Matter for Decision

At this stage in the 2013/14 budget process the range of assumptions on which the HRA Business Plan Mid-Year Update was based need to be reviewed, in light of the latest information available, to determine whether any aspects of the strategy need to be revised. This will then provide the basis for the finalisation of the 2012/13 revised and 2013/14 budgets.

 

The HRA Budget-Setting Report provided an overview of the review of the key assumptions. It set out the key parameters for the detailed recommendations and final budget proposals.

 

Housing Management Board scrutinised the detailed rent, and service charge proposals and revenue bids and savings proposed, The Executive Councillor noted the support of the recommendations by Housing Management Board, gave provisional approval to the recommendations and will formally record a decision in respect of recommendations (i) to xiii) at a meeting of Strategy & Resources on 15^th February 2013

 

Decision of Executive Councillor for Housing

Following scrutiny and debate at Housing Management Board the Executive Councillor provisionally, with the decision to be formally recorded at the meeting of Strategy & Resources on 15^th February 2013.

 

Review of Rents and Charges

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

(ii)            Approved that council dwellings rents be increased in line with rent restructuring guidelines to seek to achieve convergence with formula rent by 2015/16, with a maximum in individual increases of inflation (RPI at September 2012 of 2.6%) plus half percent (0.5%) plus £2.00 per week with effect from 1 April 2013, in accordance with the latest government guidelines.

(iii)          Approved inflationary increases of 2.4% in garage rents for 2013/14, in line with the base rate of inflation for the year assumed in the HRA Budget Setting Report, pending future recommendations in respect of garage pricing structures following the findings of the Garage Working Group.

(iv)         Approved that service charges for gas maintenance, door entry systems, lifts and electrical and mechanical maintenance are increased by a maximum of inflation at 2.6% plus 0.5%, if required, to continue to recover full estimated costs as detailed in Appendix B of the HRA Budget Setting Report.

(v)           Approved 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.

(vi)         Approved revised leasehold administration charges for 2013/14 as detailed in Appendix B of the HRA Budget Setting Report.

(vii)        Approved the revised Rent Write Off Policy, as detailed in Appendix A(1) of the HRA Budget Setting Report.

(viii)      Approved the revised Rent Policy, as detailed in Appendix A(2) of the HRA Budget Setting Report.

 

Revenue – HRA Revised Budget 2012/13:

 

(ix)         Approved with any amendments, the Revised Budget items shown in Appendix D of the HRA Budget Setting Report.

 

Budget 2013/14:

 

(x)           Approved with any amendments, of the Non-Cash Limit items shown in Appendix E of the HRA Budget Setting Report.

(xi)         Approved with any amendments, of the Unavoidable Revenue Bids and Savings shown in Appendix F of the HRA Budget Setting Report.

(xii)        Approved with any amendments, of the Priority Policy Fund (PPF) Bids shown in Appendix G of the HRA Budget Setting Report.

 

Treasury Management

 

(xiii)      Approved the continued approach to determining the most appropriate borrowing route in respect of any additional HRA borrowing requirement, as outlined in Section 6 of the HRA Budget Setting Report, delegating responsibility to the Director of Resources for the final decision, in consultation with the Executive Councillor, Chair, Vice Chair and Opposition Spokesperson for HMB.

 

 

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 Business Manager & Principal Accountant regarding the Housing Revenue Account Budget Setting Report (HRA BSR).

 

The Business Manager & Principal Accountant requested a change to the recommendations. She formally proposed that instead of making a decision at HMB, the Executive Councillor for Housing would take final decisions in respect of recommendations (i) to (xiii) at a meeting of Strategy & Resources in February 2013.

 

The Business Manager & Principal Accountant formally proposed to withdraw the following recommendations from the her report:

 

The Executive Councillor recommended to Council:

 

Revenue – HRA Revised Budget 2012/13:

 

(ix)         Approval with any amendments, of the Revised Budget items shown in Appendix D of the attached HRA Budget Setting Report.

 

Budget 2013/14:

 

(x)           Approval with any amendments, of the Non-Cash Limit items shown in Appendix E of the attached HRA Budget Setting Report.

(xi)         Approval with any amendments, of the Unavoidable Revenue Bids and Savings shown in Appendix F of the attached HRA Budget Setting Report.

(xii)        Approval with any amendments, of the Priority Policy Fund (PPF) Bids shown in Appendix G of the attached HRA Budget Setting Report.

 

Treasury Management

 

(xiii)      To approve the continued approach to determining the most appropriate borrowing route in respect of any additional HRA borrowing requirement, as outlined in Section 6 of the HRA Budget Setting Report, delegating responsibility to the Director of Resources for the final decision, in consultation with the Executive Councillor, Chair, Vice Chair and Opposition Spokesperson for HMB.

 

The following recommendations were formally proposed:

 

Revenue – HRA

 

Revised Budget 2012/13:

 

(ix)     Approve with any amendments, the Revised Budget items shown in Appendix D of the attached HRA Budget Setting Report.

 

Budget 2013/14:

 

(x)           Approve with any amendments, the Non-Cash Limit items shown in Appendix E of the attached HRA Budget Setting Report.

(xi)         Approve with any amendments, the Unavoidable Revenue Bids and Savings shown in Appendix F of the attached HRA Budget Setting Report.  

(xii)        Approve with any amendments, the Priority Policy Fund (PPF) Bids shown in Appendix G of the attached HRA Budget Setting Report.           

 

Treasury Management

 

(xiii)      Approve the continued approach to determining the most appropriate borrowing route in respect of any additional HRA borrowing requirement, as outlined in Section 6 of the HRA Budget Setting Report, delegating responsibility to the Director of Resources for the final decision, in consultation with the Executive Councillor, Chair, Vice Chair and Opposition Spokesperson for HMB.

