Report of the Strategic Director (Growth and Development) and Deputy Chief Executive and City Treasurer attached

A joint report by the Strategic Director (Growth and Development), the Strategic Director (Neighbourhoods) and the Deputy Chief Executive and City Treasurer presented the proposed budget for the Housing Revenue Account (HRA) for 2022/23 and indicative budgets for 2023/24 and 2024/25.

The report set out the requirements placed on the Council with respect to the HRA budget:-

·                The Council had to formulate proposals or income and expenditure for the financial year which sought to ensure that the HRA would not show a deficit balance;

·                To keep a HRA in accordance with proper practice to ensure that the HRA is in balance taking one year with another; and

·                The HRA must, in general, balance on a year-to-year basis so that the costs of running the Housing Service must be met from HRA income.

The HRA Budget Position for 2021/22, which as of December 2021, was forecasting that net expenditure would be £11.621m lower than budget, inked to delays in capital projects.  Although the expenditure was lower than originally forecast, it was still more than the annual income and the forecast in-year deficit of £5.073m would be drawn down from the HRA reserve.  The main reasons for in year changes were detailed in the report.

Government guidance allowed Local Authorities to increase rents by a maximum of CPI plus 1% for the five-year period 2020/21 to 2024/25. The CPI rate used was based on the September figure in the preceding year, and as at September 2021 CPI was 3.1% and therefore this report sought approval to increase tenants’ rents for all properties by 4.1% from April 2021.

In light of the current economic climate and the potential impact the proposed 4.1% rent increase might have on the most vulnerable tenants it was proposed that £200k was earmarked to provide a hardship fund to provide targeted support to those most affected by the increase in living costs, the proposed rent increase and the ongoing impacts of COVID.  In addition to the hardship fund it was also noted that the proposed 4.1% rent increase would be covered in full for those residents in receipt of 100% housing benefit entitlement which is approximately 2,800 tenants and a further c.1,900 tenants receiving partial housing benefit support.

In order to ensure that the increase applied to garage rents remained in line with that applied to dwelling rents, it was proposed that 2022/23 garage rents be increased by 4.5%, which would see an increase in the rental of between 7p and 21p per week.

The report also explained the other key changes in the HRA budget for 2022/23, and the full budget was presented as set out below.-

It was noted that the proposed HRA budget 2023/24 and indication of the 2023/24 and 2024/25 budgets had also been considered by the Resources and Governance Scrutiny Committee at its February 2022 meeting where the committee had noted the proposals in the report (Minute RGSC/22/95).

Decisions

The Executive:-

(1)      Note the forecast 2021/22 HRA outturn as set out in the report.

(2)      Approve the 2022/23 HRA budget as set out above and note the indicative budgets for 2023/24 and 2024/25.

(3)      Approve the proposed 4.1% increase to dwelling rents and garage rents, and delegate the setting of individual property rents to the Director of Housing Operations and the Deputy Chief Executive and City Treasurer, in consultation with the Executive Member for Neighbourhoods and Executive Member for Housing and Employment. 

(4)      Approve the establishment of a £200,000 hardship fund to support vulnerable tenants, and to delegate the design and operation of the fund to the Director of Housing Operations and the Deputy Chief Executive and City Treasurer, in consultation with the Executive Member for Neighbourhoods and Executive Member for Housing and Employment.