Agenda item

HRA Business Plan, Rent Setting and Service Charges 2025-26

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

Recommendations:

That Cabinet recommends to Council to: -

1. Approve the proposed 2025/26 Base Case Option 2 for the 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 2.7% in 2025/26 (Option 2).

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 shared ownership rents are increased by 3.2% in 2025/26.

6. Agree that charges for communal facilities, parking spaces, cooking gas and use of laundry facilities are increased by 2% in 2025/26.

7. Agree that charges for garages are increased by 10% in 2025/26.

8. Agree that the District Heating unit charge per Kwh is set at 13.09 pence per kwh.

9. Agree that the decision to reduce the price of District Heating Charges further during 2025/26 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 necessitating a lower unit price.

10.Approve the draft Housing Revenue Account budget for 2025/26 as shown in Appendix 6.

Minutes:

Consideration was given to the report which presented the Housing Revenue Account Business Plan, Rent Setting proposals and Service Charge proposals for 2025-26.

The proposed 2025/26 HRA Business Plan incorporated the Council’s commitments to continue and extend the Council’s Housing Delivery Programme, alongside significant new investment to support decency and thermal efficiency in existing council homes. The Plan included provision for £979m investment in the housing stock over 30 years, including approximately £35m additional investment over the next five years compared to last year’s position. This was alongside continuing to fund day-to-day housing management and repairs and maintenance costs. At the same time the Housing Delivery Programme would continue beyond 1,000 homes. The existing funding provision of £113m for hundreds more Council homes by 2027 would be supplemented with an additional £37m to begin to build the pipeline of schemes beyond 2027.

There had been a number of government policy changes in 2024/25 that would impact on the 2025/26 HRA Business Plan. These were set out in paragraph 1.6 of the report and included:

Plans to revise the current rent policy to give local authorities longer term stability to support borrowing and investment in new and existing homes.

From the 21 November 2024 the maximum discount allowed through Right to Buy was reduced. In the Yorkshire and Humber region the maximum allowed discount was now £24,000 and the level of discount would not increase by CPI. There continued to be a strong focus on regulation of the social housing sector with the first rounds of proactive inspections under consumer regulations taking place during 2024/25. During 2025/26 it was anticipated that the Government would confirm its plans for Awaab’s Law, ‘Decent Homes 2’, the Conduct and Competence Standard, and requirements to achieve EPC C by 2030. New regulations for District Heating were also due to come into effect.

The Government target to achieve 1.5 million new homes over five years had been backed by an initial £500m investment to continue the national Affordable Homes Programme. However, this would lead to less receipt income for the Council to fund its Housing Delivery Programme.

Alongside providing the draft HRA budget for 2025/26, the report recommended increases in housing rents, non-dwelling rents, District Heating charges and other service charges for 2025/26. It was recommended that Council dwelling rents were increased by 2.7%, equivalent to CPI+1%, in line with Government policy, as set out in the table at paragraph 2.6.2. There were 12,668 tenancies in receipt of full Housing Benefit or full Universal Credit (UC) who would not be directly affected by an increase in rent. 2,276 tenancies received part Housing Benefit and any increase in rent would be part covered by benefit payments.

The District Heating pricing options were set out in Table 3 at paragraph 2.6.16. Given the volatility of energy prices, the Council took the decision in July 2023 to match the average District Heating bill to the Ofgem price cap for July – September 2023. This approach continued in 2024/25 It was proposed to continue this approach into 2025/26 and match the forecast average District Heating bill to the forecast Ofgem price cap for April – June 2025 meaning an average bill would be £828 per year assuming the price cap remained unchanged. This would mean that the HRA would be paying c£206k in 2025/26 towards the cost of District Heating. The forecast Ofgem price cap

had been calculated using market data and was subject to change. As in 2024/25, it was recommended that authority be delegated in 2025/26 to

the Assistant Director for Housing in consultation with Cabinet Member for

Housing and Assistant Director for Finance to amend District heating pricing

should there be a significant movement in the Ofgem price cap.

Details of other fees and service charges were set out in paragraphs 2.6.12 to 2.6.22 of the report and included furnished tenancy charges and garage rents. Appendix 5 to the report included information on a number of leasehold management charges that were based on the full recovery of actual costs.

The Cabinet Member explained that a key priority was the ongoing work to mitigate the effects of the cost-of-living crisis. The support offered to residents was outlined in Appendix 8.

The report was considered by the Overview and Scrutiny Management

Board (OSMB), who advised that the recommendations be supported. A number of concerns had been raised in the meeting, but these had been adequately addressed by the Cabinet Members and Officers. A number of additional recommendations had been made, relating to the provision of information for elected Members.

Resolved:

That Cabinet recommends that Council: