Issue - meetings

Councillor Johnson, Portfolio Holder for Housing, introduced the recommendations of the Executive in respect of the Housing Revenue Account (HRA) budget.  The report considered by the Executive had provided an update on the HRA budget, including forecasts for the coming 5 years, along with actions that were being pursued to deliver a sustainable long-term HRA. 

The Council faced an estimated deficit of £1.6m in the HRA budget, a deficit which was unlikely to be fully corrected until 2026/27.  To address the deficit, the Council would seek to optimise rent income and review the charges put to the HRA to ensure that they were fair and reasonable.  The deficit on the annual maintenance plan would be addressed through the disposal of vacant housing assets.

The Portfolio Holder explained the background to the deficit, which was due in part to the empty properties in Sheerwater, rent for which had not been received to support the HRA.  At the same time, the Government had introduced a cap on increases in rent, whilst inflation had risen significantly.

The Council supported the proposed measures as set out in the recommendations of the Executive.

RESOLVED

That (i)    the update on the Housing Revenue Account budgets be noted;

          (ii)   the Housing Annual Maintenance Plan (AMP) budget for 2023-24, included in the Housing Investment Programme, be increased to £5,330,000 to allow essential and statutory remedial works to be completed, as set out in Appendix 1 to the report;

          (iii) the Strategic Director – Communities, in consultation with the Portfolio Holder for Housing, be authorised to agree the disposal of vacant housing assets as required; and

          (iv) any capital receipts from disposals of vacant housing assets be held in the Major Repairs Reserve for investment in the maintenance of the Council’s homes.

Reporting Persons – Brendan Arnold and Louise Strongitharm

The Executive received a report which provided an update on the Housing Revenue Account (HRA) budget, including forecasts for the coming 5 years, along with actions that were being pursued to deliver a sustainable long-term HRA.  Councillor Johnson, Portfolio Holder for Housing, advised that the HRA was in a difficult situation and forecast a deficit up to and including 2026-27.  The Executive was advised that the HRA had been adversely impacted by a combination of factors, including lost rental income due to the Sheerwater Regeneration scheme, nationally imposed rents cuts between 2016 and 2020, energy inflation, and internal cross charging practice.  The report set out a path to recovery and included the main areas of search for savings.  The need to work with Surrey County Council and partners to meet the capital budget shortfall was highlighted.  It was noted that the Annual Maintenance Plan (AMP) for 2023/24 had been reviewed and reduced with a focus on essential works only, for example, fire safety remedial works.  Due to the suspension of some works relating to the Decent Homes programme, the Council would be required to self-refer to the Social Housing Regulator.

RECOMMENDED to Council

That  (i)    the update on the Housing Revenue Account budgets be noted;

          (ii)   the Housing Annual Maintenance Plan (AMP) budget for 2023-24, included in the Housing Investment Programme, be increased to £5,330,000 to allow essential and statutory remedial works to be completed, as set out in Appendix 1 to the report;

          (iii)  the Strategic Director – Communities, in consultation with the Portfolio Holder for Housing, be authorised to agree the disposal of vacant housing assets as required; and

          (iv)  any capital receipts from disposals of vacant housing assets be held in the Major Repairs Reserve for investment in the maintenance of the Council’s homes.

Reason:   To ensure the Council is able set a sustainable Housing Revenue Account (HRA) budget and deliver on its statutory and regulatory housing duties.