Agenda item

HRA Budget, Rent and Service Charge Setting Report

Minutes:

Report was introduced by the Deputy Leader of the Council (Housing and Homelessness), Councillor Jennifer Brathwaite, She highlighted that:

 

·       The HRA’s current 2020/21 financial position was stable following the changes made in the budget setting process to manage the ongoing impact of rent reduction.

·       There were good levels of reserves, and the HRA was forecasted to break even.

·       There were some pressures on the HRA account which were set out in para 2.3 of report, relating to outstanding repair jobs and income losses from estate parking.

·       The Council was creating a Direct Labour Organisation, this being directly employed council staff especially for communal and minor repairs and would deliver substantial savings, better value and more importantly a better service for residents.

·       The HRA budget setting focused on three main areas for 2021/22:

a. expected income and proposals on rent and service charge levels;

b. expenditure plans that reflect local priorities, the impact of the self-financing business model on service delivery and the end of enforced rent reductions;

c. the reserves and provisions needed to ensure that the HRA was delivering strong financial performance over a longer period of time.

 

The Deputy Leader of the Council (Housing and Homelessness), Councillor Jennifer Brathwaite advised that it was financially irresponsible not to increase rents and needed to ensure a balanced HRA account.

 

Councillor Pete Elliott addressed Cabinet and advised that:

·       The report was unclear, there were no comparisons and would have been useful if a cash flow statement was included.

·       There was concerns about the depreciation on the HRA and felt it would result in a loss of 1900 homes.

·       The Equality Impact Assessment indicated that women and non white residents would be affected and not enough had been done to address this.

·       He advised that more clarity was needed on the transaction’s capital and revenue between the HRA and the Councils other funds (HfL and general fund).

·       In Para 2.2 of the report the figure of £35 million to the Lambeth housing standard work was not analysed in nor was it clear how it would be funded. 

·       He was pleased to hear that a community centre was being put onto central hill estate

·       He also advised that he would like to explore how his group could work with officers and Cabinet Members to see how they could collaborate better.

 

The Deputy Cabinet Member for Resident Services, Councillor Jackie Meldrum made the following points:

 

·       She welcomed the continuation of personalised service charges that were initiated by Adult Social Care in 19/20 and asked Cabinet to investigate extending a wider range of personalised service charges for individual tenants such as window cleaning, handyman service, gardening etc

·       Our ICT systems would minimise bureaucracy and help deliver personalised service charges. Some examples of the personalised services could include indoor window cleaning, handyman service, gardening etc.

·       The report was crisp and clear and this standing item had improved over time but could always be better. 

In response to some of the questions raised by Cabinet Members, Officers advised the following:

 

·       Comparing depreciation with loss of homes was an inaccurate reflection and no homes were being lost from the HRA and actually more were being brought into the HRA.

·       The current year forecast and actual spend was set out in paragraph 2.2 of the report. Officers also confirmed that the HRA was ring fenced.

·       Repurposing voids in a timely way had suffered due to Covid but this was back on track.

·       More engagement with tenants so the conversation could continue would be put in place and was a priority for the Housing team.

·       There had been extensive business planning to ensure the rent increases would be sufficient to cover the breadth of the work needed in the next year such as Capital works and fire safety improvements.

·       The Council was required by law to avoid budgeting for a deficit on the HRA

·       Within Housing Services there were projected pressures within the responsive repairs service to complete a number of outstanding repairs jobs ahead of the new suite of repairs contracts which will commence in 2022.

·       Income from rents was a key driver of the total income available to the HRA, making up approximately 79% of the total income budget in 2020/21.

RESOLVED:

1)    To agree the approach to setting tenant and leasehold service charges, garage, parking and supported housing charges.

2)    To agree the increase in rents of 1.5%, this being composed of Consumer Price Index (CPI) at the applicable rate of 0.5% plus the allowable 1%.

3)    To note the October 2020 financial forecast position as detailed in paragraph 2.2

4)    To agree the proposed growth and savings for 2021/22 as set out in paragraphs 2.26 to 2.36 and Appendix 3.

5)    To agree the HRA Budget for 2021/22 as set out in Appendix 4.

Supporting documents: