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Matter for
Decision
The Housing Revenue Account (HRA) Medium Term
Financial Strategy (MTFS) provided an opportunity to review the assumptions
incorporated as part of the longer-term financial planning process,
recommending any changes in response to new legislative requirements,
variations in external economic factors and amendments to service delivery
methods, allowing incorporation into budgets and financial forecasts at the
earliest opportunity.
Decision
of Executive Councillor for Housing (part 1):
i.
Approved the Housing Revenue Account Medium
Term Financial Strategy attached, to include all proposals for change in:
a)
Financial assumptions as detailed in Appendix B of
the document.
b)
2020/21 revenue budgets and future year forecasts
as introduced in Section 5, resulting from changes in financial assumptions and
the financial consequences of change and the need to respond to unavoidable
pressures, including the impact of the coronavirus pandemic, as introduced in
Section 5, detailed in Appendix D and D (1) of the document and summarised in
Appendices G (1) and G (2).
ii.
Delegated authority to the Strategic Director to be
in a position to confirm that the authority can renew its investment partner
status with Homes England.
Decision
of Executive Councillor for Housing (part 2) to recommend to Council to:
iv.
Approve the revised funding mix for the delivery of the
Housing Capital Programme, recognising the latest assumptions for the use of
Devolution Grant, Right to Buy Receipts, HRA Resources, Major Repairs
Allowance, Section 106 Funding and HRA borrowing.
v.
Extend the existing delegated authority to the Strategic
Director in consultation with the Executive Councillor for Housing to approve
use of Council land as sites for rough sleeper next steps POD’s on an
individual basis based on the criteria as set out in the Housing Development
Options for Homeless People report to Housing Scrutiny Committee in January
2020.
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 Assistant Head
of Finance and Business Manager:
i.
Corrected an error in the report on pages 87 and
126 where the void assumption had been increased from 1% to 1.2% in the earlier
modelling but this had been returned to the previous 1% but had not been
corrected within the text in the report.
ii.
Referred to p133 of the agenda and appendix E which
showed that extra resource had been allocated for fire door investment in
relation to the committee’s discussion regarding the estates and facilities
service review and compliance update. (See minute reference 20/31/HSC).
The Committee made the following comments in response to the report:
i.
Noted that the white paper on planning may have an
impact on affordable housing in the future.
ii.
Queried the use of the consumer price index (CPI)
within the report and noted that the implications of the covid-19 pandemic
could impact assumptions for future years.
iii.
Noted that reserves had been used to fill the gap
where there were rent arrears to avoid the council having to consider cutting
services to tenants. Asked whether rent
arrears had increased over the last 6 months.
iv.
Queried what a budget virement was and asked if a
list of definitions for acronyms could be provided to assist in understanding
details in financial reports.
The Assistant Head of Finance and Business Manager said the following in
response to Members’ questions:
i.
Rent arrears had been extrapolated up until the end
of the year, if any assumptions were needed in respect for future years impact,
this would be picked up in the January 2021 Housing Revenue Account Budget Setting
Report.
ii.
The Council was governed by a rent standard and
were only allowed to increase rent up to CPI plus 1% measured using CPI at the
preceding September. If the rate of the
CPI in September 2020 was different to that assumed then this would have a direct
impact on the income assumptions made within the MTFS. The impact of the
covid-19 pandemic had meant that more people had been forced to claim benefits
however she felt that prudent assumptions had been made in respect of income
for the current year. Officers were
actively working with tenants to ensure that they claimed the benefits that
they were entitled to. The sums
incorporated into the MTFS assume that the council build houses in the new
programme to Passivhaus standards, but the ability to do this would be
dependent upon the constraints of each site as it is identified and brought
forward for decision. If the Council were to build to higher standards
initially then the council would not be able to deliver the number of
affordable houses that they hoped to build. There is however, a clear
aspiration to move to build to net zero carbon over the life of the programme,
again dependent on site constraints.
iii.
Rent arrears had increased by £500,000 over the
past 6 months however the rate of increase had stabilised recently. The
adjustment made to the MTFS was prudent, but a further full lockdown could have
an additional impact.
iv.
A budget virement was when money was moved or
reallocated from one budget to another within the same financial year, with
officers having delegated authority to do this in some cases. Any capital budget virements are shown in the
MTFS for transparency. Agreed an acronyms definition section would be included
within the January Budget Setting Report.
The Committee resolved unanimously to endorse recommendations 2.1 and
2.2.
The Committee resolved by 5 votes to 0 to endorse recommendations 2.3 -
2.5.
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.