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Decision Maker: Executive Councillor for Housing
Decision status: Recommendations Approved
Is Key decision?: Yes
Is subject to call in?: No
The Committee is asked to
scrutinise the detailed HRA Budget-Setting Report (BSR) 2025/26 and to consider
a) the proposed charges for HRA
housing rents and service charges.
b) the revenue budget
proposals.
c) the capital budget proposals
Their findings will be reported to The Executive when they meet to consider the HRA Budget-Setting Report (BSR) 2025/26 on 10 February 2025.
Matter for Decision
The Housing Revenue Account (HRA) Budget Setting Report
(BSR) was presented to Housing Scrutiny Committee to allow scrutiny of
proposals for the review of rents and service charges, revenue bids and
savings, and the Housing Capital Investment Plan, which includes capital bids
and all associated funding proposals.
Comments made by the Housing Scrutiny Committee will be
reported to the Executive meeting taking place on 10 February 2025.
The Executive will then recommend the budget for Full
Council approval at its meeting on 24 February 2024.
Decision
of Executive Councillor for Housing
To refer the recommendations below
to the Executive to:
i.
Recommend that full Council approve that council
dwellings rents for all social rented and social shared ownership properties be
increased in line with government guidelines, with an increase of 2.7%, being
inflation as measured by the Consumer Price Index (CPI) at September 2024 of
1.7%, plus 1%. Rent increases will take effect from 1 April 2025. This equates
to an average rent increase of £3.37 per week.
ii.
Recommend that full Council approve that
affordable housing rents, inclusive of service charge, are also increased by
2.7% in line with the increase for social rents. This equates to an average
rent increase of £5.06 per week.
iii.
Recommend that full Council approve that rents
for affordable shared ownership properties are increased by RPI as at September
2024, 2.7% plus 0.5%, as allowed for in the lease requirements for these
properties.
iv.
Recommend that full Council approve that garage
and parking space charges for 2025/26 are increased by inflation at 2.7%, in
line with dwelling rents, and approve changes in charges for parking permits,
as set out at table 10 on page 28 of the attached Housing Revenue Account
Business Plan Update and Budget Setting Report 2025/26.
v.
Recommend that full Council approve the proposed
service charges for Housing Revenue Account services and facilities, as shown
in Appendix D of the attached Housing Revenue Account Business Plan Update and
Budget Setting Report 2025/26.
vi.
Recommend that full Council approve the proposed
leasehold administration charges for 2025/26, as detailed in Appendix D of the
attached Housing Revenue Account Business Plan Update and Budget Setting Report
2025/26.
vii.
Recommend that full Council approve that service
charges continue to be recovered at full estimated cost, as detailed in
Appendix D of the attached Housing Revenue Account Business Plan Update and
Budget Setting Report 2025/26, recognising that local authorities should
endeavour to limit increases to inflation as measured by CPI at September 2024
(1.7%) plus 1%, wherever possible.
viii.
Recommend that full Council approve (with any
amendments) the revenue savings, pressures and bids set out at Appendix F of
the attached Housing Revenue Account Business Plan Update and Budget Setting
Report 2025/26.
ix.
Recommend that full Council approve the
resulting Housing Revenue Account revenue budget as summarised at table 5 on
page 20 of the attached Housing Revenue Account Business Plan Update and Budget
Setting Report 2025/26.
x.
Recommend that full Council approve the capital
bid set out at Appendix F of the attached Housing Revenue Account Business Plan
Update and Budget Setting Report 2025/26.
xi.
Recommend that full Council approve the updated
Housing Capital Investment Plan as shown at Appendix E of the attached Housing
Revenue Account Business Plan Update and Budget Setting Report 2025/26.
xii.
Recommend that full Council approve the proposed
approach to financing the Housing Capital Investment Plan as set out at table
11 on page 31 of the attached Housing Revenue Account Business Plan Update and
Budget Setting Report 2025/26.
xiii.
Recommend that full Council approve the revised
need to borrow over the life of the Business Plan, to sustain the proposed
level of capital investment, which includes delivery of the 10 Year New Homes
Programme.
xiv.
Recommend that full Council recognise that the
constitution delegates Treasury Management to the Chief Finance Officer (Part
3, para 5.11), with Part 4F, C16 stating; ‘All executive decisions on
borrowing, investment or financing shall be delegated to the Chief Finance
Officer, who is required to act in accordance with CIPFA’s Code of Practice for
Treasury Management in Local Authorities’.
xv.
Recommend that full Council recognise that the
decision to borrow significantly to build new homes impacts the council’s
ability to set-aside resource to redeem the HRA Self-Financing debt at the
point at which the loan portfolio matures, resulting in a need to re-finance
debt at the point of maturity.
xvi.
Recommend that full Council approve inclusion of
a capital budget for Disabled Facilities Grant expenditure and associated grant
income from 2025/26 onwards, based upon 2024/25 net grant awarded, with
delegation to the Chief Finance Officer to approve an in year increase or
decrease in this budget in any year, in direct relation to any increase or
decrease in the capital grant funding available for this purpose, as received
from Cambridgeshire County Council through the Better Care Fund.
xvii.
Recommend that full Council approval of
delegation to the Chief Finance Officer, as Section 151 Officer, to determine
the most appropriate use of any additional Disabled Facilities Grant funding,
for the wider benefit of the Shared Home Improvement Agency.
xviii.
Recommend that full Council approve delegation
to the Director of Communities to review and amend the level of fees charged by
the Shared Home Improvement Agency for Disabled Facilities Grants and repair
assistance grants, in line with any recommendations made by the Shared Home
Improvement Agency Board.
xix.
Recommend that full Council approve delegation
to the relevant Director, in consultation with the Chief Finance Officer, to
draw down resource from the ear-marked revenue reserve or capital reserve for
potential debt redemption or re-investment, for the purpose of open market land
or property acquisition or new build housing development, should the need
arise, in order to meet deadlines for the use of retained right to buy receipts
or to facilitate future site redevelopment.
xx.
Recommend that full Council approve delegation
to the Chief Finance Officer to make any necessary technical amendments to
detailed budgets in respect of recharges between the General Fund and the HRA.
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 Chief Finance Officer.
The Committee made
the following comments in response to the report:
i.
Tenant and Leasehold Representatives expressed
concern that they were not able to vote on Housing Revenue Account (HRA) budget
amendment recommendations, which they had been able to do so previously.
ii.
Noted the budget savings figure which was
expected to be delivered following the redesign of the Housing Service but
understood further detail about this would be provided in the third week of
February.
iii.
Was disappointed to see the proposed removal of
the under-occupation incentive scheme in the report. Believed there should be
some incentive available for tenants in under-occupied properties.
iv.
Asked if there was other funding available to
support tenants who wanted to move due to the under occupation of their property.
Asked if funding was available, whether this could be publicised more.
v.
Queried the reduced budget for ‘target hardening
work’ for people suffering domestic violence.
vi.
Noted within the Executive Councillor’s Foreword
to the BSR that tenancy audits identified cases of domestic abuse and that
further tenancy audits may identify further instances of domestic abuse so
queried whether from a budget point of view, the Council may need to spend more
in this particular area than it currently did.
vii.
Asked how the committee could be assured that
adequate funding was within the HRA budget to deliver services.
viii.
Asked if Central Government would consult with
councils about financing for retrofit schemes.
ix.
Queried if ‘Right to Buy’ (RTB) funding could
only be used for shared ownership schemes.
x.
Asked what work had been undertaken to assess
the impact of the proposed rent increases on residents.
xi.
The group design restructure for the service
made it difficult to scrutinise the budget. It was not clear how the council’s
restructure would impact the delivery of frontline services. More information
and explanation should have been provided.
xii.
Asked if there was sufficient officer capacity
to deliver resident engagement taking into consideration the requirements
required by the Housing Regulator. Queried if there was sufficient resource
available to pay for communication with tenants and leaseholders.
xiii.
Referred to previous decisions discussed by the
Committee in 2013 and 2019 which agreed that the Council would not process
housing arrears action resulting from issues with Universal Credit and the
Spare Room Subsidy payments. They would have liked to have proposed an
amendment to the BSR to request that this approach be extended to include the
two-child benefit cap and the benefit cap itself. Asked whether work had been
undertaken to see whether a tenant in an affordable rented property may be
disproportionately affected by the benefit cap than a tenant in a socially
rented property.
xiv.
Referred to concerns which had been raised about
value for money / deterioration in standards for services charges in blocks of
flats and sheltered housing schemes in relation to building cleaning / window
cleaning and grounds maintenance charges (detailed in appendix D on page 75 of
the BSR).
The Assistant
Director for Housing and Homelessness, Director of Communities said the
following in response to Members’ questions:
i.
The decision for the Executive Councillor at
this meeting was to recommend the HRA budget to the Executive. Comments from
the Scrutiny Committee would be minuted and tabled at the Executive meeting.
The main reason for the change in the HRA budget process was to reflect best
practice within the Local Government sector so that revenue and capital budget
was approved by Full Council. The HRA budget process was therefore being
brought in-line with the General Fund budget process. Tenant and Leaseholders
were able to submit public questions (in accordance with the requirements set
out in the Public Speaking Scheme) to the Executive and Full Council
meetings.
ii.
The figures regarding the group redesign
proposals had only recently been collated.
iii.
The council needed to set a balanced budget,
unfortunately this meant that difficult decisions had to be made regarding what
services were provided. This was why the under-occupation incentive scheme was
proposed to be removed.
iv.
Funding was available for tenants who wanted to
move due to the under occupation of their property. If a tenant was actively
looking to move and they were in receipt of benefits, discretionary housing
payments were available to top up rent to assist with moving fees etc. Advised
that tenants could seek support from the Council’s Financial Inclusion Officer
to make sure that they were claiming all the funding that they were entitled
to. Acknowledged that there could be a potential gap for tenants who wanted to
move (due to under occupation of their property) but were not in receipt of
some kind of benefit funding as they would not be able to access the
discretionary housing payment to assist with moving fees.
v.
The ‘target hardening works’ domestic abuse
funding was a specific budget set aside to fund works to a property where a
victim of domestic abuse wished to stay in their property. Examples of target
hardening works included new doors, fencing, or a ring doorbell. Often victims
of domestic abuse did not want to stay in their property and were supported by
the Council to move to alternative accommodation. This budget was therefore
usually underspent so the reduction in the budget was to reflect this. There
was alternative funding which could be used to support people if the revised
budget was spent.
vi.
The data from tenancy audits could be
interrogated further; relevant referrals were made for victims of domestic
abuse and support was provided. Additional security measures (provided through
the target hardening funding) were only effective where the perpetrator was no
longer in the household. As noted above, usually victims of domestic abuse did
not want to stay in their property and were therefore supported to move to
alternative accommodation, therefore did not expect the reduction in budget for
target hardening works to impact residents as the budget was for very specific
circumstances.
vii.
Advised that the HRA BSR was prepared upon the
budget approved within the HRA Medium Term Financial Strategy. Revenue and
capital budgets were agreed with relevant budget holders. A balanced budget
needed to be prepared. There had been additional pressures from damp,
condensation and mould (DCM) cases which had been built into the budget. Hard
decisions had to be made about the services which were provided and those that
weren’t.
viii.
The Council had ambitious plans for both
delivering new homes and retrofitting existing homes which the Council could
not fund on its own. Officers would continue dialogue with Central Government
regarding financial support.
ix.