 

The Committee unanimously approved amending the recommendations.

 

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

 

(i)             Labour Councillors and Tenant Representatives expressed concern at the above inflation rent rises.

(ii)            Labour Councillors and Tenant Representatives expressed concern regarding the right to buy policy. They felt Central Government policy would lead to a reduction in City Council housing stock as tenants could purchase their properties at a faster rate than replacements could be built.

(iii)          Tenant Representatives referred to comments from a member of the public at the 19 June 2012 HMB regarding Tenant Representatives voting stance on rent rises. Tenant Representatives were placed in a difficult position as their role on HMB was to represent tenant and leaseholder views. Tenant Representatives abstained from voting on increasing rents as they had reservations about the rise, but recognised that not increasing the rents would lead to consequences in terms of the ability to deliver services, due to Central Government assumptions on rent increases in the HRA Self-Financing Settlement.

 

In response to Members’ questions the Head of City Homes plus Business Manager & Principal Accountant confirmed the following:

 

(i)             A charge of £10 was imposed for retrospective consent for improvements. This was intended only to be a disincentive, thus encouraging leaseholders to obtain permission in advance, and was not set to recover the costs associated with giving the required permissions. If the direct costs for all approvals were to be recovered, other methods were available to reclaim these.

(ii)            The Council had 19 cases between 2009 – 2012 where retrospective permission was sought.

 

The Head of City Homes undertook to liaise with the Executive Councillor for Housing and Mrs Best regarding a future report to HMB on possible amendments to the £10 charge. Also ways to avoid penalising tenants/leaseholders who sought approval when others may undertake work without seeking approval in order to avoid being charged.

(iii)          A blanket policy was not in place for void property rent increases. Rent would increase for properties where work had been undertaken to improve energy efficiency as the reduced energy bills should help to offset rent increases. Rent would not move directly to target for all properties.

(iv)         The Housing Needs Register was revised in line with national property guidelines and would be reported to 17 January Community Services Committee.

(v)           The Council preferred to house people on a short term basis in its temporary housing stock rather than bed and breakfast accommodation where possible. Maintenance costs were higher than other council housing stock due to the high turn over of residents. The Council had 63 temporary housing units that it owned or managed. More had been taken on as a way to house people in the City instead of sending them elsewhere or placing in bed and breakfast accommodation as had sometimes occurred in the past. The Housing Team reviewed individual circumstances to place families and workers in Cambridge where possible.

(vi)         The Business Manager & Principal Accountant undertook to clarify Disabled Facilities Grant plus Private Sector Housing Grants and Loans figures with Councillor Bird post HMB. A reduction was proposed in response to less demand in 2012/13.

 

In response to Members’ questions the Executive Councillor for Housing and Director of Customer & Community Services confirmed the following:

 

(i)             The impact on tenants from the proposed redevelopment of Water Lane and Aylesborough Close was implicit in the 11 October 2012 Community Services Committee report, but was made more explicit in the report being taken to 17 January 2013 committee meeting.

(ii)            Noted Labour Councillors and Tenant Representatives concerns regarding the right to buy policy. The Council had a right to replace housing stock as of April 2012.

 

The Business Manager & Principal Accountant said that under the new right to buy policy, for any right to buy sales over and above those assumed in the Self-Financing settlement, the authority is able to retain a proportion that relates to the debt associated with the dwelling. The authority has also signed an agreement with Communities & Local government to be able to retain any balance remaining, as long as it is invested in the delivery of new social housing. The right to buy receipt can only form 30% of the funding required to build or acquire a new social housing dwelling, with the balance to be met from Council resources or through additional borrowing.

 

The Council could buy back existing dwellings in the city, but Central Government encouraged the development of new housing, wherever Councils are in a position to do so.

 

The Chair decided that the recommendations highlighted in the Officer’s report should be voted on and recorded separately:

 

The Committee considered and endorsed recommendations (i), (iv), (v), (vi), (vii), (ix), (x), (xi), (xii) and (xiii) by 8 votes to 1.

 

The Committee considered and endorsed recommendation (ii) by 4 votes to 0.

 

The Committee considered and endorsed recommendation (iii) by 3 votes to 0.

 

The Committee considered and endorsed recommendation (viii) by 4 votes to 0.

 

The Executive Councillor noted the recommendations, and deferred considering for approval until the special Strategy & Resources Committee meeting 15 February 2013.

 

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

Not applicable.

 

 

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

 

Officer Executive Decision - Record

 

Decision(s) taken:	No decision required as no borrowing anticipated in 2013/14
Decision of:	Director of Resources for the final decision, in consultation with the Executive Councillor, Chair, Vice Chair and Opposition Spokesperson for HMB.
Date of decision:	N/A
Matter for Decision:	Treasury Management: Approved the continued approach to determining the most appropriate borrowing route in respect of any additional HRA borrowing requirement, as outlined in Section 6 of the HRA Budget Setting Report, delegating responsibility to the Director of Resources for the final decision, in consultation with the Executive Councillor, Chair, Vice Chair and Opposition Spokesperson for HMB.
Any alternative options considered and rejected:	No alternatives considered as delegated decision not required in 2013/14.
Reason(s) for the decision including any background papers considered:	Due to the timing of expenditure in relation to the new build housing programme, additional borrowing is not now anticipated in 2013/14. The delegation will be required again for 2014/15.
Conflicts of interest and dispensations granted by the Chief Executive:	If you consider that any councillor consulted when being asked to take a decision has a conflict of interest, you should consult Simon Pugh, Head of Legal Services for advice as a dispensation granted by the Chief Executive for the councillor may be arranged.
Other Comments:
Reference:	13/5/HMB Housing Revenue Account Budget Setting Report (HRA BSR)
Contact for further information:	Julia Hovells