Agenda item - Council Housing Budget (including rents) 2021 / 2022

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Agenda item

Council Housing Budget (including rents) 2021 / 2022

Meeting of Cabinet Member for Housing and Preventing Homelessness, Monday, 25th January, 2021 3.30 pm (Item 3.)

Purpose

1. The law requires that all income and expenditure relating to Council Housing is accounted for separately in the Housing Revenue Account (HRA). All other Council income and expenditure is accounted for together in a separate account called the General Fund. This report deals solely with the HRA.

2. The City Council has delegated the function of setting rents, charges and revenue budgets for Council Housing to the Cabinet Member for Housing and Preventing Homelessness. Following consultation with residents and leaseholders, this report seeks to deal with all HRA budget issues.

3. The purpose of this report is to seek the Cabinet Member’s decisions on Council Housing budgets, rents and other charges and to give authority for managers to incur expenditure in 2021/22.

4. The report also seeks to:

o Note the Forecast Revenue Outturn for 2020/21 and give authority to the Director of Housing, Neighbourhood and Building Services & the Director of Finance and Resources to amend the budgets to reflect the latest available information prior to finalising budgets for 2021/22.

o Note the Forecast Revenue Budgets for 2022/23 to 2023/24 arising from the proposals set out in this report.

o Set rents in accordance with Central Government's social rent setting policy.

RECOMMENDED that the Cabinet Member approves the following

(i) The Forecast Revenue Outturn for 2020/21 arising from monitoring discussions with Managers, as set out at Appendix 3, be noted.

(ii) All rents and charges to be effective from 1st April 2021 or such other date as determined by the Director of Housing, Neighbourhood and Building Services in consultation with the Director of Finance and Resources.

(iii) Dwelling Rents for 2021/22 to be set in accordance with Central Government's Social Rent Policy.

(iv) General Service Charges for 2021/22 to be set at this meeting, as set out in this report, and in accordance with Appendix 5.

(v) Sheltered Housing Service Charges for 2021/22 to be set at this meeting, as set out in this report, and in accordance with Appendix 6.

(vi) Laundry Charges for 2021/22 to be set at this meeting, as set out in this report, and in accordance with Appendix 7.

(vii) Heating Charges for 2021/22 to be set in accordance with Appendix 8.

(viii) Garages and Parking Site Rents for 2021/22, as shown in Appendix 9, be approved and authority to let garages at reduced rents where demand is low be delegated to the Director of Housing, Neighbourhood and Building Services in consultation with the Director of Finance and Resources.

(ix) The Revenue Budget for 2021/22, as set out in Appendix 3, be approved and authority given to the Director of Housing, Neighbourhood and Building Services in consultation with the Director of Finance and Resources to amend the budgets to reflect the latest available information prior to finalising budgets for 2021/22.

(x) The relevant Managers be authorised to incur expenditure in 2021/22.

(xi) The Forecast Revenue Budgets for 2022/23 and 2023/24 arising from the proposals contained in this report, as set out in Appendix 3, be noted.

Decision:

The Forecast Revenue Outturn for 2020/21 arising from monitoring

discussions with Managers, as set out at Appendix 3, be noted.

(ii) All rents and charges to be effective from 1st April 2021 or such other date

as determined by the Director of Housing, Neighbourhood and Building

Services in consultation with the Director of Finance and Resources.

(iii) Dwelling Rents for 2021/22 to be set in accordance with Central

Government's Social Rent Policy.

(iv) General Service Charges for 2021/22 to be set at this meeting, as set out in

this report, and in accordance with Appendix 5.

(v) Sheltered Housing Service Charges for 2021/22 to be set at this meeting,

as set out in this report, and in accordance with Appendix 6.

(vi) Laundry Charges for 2021/22 to be set at this meeting, as set out in this

report, and in accordance with Appendix 7.

(vii) Heating Charges for 2021/22 to be set in accordance with Appendix 8.

(viii) Garages and Parking Site Rents for 2021/22, as shown in Appendix 9, be

approved and authority to let garages at reduced rents where demand is

low be delegated to the Director of Housing, Neighbourhood and Building

Services in consultation with the Director of Finance and Resources.

