Agenda item

Housing Revenue Account 30 Year Business Plan 2020

A report from Sarah Cary (Executive Director Place) is attached.   (Key Decision Reference Number: 4969)                                            (Report No:  174)


Councillor Nesil Caliskan (Leader of the Council) introduced the report of the Executive Director – Place (No.174) setting out a revised HRA 30-year Business Plan.




1.            That the Business Plan aligned to the Housing and Growth Strategy which had been approved by the Cabinet at its meeting on 22 January 2020. It addressed the investment required to improve the quality, and to ensure the safety of, existing council homes as well as the delivery of new homes and regenerated places.


2.            This was a 30-year plan which required annual investment. Members noted the approvals being sought as summarised in section 1.3 of the report and reflected in the decisions below. The business plan incorporated the opportunity to fund an extensive programme of new development and regeneration totalling up to 3,500 new affordable council homes over the 10 years from 2020-2030 and to deliver service transformation to improve the quality of services.


3.            The information detailed in section 6 of the report regarding the delivery of new Council homes and regeneration, including the Joyce and Snells regeneration project. The ambitious programme was likely to incorporate a mix of affordable housing tenures, including Social Rent, London Affordable Rent, London Living Rent and Shared Ownership.


4.            The financial implications detailed in section 10 of the report. In October 2018 the Government had announced the removal of the HRA debt cap which had given Council Housing the ability to increase borrowing to develop more affordable homes. All borrowing requirements would remain within the Council’s financial metrics and in line with the General Fund prudential indicators and treasury management strategy.


5.            The intention to dispose of properties (when they became vacant) which had high maintenance costs, did not meet resident needs or which best supported the wider regeneration programme of delivering new homes, as set out in paragraph 6.3 of the report. These disposals would generate income.


6.            The benefits to residents of the investment in existing housing stock and the works that would be included improving standards. The investment would also support the Council’s climate change priorities. Consultation would continue with residents and through Customer Voice and the Housing Advisory Board.


7.            That the Business Plan was ambitious and its aims and objectives were reiterated and discussed by Members. The development proposals would include a variety of projects as detailed in the report. Developments would provide a range and variety of housing solutions for example, larger family homes that may not otherwise be provided by the market, an inter-generational housing model and a pilot scheme embedding energy efficiency standards.


Alternative Options Considered: The Council could seek to change the emphasis of investment for example a greater focus on existing stock investment rather than new build but this would have a negative effect on the business plan and would reduce the Council’s ability to meet the overcrowding needs of existing tenants as well as residents on the Housing Needs Register.


DECISION: The Cabinet agreed


1.            The revised HRA Business Plan and supporting Investment Framework comprising the financial metrics on which the Council would ensure sustainability as it develops further proposals including updated borrowing requirement from £315m to £656m over the next 10 years.


2.            Delivery of the 10-year capital programme as shown in Appendix A of the report and to agree that arising from this programme the Executive Director – Place and Director of Housing and Regeneration would be authorised the award of the contracts included in the five-year capital programme.


3.            An income target of £1m per annum to dispose of properties at void stage which had high maintenance costs, which did not meet resident needs or which best support the wider regeneration programme of delivering new homes.


4.            To note the 10-year HRA Capital Programme budget would come forward as part of the Council’s 10-year Capital Programme recommended to Council in February 2020.


5.            To note the assumed rent policy as set out in paragraph 7 of the report which provided for a rent increase in April 2020 of 2.7%. Cabinet approval would be sought in the Rent Setting report in February 2020 which would then be subject to recommendation to Council.


6.            Delegate to the Director of Housing and Regeneration in consultation with the Cabinet Member for Social Housing decisions in regard to the recovery of costs from leaseholders, for building safety measures in line with guidance and that Government should be lobbied to meet any costs associated with leaseholder contributions that fall to the HRA and that were not recharged.


7.            To continue to support the work of the GLA in seeking to enhance Council’s capacity to expand further the delivery of Council homes in the 2022 Building Council Homes for Londoners programme. To note that the Business Plan did not pre-empt and provide for funding for future Building Safety requirements arising from new legislation and any enhancements arising from the Social Housing White paper including a potential Decent Homes 2 standard and that Government should be lobbied to provide funding for these costs.


8.            To introduce from 1 April 2021 de-pooled and re-apportioned services charges after consultation with residents and the Cabinet Member for Social Housing.


Reason: The announcement from Government to remove the HRA debt cap enabled councils to deliver more affordable homes and the opportunity to review the condition of its existing stock and fire safety compliance. The report outlined its review of the HRA business plan and borrowing requirements and approval of projects and programmes that would help deliver the priorities in the emerging Housing Strategy.

(Key decision – reference number 4969)

Supporting documents: