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Issue - meetings

Housing Revenue Account – Business Plan 2019/20

Meeting: 27/02/2019 - Council Meeting (Item 157)

157 RECOMMENDATION OF THE CABINET - HOUSING REVENUE ACCOUNT - BUSINESS PLAN 2019/20 pdf icon PDF 75 KB

 

To consider a recommendation from Cabinet in respect of approving the Housing Revenue Account Business Plan for 2019/20.

Additional documents:

Minutes:

Further to Minute No. 92 of the meeting of the Cabinet held on 21st January, 2019 consideration was given the report which provided a detailed technical overview of the current position and the reason for changes to the Housing Revenue Account Business Plan.

 

The Housing Revenue Account (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 thirty year period.

 

Engagement work with tenants was ongoing and the Council had received national funding bodies support to the Housing Growth Programme.  Funding had also been received to support the prevention of, and support to, victims and survivors of domestic abuse, rough sleepers and the Council would work towards supporting the most vulnerable of people.

 

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.  A number of policies were introduced by Central Government that resulted in a reduction to HRA resources, namely:-

 

·             1% per annum reduction in Council rents over four years. 2019-20 is the final year of this policy.

·             Reinvigoration of the Right to Buy (RTB) (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.

 

At the time this resulted in the need for significant savings to be made over the life of the business plan.

 

The key shift in policies and legislation had resulted in changes to underlying assumptions were:-

 

·             Agreed rent formula of CPI + 1% from 2020-21 onward for five years.

·             Removal of the HRA Debt Cap.

·             Removal of pay to stay which would have meant any household earning over £31,000 would have been required to pay at or near market rent.

·             Removing the proposed restriction of Housing Benefit to Local Housing Allowance rate for new tenants from April 2019.

·             Removal of the proposed enforced sale of higher value Council Properties.

·             Removing the planned restriction of Universal Credit Housing costs to the majority of 18-21 year olds.

 

Whilst there have been a number of welcomed policy changes, there were still multiple policies which would continue to impact directly or indirectly on the amount of resources available with the HRA Business Plan. These were:-

 

·             Roll out of full service Universal Credit to all remaining working age tenants in Rotherham since July 2018 onwards.

·             Ongoing Right to Buy eligibility.

 

The combined effect of these changes was likely to have a significant impact on the nature of housing provision in Rotherham, not just in terms of Council Housing.

 

The Council would continue to invest in the future of its Council housing services in Rotherham and £51 million  ...  view the full minutes text for item 157


Meeting: 21/01/2019 - Cabinet (Item 92)

92 Housing Revenue Account – Business Plan 2019/20 pdf icon PDF 194 KB

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

 

Recommendations:-

 

1.    That Cabinet recommend to the Council to:

 

(a)  That the proposed 2019-20 Base Case Option 2 for the HRA Business Plan be approved.

(b)  That the plan be reviewed annually to provide an updated financial position.  ...  view the full agenda text for item 92

Additional documents:

Minutes:

Consideration was given the report which provided a detailed technical overview of the current position and the reason for changes to the Plan. This report was considered alongside proposed 2019-20 rents, service charges and budgets (Minute No. 91).

 

The Housing Revenue Account (HRA) recorded all expenditure and income  ...  view the full minutes text for item 92


Meeting: 16/01/2019 - Overview and Scrutiny Management Board (Item 150)

150 Housing Revenue Account – Business Plan 2019/20 pdf icon PDF 194 KB

 

Cabinet Portfolio:-                Housing

Strategic Directorate:-          Adult Care, Housing and Public Health

Additional documents:

Minutes:

Consideration was given to a report which was due to be submitted ato the Cabinet meeting on 21 January 2019 which provided a detailed technical overview of the current position and the reason for proposed changes to the Housing Revenue Account Business Plan for 2019/20.

 

It was reported that the Housing Revenue Account (HRA) recorded all expenditure and income relating to the provision of council housing and related services. 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. A number of policies were introduced by central government that resulted in a reduction to HRA resources, namely:

 

·         1% per annum reduction in Council rents over four years. 2019-20 in the final year of the policy

·         Reinvigoration of the Right to Buy (RTB) (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.

 

Members noted that over the past year, there has been a shift in government policy towards increasing the availability of housing across all tenure types. This had reduced pressures on the business plan, the most significant policy announcement being the return of the previous rent formula from 2020-21 onwards, namely set at Consumer Price Index (CPI) + 1% for five years. The subsequent review of the HRA Business Plan for 2019-20 had focused on achieving the following:

 

·         Contributing to the borough’s housing growth target of 900 homes per annum through building and/ or purchasing new properties

·         Maintaining and continuing to improve 20,500 Council homes

·         Contributing to the development of low cost home ownership products that were needed locally and would play a critical role in Rotherham’s overall economic growth

·         Continued investment to support the General Fund budget position

 

Referring to the recent scrutiny review on modern methods of construction and specifically the opportunities presented by modular housing, Members queried why further investment was not planned from the Housing Revenue Account when it could be delivered without further borrowing. In response, the Cabinet Member for Housing explained that £51m had already been agreed, further monies were in the pipeline but had not yet received Cabinet approval.

 

Members referred to the risks highlighted in respect of repairs and maintenance, where over a five year period it was planned to invest around £99mm with an efficiency saving of £11m over that time. Assurances were sought as to whether a review of how repairs and maintenance was working would be undertaken and what amount of exposure there was to interest rate rises. In response, it was explained that efficiency savings for repairs and  ...  view the full minutes text for item 150