Agenda and draft minutes

Venue: The John Meikle Room - The Deane House. View directions

Contact: Tracey Meadows Email: t.meadows@somersetwestandtaunton.gov.uk 

Items
No. Item

17.

Apologies

18.

Notes from previous meeting on 16 December 2019

19.

Housing Review Account Business Plan 2020-2050 pdf icon PDF 1 MB

    Additional documents:

    Minutes:

    HRA Business Plan 2020-2050 - Report of The Director of Housing

     

    The Housing Revenue Account (HRA) Business Plan contained the financial model of the service for the next 30 years. A number of largely external changes meant that a full refresh of the Business Plan was necessary. This report identified the changes and the impact of these. The report also set out a new vision for the Housing Service and plans for growth in the number of new homes we plan to build. The report also proposed a new rent policy following the end of a period of four years of imposed rent reduction, this would provide a refreshed income position on which to build future plans set out in this report.

     

    Officers worked with external housing and business planning advisers Savills to create a new structure and approach to modelling future financial planning. The proposed Business Plan represented the current established position, it incorporated assumptions concerning future projected substantial growth and gearing primarily to invest in new homes, that have been accommodated within the plan. This substantially increased level of investment was possible due to the imposed debt cap on the business having been removed, and represented higher levels of investment and borrowing than the service had previously undertaken. This created substantial opportunity to do more, but also would increase risk, factors which would need to be balanced carefully by the Council in the coming years.

     

    The assumptions made within the business plan were prudent without being excessively restrictive; they provided for inflation on income and costs at prevailing rates which were aligned, allowed a considerable investment in existing stock, a substantial investment in new homes leading to a net increase in properties, whilst debt forecast at elevated levels to today at the end of 30 years. The peak debt of the plan was £164.4 million in year 11, which would not have been possible under the previous HRA regime with a debt cap of £115.8million.

     

    Somerset West and Taunton Council owns and manages affordable housing of over 5700 homes mostly at social rent levels. This “business” within the Council had a turnover of £26M. Income was derived mostly from rents from tenants but also from service charges and other fees. Expenditure was made up of Council staff delivering services to tenants along with repairs and maintenance and other improvements to existing homes and investment in new much needed homes, and the repayment of borrowing.

    The finances of the Housing Service was held within a ring-fenced account called the Housing Revenue Account (HRA) which was separate from all other Council finances in that the money was only to be used for providing services to tenants.

     

    In 2012 the Council moved away from a national subsidy system, which meant an annual payment from the HRA to central government, to be ‘self-financing’. As part of the self-financing agreement, a mandatory one-off payment of £85.12m

     

    SWT Scrutiny Committee, 20 01 2020

     

    was made to government, in return for being able to retain  ...  view the full minutes text for item 19.

20.

HRA Budget Setting 2020/21 pdf icon PDF 1 MB

    Additional documents:

    Minutes:

    HRA Budget Setting 2020/21

     

    An update was given on the HRA Budget Setting for 2020/21. Stated that the HRA is a ring fenced account used to manage the Council’s housing stock of some 5,700 properties, with the Council acting as the Landlord.

     

    This report updates Members on the proposed HRA Annual Revenue Budget and Capital Programme for 2020/21, the proposed Rent Setting for the average weekly rent for 2020/21 and the proposed Fees and Charges for 2020/21. These proposals would enable the Council to set a balanced budget for the HRA for 2020/21.

     

    In accordance with the Regulator of Social Housing’s new Rent Standard from April 2020, the Dwelling Rent for 2020/21 for existing tenants will be an increase of CPI+1% to the average weekly rent, from £80.87 per week to £83.05 per week. For new tenants only this will be an increase of CPI+1%

    plus an additional 5% for general needs to the average weekly rent, from £80.87 per week to £87.21 per week. An additional 10% for sheltered/supported and extra care dwelling rents to the average weekly rent, from £80.87 per week to £91.36 per week.

     

    To increase non-dwelling rent and service charges in line with national policy by CPI+1% for 2020/21, with the exception of garages for private and shared ownerships tenants which would increase from £10.32 (including VAT) to £12.00 (including VAT).

     

    Resolved that the Board Members were happy to support the recommendations proposed to the Executive and Full Council.