Agenda item

Decision

RESOLVED TO RECOMMEND

That the Council approve

1.    The updated Housing Revenue Account Business Plan.

2.    The revised development programme budgets as set out in Section 8 of the report; and the budget for the Martindale Development in Appendix 2 of the report to the Cabinet.

Reason for decision

To review and approve the Annual Review of the Council’s Housing Revenue Account Business Plan.

Corporate objectives

Delivering Affordable Housing

Monitoring Officer/S.151 Officer comments

Monitoring Officer:  

The annual review provides a robust mechanism to monitor the business plan to ensure that it takes account of changes in government policy, law and the economy and therefore meets the Council’s statutory requirements.

S.151 Officer:

Over the coming months the Council should focus on the medium-term development opportunities that will arise following MHCLG clarifying their approach to potentially lifting the borrowing cap. This will need to combine the updated trend for RTB sales and the increased scope for internal use of the 141 receipts.

The development budgets identified in Appendix 2 represent a re-profiling of previously approved budgets.

Advice

Cllr Griffiths introduced the report and advised it is the annual report. The 1% reduction in rents is incorporated into the money we have left to spend. She added that we have another year left on that with no sign of what the policy will be after that.  Cllr Griffiths asked E Brooks to add any further comments.

E Brooks highlighted to Members that this is the Annual Review to the Business Plan, the 5^th review that we have carried out since the introduction of self-financing in 2012 and drew attention to Section 3.2 of the report highlighting the good work that we have been able to do since introduction of self-financing with the additional resources that the Housing Revenue Account had. DBC have made some real differences to our tenants’ homes in terms of improvements and the latest calculation from our asset management system around decency levels of our stock is that we are over the 90% level now.

He continued to highlight a couple of issues around Section 4, in particular two areas of government policy, one being the sale of high value Council homes which still hasn’t been rolled out to all authorities.  The advice we’ve had this year is to not make any assumptions in the business plan for any amount of money we would have to generate under this policy but we will need to keep an eye on this.  With regard the issue of Universal Credit; whilst this is still an unknown we have made some assumptions having taken advice, in terms of increasing our bad debt provision.  We continue to closely monitor the plan throughout the year with Finance.  Another point to raise is in Section 7.2 of the report, highlights the current headroom in terms of borrowing.  There isn’t currently money in the business plan and that is the main impact of the 1% rent reduction, which has affected our income over a length of time by over £30m but as you can see from the business plan we have headroom, as it stands we could borrow £7.8m and that rises to £22m by the end of year 5, this year would be the time for discussions to start about that.  Government have been talking around potential for LAs to raise the borrowing gap and we have made initial contact about that but are waiting to hear back, it is something we will need to consider if we want to continue our new build programme after the next phase. The two tables in Section 8.3 give a summary of what we are left with in terms of the investment programme over the coming years; we still have a healthy investment programme in terms of our current stock.

M Gaynor added that whilst there is some difficult news in here, there is a lot of good news as well in terms of the amount of money we are able to invest.  To clarify, the government indications of future rent policy are from 2021 are that it will not be a reduction, but an increase of CPI inflation + 1%, which will stabilise the ability to invest in our stock and continue with new build.

Recommendations agreed.

Voting

None.