Advised that Officers were trying to highlight
that RTB funding could now be used to fund shared ownership housing as
previously it was not possible to do so.
x.
The Council was mindful of the impact on
residents when rents were increased. An Equality Impact Assessment was
undertaken as part of the HRA BSR drafting process. The Council was in a
difficult economic position. Rent increases were capped on an annual basis. If
rents were not increased there would be a lasting impact on the HRA, and this
needed to be balanced against the ability of the Council to deliver services
for tenants.
xi.
Under the current staffing structure there was
sufficient capacity within the Team to fulfil the resident engagement
requirements of the Housing Regulator. The Resident Engagement Strategy would
be reviewed as part of the transformation programme. Moving forward the
proposals to bring together certain Teams as part of the restructure would
strengthen resident involvement.
xii.
In response to the question regarding previous
Housing Scrutiny Committee decisions and the process for rent arrears action,
noted that the 2019 report and decision statement was in relation to Universal
Credit Agenda for Housing Scrutiny Committee on
Wednesday, 16th January, 2019, 5.30 pm - Cambridge Council.
This stated ‘In light of issues surrounding Universal Credit and payment
arrangements for housing costs, approvals for eviction will not be progressed
for a tenant in rent arrears which relate solely to Universal Credit delays and
missed payments which are beyond their control. Any delays that are deemed to
be the result of the tenant’s own delay in applying/supplying the correct
information will be followed up through the usual processes.’
xiii.
The report referred to in October 2013 was a
report on Welfare Reform and the impact on tenants Agenda for Housing Management Board on
Tuesday, 1st October, 2013, 5.30 pm - Cambridge Council.
The decision stated that ‘Eviction will not be progressed for a tenant in rent
arrears, which solely relate to the under occupation reduction in Housing
Benefit, when all any of the following criteria are met:
a. Where
the tenant has applied for rehousing and is making active reasonable bids.
b. Where
the tenant has applied for DHP.
c. Where
other tenancy conditions (such as anti-social behaviour) have not been
seriously breached.’
xiv.
The issues raised in relation to enforcement
action for rent arrears would be better considered within the Council’s Rental
Arrears and Income Collection Policy rather than as part of the BSR. The Rental
Arrears and Income Collection Policy was due to be reviewed, and Tenant and
Leaseholder Representatives would be involved with the review in due course. In
response to the concerns raised regarding the two additional factors impacting
rent arrears (two child benefit cap and benefit cap) it would not be prudent
for the Council to pursue possession orders or eviction for rent arrears which
occurred due to delays with payment of benefits.
xv.
Noted concerns raised about service charges and
the standard/level of service provided. Noted that building cleaning was tricky
as areas could be cleaned and shortly afterwards for example following
inclement weather areas become dirty quickly, so it appeared as though cleaning
had not been undertaken. Requested that issues were raised with Officers and
noted that Tenants and Leaseholders could raise concerns via the Council’s
complaint process.
The Executive
Councillor for Community Safety, Homelessness and Wellbeing advised that the
reduction in the budget for domestic abuse funding for ‘target hardening works’
appeared on the face of the document to be alarming however it was a budgetary
measure and advised that anyone who needed help and support would receive
it.
The Executive
Councillor for Housing noted that rents were increased by 5% in 2022/23, in
2023/24 rents were increased by 7.4%. The proposed rent increase for 2025/26
was 2.7% which was a lower percentage than in previous years. The impact of
rent increases on tenants unfortunately had to be balanced against the delivery
of a balanced budget.
The Committee
resolved by 6 votes to 1 with 5 abstentions to endorse recommendations a to i.
The Committee
resolved by 6 votes to 1 with 2 abstentions to endorse recommendations j to t.
The Executive Councillor approved the
recommendations.
Conflicts of Interest Declared by
the Executive Councillor (and any Dispensations Granted)
No conflicts of interest were declared by the
Executive Councillor.
Publication date: 13/03/2025
Date of decision: 04/02/2025