Report of the Strategic Director (Growth & Development), Strategic Director (Neighbourhoods) and Deputy Chief Executive and City Treasurer.

This report presents members with details on the proposed Housing Revenue Account (HRA) budget for 2024/25 and an indication of the 2025/26 and 2026/27 budgets. It sets out the key assumptions being used in developing the next year’s budget and the outlook for the 30-year HRA business plan in light of the budget proposals.

The committee considered a report of the Strategic Director (Growth & Development), Strategic Director (Neighbourhoods) and Deputy Chief Executive and City Treasurer which presented details on the proposed Housing Revenue Account (HRA) budget for 2024/25, and an indication of the 2025/26 and 2026/27 budgets. 

Key points and themes within the report included: 

·        Providing an introduction and background to the HRA and the Council’s statutory duty; 

·        The current year’s budget position at period 9; 

·        The Budget Strategy for 2024/25-2026/27; 

·        Current budget assumptions; 

·        A proposed rent increase of 7.7% for 2024/25; 

·        Management of the housing stock and property numbers;  

·        Repairs and maintenance;  

·        The forecast overall reserves position at the start of 2024/25; 

·        The key assumptions used to develop next year’s budget; and  

·        The outlook for the 30-year HRA business plan in light of the budget proposals. 

Some of the key points and queries that arose from the committee’s discussion included: 

·        Changes to legislation regarding fire assessments in buildings over 11 metres in height;  

·        The cap on the number of existing properties that the Council can purchase directly; 

·        Whether any consideration had been given to moving from communal to individual heating sources;  

·        If maintenance works were included as part of garage leases;  

·        Recognising that some money would have been wasted as a result of miscommunication between different trades providing repairs;  

·        Increases in the number of disrepair claims;  

·        Recognising how the HRA was constantly put under strain by central government introducing new regulations without providing additional funding; and  

·        Welcoming increased engagement with residents and suggesting that these groups be engaged with as part of the refreshed Our Manchester Strategy. 

The Executive Member for Housing and Development explained that the HRA was used to fund works such as retrofitting; developing new homes; implementing fire and building safety regulations; and estate management. He informed the committee that rents would increase from April 2024 in line with the government policy of Consumer Price Index (CPI) plus 1%, which was 7.7%. He stated that the Council set aside £1m in 2023/24 to support residents with rent increase and the cost-of-living crisis and that £300k would be set aside for 2024/25 to continue helping ease financial pressures for residents.  

In response to a question regarding recent changes to fire safety legislation, the Executive Member for Housing and Development acknowledged that the changes were required following the Grenfell tragedy. He stated that the Council managed a number of high-rise properties over 11 metres and that cladding and sprinklers had been assessed. He stated that further certainty and clarity was required and the Council would continue to monitor the regulations closely.  

The Executive Member for Housing and Development recognised the need to build the Council’s housing stock, which had reduced due to Right-to-Buy schemes and cited recent new-build developments in Collyhurst and Newton Heath. He explained that the HRA was used to purchase existing properties and buy-backs from Right-to-Buy properties where applicable.  

The Directorate Head of Finance explained that a cap on the number of existing properties that the Council could buy came into effect in 2022/23 and intended to encourage a new supply of housing. He stated that this was a phased reduction of 50% of stock in 2022/23-2024/25 and would reduce to 40% and 30% in subsequent years. He explained that the cap did not have an immediate impact on the Council’s housing stock given recent and planned developments, but it would be reviewed as the phased reduction continued.  

The Director of Housing Operations informed members of a government inquiry into the financial sustainability of delivering social housing and he looked forward to the recommendations arising from this.  

It was also stated that the Council had embarked on a comprehensive stock condition survey of every social housing property.  

The Director of Housing Operations also confirmed that responsibility for the maintenance of garages leased by the Council would be stipulated within individual contracts but funding for repairs was taken from the HRA.  

Members were also advised that a new engagement strategy had been devised to improve communication with residents, which included a focus on resident experience and repairs. The Director of Housing Operations stated that recent feedback had commended improvements in communication, which the committee welcomed.  He also stated that there was a 13% year-on-year increase in satisfaction with repairs.  

In response to a query regarding increases in the number of disrepair claims, the Director of Housing Operations stated that the Council was not an outlier in this area. He stated that there was a significant investment programme for home improvements and that it was prudent to have provisions for disrepair claims. He commented that the Council worked with residents and awarded compensation where appropriate.  

The Executive Member for Finance and Resources echoed a member’s comment about the strain placed on the Council and the HRA by the policies and regulations imposed by central government without any additional funding to implement these changes. He stated that it was the right thing to maintain the HRA when many local authorities did not, but that this led to challenges. He also stated that he would lobby a future government to commit to providing additional funding for social housing.  

The Deputy Chief Executive and City Treasurer stated that the HRA was intended to be self-financing, but this concept had been undermined by the depletion of housing stock and the inability to replace; requirements around regulation changes and the associated costs of this; and the impact of inflation and the rent cap. She stated that these challenges meant there would need to be difficult trade-offs in what could and could not be afforded in future years. She reiterated, however, that statutory requirements would be prioritised.  

Decision: 

That the report be noted.