Agenda item

Housing Revenue Account (HRA) 30-Year Business Plan, Budget 2017/18, Rent Setting and Service Charges

A report from the Executive Director of Finance, Resources and Customer Services and Executive Director of Regeneration and Environment will be circulated as soon as possible. (Key decision – reference number 4451)

(Report No.195)

(8.30 – 8.40 pm)



Councillor Ahmet Oykener (Cabinet Member for Housing and Housing Regeneration) introduced the report of the Executive Director of Finance, Resources and Customer Services and Executive Director of Regeneration and Environment (No.195) setting out the proposed HRA 30 Year Business Plan, the detailed HRA Revenue Budget for 2017/18, the five year HRA Capital Programme and Right to Buy (RTB) One for One Receipts Programme (2017/18 to 2021/22).




1.               The report also presented the levels of rents, service charges and heating charges to be operative with effect from 3 April 2017 for HRA Council tenant and leaseholders, and rents for tenants in Temporary Accommodation.


2.               That the detailed figures included in the latest version of the HRA 30 Year Business Plan were set out in Appendix A to the report. Members noted the constraint on resources.


3.               The detailed programme of works and key risks in the delivery of the HRA business plan as set out in the report. Members noted that 2017/18 would be the second year of the 1% rent reduction which had been agreed over four years and its impact had been factored into the 30-year business plan and budget setting, as outlined in the report.


4.               The recent publication of the Government’s Housing White Paper, the future impact of which was still to be determined. Members noted that the Government’s borrowing cap on the Housing Revenue Account had not been relaxed.


5.               The base budget for 2017/18 as set out in section 5 of the report. During 2016/17, a project had been in place to identify ongoing savings of £2m per annum from the HRA which would start to have a full year effect in 2017/18. These savings were in addition to the savings of £1.955m identified in 2015/16. As at December 2016, a net £2.3m had been found.


6.               The implications of the Welfare Reform and Work Act which had come into force in March 2016, as set out in the report.


7.               That the report set out the service charges for tenants and leaseholders.


8.               The proposed Heating Charges as set out in section 12 of the report. It was recommended that, with effect from 1 October 2017, heating charges move to being reviewed and increased or decreased on 1 October each year, rather than April. This meant that, in 2017/18, there would be two heating charge reviews, one now and one in October. Heating charges, especially electricity, were predicted to increase significantly this year. Section 12.4 set out the proposed electricity charges which would be increased by 8% now and reviewed again in October. A review of all heating charges in October of each year would also align with the setting of the Council’s annual contracts. Members noted that the poor electricity generating capacity in the UK increased the grid’s reliance on imports from France, the price for which would depend on the performance of the pound against the euro.


Alternative Options Considered: Currently, the Council had no choice about the level of rents it sets for Council tenants and the options available regarding Temporary Accommodation rents remain unclear. The Council could not afford to forgo available income in the current financial climate, so this had been maximised where possible. A number of different options had been considered around budget levels required both for 2017/18 and in the medium term. The preferred option, to meet the priorities of the service and the Council, was presented in the report. Service charges could be set at alternative levels, but those set out in paragraph 10 of the report would need to result in improved services to tenants and leaseholders. Advice from the Council’s energy management team and energy management advisors, LASER, was that electric communal heating charges should go up by 16% with effect from 3 April 2017. However, the report proposed instead that the charges were reviewed mid-year since charges relating to October 2017 onwards were not yet subject to contract.




1.               Approve the HRA 30-Year Business Plan.


2.               Approve the detailed HRA Revenue Budget for 2017/18.


3.               Approve the HRA Capital Programme and Right to Buy One for One Receipts Programme 2017/18 to 2021/22.


4.               Note the rent levels for 2017/18 for HRA properties and Temporary Accommodation properties.


5.               Approve the level of service charges for 2017/18 for those properties receiving the services.


6.               Approve the heating charges for 2017/18 for those properties on communal heating systems and the proposed mid-year review.


7.               Approve the proposals for increases in garages and parking bay rents.


8.               Delegate authority to the Cabinet Member for Housing and Housing Regeneration and the Executive Director of Regeneration and Environment to approve tenders for Major Works.


Reason: The Council must comply with the law in setting its rents for Council tenants and Temporary Accommodation rents could not be increased whilst the effect of this could not be properly understood. Setting an annual budget, capital programme and balanced HRA 30 Year Business Plan were also legal requirements. Increasing service charges would allow the Council to provide new and better services to tenants, and the charges set out in the report were supported by the Council’s Housing Board and Customer Voice (the Tenant and Leaseholder representative body).

(Key decision – reference number 4451)

Supporting documents: