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Decision details

HRA Budget-Setting Report (BSR) 2022/23

Decision Maker: Executive Councillor for Housing

Decision status: Recommendations Approved

Is Key decision?: Yes

Is subject to call in?: No

Purpose:

a) Approve the proposed charges for HRA housing rents and service charges.

b) Consider the revenue budget proposals.

c) Consider the capital budget proposals.

Decision:

Matter for Decision

As part of the 2022/23 budget process, the range of assumptions upon which the HRA Business Plan and Medium Term Financial Strategy were based, have been reviewed in light of the latest information available, culminating in the preparation of the HRA Budget Setting Report.

 

The HRA Budget-Setting Report provides an overview of the review of the key assumptions. It sets out the key parameters for the detailed recommendations and final budget proposals and is the basis for the finalisation of the 2022/23 budgets.

 

Decision of Executive Councillor for Housing

  i.  Approved that council dwellings rents for all social rented properties be increased by inflation of 3.1%, measured by the Consumer Price Index (CPI) at September 2021, plus 1%, resulting in rent increases of 4.1%, with effect from 4 April 2022. This equates to an average rent increase of £4.21 per week.

  ii.  Approved that affordable rents (inclusive of service charge) are reviewed in line with rent legislation, to ensure that the rents charged are no more than 80% of market rent, with rents for existing tenants increased by no more than inflation of 3.1%, measured by the Consumer Price Index (CPI) at September 2021, plus 1%, resulting in rent increases of up to 4.1%. Local policy is to cap affordable rents (inclusive of all service charges) at the Local Housing Allowance level, which would usually result in rent variations in line with any changes notified to the authority in this level if these result in a lower than 4.1% increase. As the Local Housing Allowance was increased significantly in late March 2020, affordable rent increases will be capped at 4.1% from April 2022, which is still well below the 2022/23 Local Housing Allowances levels.

  iii.  Approved that rents for shared ownership properties are reviewed and amended from April 2022, in line with the specific requirements within the lease for each property.

  iv.  Approved that garage and parking space charges for 2022/23 be increased by inflation at 2% in line with the level of inflation incorporated into the HRA as part of the Medium-Term Financial Strategy process, and that charges for parking permits are reviewed, with any resulting charges summarised in Section 3 of the HRA Budget Setting Report.

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

  vi.  Approved the proposed leasehold administration charges for 2022/23, as detailed in Appendix B of the HRA Budget Setting Report.

 vii.  Approved that caretaking, building cleaning, window cleaning, estate services, grounds maintenance, temporary housing premises and utilities, sheltered scheme premises and utilities, digital television aerial, gas maintenance, door entry systems, lifts, electrical and mechanical maintenance, flat cleaning, third party services, specialist equipment 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 2021 (3.1%) plus 1%, wherever possible.

viii.  Approved the updated HRA Rent Setting Policy, included at Appendix M to the HRA Budget Setting Report.

  ix.  Approved with any amendments, the Revised Budget identified in Section 4 and Appendix D (1) of the HRA Budget Setting Report, which reflects a net reduction in the use of HRA reserves for 2021/22 of £262,870.

  x.  Approved with any amendments, any Non-Cash Limit items identified in Section 4 of the HRA Budget Setting Report or shown in Appendix D (2) of the HRA Budget Setting Report.

  xi.  Approved with any amendments, any Savings, Increased Income, Unavoidable Revenue Bids, Reduced Income Proposals and Bids, as shown in Appendix D (2) of the HRA Budget Setting Report.

 xii.  Approved the resulting Housing Revenue Account revenue budget as summarised in the Housing Revenue Account Summary Forecast 2021/22 to 2026/27 shown in Appendix J of the HRA Budget Setting Report.

