Agenda item

The Cabinet Member for Finance, Growth and Core Services introduced a report on the review of rents and other charges within the Housing Revenue Account (HRA) for 2024/25 and the draft HRA 30-year Business Plan.

The Cabinet Member referred to previous Government policy that imposed a social housing rent reduction for the financial years 2016/17 to 2019/20.  Furthermore, although the Government reinstated previous national rent policy from 2020/21 of social rents being increased annually in line with the Consumer Price Index (CPI) plus 1%, a capping of that level to 7% last year, when inflation was over 11%, meant that the HRA had to absorb the difference.  The combined effect of those measures was a loss of income to the Council in excess of £35 million which severely impacted plans to rejuvenate the Council’s housing stock and reduced capacity for the Council to implement lower increases in future years.  As a consequence, it was proposed that for 2024/25, rent levels for Council tenants would increase by an average of £8.35 per week to £117.07 per week under the CPI + 1% arrangement.  In recognising the impact that any level of rent increase would have on local residents during the current economic climate, the Cabinet Member stressed the importance of the Council continuing to invest in its housing stock and pointed out that those receiving Housing Benefit / Universal Credit should find that their benefit would increase to cover any uplift.

The annual review of service charges continued to focus on achieving full cost recovery where appropriate, which meant that services for grounds maintenance, concierge, CCTV and TV aerials would increase by CPI plus 1% for those receiving such services, while caretaking, cleaning and Safer Neighbourhood-related services would increase by varying degrees.  The charge for estate lighting would remain at the 2023/24 level, while heating and hot water charges would be reduced by 5.5% and water and sewerage charges increased by 10%, to reflect the predicted uplift in suppliers’ charges.

The Cabinet Member advised on the principles that underpinned the draft HRA 30-year Business Plan, which showed an expected investment requirement of £1.8 billion over the period once inflationary factors had been taken into account and a borrowing requirement for the HRA up to 2053/54 of £987.3m.  The planned HRA Capital Programme for 2024/25 was proposed at £24.688m.

Cabinet Members acknowledged the reality of rising costs and the balance that the Council had sought to achieve through the proposals.  Reference was also made to the Council’s new homes programme through B&D Reside, which had helped provide affordable, good quality properties for local people and reduce the reliance on temporary accommodation, and the numerous avenues of advice and financial support that the Council offered for those struggling to make ends meet.

Cabinet resolved to:

(i)  Agree that rents for all general needs secure, affordable and sheltered housing accommodation be increased by 7.7%, in line with the Government’s current rent policy of CPI +1% (with CPI for September 2023 of 6.7% being used as the base), meaning an increase to the average rent for general needs from £108.72 per week to £117.07 per week;

(ii)  Agree the following service charges for tenants:

(iii)  Agree that charges for heating and hot water be reduced by 5.5% in line with decreases in the estimated charges for 2024/25 provided by suppliers as follows:

(iv)  Note that following the annual review of current charges and insight from the provider, water charges shall increase by 10% while sewerage charges shall remain at the current year’s rates;

(v)  Agree the HRA Income and Expenditure budget for 2024/25 and note the changes from the 2023/24 budget, as detailed in section 3 of this report.

(vi)  Agree a £24.7m capital programme for the HRA in 2024/25 and note the indicative 4-year HRA capital programme detailed in section 4 of the report;

(vii)  Agree that the above charges take effect from 1 April 2024;

(viii)  Note the draft HRA 30-year business plan, as detailed in section 2 of the report, and the indicative 30-year financial forecasts set out in Appendices A and B to the report; and

(ix)  Note that the final version of the HRA Business Plan shall be presented to Cabinet in March 2024 after a comprehensive review by the Strategic Director, Resources.