Agenda item

Cabinet Portfolio: - Housing

Strategic Directorate: - Adult Care, Housing and Public Health

Report to follow

Consideration was given to a report that was submitted for pre-decision scrutiny ahead of the Cabinet meeting scheduled for 20 December 2021 regarding the proposed Housing Revenue Account (HRA) Business Plan 2022/23. The Cabinet Member for Housing, the Acting Assistant Director of Housing and the Interim Head of Housing Operational Services attended the meeting to present the report.

The report stated that the Housing Revenue Account (HRA) recorded all expenditure and income relating to the provision of council housing and related services and as such the Council was required to produce an HRA Business Plan that was reviewed annually to set out its investment priorities over a 30-year period.

In introducing the report, the Cabinet Member for Housing noted that since the last update of the plan there had been significant policy changes that had impacted on the delivery of business plan, specifically relating to the Council’s commitment to become net zero carbon by 2030 following the government’s target for the UK to achieve net zero carbon by 2050. The Cabinet Member noted that this created a significant financial challenge for the HRA Business Plan that would require further consideration even based on the government’s 2050 target.

Members asked for further information on the challenges of delivering the HRA Business Plan in the context of the Council’s commitment to become net zero carbon by 2030 following the government’s target for the UK to achieve net zero carbon by 2050. The Cabinet Member advised that the net carbon commitments had created a significant financial challenge for the HRA Business Plan as it would require an estimated £585 million to achieve net zero carbon emissions in Council Housing. The Cabinet Member noted that given the scale of the financial challenge the HRA did not have sufficient resources to achieve net zero carbon by 2030 and to even achieve net zero carbon by 2050 and as such the government’s target, would be extremely challenging to achieve. The Cabinet Member advised that due to the scale of the challenge activity around reducing the carbon impact of the HRA Business Plan would be focused where it would have maximum impact. The Acting Assistant Director of Housing assured members that significant work was being carried out to look at the various options for how the Council’s housing stock could be decarbonised, become more energy efficient and to establish the level of investment required to achieve these changes. The Acting Assistant Director of Housing advised that officers would be working with other social housing providers to share best practice on how to meet the challenges related to decarbonising the Council’s housing stock and that all possible options to secure extra resources to support the changes required would be explored.

Members asked what the implications would be for the Council if it was unable to meet the net zero carbon targets. The Acting Assistant Director of Housing assured members that when the current work that was being carried out to establish which activities would deliver maximum benefit regarding decarbonising the Council’s housing stock had been completed then officers would be a better position to see what further activity would be needed to meet the required targets.

Members asked for further information on the assumptions had been included in the HRA Business Plan regarding right to buy sales of council homes and how these had informed the forecasts that had been made. The Interim Head of Housing Operational Services advised that the HRA Business Plan required the number of right to buy sales to be predicted for a number of years and provided a detailed explanation of how the figures were worked out and how they related to other assumptions around investment and housing growth, noting that the predicted number of sales was based on actual sale numbers in previous years. The Interim Head of Housing Operational Services advised that whilst the HRA Business Plan included details of the number of predicted sales over a number of years that the annual refresh of the business plan would always ensure that the figures for the upcoming year were always as accurate as possible.

Councillor Carter noted with concern the proposed increase in housing rents of 4.1% and how this would impact on residents at a time when there were other significant pressures on household incomes caused by rising prices. Councillor Carter asked whether at this difficult time a lower rent increase could be agreed. The Cabinet Member advised that social housing rents were set in line with Government policy that required rents to increase by CPI (as of September 2021) plus 1% in 2022/23, therefore an increase of 4.1%. The Cabinet Member advised that due to the very low rate of CPI in September 2020 that rents had only increased by 1.5% in 2020/21, and as such when taken across both years the rent increases had risen as had previously predicted. The Cabinet Member assured members that 67% of tenants received support with their rent and as such would be protected from the increase in rents.

Members noted the proposed tapered increase for charges for the district heating schemes and asked whether this approach was sustainable given the significant increases in energy costs that were being seen. The Interim Head of Housing Operational Services assured members that the proposed price increases would protect tenants and that were the full prices increases to be passed on to tenants then their charges would have increased by 50%. The Interim Head of Housing Operational Services noted that due to the current volatility of the energy market it was very hard to predict what would happen to energy prices in the future.

The Chair thanked the Cabinet Member for Housing, the Acting Assistant Director of Housing and the Interim Head of Housing Operational Services for attending and answering member questions.

Councillor Carter requested that it be recorded that he did not support the proposed 4.1% increase in housing rents.

Resolved: -

That Cabinet be advised that the recommendations be supported.