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Contact: Claire Tunnicliffe Committee Manager
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Apologies To receive any apologies for absence. Minutes: No apologies were received. |
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Declarations of Interest Members are asked to declare at this stage any interests that they may have in an item shown on this agenda. If any member of the Committee is unsure whether or not they should declare an interest on a particular matter, they should seek advice from the Head of Legal Services before the meeting. Minutes:
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Public Questions (See information below). Minutes: There were no public questions. |
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Housing Revenue Account budget for 2014/15 PDF 41 KB Additional documents:
Minutes: Matter for
Decision: To consider the Revenue Account Budget 2014/115 for the Housing
Portfolio. Decision of the
Executive Council for Housing: As the Executive
Councillor for Housing took a view on this key decision which materially
differed to that of the Housing Management Board. Under 2.5 of Part 4D Executive
Procedure Rules of the Council’s Constitution, the matter was referred to the
Leader of the Council for Decision. Approved the principle of the Labour Group Amendment to allow the phased
recruitment of an additional two, therefore totalling four, Repairs Apprentices
starting in 2015/16, on the condition that Officers could guarantee sufficient
appropriate training and development could be provided. The funding for these
additional posts will need to be bid for as part of 2014/15 HRA MFR process, with
cross party support already in place. Reason for
the Decision: Not applicable. Any
Alternative Options Considered and Rejected: Not applicable Scrutiny
Considerations: The Committee received a report from the Business
Manager/Principal Accountant regarding the Housing Revenue Account Budget
Setting Report. The Report referred to proposals for both the review of rents and
service charges and revenue bids and savings, which form part of the HRA
budget, both revised for 2013/14 and for 2014/15 and beyond. The Director of Customer and Community Services, reminded
the Committee of the procedural process for considering the Labour Group
Amendment. Mr Marais expressed opposition and concern about the
proposed council dwellings rent increase above the rate of inflation for a
following year (as specified under recommendation A of the committee report)
and outlined the effect that this would have on tenants. In response to the Committee’s questions Officers stated the
following: i. There would be very few tenants who would not be affected by the additional £2.00 for conversion to target rent. ii.
Inflation plus half a percent
plus £2.00 is the current limit that could be applied under the rent
re-structuring policy, and is the expectation of Government. iii.
As the outcome of the recent Government
consultation on rent policy had not yet been published and would not come into
force until April 2015, rent levels for consideration had been calculated under
existing Government guidelines. It was the assumption that 2014/15 would be the
last opportunity for Local Authorities to close the gap between actual and
target rents and that they were expected to do this. iv.
Due to the high differential between actual and
target rents in Cambridge at the outset of the regime, the gap remains too
great to be closed fully in April 2014. v.
The HRA has a fully committed business plan,
with the level of debt based on the assumption that Government guidelines would
be followed and adhered to. Any decision
not to follow the Government guidelines to increase the rent would equate to
savings needing to be made elsewhere in the HRA. vi.
There was nothing to stop the Committee
considering the HRA business plan over a longer time frame, but this would not
change the financial impact of fixed rate loans and the timing of their
maturity. Any decision to re-finance loans at any point in the business plan is
likely to result in higher interest payments, as the lending rates would not be
as favourable as they were at the outset of self-financing. vii.
For every £1 that rent
prices did not increase the Council would have to find a year on year saving of
approximately £330,000. Councillor
Price proposed the Labour Group amendment and outlined the following proposals
for the Committee’s consideration, with the changes identified in italics. In most cases the
entire section or appendix has been re-stated for ease of reference. Councillor Price
highlighted to the Committee a section of the Labour budget amendment which
focused on increasing training and employment opportunities for young people.
This would allow the recruitment of two additional repairs apprentices in
2015/16 and 2016/17. The Committee were advised that the rent reduction
recommended for consideration (as specified under recommendation (i) of the Labour Amendment) would be offset by using 20% of
the existing £1,090,000 set aside. The on-going impact of the business plan
would be managed by greater efficiency savings in 2015 (a suggested saving of
4%). A reduction of HRA target reserves
from £3,000,000 to £ 2,750,000 would also contribute to offsetting the
reduction in rental income in the first year. Councillor Price stated it was important to acknowledge that
tenants were facing economic hardship whilst rents had consistently increased
since 2010/11 with the cost of living also growing. Review of Rents and Charges
i.
Approve that council
dwellings rents be increased, departing from Government guidelines, assuming
that 2014/15 is the last year that a move towards convergence with formula rent
is possible, but introducing a local maximum in individual increases of
inflation (RPI at September 2013 of 3.2%) plus half percent
(0.5%) plus £1.00 per week with effect from 7th
April 2014.
ii.
Approve inflationary increases of up to a maximum
of 2.5% in garage and parking space rents for 2014/15, in line with the base
rate of inflation for the year assumed in the HRA Budget Setting Report.
iii.
Approve the proposed service charges for Housing
Revenue Account services and facilities, as shown in Appendix B of the HRA
Budget Setting Report.
iv.
Approve revised leasehold administration charges
for 2014/15 as detailed in Appendix B of the HRA Budget Setting Report.
v.
Approve that service charges for gas maintenance,
door entry systems, lifts and electrical and mechanical maintenance are
increased by a maximum of inflation at 3.2% plus 0.5%, if required, to continue
to recover full estimated costs as detailed in Appendix B of the HRA Budget
Setting Report.
vi.
Approve that caretaking, communal cleaning, estate
services, grounds maintenance, window cleaning, temporary housing premises and
utilities, sheltered scheme premises, utilities, digital television aerial 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 2013/14: vii.
Approve with any amendments, the Revised Budget
items shown in viii.
Appendix D of the HRA Budget Setting Report. Budget 2014/15: ix.
Approve the Non-Cash Limit
items originally shown in Appendix E of the HRA Budget Setting Report, as
amended in line with Appendix E to this report.
x.
Approve with any amendments, the Unavoidable
Revenue Bids and Savings shown in Appendix F of the HRA Budget Setting Report. xi.
Approve the Priority
Policy Fund (PPF) Bids originally shown in Appendix G of the HRA Budget Setting
Report, as amended at Appendix G to this report. xii.
Approve the resulting
Housing Revenue Account Summary Forecast 2013/14 to 2017/18, shown originally
in Appendix L of the HRA Budget Setting Report, as subsequently amended and
re-stated in full at Appendix L to this report. The following comments were made in relation to the proposed
Labour amendment: i.
It would undermine the service tenants receive
going forward and the Council’s ability to build, which would impact on those
on the waiting list.
ii.
The purpose of target rent was to close the gap
between all types of social housing rent.
iii.
Not aware of the Council ever attempting a 4%
saving target and there is no evidence to show how this would be met. iv.
The proposed amendment was based on a lower
level of reserves and doubled the rate of efficiency gains with no indication
of how this would be delivered. v.
It offers no suggestion of what areas of the
service would be reduced to make the savings. vi.
Queried if the reserves of the HRA should be
touched as this was the wrong direction of travel at this particular time. vii.
Raised the possible risk of future borrowing at
a higher interest rate. viii.
If the amendment was to be approved the savings
would be have to be achieved. Councillor Blencowe reminded the
Committee that efficiency gains had already been over-achieved for 2013/14
therefore it would be entirely possible to achieve the proposed savings target
of 4% in 2014/15. Councillor Johnson concluded that the proposed amendment
would still ensure the flexibility in the HRA to build the much need social
housing required in the City as demand dictated. The Executive Councillor stated that if the rent increased
in line with the rent restructuring guidelines the Council’s tenants would be
paying a maximum of 45% of market rent.
Those in the private sector regardless of income level could pay double,
a factor of the Cambridge housing market and an indicator of the urgent need to
build more houses in the social rented sector. She, reiterated to the Committee
that the purpose of target rent was to close the gap between all types of
social housing rent. Finally the Executive Councillor spoke of the HRA reserves
which may be required to cover the Council’s self-insure policy which could
affect the building programme. The Committee accepted the
Labour amendment by (7 votes to 4 votes). The Committee: Resolved (7 votes to 5 votes) to agree the following
recommendations: Review of Rents and Charges xiii.
Approve that council
dwellings rents be increased, departing from Government guidelines, assuming
that 2014/15 is the last year that a move towards convergence with formula rent
is possible, but introducing a local maximum in individual increases of
inflation (RPI at September 2013 of 3.2%) plus half percent
(0.5%) plus £1.00 per week with effect from 7th
April 2014. xiv.
Approve inflationary increases of up to a maximum of
2.5% in garage and parking space rents for 2014/15, in line with the base rate
of inflation for the year assumed in the HRA Budget Setting Report. xv.
Approve the proposed service charges for Housing
Revenue Account services and facilities, as shown in Appendix B of the HRA
Budget Setting Report. xvi.
Approve revised leasehold administration charges
for 2014/15 as detailed in Appendix B of the HRA Budget Setting Report. xvii.
Approve that service charges for gas maintenance, door
entry systems, lifts and electrical and mechanical maintenance are increased by
a maximum of inflation at 3.2% plus 0.5%, if required, to continue to recover
full estimated costs as detailed in Appendix B of the HRA Budget Setting
Report. xviii.
Approve that caretaking, communal cleaning, estate
services, grounds maintenance, window cleaning, temporary housing premises and
utilities, sheltered scheme premises, utilities, digital television aerial 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 2013/14: xix.
Approve with any amendments, the Revised Budget
items shown in xx.
Appendix D of the HRA Budget Setting Report. Budget 2014/15: xxi.
Approve the Non-Cash
Limit items originally shown in Appendix E of the HRA Budget Setting Report, as
amended in line with Appendix E to this report. xxii.
Approve with any amendments, the Unavoidable
Revenue Bids and Savings shown in Appendix F of the HRA Budget Setting Report. xxiii.
Approve the Priority
Policy Fund (PPF) Bids originally shown in Appendix G of the HRA Budget Setting
Report, as amended at Appendix G to this report. xxiv.
Approve the resulting
Housing Revenue Account Summary Forecast 2013/14 to 2017/18, shown originally
in Appendix L of the HRA Budget Setting Report, as subsequently amended and
re-stated in full at Appendix L to this report. The Executive Councillor for Housing refused the recommendations and under 2.5
of Part 4D Executive Procedure Rules of the City Council’s
Constitution, the matter
would be referred to the Leader of the Council for decision. Conflicts of Interest Declared by the Executive
Councillor (and any dispensations granted): No conflicts of interest were
declared by the Executive Councillor. The Leader of the
Council’s decision can be viewed at the following link: http://democracy.cambridge.gov.uk/ieDecisionDetails.aspx?ID=2686
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