Agenda item

To consider a report of the Strategic Director for Adult Care, Housing and Public Health outlining expenditure and income relating to the provision of Council housing and related services, and a proposed HRA Business Plan setting out the Council investment priorities over a 30-year period.

Recommendations

That Cabinet recommends to Council to: -

1.             Approve the proposed 2024-25 Base Case Option C 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 7.7% in 2024/25 (Option 3).

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 9.4% in 2024/25.

6.             Agree that charges for garages and parking spaces, communal facilities, cooking gas and use of laundry facilities are increased by 6% in 2024/25.

7.             Agree that the District Heating unit charge per Kwh is set at 15.27 pence per kwh, a decrease of 4.2% (0.67 pence per khw).

8.             Agrees that the decision to reduce the price of District Heating Charges further during 2024-25 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.

9.             Approve the draft Housing Revenue Account budget for 2024/25 as shown in Appendix 6.

The Chair invited the Deputy Leader and Cabinet Member for Housing and Neighbourhood Working to introduce the report. Also in attendance were the Strategic Director for Adult Care, Housing and Public Health, Assistant Director of Housing and Service Manager (Business and Commercial). It was a requirement that the Council sets out its investment priorities over the 30-year period in an annual report. The proposed 2024-25 business plan made funding provision of £126 million for new council homes. It also committed £856 million for investment in housing stock, alongside day-to-day housing management and repairs and maintenance costs.

The Deputy Leader referred to the HRA business plan and areas for prioritised investments. These included:

·       Continued delivery of housing growth;

·       Safety and quality of the housing stock, including damp and mould;

·       Preparation for proactive consumer regulation from April 2024;

·       Meeting statutory minimum energy performance standards in the housing stock by 2030;

·       Refreshing the Council’s stock condition data by 2026.

The draft report recommended an increase in housing rents, non-dwelling rents, district heating charges and other charges. It was recommended that the Council dwelling rents are increased by 7.7%. It was outlined that the rent standard was published by Government and was set at the consumer prices index (CPI) plus an additional 1%. The CPI was measured at the end of September at 6.7%. The 7.7% increase equated to an average weekly increase of £6.54. It was established that around 73% of Council households would have the increase covered in their benefit entitlement and would therefore not feel a direct impact of the proposed change. The report outlined recommended options and presented modelling on alternatives. It was also noted that properties that were let for the first time or relet to a new tenant would be aligned to a formula rent level. The report also outlined shared ownership rent; charges for garages and parking spaces; and charges for cooking gas and district heating unit charge. It was noted that the report recommended a decrease in this charge of 4.2%.

It was highlighted that delegation had been assigned to the Assistant Director of Housing (in consultation with the Assistant Director of Financial Services and Cabinet Member) to review and change pricing structure if there were further reductions in fuel prices.

The Assistant Director of Housing added that the operating environment was extremely challenging for social housing landlords, with 18% cost inflation over the last two years and it was noted that new proactive consumer regulations would be applied in respect of building and fire safety and damp and mould. It was outlined that the waiting list for council housing was in the region of 6500 households and homelessness rates were the highest they have been for the Council. This was also reflected nationally. The business plan continued to prioritise housing growth with the objective to extend the benefits of secure, affordable homes to as many residents as possible whilst ensuring that there was sufficient funding available to keep properties in a good standard.

It was noted that the Council had successfully sustained tenancies and support was available to tenants who may struggle due to cost-of-living pressures.

The Chair invited comments and questions from Board Members and a discussion on the following issues ensued:

·      The growth in numbers of Council housing was welcomed. The numbers of households on the waiting list were referenced, however it was also noted that the existing stock may not meet the needs or requirements of families (for example, a surplus of older one bedroomed bungalows). It was felt that historic stock should be reviewed to ensure that it met projected need.

·      Clarification was sought on the modelling applied to inflationary increases and if this was subject to an ongoing review. It was reiterated that the inflationary assumptions were based on the consumer price index as prescribed by the Government.

·      It was noted that there had been a continued reduction in arrears balances across all tenants. This was partly because of the work undertaken around financial inclusion and supporting tenants to improve their financial position so they can sustain their tenancy and prioritise rent payment.

·      It was clarified that temporary accommodation and homelessness in general was not accounted for in the Housing Revenue Account as this was a general fund function. This would be addressed in the budget documents that would be considered in the following month. As the size Council’s stock increased, more lettings would be created and because of the way the allocations policy worked, some people who were homeless or at risk of homelessness would be prioritised for those new lettings.

·      It was reiterated that over 70% of tenants received housing benefit or universal credit which covered in full or in part their housing rent costs. An analysis of the affordability of the increase on households was detailed in the report.

·      It was noted that the equality impact assessment was based on 2019 figures and required amendment.

·      Clarification was sought whether the rent and charges could be amended should inflation decrease further. In response, it was outlined that the service was still having to catch up with historic high inflation, when rents were at a lower rate.

·      Further details were sought on the temporary delegation to reduce district heating charges. It was highlighted that it was felt appropriate to put this temporary measure in place because of market volatility. This enabled lower charges to be introduced more quickly should energy prices decrease. Assurance was given that when stability returned to energy market, the delegation would be removed and returned to Council for decision.

·      Clarification was sought on how district heating costs were calculated, with the suggestion that this be referred to Improving Places Select Commission for its consideration.

·      It was clarified that information and advice about available support was published on the Council website, in communications distributed to Council tenants (newsletters etc) and in the local newspaper.

·      Further details would be provided about the Warm Home Discount and eligibility of tenants who may not have a current EPC (energy performance certificate).

Resolved:

1.    That the matter of district heating costs be referred to Improving Places Select Commission for inclusion on its 2024-25 work programme.

2.    That Cabinet be advised that the recommendations be supported:

That Cabinet recommends to Council to: -

1)    Approve the proposed 2024-25 Base Case Option C 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 7.7% in 2024/25 (Option 3).

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 9.4% in 2024/25.

6)    Agree that charges for garages and parking spaces, communal facilities, cooking gas and use of laundry facilities are increased by 6% in 2024/25.

7)    Agree that the District Heating unit charge per Kwh is set at 15.27 pence per kwh, a decrease of 4.2% (0.67 pence per khw).

8)    Agrees that the decision to reduce the price of District Heating Charges further during 2024-25 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.

9)    Approve the draft Housing Revenue Account budget for 2024/25 as shown in Appendix 6.