 

The Executive Councillor recommended to Council to:

xiii.  Approve the revised need to borrow over the 30-year life of the business plan, with the first instance of this anticipated to be in 2022/23, to sustain the proposed level of investment, which includes earmarking funding for delivery of a net 1,000 new homes over a 10-year timeframe.

xiv.  Recognise that the constitution delegates Treasury Management to the Head of Finance (Part 3, para 5.11), with Part 4F, C16 stating: ‘All executive decisions on borrowing, investment or financing shall be delegated to the Head of Finance, who is required to act in accordance with CIPFA’s Code of Practice for Treasury Management in Local Authorities’.

xv.  Recognise that any decision to borrow further will impact the authority’s ability to set-aside resource to redeem 25% of the value of the housing debt by the point at which the loan portfolio matures, with the approach to this to be reviewed before further borrowing commences.

xvi.  Approve capital bids, as detailed in Appendix D (3 ) and Appendix E of the HRA Budget Setting Report.

xvii.  Approve the latest Decent Homes and Other HRA Stock Investment Programme to include reduced expenditure for wall structure and fire safety works and re-phasing of other elements of the programme into later years, as detailed in Appendix E of the HRA Budget Setting Report.

xviii.  Approve the latest budget sums, profiling and associated financing for all new build schemes, including revised scheme budgets for Colville III, Fen Road, Ditton Fields, Aragon Close, Sackville Close and Borrowdale based upon the latest cost information from the Cambridge Investment Partnership (CIP) and a reduction in unit numbers at Aylesborough Close, as detailed in Appendices E and H, and summarised in Appendix K, of the HRA Budget Setting Report.

xix.  Approve the allocation of funds from the budget earmarked for the delivery of 1,000 net new homes to allow buy back of leasehold dwellings and relocation of tenants from Princess and Hanover Court over the next two years, in advance of a final recommendation for the future of the estate which will be presented once the options appraisal and consultation work has been concluded.

xx.  Approve the revised Housing Capital Investment Plan as shown in Appendix K of the HRA Budget-Setting Report.

xxi.  Approve the inclusion of Disabled Facilities Grant expenditure and associated grant income from 2022/23 onwards, based upon 2021/22 net grant received, with delegation to the Head of Finance, as Section 151 Officer, to approve an in year increase or decrease in the budget for disabled facilities grants in any year, in direct relation to any increase or decrease in the capital grant funding for this purpose, as received from the County Council through the Better Care Fund.

xxii.  Approve delegation to the Head of Finance, 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.

xxiii.  Approve delegation to the Strategic Director 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 decisions made by the Shared Home Improvement Agency Board.

xxiv.  Approve delegation to the Strategic Director to review, agree and enter into a revised Shared Home Improvement Agency Shared Service Agreement, in line with recommendations made by the Shared Home Improvement Agency Board.

xxv.  Approve delegation to the Strategic Director, in consultation with the Head of Finance, as Section 151 Officer, to draw down resource from the ear-marked reserves 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.

xxvi.  Approve delegation to the Head of Finance, as Section 151 Officer, to make any necessary technical amendments to detailed budgets in respect of recharges between the General Fund and the HRA, with any change in impact for the HRA to be incorporated as part of the HRA Medium Term Financial Strategy in September 2022.

 

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 Assistant Head of Finance and Business Manager.

 

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

i.  Noted the budget had been drawn up in challenging times. The work of the HRA was dependent on rental income, and that rents were proposed to be increased. Tenants had benefitted from a reduction in rents however this had put improvement works, which were dependent on rental income behind. The HRA could not support net zero carbon initiatives across the whole of the housing stock. Central government needed to provide resources to do this. 96% of the housing stock were at decent homes standard and the council was working towards 100% of the stock being decent homes standard.

ii.  Asked if rents had to increase to off-set shortfalls in rental income from the Mill Road and Cromwell Road developments.

iii.  Noted inflation assumptions had been built into the HRA as best as officers could from the autumn’s numbers however there had been a marked increase. Asked what assurance could be given to manage inflation increases.

iv.  Felt the Council was in a holding pattern as new housing developments were dependent upon receipt of Homes England funding. 

v.  The isolation of elderly residents was a problem and the council could not wait for the internal scoping work study (as set out in the Labour amendment to the fourth bullet point in recommendation 1.3 on page 2-3 of the Liberal Democrat Amendment document) to be undertaken.

vi.  Noted reference to a decarbonisation fund but this was not set out in any document.

vii.Asked how much CO2 the council’s housing stock was putting into the atmosphere.

 

The Assistant Head of Finance and Business Manager said the following in response to Members’ questions:

  i.  Rent increases were not linked in any way to delays in rental income from the Mill Road and Cromwell Road development. However if rents were not increased, then savings would have to be made elsewhere and difficult decisions would need to be taken about where to reduce expenditure. Rent levels had always been set in accordance with government guidelines. Rent increases meant the council could continue to deliver a programme of investment and would for example cover the retrofit pilot project.

  ii.  Recognised that inflation was proving a challenge. Had built an additional 1.7% inflation in as part of the budget process, over and above the estimate of 2% rise in inflation in the Housing Revenue Account Medium Term Financial Strategy. These funds would be held centrally and allocated to areas as required to fulfil contractual commitments. This would be reviewed again as part of the Medium-Term Financial Strategy.

 

Councillor Dalzell introduced the Liberal Democrat Amendment to the 2022/23 Housing Revenue Budget.

 

Councillor Robertson proposed an amendment to the fourth bullet point in recommendation 1.3 on page 2-3 of the Liberal Democrat Amendment document. (deleted text struckthrough, additional text underlined.)

 

A proposal for internal scoping work, including the Independent Living Service and Communities Service, alongside the assessment of external provision, to inform an analysis of the services provided to older residents (not just council tenants) experiencing isolation and to assess community needs. This analysis may include recommending a future revenue bid forto include a revenue bid of £21,580 in 2022/23 and £43,160 in 2023/24 to fund an 18-month fixed term  a Community Inclusion Officer from October 2022. They would will work across the sheltered housing portfolio and with older tenants in our general needs housing, to support residents, to improve connectivity between sheltered schemes and other residents and to reduce loneliness and social isolation. The new post would will supplement the existing Independent Living Service.

 

The amendment was approved by 9 votes in favour, 1 against and 4 abstentions.

 

The Chair decided that the recommendations highlighted in the Liberal Democrat Group (LD) amendment (as amended) should be voted on and recorded separately:

 

The following vote was chaired by Councillor Sheil.

 

LD1.3(i). A proposal to specifically earmark any net underspend in revenue repair budgets, capital decent homes budgets and capital other spend on own stock budgets from the financial year 2021/22 onwards, after allowing for any requested carry forwards, with the resource set-aside for investment in improving the energy efficiency of our existing housing stock. Any resulting resource will be incorporated into delivery plans as soon as is practical after being ear-marked, to ensure that any available funding is directed into helping to meet net zero carbon targets across the housing portfolio. Over the last 5 years, this would have given rise to an ear-marked fund of in excess of £3.5 million.

 

The amendment was lost by 3 votes in favour to 6 against.

 

The following vote was chaired by Councillor Sheil.

 

LD1.3(ii). A proposal that if a Social Housing De-Carbonisation Fund (SHDF) Wave 1 grant bid for approximately £783,000 is successful, that delegated authority be given to the Head of Finance to both recognise the grant income in 2022/23 and to increase the energy investment budget by the same sum to allow additional properties to receive the much-needed investment in 2022/23, or at the earliest delivery opportunity.

 

The amendment was lost by 3 votes in favour to 6 against.

 

The following vote was chaired by Diana Minns.

 

LD1.3(iii). A proposal to include a revenue bid of £12,000 in 2022/23 to employ resource to undertake a project to allow the estimated carbon footprint of the housing stock to be measured and to put in place a robust structure to facilitate reporting the carbon impact of any future investment proposals. This will provide an estimated baseline and will enable improved evaluation of future investment proposals.

 

The amendment was lost by 3 votes in favour to 8 against with 1 abstention..

 

 The following vote was chaired by Diana Minns.

 

LG1.3(iv). A proposal for internal scoping work, including the Independent Living Service and Communities Service, alongside the assessment of external provision, to inform an analysis of the services provided to older residents (not just council tenants) experiencing isolation and to assess community needs. This analysis may include recommending a future revenue bid for a Community Inclusion Officer. They would work across the sheltered housing portfolio and with older tenants in our general needs housing, to support residents, to improve connectivity between sheltered schemes and other residents and to reduce loneliness and social isolation. The new post would supplement the existing Independent Living Service.

 

The amendment was carried by 9 votes in favour to 1 against with 4 abstentions.

 

Councillor Bennett introduced the Green and Independent Group Amendment to the 2022/23 Housing Revenue Budget.

 

Councillor Robertson proposed an amendment to the Green and Independent Group Amendment proposed third bullet point in recommendation 1.3 on page 3 of the Green and Independent Amendment document. (deleted text struckthrough, additional text underlined.)

 

A proposal to request officers to include in the Transformation Programme some workshops of councillors and stakeholders, such as tenant and leaseholder representatives, set up a small volunteer cross party working group to work on a short, focussedoverview of the HRA Medium Term Financial Strategy and Budget Setting Reports and the General Fund Medium Term Financial Strategy and Budget Setting Reports, which could summarise and communicate information more effectively such as by:

Popular ways to do this include:

·  Use of key questions

·  Graphical presentation

·  Key performance indicators

·  Benchmarking

 

This would facilitate more effective scrutiny by all councillors and clearer communication to city residents.

 

A cost figure is not provided for this recommendation because the HRA’s accounting function already produces a very full range of high quality key performance indicator reports and benchmarking. The proposed newoverview report would be is an introductory guided tour that assists users to engage with the main report and put it in context.

 

Councillor Bennett accepted Councillor Robertson’s amendment to the Green and Independent Group recommendation 1.3(iii) and agreed to withdraw the Green and Independent Group recommendation 1.3(iv) following a commitment from the Executive Councillor to provide the information requested in recommendation 1.3(iv) as far as it was possible within existing resources.

 

The Chair decided that the recommendations highlighted in the Green and Independent Group (GI) amendment (as amended) should be voted on and recorded separately:

 

The following vote was chaired by Diana Minns.

 

GI1.3(i). A proposal to include a revenue bid of £40,000 to fund a project to explore alternative housing delivery options, with a focus on the delivery of smaller homes, such as:

 

POD homes for retention in the HRA and the potential for conversion of existing unused office and retail space into residential accommodation: and

 

Delivery models that include smaller self-contained accommodation on co-living principles to provide safe, affordable, sociable and sustainable living space.

 

This could include shared communal facilities such as laundry rooms, guest rooms, co working space and social meeting space which could also be available to the wider community.

 

The project has been conceived with the particular needs of young key workers and care leavers in mind but could be adapted to suit more diverse groups of residents.

 

The project will cover market research, feasibility work, site identification, a review of vacant office and retail space in the city and liaison with planning.

 

The amendment was lost by 2 votes in favour to 10 against and 2 abstentions.

 

Recommendation GI1.3(ii) was contingent on recommendation GI1.3(i) as this amendment was lost recommendation GI1.3(ii) fell.

 

The following vote was chaired by Diana Minns.

 

GI1.3(iii). A proposal to request officers to include in the Transformation Programme some workshops of councillors and stakeholders, such as tenant and leaseholder representatives, to work on a short, focussed overview of the HRA Medium Term Financial Strategy and Budget Setting Reports and the General Fund Medium Term Financial Strategy and Budget Setting Reports, which could summarise and communicate information more effectively such as by:

  Use of key questions

  Graphical presentation

  Key performance indicators

  Benchmarking

 

This would facilitate more effective scrutiny by all councillors and clearer communication to city residents.

 

A cost figure is not provided for this recommendation because the HRA’s accounting function already produces a very full range of high quality key performance indicator reports and benchmarking. The proposed new overview report would be an introductory guided tour that assists users to engage with the main report and put it in context.

 

The amendment was carried by 13 votes in favour to 0 against and 1 abstentions.

 

The following vote was chaired by Diana Minns.

 

The Committee resolved by 12 votes to 0 to endorse the recommendations  a - l of the budget proposal including the Liberal Democrat Group recommendation (as amended) 1.4(iv) and the Green and Independent Group recommendation (as amended) 1.3(iii).

 

The following vote was chaired by Councillor Sheil.

 

The Committee resolved by 7 votes to 0 to endorse the recommendations  m – z of the budget proposal.

 

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: 31/03/2022

Date of decision: 20/01/2022