Issue - decisions

HRA Business Plan, Rent and Service Charge setting report

20/01/2020 - HRA Business Plan, Rent and Service Charge setting report

Councillor Paul Gabdsy, Cabinet Member for Housing introduced the report and highlighted that:


The HRA’s current 2019/20 financial position was adequate following the changes made in the budget setting process to manage the ongoing impact of rent reduction. Just over £10m were held in general reserves.

Between 2016/17 and 2019/20 rents were reduced by 1% per year as a consequence of the Welfare Reform and Work Act 2016 resulting in an estimated £28.5m cumulative loss to the HRA. 2020/21 was the first year in which councils have discretion over setting rents since the Act came into force.


Prior to the abolishment of the borrowing cap, Lambeth had expected to borrow the full amount of funding available to invest in the housing stock. This was managed through the Housing Investment Strategy and sought to deliver the Lambeth Housing Standard (LHS) across the borough over a period of time. The Welfare Reform and Work Act 2016 and more specifically the rent reduction of 1% each year for four years means that the utilisation of borrowing up to the limit was not sought

due to affordability.


The approach to HRA budget setting focuses on three separate areas for 2020/21:

·         Expected income and proposals on rent and service charge levels;

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

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





1)    That the approach to setting tenant and leasehold service charges, garage, parking and supported housing charges be noted.

2)    That the increase in rents of 2.7%, this being composed of Consumer Price Index (CPI) at the applicable rate of 1.7% plus the allowable 1% be noted.

3)    That the October 2019 financial forecast position as detailed in paragraph 2.1 be noted.

4)    That the proposed growth and savings for 2020/21 as set out in paragraphs 2.8 - 2.9 and Appendix 3 be approved.

5)    That the HRA Budget for 2020/21 as set out in Appendix 4 be approved.