Agenda item

Housing Revenue Account - Capital and Revenue Budgets 2019/2020

This report presents the Housing Revenue Account (HRA) capital and revenue budgets for 2019/20, provides details of proposed rent and service charge levels for 2019/20 and also contains the latest revised forecasts of the HRA Business Plan.




Members considered a report which presented the Housing Revenue Account

(HRA) capital and revenue budgets for 2019/20 and provided details of

proposed rent and service charge levels for 2019/20.


With regard to how the extended five year contract with Mears would be monitored, the Head of Strategic Housing advised that performance was measured and discussed monthly with Mears. A request for information on any break clauses in the contract would be provided to Members.


A Member asked if the Government had indicated what the position would be after the final year of the rent reductions the Council had been required to make. The Head of Strategic Housing responded that his assumption, based on indications from the Government, was for rent increases of consumer price inflation plus 1%.


Clarification was requested on what contingencies were in place in the 2019/20 financial year for the impact of Universal Credit (UC) arrears on the HRA account and also council tax arrears. The Committee was advised that, as well as bad debt provision, the welfare reform team would look to mitigate any impacts of UC. However, this still presented a significant risk for the HRA account. The Council was actively working with tenants to provide support to ensure rent continued to be paid and tenancies were sustained.


A Member queried the loss of income from the 225 properties expected to be lost as a result of Right to Buy. The Head of Strategic Housing clarified this loss was over a 30 year period and details of Right to Buy discounts would be clarified. A Member queried how Right to Buy receipts could be used and was advised that the formula for determining this was quite complex but broadly, after allowances which the Council could deduct from the receipt, the Government received 70% and the Council’s share was 30%.


Following a query about garage voids, the Head of Strategic Housing commented these were advertised locally and undertook to provide details of the number of voids.


A Member referred to the HRA working balances and, noting that the actual balance exceeded the recommended best practice guideline, queried whether this was appropriate given the need for more affordable housing. Officers responded that a prudent approach had been taken in the light of government policies, such as the high value asset levy) and the risk of future changes in Government policy which could impact on the HRA.




The Committee agreed to recommend the following to the Cabinet:


a)     a proposed rent decrease of 1% for the housing stock as set out in Appendix A to the report (based upon 53 collection weeks) with effect from 1 April 2019;


b)     a proposed average rent of £82.47 per week based on a 53 week rent cycle be agreed for the six new build one bedroom bungalows at Perham Green Twydall (estimated let date Autumn 2019);


c)     the baseline garage rent for Council tenants be increased by £1 from £8.12 to £9.12 with effect from 1 April 2019 per week;


d)     a rent increase for all garage tenure types of 5% will be applied with effect from 1 April 2019 per week;


e)     that the service charges and increases as set out in Appendix B of the

report for 2019/20 be approved;


f)      that the revenue budget for the HRA Service for 2019/20 as per Appendix C to the report be approved;


g)     that the proposed capital budget of £3.3m be approved for the fourth phase of new build programme on various garage sites to be funded from borrowing and 1-4-1 capital receipts as set out in sections 8.6.4 of the report;


h)     that the provision for the repayment debt based on annuity based payment on the HRA outstanding debt to be £0.326m for 2019/20 be approved, and;


i)       that members approve the revised 30 year HRA Business Plan model as attached at Appendix D of the report.

Supporting documents: