Issue - meetings

Report of the Strategic Director of Adult Care and Housing

Cabinet Member:     Councillor Beck

Commissioner:         Myers (in advisory role)

Recommendations:

1.    That the proposed 2016-17 Base Case for the HRA Business Plan be approved.

2.    That agreement be given to review the plan annually to provide an updated financial position as new government regulations come into force.

Consideration was given to a report which provided a detailed technical overview of the current position and the reason for changes to the Housing Revenue Account (HRA) 30 Year Business Plan.

It was noted that the HRA recorded all expenditure and income relating to the provision of council housing and related services, and the Council was required to produce a HRA Business Plan setting out its investment priorities over a 30 year period.

Following the introduction in 2012 of HRA self-financing, whereby the Council was awarded control over its HRA in return for taking on a proportion of national housing debt, Rotherham’s HRA was in a strong position with a healthy level of reserves.  However, it was reported that a number of policies had been introduced by central government that would result in a dramatic reduction to HRA resources, namely:

·           1% per annum reduction in Council rents over four years:

·           Reinvigoration of the Right to Buy (reduction of qualifying period to three years): Reducing stock

·           Welfare reform - bedroom tax, universal credit and benefits cap: Impacting on tenants’ ability to pay their rent, and increasing the resources required by the Council to collect rent from tenants in receipt of benefits

·           Introduction of ’Pay to Stay’ and mandatory fixed term tenancies: Which will significantly increase the administrative burden on the Council, and may also lead to increased Right to Buy sales / more lost stock

·           Introduction of the enforced sale of high value properties / equivalent levy: Meaning the Council will have to pay in the region of £2m annually to the Treasury, to cover the costs of the discounts housing associations must offer now they can offer the Right to Buy to their tenants

It was reported that the cumulative effect of such changes was that £51m of savings were likely to be required by 2020-21 when compared to the previous business plan, meaning that the Council would need to take difficult decisions about prioritisation, and how to achieve the best balance between:

·           Maintaining and continuing to improve our 21.000 Council homes

·           Contributing to the borough’s housing growth target of 900 homes per annum

·           Contributing to the development of Starter Homes and other affordable housing products that are needed locally and will play a critical role in Rotherham’s overall economic growth

In agreeing the recommendations, it was noted that the report would be forwarded for debate by the Council on 19 October 2016

Resolved:-

(1)  That the proposed 2016-17 Base Case for the HRA Business Plan be approved.

(2)  That agreement be given to review the plan annually to provide an updated financial position as new government regulations come into force.