Decision details

Matter for Decision

 

The report referred to the 2015/16 budget process, the range of assumptions upon which the Housing Revenue Account (HRA) Business Plan and Mid-Year Financial Review were based, were reviewed in light of the latest information available, culminating in the preparation of the HRA Budget Setting Report.

 

Decision of Executive Councillor for Housing

 

The Executive Councillor for Housing resolved to:

 

a.   Approved that council dwellings rents be increased in line with Government guidelines, ceasing any move towards target rents for existing tenants, but instead applying an individual increase of 2.2% across all tenure, made up of inflation (CPI at September 2014 of 1.2%) plus 1%, with effect from 6th April 2015. This equates to an average rent increase at the time of writing this report of £2.18 per week on a 52 week basis.

 

b.   Approved inflationary increases of 2% in garage and parking space rents for 2015/16, in line with the base rate of inflation for the year assumed in the HRA Budget Setting Report.

 

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

 

d.   Approved the proposed leasehold administration charges for 2015/16 as detailed in Appendix B of the HRA Budget Setting Report.

 

e.   Approved that service charges for gas maintenance, door entry systems, lifts and electrical and mechanical maintenance are increased by a maximum of inflation at 1.2% plus 1%, if required, to continue to recover full estimated costs as detailed in Appendix B of the HRA Budget Setting Report.

 

f.     Approved that caretaking, communal cleaning, estate services, grounds maintenance, window cleaning, 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

 

Revised Budget 2014/15

 

g.   Approved 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 2014/15 of £1,084,630.

 

h.   Approved the release of a net sum of £823,400, previously held within HRA repairs and renewals funds back into general HRA reserves, following a fundamental review of both the inventories and existing funds held.

 

i.     Approved release of the ear-marked reserves of £389,960 previously held for the purpose of meeting additional pension fund contributions into general HRA reserves, to allow alternative future use.

 

Budget 2015/16:

 

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

 

k.    Approved with any amendments, the Unavoidable Revenue Bids and Savings, including those associated with organisational transformation, shown in Appendix D (1) of the HRA Budget Setting Report.

 

l.     Approved with any amendments, the Priority Policy Fund (PPF) Bids shown in Appendix D (1) of the HRA Budget Setting Report.

 

m. Approved the resulting Housing Revenue Account Summary Forecast 2014/15 to 2019/20, as shown in Appendix H of the HRA Budget Setting Report.

 

The Executive Councillor for Housing resolved to recommend to Council to:

 

Treasury Management

 

n.   Retain the existing approach to treasury management, setting-aside a proportion of the surpluses generated over the life of the Business Plan to allow for potential debt redemption, but re-investing up to 75% of the surplus generated in the acquisition or development of new affordable housing, as outlined in Section 6 of the HRA Budget Setting Report.

 

Housing Capital

o.   Approve capital bids, shown in Appendix D (2) of the HRA Budget Setting Report, to include ear-marking resource for the implementation of both a new sub-regional choice based lettings IT system, and the software required to facilitate customer access to elements of the housing management information system, subject to each project demonstrating viability.

 

p.   Approve of amendment to the Decent Homes Programme investment, recognising the financial implications of a change in the assumed life for UPVC window replacements, from 25 years, to the 40 years required as part of the Decent homes Standard.

 

q.   Approve re-allocation of £976,000 of resource in 2015/16 and 2017/18, originally included in previous years for works to communal areas, into the budget for garage improvement works, to allow the authority to undertake major works to some of the larger garage blocks should there be a financially viable business case for investment. The decision to proceed with works following the preparation of each business case shall be delegated to the Director of Customer & Community Services, in consultation with the Executive Councillor, Chair of Housing Scrutiny Committee (Part 2) and the Opposition Spokespersons.

 

r.     Approve the latest budget and funding mix for each of the schemes in the 2011-15 new build programme, as detailed in Section 5 and Appendix F of the HRA Budget Setting Report, recognising the most up to date information available as each scheme progresses through the design, planning, build contract and completion process.

 

s.   Approve gross funding of £7,008,000 for the development of the affordable housing project on the Homerton site, in line with the scheme specific report being presented to Housing Scrutiny Committee on 14th January 2015, which assumes 75% affordable rented and 25% shared ownership housing.

 

t.     Approved to earmark the required level of additional funding for new build investment between 2015/16 and 2019/20 to ensure that the anticipated level of future retained right to buy receipts can be appropriately utilised.

 

u.   Approve re-direction of existing resource, previously identified as Cambridge Standard Investment, to create a new City Homes Estate Improvement Programme, with a view to increasing the future level of investment in this area, as part of the Fundamental Review of the HRA and Housing Service, which will take place during 2015.

 

v.   Approved of the revised Housing Capital Investment Plan as shown in Appendix I of the HRA Budget Setting Report.

 

w.  Approve a provisional addition to the Housing Capital Allowance of £29,151,000 in respect of anticipated qualifying expenditure in 2015/16.

 

Scrutiny Considerations

 

The Committee received a report from the Principal Accountant / Business Manager on the HRA Budget-Setting Report. It set out the key parameters for the detailed recommendations and final budget proposals, and is the basis for the inalisation of the 2015/16 budgets.

 

An additional recommendation to the original HRA BSR had been tabled by the Principal Accountant / Business Manager at the meeting.

 

m.    Approve the resulting Housing Revenue Account Summary    Forecast    2014/15 to 2019/20, as shown in Appendix H of     the HRA Budget Setting Report.

 

Due to the Liberal Democratic proposed amendment to the budget the Principal Accountant / Business Manager advised the order of the vote would be reversed with part two of the recommendations (xiv to xxiii) being taken first, in order for the Councillors to vote on the capital before the Committee voted on the first half of the recommendation (i to xiii).

 

Diane Best proposed and Diana Minns seconded the following amendment to the wording on page 69 of the printed agenda under the Heading ‘STAR survey 2014 – Planning ahead’ (deleted text struck through and additional wording underlined)

 

The Housing Regulation Panel (HRP) and Resident Representatives on the Housing Scrutiny Committee has been tasked will be asked to helping officers develop a programme of work that will be taken forward over the next year and beyond. Plans include a comprehensive drill-down into areas of lower satisfaction, using the Tenant and Leaseholder magazine Open Door to further capture opinion, using best practice from other Local Authorities to make the changes to services that most matter to our tenants and leaseholders and undertaking ‘hotspot’ improvements in specific services across the City where low satisfaction has been captured at ward level.

 

This amendment was carried nem con.

 

The Committee made the following comments in response to the report:

     i.        Asked for clarification on communal cleaning charges in Appendix B of the Officer’s report.

    ii.        Requested an explanation in Appendix D of the Officer’s report concerning Unavoidable Revenue Pressure: Full costs of building cleaning and services and the suggestion that that higher costs could be passed to residents temporarily.

   iii.        Asked if the savings in Appendix D of the Officer’s report and the proposed reduction in operational costs across City Homes would include ‘Open Door’.

  iv.        Asked if the cost of floor coverings would be continued to be met after 2015/16.

   v.        Queried if the disability facility grants was the amount allocated by the City Council or from Government funding and if the allocation always spent.

  vi.        Noted that the affordable housing programme was dependent on the Council’s financial reserves and asked if it was possible to identify what reserves could be spent on the Housing programme.

 vii.        Queried the relationship between the general fund and treasury management.

viii.        Asked if investment from the general fund did not return what was forecasted would the HRA take the hit.

  ix.        Asked if the Executive Councillor for Housing and the Housing Scrutiny Committee be asked to consider on how the general funds were spent for housing.

   x.        Requested a report on where money from the HRA could be invested.

.

In response to Committees comments Officers, the Director of Community and Customer Services stated the following:

     i.        The proposal was not to pass on the additional charge for communal cleaning but this would be absorbed in the budget until the cleaning contract had been agreed.

    ii.        If the budget approved the cost of building cleaning and services would not be passed on to residents.

   iii.        Confirmed that ‘Open Door’ came under a separate cost centre.

  iv.        A specific allocation for work to communal areas could cover the work to communal floor coverings if required after 2015/16.

   v.        Disabled facility grants were a combination of City Council allocation and Government funding. In the last two years this budget had been underspent in the private sector.

  vi.        Part of the review of the Housing Revenue Account would be to consider how best to invest in the longer term. Options would be brought back to Committee for new housing investment. Part of the consideration will be if the reserves should be invested for a return.

 vii.        Although the HRA was ring fenced this was part of the Council budget which is invested as a whole. The HRA would then be returned a percentage under statutory guidelines.

 

Councillor Blackhurst proposed the Liberal Democrats Group alternative budget and outlined the following proposals for the Committee’s consideration, with the changes identified underlined. In most cases the entire section or appendix has been restated for ease of reference.

 

a.     Approve that council dwellings rents be increased in line with government guidelines, ceasing any move towards target rents for existing tenants, but instead applying an individual increase of 2.2% across all tenure, made up of inflation (CPI at September 2014 of 1.2%) plus 1%, with effect from 6th April 2015. This equates to an average rent increase at the time of writing this report of £2.18 per week on a 52 week basis.

b.     Approve inflationary increases of 2% in garage and parking space rents for 2015/16, in line with the base rate of inflation for the year assumed in the HRA Budget Setting Report.

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

d.     Approve the proposed leasehold administration charges for 2015/16 as detailed in Appendix B of the HRA Budget Setting Report.

e.     Approve that service charges for gas maintenance, door entry systems, lifts and electrical and mechanical maintenance are increased by a maximum of inflation at 1.2% plus 1%, if required, to continue to recover full estimated costs as detailed in Appendix B of the HRA Budget Setting Report.

f.      Approve that caretaking, communal cleaning, estate services, grounds maintenance, window cleaning, 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.

 

Revenue – HRA

 

Revised Budget 2014/15:

 

g.   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 2014/15 of £1,084,630.

h.   Approve the release of a net sum of £823,400, previously held within HRA repairs and renewals funds back into general HRA reserves, following a fundamental review of both the inventories and existing funds held.

i.     Approve release of the ear-marked reserves of £389,960 previously held for the purpose of meeting additional pension fund contributions into general HRA reserves, to allow alternative future use.

