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5 Housing Revenue Account Budget Setting Report PDF 80 KB
Additional documents:
Minutes:
This item was chaired by Diana Minns (Vice Chair
/Tenant Representative)
Matter for
Decision
The report
referred to the 2016/17
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)
Approve that council dwellings rents for existing
tenants be reduced by 1%, in line with legislative requirements, introduced as
part of the Welfare Reform and Work Bill 2015, with effect from 4th April 2016.
This equates to an average rent reduction at the time of writing this report of
£1.01 per week on a 52 week basis.
b)
Approve inflationary increases of 2% in garage and
parking space rents for 2016/17, 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 2016/17 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 as measured by CPI at September 2015
(-0.1%) plus 1%, if required, to continue to recover full estimated costs as
detailed in Appendix B of the HRA Budget Setting Report. This will result in a
cap in increases for these charges of 0.9%.
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.
g)
Approve that the charge for the full cost of the
provision of the alarm service in sheltered housing and dispersed community
alarm properties be identified separately, as a charge which is ineligible for
housing benefit, following cessation of funding for this service by the County
Council from April 2016.
Revenue – HRA
Revised Budget 2015/16:
h)
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 2015/16 of £19,300.
i)
Approve release, cessation of use, and
appropriation, of an ear-marked reserve currently standing at £121,900, held in
respect of monies received for the placement of aerials on HRA flat blocks,
into general HRA reserves, to allow alternative future use.
Budget 2016/17:
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 Unavoidable
Revenue Pressures, Savings and Increased Income proposals, shown in Appendix D
(1) of the HRA Budget Setting Report.
l)
Approve the deletion of the Priority Policy Fund
(PPF) allocation of £150,000 from 2017/18, and instead approve the creation of
a fund for Service Development and Transformation/ Invest to Save Initiatives,
of £120,000 per annum for 5 years from 2016/17. Approve delegated authority to
the Strategic Advisor, to invest this fund, in either one-off projects, or to
fund ongoing activity as required.
m)
Approve the resulting Housing Revenue Account revenue
budget as summarised in the Housing Revenue Account Summary Forecast 2015/16 to
2020/21 shown in Appendix J of the HRA Budget Setting Report.
Treasury
Management
n)
Request that, in 2016/17, officers review the
existing approach to treasury management, which required 25% of the value of
the housing debt to be set-aside by the point at which the loan portfolio
matures, recognising the financial constraints that have been placed upon the
HRA as a result of recent change in national housing policy. A separate report
will be brought back to Housing Scrutiny Committee in 2016/17 following this
review.
Housing Capital
o)
Approval of capital bids, shown in Appendix D (2)
of the HRA Budget Setting Report, to include meeting the capital cost of
re-locating staff to a single area housing office, with the cost to be funded
from existing repairs and renewals funds for the service.
p)
Approval of amendment to the Decent Homes Programme
investment, recognising the ability to make savings of £810,000 in 2015/16 in
respect of boiler replacements, roof structure works, communal areas
investment, garage refurbishment, asbestos removal and fire safety works, as
detailed in Section 5 and Appendix E (2) of the HRA Budget Setting Report.
q)
Approval of the need to re-profile resource of
£570,000 from 2015/16 into 2016/17 in respect of roof covering works and
bathroom replacements, and £102,000 from 2015/16 into later years of the
programme in respect of remedial works due to sulphate, as detailed in Section
5 and Appendix E (2) of the HRA Budget Setting Report.
r)
Approval of the latest budget, spend profile and
funding mix for each of the schemes in the new build programme, as detailed in
Section 5 and Appendix H 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)
Recognition of the need to incorporate into the
Housing Capital Investment Plan, grants awarded by the Homes and Communities
Agency in respect of Aylesborough Close, Water Lane, Ditchburn Place and Clay Farm.
t)
Approval to earmark the required level of
additional funding for new build investment between 2016/17 and 2017/18 to
ensure that commitments can be met in respect of the investment of all right to
buy receipts retained by the authority, up to the end of September 2015.
u)
Approval to earmark additional resource of
£3,110,000 towards the cost of the re-development of Anstey Way, in
anticipation of a revised scheme being brought forward for the site,
recognising the lower level of HRA resource available than anticipated when the
scheme was first considered.
v)
Approval of allocation of funds for a scheme to
re-develop a mixed use HRA site in Akeman Street,
subject to the approval of a separate report for the scheme, to be considered
in Part 2 of this committee agenda.
w)
Approval of the revised Housing Capital Investment
Plan as shown in Appendix K of the HRA Budget Setting Report.
x)
Approve a provisional addition to the Housing
Capital Allowance of £34,303,000 in respect of anticipated qualifying
expenditure in 2016/17.
General
y)
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 Mid-Year Financial
Review, following the outcome of consultation with both tenants and staff about
proposed service changes and resulting final savings.
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 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 finalisation of the
2016/17 budgets.
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 (O to Y) being taken first, in
order for the Councillors to vote on the capital before the Committee voted on
the first half of the recommendation (A to N).
The Committee made the following comments in response to the report:
i.
Sought clarification regarding the following
issues: Star Surveys; progress with shared Housing Management Service;
recharges for building cleaning costs; HRA receipts for aerials; and why an
office move for the area housing offices produced a need for new furniture.
ii.
Suggested that both Area Housing Manager posts be
retained while major changes were delivered.
iii.
Requested updates on any representations to Central
Government regarding the rent reductions.
iv.
Expressed regret that extending the life of older
boilers would have an impact on climate change reduction targets and on costs
to tenants.
v.
Suggested that a reduced
provision of emergency alarms would increase cost to other services such as the
NHS.
In response to Members’ questions the Director of Customer and Community
Services and Business Manager / Principal Accountant stated that:
i.
The Star Survey would be reviewed at the March
meeting. The need to manage expectations in line with the need to meet savings
targets.
ii.
Sharing services with South Cambs
would provide savings in future. Work was ongoing to examine potential new ways
of working and to identify potential savings.
iii.
Negotiations were on-going regarding the building
cleaning contract. However, a refund for past poor performance had been secured.
iv.
Aerial revenues funds were used to fund the
following: CCTV and the laundry room at Kingsway flats and a laundry room and
community room at Princess and Hanover Courts. Any remaining revenue would be
added to the HRA budget.
v.
The existing furniture of the area housing offices
would be reused where possible following any move. However, some smaller
furniture might be required to maximise usable office space in the new
location.
vi.
Local Authorities were holding meetings to discuss
the potential impact of the Housing Bill. However, until the Bill became law,
no legal challenge was possible. Submissions would be made to the Housing
Commission.
vii.
A future report of provisions to sustain tenants
and to assist them to manage their budget and to maintain their rent payments
following changes to welfare provision and the loss of Area Housing Offices,
would come to this committee later in the year.
viii.
Tenants would be informed of alternative provision
for the payment of rent and access points for housing advice.
Councillor Price stated that he had met with
the Housing Minister and had written to him regarding the rent reductions and
the requirement to sell high value properties.
The Business Manager / Principal Accountant
stated that there were no proposals to remove the alarms from sheltered Housing
schemes. However, the County Council subsidy for this service was being
withdrawn. The Head of City Homes stated that his team were aware of how
important this service was and that the current provision went above and beyond
what many providers offered. He invited Members to contact him if they would
like to visit to the Care Call service.
The Committee discussed the level of council
garage voids and potential solution. It was suggested that many were too small
for modern cars and that rent levels for alternative uses, such as storage,
were prohibitively expensive compared to other storage options.
Councillor Avery
proposed the Liberal Democrats Group alternative budget and outlined the
proposals for the Committee’s consideration. He thanked officers for their time
and assistance over the Christmas period.
2.
Recommendations
Changes to
recommendations in the original report are highlighted in Bold Italics. All of the
recommendations have been re-stated in full for clarity.
Under Part 1 of
the agenda, the Executive Councillor, is recommended, following scrutiny and
debate at Housing Scrutiny Committee, to:
Review of Rents and Charges
a)
Approve that council dwellings rents
for existing tenants be reduced by 1%, in line with legislative requirements,
introduced as part of the Welfare Reform and Work Bill 2015, with effect from
4th April 2016. This equates to an average rent reduction at the time of
writing this report of £1.01 per week on a 52 week basis.
b)
Approve inflationary increases of 2% in
garage and parking space rents for 2016/17, 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 2016/17 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 as measured by CPI at
September 2015 (-0.1%) plus 1%, if required, to continue to recover full
estimated costs as detailed in Appendix B of the HRA Budget Setting Report.
This will result in a cap in increases for these charges of 0.9%.
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.
g)
Approve that the charge for the full
cost of the provision of the alarm service in sheltered housing and dispersed
community alarm properties be identified separately, as a charge which is
ineligible for housing benefit, following cessation of funding for this service
by the County Council from April 2016.
Revenue – HRA
Revised Budget 2015/16:
h)
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 2015/16 of £19,300.
i)
Approve release, cessation of use, and
appropriation, of an ear-marked reserve currently standing at £121,900, held in
respect of monies received for the placement of aerials on HRA flat blocks,
into general HRA reserves, to allow alternative future use.