(ix) The Revenue Budget for 2021/22, as set out in Appendix 3, be approved

and authority given to the Director of Housing, Neighbourhood and

Building Services in consultation with the Director of Finance and

Resources to amend the budgets to reflect the latest available information

prior to finalising budgets for 2021/22.

(x) The relevant Managers be authorised to incur expenditure in 2021/22.

(xi) The Forecast Revenue Budgets for 2022/23 and 2023/24 arising from t

Minutes:

Wayne Layton, Finance Manager, presented the report, noting that feedback on the consultation mainly comprised comments on residents' individual circumstances. Very little had changed since the Winter 2020 edition of Housetalk. The main reason why the in-year deficit is lower than expected is because less money has been spent on repairs and maintenance due to being unable to access properties during Covid. Any backlog arising will need to be managed. The predicted £1.2m deficit next year will be met by the Housing Revenue Account's (HRA) ring-fenced reserve. Although the current reserve is sufficient in the short-term if the situation continues it will not be possible to meet obligations over the HRA's 30-year business plan. The increased depreciation costs arising from the age and type of housing stock also increases the deficit.

In response to a question from Maria Cole, Mr Layton said the amount of bad debt caused by furlough or unemployment was not as bad as first thought. In the first wave of Covid there was delinquent debt when people were trying to claim Universal Credit. Bad debt has increased by about £600,000.

In response to questions from Councillor Payter-Harris, Mr Layton said the current level of bad debt provision is £2.2m whereas it is usually around £1.5m. With regards to factoring in price increases incurred due to the backlog of repairs and maintenance, for example, increased contractor costs, the HRA has two sources of funding: one is for repairs and maintenance and is about £24.5m per year; the other figure is the depreciation charge which is put towards planned maintenance. Housing has traditionally underspent against the £24.5m, providing for about £1,700 for each property (which is where the £24.5m comes from). Some costs are met from depreciation and planned maintenance so Housing is confident pressures will be met going forward. The cost of repairs which have not been done has been considered but is not reflected in reports.

James Hill, Director of Housing, Neighbourhood & Building Services, said although work on the efficiency programme has been delayed Housing still wants to proceed with it. Much work was done with contractors like Mountjoy before Covid to reduce costs while not impacting on delivery. Housing has been active in buying properties and anticipates it will have bought more properties than it has sold by the end of the year which will increase rental income. The report gives a clear signal that Housing needs to address the deficit and hopefully when Covid ends will present a revised plan to the administration. If repairs had been done the deficit would have been a million more than the current figure.

Councillor Corkery commented that overall tenants receive good service and that Housing is well run; the Local Housing Offices are good. He suggested a dedicated ring-fenced hardship fund as some other local authorities do. Vivid housing association has a welfare fund which can provide items like white goods and flooring. Funds could be reviewed after a year to see how they have been spent. Councillor Sanders asked James Hill, Director of Housing, Neighbourhood & Building Services, to comment on the idea. James Hill suggested that we begin by looking at what the housing service currently offer, reflecting that we provide support through, for example, our Money Advisers, our funding of the Tackling Poverty Co-ordinator's work, funding in kind for services like the Moving On Project, many of which provide support to our tenants. It may well be the case that whilst we do not specifically have a hardship fund we provide support in different ways. The Tackling Poverty Co-ordinator is bringing an update on the support on offer to the Cabinet and that report could also include the support for our housing tenants. Members thought a hardship fund was a good idea but were concerned where the money would come from. Councillor Sanders noted many people were in hardship and sought help as they were behind with rent payments; having payment plans in the private sector would tackle debt and hardship. Members and Ms Cole agreed with examining existing provision and joining up services rather than duplicating them.

Summing up, Councillor Sanders requested that officers pursue how to help social housing tenants whose positions may worsen in the next few months because of Covid. He thanked Ms Cole and members for their insights and questions. Despite the bleak economic picture of the past year the aim is still to keep housing and residents safe. The importance of protecting the environment is shown by the new heating contract that provides totally renewable electricity with no increased charges for residents. He was pleased to see funding provided for initiatives like the Landport Community Garden and youth clubs. He thanked officers for their reports.