Decision details

a) Approve the proposed charges for HRA housing rents and service charges.
b) Consider and approve the revenue budget proposals.
c) Consider the capital budget proposals for recommendation to Council.

Matter for Decision

As part of the 2024/25 budget process, the range of assumptions upon which the HRA Business Plan and Medium-Term Financial Strategy were based were reviewed in light of the latest information available, culminating in the preparation of the HRA Budget Setting Report.

 

The HRA Budget-Setting Report provided 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 2024/25 budgets.

 

Decision of Executive Councillor for Housing and Homelessness

i.               Approved that council dwellings rents for all social rented and social shared ownership properties be increased in line with government guidelines, with an increase of 7.7%, being inflation as measured by the Consumer Price Index (CPI) at September 2023 of 6.7%, plus 1%. Rent increases will take effect from 1 April 2024. This equates to an average rent increase of £8.69 per week.

ii.             Approved that affordable rents, inclusive of service charge, are also increased by 7.7% in line with the increase for social rents. This equates to an average rent increase of £13.05 per week.

iii.            Approved that rents for affordable shared ownership properties are increased by RPI as at January 2024, plus 0.5%, as allowed for in the lease requirements for these properties.

iv.           Approved that garage and parking space charges for 2024/25, are increased by inflation at 7.7%, in line with dwelling rents, recognising the proposal to increase garage rents at a higher rate for 2024/25 as rents were increased by lower than inflation in 2023/24. Approved any changes in charges for parking permits, with any resulting charges summarised in Section 6 of the HRA Budget Setting Report.

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

vi.           Approved the proposed leasehold administration charges for 2024/25, as detailed in Appendix D of the HRA Budget Setting Report.

vii.          Approved that service charges continue to be recovered at full estimated cost, as detailed in Appendix D of the HRA Budget Setting Report, recognising that local authorities should endeavour to limit increases to inflation as measured by CPI at September 2023 (6.7%) plus 1%, wherever possible.

viii.        Approved with any amendments, the Revised Budget identified in Section 7 and Appendix E (1) of the HRA Budget Setting Report, which reflects a net reduction in the use of HRA reserves for 2023/24 of £571,010

ix.           Approved with any amendments, any Non-Cash Limit items identified in Section 7 of the HRA Budget Setting Report or shown in Appendix E (2) of the HRA Budget Setting Report.

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

xi.           Approved the resulting Housing Revenue Account revenue budget as summarised in the Housing Revenue Account Summary Forecast 2023/24 to 2028/29 shown in Appendix G of the HRA Budget Setting Report.

xii.          Delegated to the Director of Communities the setting of Affordable Rents affected by historic errors, where these have to be reduced and recalculated individually.

 

The Executive Councillor recommended Council:

i.               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 2023/24, to sustain the proposed level of investment, which includes ear-marking funding for delivery of the 10 Year New Homes Programme.

ii.             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.

iii.            Recognise that the decision to borrow significantly to build new homes impacts the authority’s ability to set-aside resource to redeem the HRA Self-Financing debt at the point at which the loan portfolio matures, with the need to re-finance debt in the latter stages of the business plan.

iv.           Approval of capital bids, as detailed in Appendix E (3) and Appendix F of the HRA Budget Setting Report.

v.             Approval of the latest Decent Homes and Other HRA Stock Investment Programme, to include re-phasing of elements of the programme between capital and revenue, as detailed in Appendix F of the HRA Budget Setting Report.

vi.           Approval of the latest budget sums, profiling and associated financing for all new build schemes, as detailed in Appendix F, and summarised in Appendix H, of the HRA Budget Setting Report.

vii.          Approval of allocation of £15,285,000 of funds from the budget ear-marked for the delivery of new homes into a scheme specific budget for Newbury Farm, in line with the scheme specific report presented as part of the committee cycle.

viii.        Approval of the revised Housing Capital Investment Plan as shown in Appendix H of the HRA Budget Setting Report.

ix.           Approval of inclusion of Disabled Facilities Grant expenditure and associated grant income from 2024/25 onwards, based upon 2023/24 net grant awarded, with approval of delegation to the Chief Finance Officer, 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.

x.             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.

xi.           Approval of 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.

xii.          Approval of delegation to the relevant Director, in consultation with the Chief Finance Officer, as Section 151 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.

xiii.        Approval of delegation to the Chief Finance Officer, 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 reported and incorporated as part of the HRA Medium Term Financial Strategy in September or November 2024.

