Agenda item

This report deals with:

·        management of the Housing Revenue Account (HRA) following the return of the housing stock to direct Council control in April 2011 and post HRA reform;

·        the HRA Financial Strategy, the HRA Medium Term Financial Strategy (MTFS) for the five years 2014/15 – 2018/19, and the HRA Revenue Budget for the year 2014/15;

·        the proposed increase in dwelling rents for 2014/15 having regard to national government guidance for council rents and the maintenance requirements of the housing stock owned by the borough, and the related fees and charges covering parking and garages, water rates and communal energy charges where levied. 

Mr Barrett introduced the report, which outlined: the management of the HRA; the HRA Financial Strategy, the HRA Medium Term Financial Strategy and the HRA Revenue Budget for 2014/2015; and the proposed increase in dwelling rents for 2014/2015. The broad strategy was to continue with improvement of service quality and cost efficiency.

Mr Barrett highlighted key achievements in respect of the 50% reduction in employee headcount funded by the HRA and the commencement of the necessary rebuilding of reserves, since the return of management to the Council, to create a sound platform for investment in infrastructure, including lifts and fire safety and general estate improvement.

Ms Corbett presented the financial strategy and highlighted financial risks and savings proposals. In respect of income, it was proposed to: increase rent by 5.79%; increase tenant service charges by 3.7%; freeze heating charges; increase water rates by 0.1% to ensure full recovery; and to freeze garages and parking charges.

Ms Corbett responded to Councillor Graham’s query that it was likely that the rent increase would have been more than double, should it not have been possible to contribute to stock maintenance through the Expensive Void Disposals Programme.

Ms Corbett responded to Councillor Cowan that rent increases over the previous four years had been in the region of 5/6%. A written response in respect of the exact percentage for both houses and garages would be provided.

Action: Kathleen Corbett

In response to a  query from Councillor Ivimy in respect of the re-procurement of the Housing Repairs and Maintenance Service, Mr Barrett stated that, as part of the savings programme, a sole supply contract for Housing Repairs and Maintenance had been awarded to MITIE Property Services (UK Ltd) and that this had achieved circa £2 million per annum savings in aggregate compared with previous arrangements. The sole supply contract had been evaluated against separate contracts for the North and South of the borough and there had been a circa 10% price difference. (There had previously been eight separate contracts.) In addition service improvements had been built into the contract.

MITIE had commenced on 1 November 2013, after a fairly short mobilisation period and were dealing with an average of one thousand repairs a week.

Councillor Cowan considered that the contract was proving to be more expensive because of chronic and repeated failures and that the choice of contractor should be given to the consumer, with possible economies of scale on a tri-borough basis.

Councillor Graham asked for comments on specific implications of appointing a number of contractors. Ms Corbett responded that multiple contractors would be likely to increase costs, as there was no certainty of work; and overheads and there would be greater  risk in respect of costs and performance and a tenant’s ability to select appropriate contractors.

Councillor Johnson noted good feedback in respect of MITIE’s performance and stated that it was not possible to meaningfully assess a contract which had been in place for only nine weeks. In addition, there were likely to be legacy issues.

A member of the public asked for clarity for tenants in respect of performance standards, and referred to problems with a leak in a Community Hall.

Mr McVeigh queried the removal of the spare room subsidy for under-occupancy. Mr England responded that Discretionary Housing Payments had continued throughout 2013/2014. Guidance from the Secretary of State in respect of 2014/2015 and 2015/2016 was expected within the following week.

In response to Councillor Ivimy’s query, Mr England stated that, since April 2013, moves to more appropriately sized accommodation had been enabled for 37 households. The Council currently provides incentive payments of £500 per room to under-occupiers who downsize. Given the overall benefit to the Council of securing larger accommodation.  it was proposed to increase the payments to £2,000 per room.

RESOLVED THAT:

The report be noted.