheme to be brought forward, with any additionality on the site being funded from the devolution programme, using devolution grant and retained right to buy receipts.

 

u)      Approval of the revised Housing Capital Investment Plan as shown in Appendix K of the HRA Budget Setting Report.

General

v)      Approval of delegation to the Head of Finance, as Section 151 Officer, to make the necessary detailed budgetary adjustments in the HRA, in respect of savings approved as part of the HRA Budget Setting Report, following the outcome of consultation with both tenants and staff about proposed service changes and resulting final savings.   w)      Approval of delegation to the Head of Finance, as Section 151 Officer,          to approve an in year increase in the budget for disabled facilities grants, in direct relation to any increase in the capital grant funding for this purpose, as received from the County Council through the Better Care Fund.   x)      Approval of delegation to the Head of Finance, as Section 151 Officer, to make the necessary detailed budgetary adjustments in the HRA, to reflect the impact of the triennial valuation of the Cambridgeshire Local Government Pension Scheme.   y)      Approval of delegation to the Strategic Director, in consultation with the Head of Finance, as Section 151 Officer, to draw down resource from the ear-marked reserve for potential debt redemption or re-investment, for the purpose of open market property acquisition or new build housing development, should the need arise, in order to meet quarterly deadlines for the use of retained right to buy receipts.

 

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 (Shared Housing Finance Team).

 

Councillor Avery presented Liberal Democrat amendment to the budget. The committee discussed the proposals within the amendment regarding a 2% reduction in the annual set-aside debt repayment fund.

 

The Committee made the following comments in response to the report and the proposed amendment:

     i.        Sought clarification regarding fixed term tenancies.

    ii.        Suggested that the position regarding Pay-to-Stay was unclear.

   iii.        Welcomed the potential additional housing that devolution would bring.

  iv.        Suggested that the Liberal Democrat amendment was an interesting idea but that it was premature as the set-aside budget would be fully reviewed in the near future.

   v.        Suggested that identifying a potential additional funding source and then looking for something to spend it on was not the best approach.

  vi.        Stated that the Housing Transformation Programme would result in a restructure of staff and that added posts at this stage would be unhelpful.

 vii.        Supported Councillor Avery’s view that the inherited debt was unfair.

 

The Business Manager/Principal Accountant (Shared Housing Finance Team) stated the following in response to Members’ questions:

     i.        Pay-to-Stay would be difficult to implement as the council does not hold the required information. Fixed term tenancies where an alternative option.

    ii.        Confirmed that although ‘Pay to Stay’ was no longer a requirement, an option to apply it locally for incomes levels above £60,000 was available.

   iii.        Confirmed that the original budget for debt repayment had been based on repaying 100% of the debt. Based on peer authority review, this had been reduced to the current position of a set-aside that would repay 25% of the debt. This was due for review and a decision based on an examination of the risks would come to this committee at a later date.

 

Councillor Executive Councillor stated that there was no intention to instigate the voluntary scheme Pay-to-Stay.

 

The following vote was chaired by Diana Minns (Vice Chair /Tenant Representative)

 

The Liberal Democrats Group alternative budget: 8 votes in favour to 4 against. The amendment was lost.

 

Resolved (by 12 vote to 0) to endorse the original recommendations A to Y.

 

The following votes were chaired by Councillor Todd-Jones

 

Resolved (6 votes to 0) to endorse the original report recommendations M to Y of the budget proposals

 

The Executive Councillor approved the recommendation.

 

Conflicts of Interest Declared by the Executive Councillor (and any Dispensations Granted)

No conflicts of interest were declared by the Executive Councillor.