Agenda item

This report presents the Housing Revenue Account (HRA) capital and revenue budgets for 2025/26 and provides details of proposed rent and service charge levels for 2025/26.

The report also contains the latest revised forecasts of the HRA Business Plan.

The comments of this Committee will be collated for onward despatch to the Cabinet on 11 February 2025 and Council on 27 February 2025.

Discussion:

Officers summarised the report and the requirement for a 30 year balanced business plan and annual review. Members were informed that current reserves had been reduced which also reduced borrowing.

Members queried the level of voids and associated loss of rent. Officers explained that there was a similar picture across the South East, and that Covid still had an impact on contractors and equipment however the contract had been reprocured and a task force had been used to target works and lower the level of voids. Members were informed that contracts now had index financial penalties if they failed to meet targets and the expectations on contractors were now much higher.

Members requested clarity regarding the level of debt and were informed that the current rent arrears for tenants in situ was £288,000 and this had been classed as recoverable. Officers explained that section 7.3.3 of the report stated the debt relating to both current and former tenants rent arrears and section 7.3.4 stated the estimated position at the end of 2024/25. The bad debt provision as of 31 March 2025 was set out in section 7.3.5 of the report and was £399,000.

Members queried the impact of National Insurance increases on the contract and officers agreed to provide information on this outside the meeting but reassured Members that there would be no risk to tenants.

Members identified an error in point 1 of page 68 of the Savills report and officers said they will ensure that this is amended.

Decision:

The Committee agreed to recommend the following to Cabinet:

a)  A proposed social rent increase of 2.7% (CPI of 1.7 plus 1%) for the social rent housing stock as set out in Appendix A (based on 52 collection weeks) with effect from 01 April 2025. All new tenancies issued during 2025/26, to be set at either the formula rent or rent cap for social rent dwellings, whichever is lower.

b)  A proposed affordable rent increase of the lower of Local Housing Allowance (LHA) rate or 2.7% (CPI of 1.7 plus 1%) for the affordable rent properties as set out in Appendix B (based on 52 collection weeks) with effect from 01 April 2025. All new tenancies during 2025/26 to be set at either 80% of market rent or the LHA rate for affordable rent dwellings, whichever is lower.

c)  A proposed rent increase of 2.7% to be applied to all garage tenure types with effect from 01 April 2025 as stated in section 5.

d)  That the service charges increases/decreases as set out in Appendix C of the report for 2025/26 be approved.

e)  That the revenue budget for the HRA service for 2025/26 as per Appendix D be approved.

f)    That the provision for the estimated repayment of debt, based on annuity-based payment as set out in section 7.3, on the HRA’s outstanding debt for 2025/26 be approved.

g)  To delegate authority to the Assistant Director, Culture and Community to agree weekly rental values presented by the Head of Tenant Services for any in-year completed HRA acquisitions and/or new builds during 2025/26.

h)  That Members approve the 30-year HRA Business Plan model as attached at Appendix E.