Agenda item

A report from the Executive Director Resources is attached.  (Key decision – reference number 5342)

Councillor Mary Maguire (Cabinet Member for Finance and Procurement) introduced the report of the Executive Director Resources reviewing the financial assumptions in the Housing Revenue Account (HRA).

NOTED

1.  The update on the HRA 30-year business plan position and the main changes were outlined.

2.  The main points of the Development Programme were summarised in para 28 of the report, noting the 3,500 new home starts over the next 13 years and the funding mechanisms.

Alternative Options Considered:

Not relevant in the context of this report.

DECISION:  The Cabinet agreed to

1.    Note the updated HRA Business Plan and financial assumptions on which we will ensure an affordable and viable 30-year plan.

2.    Recommend to Council the revised 10-year HRA Capital Programme budget, including reduction of £94.8m in the overall budget requirement.

3.    Note the reduced HRA borrowing requirement from £656.2m to £622.6m over the next 10 years.

4.    Recommend to Council to approve the updated hurdle rates and build costs on development schemes as a result of adverse market conditions which will enable us to continue to build new homes during this period.

5.    Recommend to Council to approve acceptance of successful GLA grant bid of £166.5m as part of the AHP 21-26 programme and entering into of grant agreement for starts from 2023-2028. This secures funding for the first phases of the Joyce and Snells regeneration scheme.

6.    Note September CPI of 3.1%, which increases the social and affordable rents levels in April 2022 by 4.1%, approval will come forward as part of the HRA rent setting report recommended to Council on 23rd February 2022.

7.    Note the reduction in borrowing interest rates for 2021-22 and 2022-23, approval will be recommended to Council as part of the Treasury Strategy update report on 23rd February 2022.

8.    Note the outline criteria to be used when assessing lease propositions from external investors as a means of increasing supply without entering into any binding commitment until all aspects, including Treasury Management, have been fully considered.

9.    Recommend to Council to approve entering into of a Deed of Variation to the Development Agreement for the Ladderswood project for costs accrued in earlier phases and adjustments to overage income projections.

10. Recommend to Council to approve Deed of Variation to the New Avenue Development Agreement to increase the number of homes from 408 to 503, subject to planning and all relevant consents.

11. Note that there is no additional funding available to meet the Fire Safety Act 2021, made law in April and the Building Safety agenda and that additional staffing resources to meet these new functions is included in the business plan on a phased basis from April 2022.

12.  Note the additional investment made in improving the environmental conditions of estates following lifestyle changes as a result of the pandemic.

Reason:

To ensure that a balanced and viable 30-Year HRA Business Plan is approved by Cabinet which meets the strategic priorities of the service.

(Key decision – reference number 5342)