Budget 2016/17:
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 Pressures, Savings and Increased Income proposals, shown in
Appendix D (1) of the HRA Budget Setting Report, as amended in line with
Appendix D (1) to this report.
l)
Approve the deletion of the Priority
Policy Fund (PPF) allocation of £150,000 from 2017/18, and instead approve the creation
of a fund for Service Development and Transformation/ Invest to Save
Initiatives, of £120,000 per annum for 5 years from 2016/17. Approve delegated
authority to the Strategic Advisor, to invest this fund, in either one-off
projects, or to fund ongoing activity as required.
m)
Approve the resulting Housing Revenue
Account Summary Forecast 2015/16 to 2020/21, shown originally in Appendix J of
the HRA Budget Setting Report, as subsequently amended and re-stated in full at
Appendix J to this report.
Under Part 2 of the agenda, the Executive Councillor for
Housing is asked to recommend to Council (following scrutiny and debate at
Housing Scrutiny Committee):
Treasury Management
n)
Request that, in 2016/17, officers
review the existing approach to treasury management, which required 25% of the
value of the housing debt to be set-aside by the point at which the loan
portfolio matures, recognising the financial constraints that have been placed
upon the HRA as a result of recent change in national housing policy. A
separate report will be brought back to Housing Scrutiny Committee in 2016/17
following this review.
Housing Capital
o)
Approval of capital bids, shown in
Appendix D (2) of the HRA Budget Setting Report, to include meeting the capital
cost of re-locating staff to a single area housing office, with the cost to be
funded from existing repairs and renewals funds for the service.
p)
Approval of amendment to the Decent
Homes Programme investment, recognising the ability to make savings of £810,000
in 2015/16 in respect of boiler replacements, roof structure works, communal
areas investment, garage refurbishment, asbestos removal and fire safety works,
as detailed in Section 5 and Appendix E (2) of the HRA Budget Setting Report.
q)
Approval of the need to re-profile
resource of £570,000 from 2015/16 into 2016/17 in respect of roof covering
works and bathroom replacements, and £102,000 from 2015/16 into later years of
the programme in respect of remedial works due to sulphate, as detailed in
Section 5 and Appendix E (2) of the HRA Budget Setting Report.
r)
Approval of the latest budget, spend
profile and funding mix for each of the schemes in the new build programme, as
detailed in Section 5 and Appendix H of the HRA Budget Setting Report, and
amended by this report, recognising the most up to date information available
as each scheme progresses through the design, planning, build contract and
completion process.
s)
Recognition of the need to incorporate
into the Housing Capital Investment Plan, grants awarded by the Homes and
Communities Agency in respect of Aylesborough Close,
Water Lane, Ditchburn Place and Clay Farm.
t)
Approval to earmark the required level
of additional funding for new build investment between 2016/17 and 2017/18 to
ensure that commitments can be met in respect of the investment of all right to
buy receipts retained by the authority, up to the end of September 2015.
u)
Approval to invest net HRA
resource of £1,764,000 (£5,564,000 build cost less £3,800,000 sales receipts at
base year prices), over and above that already approved for land assembly
costs, for the re-development of Anstey Way, as a mixed tenure scheme
comprising 24 social rented homes and 10 dwellings for market sale.
v)
Approval of
allocation of funds for a scheme to re-develop a mixed use HRA site in Akeman Street, to deliver a mixed tenure scheme comprising
8 social rented homes and 2 dwellings for market sale, subject to the approval
of a separate report for the scheme with recommendations amended as proposed by
this amendment, when considered in Part 2 of this committee agenda.
w) Approval
of the revised Housing Capital Investment Plan as shown in Appendix K of the
HRA Budget Setting Report, as amended by Appendix K to this report.
x)
Approve a provisional addition to the
Housing Capital Allowance of £34,244,000 in respect of anticipated qualifying
expenditure in 2016/17. General |
y)
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 Mid-Year
Financial Review, following the outcome of consultation with both tenants and
staff about proposed service changes and resulting final savings. |
Scrutiny
Considerations of Liberal Democrat Alternative Budget amendment
The Committee made the following comments in response to the report:
i.
Questioned the advantages to be had from using
private developers to develop Anstey Way.
ii.
Suggested that the proposals would result in asset
stripping and stated that the best reserve for the Council was housing stock
and land.
Councillor Avery
stated that he was not in favour of selling off land but that there was a need
to deliver social housing as soon as possible. Delivering Anstey Way would be
sending Central Government a message that Cambridge would continue to build
social housing. It would also generate income.
The Chair noted
the Tenant and Leaseholder representative’s comments that it was unfair that
they could not vote on recommendations n to x.
The following votes were chaired by Councillor
Todd-Jones
The Liberal
Democrats Group alternative budget: 2
votes in favour to 6 against. The amendment fell.
Resolved
(6 vote to 0, with 2 abstentions) to
endorse the original recommendations n to x and y (noting the corrected
numbering) of the budget proposals.
The following vote was chaired by Diana Minns (Vice
Chair /Tenant Representative)
Resolved (8 votes to 0, with 5 abstentions) to
endorse the original report recommendations a to m 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.