Issue - meetings

Report from the Strategic Director of Adult Care, Housing and Public Health.

Recommendations:

1.             Agree that affordable rents are calculated at relet, based on an individual property valuation.

2.             Agree that affordable rents are increased by 4.8% in 2026/27.

3.             Agree that shared ownership rents are increased by 5% in  ...  view the full agenda text for item 90

Consideration was given to the report which presented the Housing Revenue Account (HRA) Plan, Rent Setting and Service Changes 2026-27 for endorsement and recommendation to Council. The Housing Revenue Account (HRA) recorded all expenditure and income relating to the provision of Council housing and related services, and the Council was  ...  view the full minutes text for item 90

Report from Strategic Director for Adult Care, Housing and Public Health

Recommendations

That Cabinet recommends to Council to:

1.             Approve the proposed 2026/27 HRA Business Plan.

2.             Note that the Business Plan will be reviewed annually to provide an updated financial position.

3.             Agree that Council dwelling rents are increased by 4.8% and, dependent upon the Government announcement in January 2026, implement a policy of rent convergence. Allowing rents for social housing properties that are currently below the Government-calculated formula rent to increase by an additional £2 per week in 2026/27. If convergence is capped below £2 that will be the level applied.

4.             Agree that the Council should retain the policy of realigning rents on properties at below formula rent to the formula rent level when the property is re-let to a new tenant.

5.             Agree that affordable rents are calculated at relet, based on an individual property valuation.

6.             Agree that affordable rents are increased by 4.8% in 2026/27.

7.             Agree that shared ownership rents are increased by 5% in 2026/27.

8.             Agree that charges for communal facilities, parking spaces, cooking gas and use of laundry facilities are increased by 3% in 2026/27.

9.             Agree that charges for garages are increased by 10% in 2026/27.

10.          Agree that the District Heating unit charge per kWh remains at 13.09 pence per kWh.

11.          Agree that the decision to reduce the price of District Heating Charges during 2026/27 be delegated to the Assistant Director of Housing in conjunction with the Assistant Director of Financial Services following consultation with the Cabinet Member for Housing. The delegation would only be used to respond to a change in Government policy or a significant change in the Ofgem price cap that has the effect of a lower unit price.

12.          Approve the draft Housing Revenue Account budget for 2026/27 as shown in Appendix 8.

At the Chair’s invitation the Cabinet Member for Housing introduced the report highlighting the starting premise was that everyone deserved a safe, warm home, and the aim was to be the best social housing provider.

The HRA was ring-fenced and self-funding, with no reliance on council tax. It covered all housing-related costs, including repairs, maintenance, property upgrades (e.g., kitchens, bathrooms, roofs), new builds, acquisitions, and housing and neighbourhood support services.

Historically, rents were kept as low as possible, but the service faced increasing challenges and regulatory requirements, alongside ambitions to maintain high standards. Recent and upcoming changes included Awaab's Law (damp and mould management), stock condition surveys (for compliance and quality assurance), and minimum energy efficiency ratings (C), which would be costly. Future changes under the Decent Homes Standard were anticipated but unclear.

The team planned to present proposals on rent, rent convergence, garage rents, and fees. The Chair then handed over to the housing team for the presentation.

The Assistant Director of Housing and the Head of Housing Income and Support Services ran through the presentation. Before presenting proposals, additional background was provided on the Housing Revenue Account (HRA). As noted, the HRA was a self-financing, ring-fenced account funded by rents, used for repairs, maintenance, and investment in housing stock. The HRA business plan was reviewed annually to ensure 30-year viability, which had become increasingly difficult due to significant pressures.

Risks were highlighted: both locally and nationally, the HRA had been under pressure for several years. Key factors included increased regulatory requirements, such as the Social Housing Regulation Act, fire safety changes, and Awaab's Law which were not anticipated when self-financing was introduced in 2012. Self-financing meant no government subsidy; income was limited to rent collected. This created challenges in balancing investment in existing stock (a priority) against new stock. Economic pressures, including inflation and rent increases not keeping pace with costs, further compounding the situation.

Further background was provided on pressures facing the HRA. While compliance with legal and regulatory requirements was clear, upcoming government announcements were expected to add further pressure. Consultation on changes to the Decent Homes Standard was ongoing; costs would remain unclear until details were confirmed.

Locally, investment continued in both existing stock and new builds, supported by borrowing. Internal challenges included securing a new repairs and maintenance contract, expected to cost more, and the completion of stock condition surveys on all 19,000 properties to enable a shift from responsive to planned repairs.

Nationally, Rotherham participated in lobbying for greater HRA support and flexibility. Government responses included a longer-term rent settlement, changes to Right to Buy eligibility, and funding announcements, £39 million nationally for new homes over 10 years, with £700 million allocated to the South Yorkshire Mayoral Combined Authority area. However, clarity was still awaited on self-financing, energy efficiency, low-carbon requirements, and Decent Homes 2 standards.

Significant risks and costs were highlighted for the HRA due to the upcoming regulations. Funding these pressures would rely solely on rental income, as the HRA was  ...  view the full minutes text for item 71