 

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 Head of Finance and Business Manager. The Committee’s attention was drawn to an additional recommendation y) ‘To delegate to the Director of Communities the setting of Affordable Rents affected by historic errors, where these have to be reduced and recalculated individually’ which had been published online and circulated to the Committee in advance of the meeting.

 

Councillor Porrer introduced the Liberal Democrat Amendment to the 2024/24 Housing Revenue Account Budget Setting Report.

 

Councillor Tong introduced the Green Group’s commentary on the Housing Revenue Account Budget Setting Report.

 

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

      i.         The council can use all of the ‘Right to Buy’ receipts but this funding can only meet 40% of any new dwelling. The Council then had to fund the difference. The Council was doing well at re-investing the Right to Buy receipts and the on-going development programme anticipated using this funding by the end of next year. 

    ii.         Right to buy sales were around 120-130 properties per year historically but levels had reduced to around 30-40 properties per year in recent years. There was an increase in sales when Central Government increased the discount value that tenants could receive and there was also an increase in 2016 (under the Welfare Reform Act) when some tenants exercised a right to buy as they may have been required to pay market levels of rent if they earned high incomes. 

   iii.         Void properties would be used as temporary accommodation where it was appropriate to do so. The council was seeking to reduce the time properties were void to try and get properties back into circulation as soon as it was possible to do so. 

  iv.         It was hoped with new software and better resident engagement that residents would feel empowered and able to report repairs and maintenance requests.

    v.         For residents affected by the rent issue, advised that due to the procedure that needed to be followed the correct rent would be charged from April 2024. A report detailing progress on this matter would be brought back to the June Committee as the March Committee was too early for the information to be provided. 

  vi.         The transformation budget would be used initially to fund compliance and the rent issue.

 vii.         Sites which were owned by the Council and considered for redevelopment could provide 100% affordable housing as there was no ‘land purchase cost’ which needed to be taken in account as part of any viability assessment for development. Where land was bought and redeveloped, market housing may need to be provided to make the development (including affordable housing) viable. Planning Policy stipulated the 40% affordable housing requirement. Any restrictions from grant funding also needed to be taken into consideration. Some Housing Revenue Account (HRA) sites may also need to consider delivery of market housing to ensure viability.

viii.         The capacity of the Resident Engagement Service would be reviewed following changes in regulation of social housing which meant that Local Authorities would now be regulated by the Social Housing Regulator.

  ix.         With reference to a question regarding the funding referred to in recommendation 1.4b of the Liberal Democrat Budget amendment commented that at the time the budget amendment was drafted it wasn’t known how much grant funding Homes England would provide. However an update had been provided to Committee advising them that the council had just been notified that they were successful in securing £3 million grant funding from Homes England.  

 

The Liberal Democrat Group amendments were voted on and recorded separately (see the second circulation agenda paragraph 1.3).

 

1.3 a) A proposal to include a revenue bid of £54,990 per annum to employ a dedicated Damp, Mould and Condensation (DMC) Surveyor on a 2-year fixed term contract. The post would work proactively with data on existing repair requests from tenants and from void inspections to future proof the housing stock across the city against cases of damp, mould and condensation. They would deploy mitigation measures to ensure that if one house experiences a problem, the knowledge is rolled out to all similar stock types before future problems arise and ensure that operatives are empowered to treat the root cause and not just the effects of DMC. This post would include a flexible contract, covering later weekdays or Saturday mornings to allow tenants more options to book work out of working hours.

 

The amendment was lost by 4 votes in favour to 6 against with 1 abstention.

 

1.3 b) A proposal to include a revenue bid of £48,270 to employ a Housing Maintenance Improvement Officer on a 2-year fixed term contract to support the Service Improvement Manager and DMC Surveyor, reviewing and improving processes, increasing operational efficiency and monitoring and dealing with complaints. This post would include a flexible contract, with some working later weekdays or Saturday mornings to allow tenants more options to make contact out of working hours.

 

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

 

1.3 c) A proposal to include a revenue bid of £41,300 per annum to employ an additional Asset Management Officer for a period of 10 years, dedicated to working with tenants to ensure that access is granted to allow decent homes work to take place and the current backlog caught up. The post would address the access issues leading to so many refusals, with tenant engagement and feedback a priority, plus pulling together data to produce regular reports of why access is refused. This post would include a flexible contract, with some working later weekdays or Saturday mornings to allow tenants more options to make contact out of working hours.

 

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

 

1.3 d) A proposal to allocate £50,000 in 2024/25 to fund overtime and any other initiatives considered appropriate by officers to ensure that the resources currently reallocated to resolve the urgent compliance issues within the council’s housing stock are replaced, and not taken from the transformation budget in future. This will ensure that existing tenants awaiting responsive repairs and planned maintenance work are not disadvantaged further.

 

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

 

As the recommendations set out in the Liberal Democrat budget amendment paragraph 1.3 were lost the capital funding set out in paragraph 1.4 to fund the initiatives set out in paragraph 1.3 were not voted upon.

 

The Committee resolved:

        i.       Unanimously to endorse the recommendations a-g and y.

      ii.        By 8 votes in favour to 0 against and 3 abstentions to endorse recommendations h – k.

 

The Executive Councillor approved the recommendations.

 

The following vote was chaired by Councillor Robertson following agenda item 24/9/HSC.

 

The Committee resolved:

        i.       By 5 votes in favour and 0 against with 3 abstentions to endorse recommendations L – n.

      ii.        By 5 votes in favour and 0 against with 3 abstentions to endorse recommendations o – s.

    iii.        Unanimously to endorse recommendations t – x.

 

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

No conflicts of interest were declared by the Executive Councillor.

 

***See below for record of delegated Officer’s Decision ***

Record of Officer Delegated Decision

Recalculation of Affordable Rents to take account of rent reductions; provision for a refund scheme to follow

Decision taken:

1.    To Recalculate Affordable Rents for tenants whose tenancies commenced before 31 March 2019 (taking account of government requirements to reduce rents in 2016/17/18 and 19), and

2.    To provide resources for a team to work on these affected rent accounts, in order to calculate overpayments, so that refunds can be paid after April 2025.

3.    Note that further decisions on details of the refund scheme may be required.

 

Decision of: Sam Scharf, Director of Communities

Reference: rent calculation is a delegated process, however this is an unusual recalculation, the member decision for which is included in the Housing Revenue Account Budget Setting Report for 2024/25, with rents and charges set under recommendations a to g. Recommendation y allowed this delegation to officers in respect of the recalculation of affordable rents.

Date of decision: 29 January 2024

Matter for Decision:

Recalculation of Affordable Rents where the Council had failed to apply a 1% rent reduction mandated by government to be applied to such rents in April 2016, 2017, 2018 and 2019 and to correct any miscalculation resulting in a higher increase than allowed as a result of the annual review of rents, inclusive of service charges. Briefing paper Document 240129 Officer Briefing Paper to Support Delegated Officer Decision on Affordable Rents - Cambridge Council provides more information on the error, and the legal advice taken.

Any alternative options considered and rejected: There are no legally valid alternative options available. The only options affect timings, and the Council has sought to carry out the calculations as quickly as possible so as to reset rents from the normal rent increase date.

Refunds will be payable, but as these require detailed work on each rent account, will take longer to put in place.

Reason for the decision including any background papers considered: the decision is required in order for the Council to set legally compliant rents for these properties, and to correct rents which were not legally complaint (although they had been set at lower rent levels than the maximum allowed by government).

Conflict of interest and dispensation granted by Chief Executive: Not required

Comments: None / Chair, Executive Councillor and Opposition Spokesperson consulted before decision was taken.

Contact for further information: Samantha Shimmon, Assistant Director of Housing