Agenda item

A slide presentation on the Housing Revenue Budget 2024/25 and its Business Plan will be delivered at the meeting.

Councillor Adronie Alford expressed concern about the lack of papers for this item.  She believed that she had probably already seen half of the Housing Revenue Account (HRA) report during the Sheltered Housing Forum meeting where the information was distributed on printed papers. 

Councillor Frances Umeh (Cabinet Member for Housing and Homelessness) and Richard Shwe (Director of Housing) explained that it was the intention of Housing Services to brief the Sheltered Housing Forum through slide presentation in the same way as it was here, going forward.  However, due to technical issues, the presentation at the Forum had to be done in paper format.  Richard apologised on behalf of Housing Services.  Sukvinder Kalsi (Strategic Director of Finance) reassured the Committee that robust reports on the financial position of the Housing Services would be presented to Council’s various committees on a regular basis.

Danny Rochford (Head of Finance – Economy and Housing Revenue Account) gave a presentation on the proposals for the HRA budget including the rent and service charge changes. He outlined the HRA 10-Year Business Plan and the housing capital programme to 2027/28.  In respect of the proposed rent increase of 7.7%, Sukvinder Kalsi highlighted that the Council provided support to residents by maximising their benefit entitlement such that almost half of them would be able to recover the proposed increase through housing benefit. He also highlighted the merits of social tenancies with value for money rents which compared favourably to that in housing associations or private rented sector.

Officers’ presentation is attached in Appendix C

The Chair asked about the residents’ response in forums to the proposed increases in rent and service charge. Danny Rochford advised that there was a reluctant acceptance of the proposals among the residents who understood the Council had to deliver services amidst the cost-of-living crisis.  He remarked that the Council recognised the financial hardship faced by struggling tenants and about 50% of the tenants would be supported financially through housing benefits and universal credit as well as discretionary housing payments or if renewed in March, the Household Support Fund. Richard Shwe highlighted residents’ positive feedback towards Housing Services’ improvements over repairs work and complaints management that they began to understand and see the benefits of what the Council had been doing.

Councillor Paul Alexander expressed concern about the involvement of residents, in particular the leaseholders, in Council major projects such as attaining net carbon zero emissions, or security system.  He hoped to see more resident-driven initiatives which in his opinion might help create savings as in the case of responsive repairs. Councillor Alexander reflected residents attending the housing forum were representing TRAs and residents from smaller estates or street properties might be under-represented.

Richard Shwe agreed that more community engagement should be carried out by the project managers for the housing capital programme which also helped residents to understand the housing budget.  He noted the relevant team would start doing more such community engagement over the next year.  Jon Pickstone (Strategic Director for the Economy) remarked that enhancing community engagement could help the Council gain useful insights on how to take forward capital programmes based on collective local wisdom.  On the link between capital programmes and responsive repairs, he noted that while current capital programmes were prioritised based on best available data e.g. for repairs and complaints, the Housing Service had completed 9,000 units of its stock condition survey, which would provide strong evidence-based data to develop an asset management strategy. This strategy would help inform a long-term plan for the Council’s housing capital investment. Councillor Umeh remarked that with the Social Housing Act coming into force, effective resident engagement via different co-production channels became even more important.

Councillor Asif Siddique thanked officers’ comprehensive presentation and explanation about the short- and long-term policy and strategy.  He appreciated the setting of a balanced budget despite all the economic challenges in the past three years due to COVID-19, cost-of-living crisis and high inflation.  He was thankful that there were no service cuts but more improved services like the one-stop Family Hubs.

Councillor Alford referred to a recent meeting with residents who were shocked to be told  about major works involving cladding.  She considered it necessary to explain clearly what the cladding was given the deep ingrained fear of the tragic fire incident at Grenfell Tower.  They wanted extra assurance that the cladding was not flammable. Separately, Councillor Alford questioned whether surveys had been carried out for the properties concerned as the residents learnt about having new windows again since last renewal some 15 years ago. Jon Pickstone (Strategic Director of the Economy) thanked her for conveying the residents’ feedback.  He assured that both the law and standards had been improved since the Grenfell tragedy.  The Housing Services would ensure good communication and conduct investigations before the start of works.  

Councillor Alford noted that one of the key recommendations on the HRA made in November 2023 by Grant Thronton, the Council’s External Auditor, was that the Council should start building up the HRA general reserve balances.  According to the officer’s presentation, HRA general reserves balance carried forward to 31 March 2024 was expected to be £5m, dropping from £10m as of 1 April 2023. 

Sukvinder Kalsi noted that the Council had reduced the structural deficit of the HRA from £4.1m in 2022/23 to £1.4m in 2023/24 and planned to eradicate it totally by 2024/25.  He further advised that those investments listed under the HRA’s 10-year business plan should enable the HRA to remain sustainable and resilient moving forward. He assured that the external Auditor, in reviewing the position of the HRA for 23/24, would note that the Council had rectified some of the issues  raised in the previous year, and would report any concerns if any were found in the audit.

On the HRA general reserve balances, Sukvinder Kalsi explained that while £5m might seem smaller than it used to be, it represented 5% of the annual spend, and the Council would endeavour to increase the general reserve balance should it be able to do so.  Councillor Rowan Ree (Cabinet Member for Finance and Reform) added that the reserve could help smooth out longer term spending and cover the needs of rainy days. Having eliminated its structural deficits, the HRA was now in a more sustainable position and might increase its reserve balance to go up with inflation. 

Councillor Alford asked whythe provision for tenant arrears was pitched at 90% under the proposed HRA budget 2024/25. Sukvinder Kalsi noted that a 90% coverage was reasonable. Danny Rochford explained that the calculation of the provision depended on the status of the tenant (current or former) and the amount of the arrears. The approach was a long-established and prudent one which had been audited many times and was appropriate during the cost-of-living crisis.

Councillor Alford enquired further why was the leaseholder contribution under the housing capital programme increasing more than double from £3.1m in 2024/25 to £7.7m in 2027/28. Danny Rochford noted that the increase was in line with the increasing expenditure in the asset management and compliance programme which also doubled from about £40m in 2024/25 to some £80m in 2027/28.

Responding to Councillor Alford’s further concerns, Jon Pickstone explained that the Housing Services team was encouraging residents to report repair issues directly to the Council rather than through third parties. Having focused on improving their partnership for several months, the repairs team and legal team were working well and in tandem with the additional contractors.  The number of disrepair backlog cases was reducing at a good rate, while the management of voids had been a high priority.

Question from the floor

Martin Thirlaway was concerned that Grant Thornton’s report dated September 2023 stated on page 8, “in 2023/24, the Council had raised rent by the maximum allowable of 7.0%”.  If this was true, why was this Committee presented with a proposal on 23 January 2023 to increase rent by 4.4% and the Cabinet approved this on 6 February 2023. Sukvinder Kalsi undertook to brief him in detail after the meeting.

ACTION: Sukvinder Kalsi

Martin Thirlaway asked whether there had been any estimate of what compliance with the Social Housing Regulation Act 2023 would cost either initially or ongoing, in particular any initial or ongoing costs of Section 21 regarding the competence and conduct of relevant individuals.  In response, Richard Shwe noted that the Council was getting ready for compliance under the Social Housing Act and the staffing competencies would be allowing local authorities two years to ensure that housing staff qualifications level would occur across housing from level 1 to level 5.  The Housing Services team was reviewing the budget with colleagues in people and talent to arrange staff undergoing relevant training as part of their personal development. 

RESOLVED

That the Committee noted the presentation.