Agenda item

Housing Revenue Account (HRA) Revenue and Capital Budget Setting 2022-23 including Dwelling Rent Setting 22-23, MTFP Update and 30-Year Business Plan Review

This matter is the responsibility of Executive Councillor Francesca Smith, the Portfolio Holder for Housing


Report Author: Kerry Prisco, Management Accounting and Reporting Lead.


The portfolio holder for Housing introduced the report and raised the following points: 

·                   The report included rent setting.  

·                   The HRA faceda number of financial pressures but there was confidence that the standards provided for tenants could be maintained and the development of more housing could continue. 

·                   Increased rents were recommended to be CPI plus 1%.  

·                   Further investigation regarding the recommendation for the disposal of the Duke Street carpark would be undertaken ahead of the report going to the Executive 


The Director for Housing and Communities raised the following points: 

·                   The previous meeting of this committee looked at the future plans for the HRA and some of the challenges it faced 

·                   The HRA was facing substantial pressures and challenges. There had been changing customer needs, pressure on the labour and skills market, climate change and retrofit, increased standards following the Grenfell tragedy, Covid and Brexit. These pressures had put significant challenges on the budget setting process. The budget was effectively a balanced budget.  

·                   An annual review of the business plan was undertaken,and officers had done that again with the financial advisers Altair. The proposed budget did meet the parameters for being safe but some of the margins on these are tighter than they have been previously due to the pressures on the budget.  

·                   The budget would require efficiency savings to be made.   

·                   There was more work to do over the coming months to plan mitigations for various scenarios to ensure the HRA would be resilient to increased pressures on the business.  

·                   There would be a need to make sure income performance was good on void management and arrears.  

·                   The central recharge paid to the General Fund from the HRA for the HRA being part of the Council would need to be looked at. It would also be important to agree the percentage the HRA would pay the new unitary authority once that came into existence.  

·                   Officers were looking to maximise the use of grant funding.  

·                   A review of the HRA’s discretionary services was also planned to be undertaken. 

·                   A review of the HRA’s assets was intended to be undertaken with the intent to potentially dispose of a few assets a year to meet a modest target of £350,000 of income generation per year.  

·                   The Duke Street Car Park is owned by the HRA but the income of the pay and display car park had been going to the general fund as the running of a car park was not something which would usually be owned by the HRA. There would be a review of the car park to see if the income could go to the HRA and if this was a function the HRA could undertake,but the current proposal was to effectively sell the car park to the General Fund 

·                   The report detailed a proposed rent increase of 4.1%. This figure was based off of CPI plus 1%. CPI was 3.1%, meaning a rent increase of 4.1%. The Council has an agreed rent strategy. There had been significant increases in the cost of the business. The Council did provide hardship support to its tenants 

·                   There was an ambitious capital programme for the HRA including building new homes. Also, an ambitious maintenance and regeneration programme.  

·                   The report included an Equalities Impact Assessment as an appendix. Consultation had been undertaken with the relevant organisations, but no further feedback had been received from them.  

·                   The Tenants Strategic Group had commented on the report and given overall support for the report.  


During the debate the following points were raised: 

·        Concerns were raised about the lack of comments on the equality and diversity assessment. It was responded that the Christmas break may have had an impact, but officers would contact the relevant organisations again.  

·        It was highlighted that there were increases in the price of fuel and food and concerns were raised about the rent increase and its affordability for tenants in combination with this and whether this level of increase would result in a greater level of defaults on payments. Officers responded that they shared these concerns and that the impact of the rent increase would be monitored closely. Housing organisations across the country were struggling with the same issues. Due to the pressures many were also raising rents. It was also added that for the 65% of tenants on benefits it would not cause as much impact as their benefits would cover the cost, but it was acknowledged that it would more significantly impact some of the remaining 35% of tenants. However, there would be support for those tenants who needed it and officers would be signposting tenants to a winter hardship fund which would provide grants to tenants 

·        It was raised that 4.1% was a significant increaseto rent and that the communication of that needed to be considered. Officers responded that there had been four years of rent reductions, with rents reducing by 1% each year. Communication would be considered, and explanation for the increase provided.  

·        It was raised that the ethnicity of tenants should not need to be included in the report as it did not matter what race people were, they were all the Council’s tenants. 

·        It was asked what the level of arrears currently was. Officers responded that arrears were around £500,000. Performance around arrears management was a strong area of the business.  

·        It was asked if housing benefit was now paid directly to the tenant who would then pay the council. Officers answered that housing benefit could be paid to the tenant or directly to the Council.  

·        It was asked about the saving to be made in relation to the Taunton Citizen’s Advice Bureau. It was responded by officers that the reduction was due to the HRA having gained a debt advisor which previously was part of the contribution to the Citizens Advice Bureau, but significant funding would still be provided to the Citizens Advice Bureau. Officers had spoken to the Chief Executive of the Citizens Advice Bureau to sight them on this.  

·        It was asked if the HRA would have to contribute to any Local Government Reorganisation costs. Officers responded that the HRA would have to contribute to a share of the costs as it was part of the Council 

·        Concerns were raised about the Council disposing of difficult properties as problem properties which were sold may not be sold to an owner who was adept to deal with the issues. Officers responded that considerations for disposal for a property included the receipt it could realise for the HRA.Many properties sold provided an opportunity for to invest in properties and renovate them. 

·        It was asked about whether all new build properties the Council were building would be to a zero-carbon standard. Officers responded that they would provide a response to this after the meeting.  

·        It was asked about grant money to local government from central government to pay for hardship. It was asked if some of that money could be used to help those tenants who are struggling to pay their rents. Officers responded that the County Council had received a sum from government and that some of that was used to provide free school meals. A further announcement was made today which officers would share further information with membersafter the meeting.   


Councillor Andy Milne left the room for part of the debate on this item. 


The Community Scrutiny committee resolved to note the report.  


The committee resolved to extend the meeting by 30 minutes.  


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