 

Budget 2015/16:

 

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

k.    Approve with any amendments, the Unavoidable Revenue Bids and Savings, including those associated with organisational transformation,   shown in Appendix D (1) of the HRA Budget Setting Report.

l.    Approve with any amendments, the Priority Policy Fund (PPF) Bids shown in Appendix D (1) of the HRA Budget Setting Report.

m.   Approve the resulting Housing Revenue Account Summary     Forecast 2014/15 to 2019/20, shown originally in Appendix      H of the HRA Budget Setting Report, as subsequently amended and re-stated in full at Appendix H to this report.

 

The Executive Councillor for Housing is asked to recommend to Council (following scrutiny and debate at Housing Scrutiny Committee):

 

Treasury Management

 

n.     Retain the existing approach to treasury management, setting-aside a proportion of the surpluses generated over the life of the Business Plan to allow for potential debt redemption, but re-investing up to 75% of the surplus generated in the acquisition or development of new affordable housing, as outlined in Section 6 of the HRA Budget Setting Report.

 

Housing Capital

 

o.    Approval of capital bids, shown in Appendix D (2) of the HRA Budget Setting Report, and as amended by Appendix D (2) of this report, to include ear-marking resource for the implementation of both a new sub-regional choice based lettings IT system, and the software required to facilitate customer access to elements of the housing management information system, subject to each project demonstrating viability, and identification of additional funding of £100,000 per annum from 2015/16 to improve the energy efficiency in void properties.

p.    Approval of a reduction in the recent additional investment for fencing on housing estates, with a reduction of £50,000 in 2015/16, rising to £100,000 per annum from 2016/17 and beyond. It is expected that provision for fencing renewal will feature in the new Estate Fund.

q.   Approval of amendment to the Decent Homes Programme      investment, recognising the financial implications of a        change in the assumed life for UPVC window replacements,         from 25 years, to the 40 years required as part of the Decent        Homes Standard.

r.                Approval of re-allocation of £976,000 of resource in 2015/16 and   2017/18, originally included in previous years for works         to communal areas, into the budget for garage improvement    works, to allow the authority to undertake major works to     some of the larger garage blocks should there be a financially viable business case for investment. The        decision to proceed     with works following the preparation of each business case shall be delegated to the Director of Customer & Community Services, in consultation with the Executive           Councillor, Chair of Housing Scrutiny Committee (Part 2) and the Opposition Spokespersons.

s.     Approval of the latest budget and funding mix for each of the schemes in the 2011-15 new build programme, as detailed in Section 5 and Appendix F of the HRA Budget Setting Report, recognising the most up to date information available as each scheme progresses through the design, planning, build contract and completion process.

t.      Approval of gross funding of £7,008,000 for the development of the affordable housing project on the Homerton site, in line with the scheme specific report being presented to Housing Scrutiny Committee on 14^th January 2015, which assumes 75% affordable rented and 25% shared ownership housing.

u.    Approval to earmark the required level of additional funding for new build investment between 2015/16 and 2019/20 to ensure that the anticipated level of future retained right to buy receipts can be appropriately utilised.

v.     Approval of re-direction of existing resource, previously identified as Cambridge Standard Investment, to create a new City Homes Estate Improvement Programme, with a view to increasing the future level of investment in this area, as part of the Fundamental Review of the HRA and Housing Service, which will take place during 2015.

w.   Approval of the revised Housing Capital Investment Plan as shown in Appendix I of the HRA Budget Setting Report, as amended by Appendix I to this report.

x.   Approve a provisional addition to the Housing Capital     Allowance of £29,201,000 in respect of anticipated qualifying expenditure in 2015/16.

 

Scrutiny consideration for the Liberal Democrat Group alternative budget.

 

Councillor Blackhurst highlighted to the Committee a section of the Liberal Democrats amendment which focused on accelerating the existing practice to make empty properties more energy efficient to the energy rating of City Homes, making the housing stock more sustainable, whilst reducing energy bills for incoming tenants.

 

Councillor Blackhurst advised that money would be allocated in a separate fund to bring void properties up to the energy rating standard. This would be a direct response to climate change and fuel poverty while long term the return would pay off the investment spent.

 

    The Committee made the following comments in response to the     report:

 

i.        Expressed concern about the proposed reduction in the fencing budget.

ii.        Stated that the £100,000 allocation to the fencing budget was a key commitment by the current administration as a direct result of talking to residents to ask what they wanted.

iii.        Reiterated that fencing was a big issue with residents.

 

Councillor Blackhurst responded that investment was an achievable sound investment and would elevate the pressure of utility bills on tenants.

The Committee:

 

The following votes were chaired by Councillor Todd-Jones

 

The Liberal Democrats Group alternative budget: 2 votes in favour to 4 against, with 1 abstention. The amendment fell.

 

Resolved (5 vote to 0, with 2 abstentions) to endorse the recommendations n to x of the budget proposals.

 

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.

 

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

 

Resolved (9 votes to 0, with 3 abstentions) to endorse the recommendations a to m 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.