Agenda item

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

This report provides an update on the projected outturn financial position of the Council’s Housing Revenue Account (HRA) for the financial year 2022/23 (as at 30 June 2022).

This matter is the responsibility of Executive Councillor Fran Smith, Portfolio Holder for Housing. In her absence the report was introduced by Cllr Federica Smith Roberts via zoom.

Kerry Prisco as the report author read out a briefing statement on behalf of Cllr Fran Smith as follows: -

“Members will recall that setting a budget for 2022/23 was extremely challenging. The Housing Sector is experiencing the most challenging period in a generation as multiple risks, from both a regulatory and economic perspective, crystalise and competing demands place pressure on the service. However, a balanced budget was presented and approved, albeit with a strategy relying on one-off financial measures.

The projected outturn financial position for the year is an overspend of £745k based on estimates made as of 30 June 2022. This is mainly due to a potential pay award pressure exceeding that budgeted, the rising cost to bring void properties back up to a lettable standard due to the condition of properties returned and inflated cost of materials, as well pressures on staffing costs. 

There are still further risks and uncertainties well documented within the report, with some that will materialise over the next few months and place further pressure on the reported outturn position e.g., pay award, insurance premiums and depreciation. 

Whilst the current level of General Reserves at £3.213m does provide the ability to cover the current predicted overspend, if required, the projected overspend will reduce to General Reserves £2.468m, which does not provide sufficient resilience to mitigate the risk of any further significant overspend or additional pressures. 

The Housing Management Team will take steps to reduce, and halt spend especially for discretionary activities, to help mitigate the current position, and to try to maintain a more secure reserves position”.  

·       Cllrs Habgood/Lisgo asked if this was the worst-case scenario and what steps were being taken to protect services going forward? There are steps being taken to protect core services, whether via cuts, stopping discretionary works or finding alternative methods of delivery. It is likely that central government will implement rent freezes going forward to mitigate the cost-of-living crisis. Work is currently taking place to protect the HRA Business plan but that relates to next year. The report details the current position at the end of Qtr1, and managers are currently looking at their budgets to determine if they have any slack that can be trimmed, or where savings can be identified. Procurement is also being investigated to see if there is better buying power on the supply of materials.

·       The HRA is very much a reflection of the wider world and the current challenges being faced by many residents in the district. Unfortunately, it is going to be a very difficult time for everyone.

·       Capital Projects - SWT is currently looking at the projected risks/costs and is working to mitigate against this. Some of the capital projects are protected due to fixed rates combating against inflationary increases, but SWT is working with its contractors to protect our interests.

·       The SWT Revenue budget is more volatile and is difficult to mitigate due to inflation, pay increases, rising utility bills and the escalating cost of building materials.

·       The housing team currently have extra staff employed, over and above the management structure, but they were put in place during the pandemic to deal with complex casework and are demand led. Current areas of scrutiny to reduce costs are possibly increasing service charges and reducing staff capacity. The housing directorate is mindful however of the impact this could have on tenants and support services, at a time when all other costs are increasing. It is being carefully monitored.

·       It was requested that any potential savings are identified and reported to the Committee for the Qtr2 update at the end of November.

The committee noted the report. (Unanimous)

8.14pm         Simon Lewis and Kerry Prisco left the meeting.