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Noted
that there is increased pressure on the finances of
the Housing Revenue Account (HRA) in 2026/27 due to the cost of
repairs, increased requirements for regulatory compliance, and the
impact of inflation. See section 4.2 below for more details on
these pressures and the risks that they pose to the HRA.
 
Noted
that a HRA Voluntary Revenue Provision on amounts
above the Major Repairs Reserve will not be provided in 2026/27, to
assist the HRA in achieving a balanced budget and adequate Minimum
Working Balance. This aligns with the Treasury Management and
Capital Strategy, with further detail contained in the Minimum
Revenue Provision Policy.
 
Agreed
to the following changes to rents and charges which
partially mitigate the financial pressures on the HRA:
 
·       
To follow the national rent policy, as set out in
the Rent Standard, and to approve an increase in rents for council
homes by 4.8% (September's CPI + 1%), the maximum allowed by
government. This will increase the average weekly rent to
£118.35.
·       
To note that the government made an announcement in
relation to rent convergence on 28 January 2025 (see section
4.3.2):
o  
to commence from 2027/28 at a rate of £1 per
week (included in the calculations within this report)
o  
increasing to £2 per week from 2028/29 (not
included in the calculations within this report, but which
provisionally could provide a further £0.850m of rental
income from that year and further sums beyond).
·       
To agree an increase in Tenant Service Charges for
council homes by 5.3%, resulting in an increase of 93p per week,
according to the methodology set out in section 4.4.3 below. This
will increase the service charge to £18.65.
·       
To agree to increase rents for tenants in HRA and
General Fund temporary accommodation by 3.8% (CPI) to an average of
£310.55 for a 2 bed flat.
·       
To agree to increase garage rents by £1 a
week, between 6.5% and 8.4% depending on garage tier.
·       
To agree to increase parking charges on estates by
£3 per year for an annual permit, an increase of 5.2%, and by
50p per 10 visitor permits an increase of 14.3%.
 
Noted
that even with these proposed increases, the HRA
will still be under significant financial pressure.
 
Agreed
to the following proposals, which address the
financial pressures on the HRA, described in detail in section
4.6:
 
·       
To moderate the amount spent on legal disrepair
cases (where tenants take legal action against the council for
issues in their homes) by intervening earlier during
cases.
·       
To reduce spend on voids works (maintenance to homes
before new tenants move in) through improved project management and
contract management.
·       
To improve rent collection levels and reduce arrears
rates for tenants in HRA and General Fund temporary accommodation
by improving processes and maximising use of technology.
·       
To resolve technical issues with incorrect energy
bills that have been paid by the HRA.
 
Noted
progress on the following existing savings
proposals, which were agreed by previous HRA rents reports,
described in detail in section 4.5.2.
 
o  
Increased rent collection and reduced arrears for
council tenants.
o  
Increasing income collection from
garages.
o  
Efficiencies in repairs and compliance
services.
o  
Replacing some proposed new-build properties for the
HRA with acquisitions.
o  
New lettings at formula rent plus 5%.
o  
Estate regeneration
 
Noted
that the 2025-26 HRA MTFS report agreed to rephase
10% of capital expenditure (£40m of £400m) on the
Housing Capital Programme, so it finishes in 2030/31 rather than in
2028/29, which was projected to reduce revenue borrowing costs by
£1.479m by 2028/29. 
 
Agreed
to an amendment to this reduction and reduce the
rephasing to £20m (5%), which will allow us to maintain spend
on safety critical and environmental improvements, reducing the
associated savings to £562k by 2028/29.
 
Noted
that the savings lost (c£917k) as a result of
the reduced rephasing will be made instead in the repairs and
investment service efficiencies PID, so that the change is cost
neutral to the HRA. More detail in section 4.5.2.
 
Noted
that the savings agreed from the following proposals
in last year’s HRA rents report have now been achieved, and
the projects will be closed down. More detail in section
4.5.1.
 
o  
Reduction in funding to Tenant Management
Organisations.
o  
Increase in rents for temporary accommodation to
2024 LHA levels.
o  
Converting HRA void properties to temporary
accommodation.
 
Noted
that (subject to agreement by the Pension
Fund Investment & Administration Panel) (section 4.1.5 of the
report):
 
·       
the council’s pension fund is now 118%
funded
·       
an ongoing saving of around £1m per year will
arise from a reduction in future pension costs
·       
a saving of £1.28m is also available to the
HRA each year in 2026/27, 2027/28 and 2028/29 only, as a result of
the surplus.
 
Agreed
to funding of £200,000 for the Hardship Fund
in 2026/27, to support tenants in financial difficulty. More detail
in section 4.7.1 of the report.
 
Agreed
to funding of £170,000 to extend the
Downsizing Incentive Programme, driving quality of life
improvements and savings to the General Fund. More detail in
section 4.7.2 of the report.
 
Delegated
authority to the Director of Housing and Safer
Communities to make decisions related to HRA finances for two of
the proposals in this report (subject to the overall HRA budget
having sufficient resources available):
 
·       
To set reasonable rents for garages let in pilot
schemes under the Garages MTFS project to community groups and
local businesses, in cases where they have not been let to tenants.
More detail in section 4.5.2 of the report.
·       
To amend the levels of incentives and support
available to tenants who wish to downsize, allowing for increases
of up to 50% on this year’s incentive payments and reductions
of any amount. More detail in section 4.7.2 of the
report.
 
Noted
that if the recommendations set out above are
accepted, the forecast 2026/27 closing balance position of the
Housing Revenue Account (HRA) is forecast to be £4.547m,
which would be above the HRA Minimum Working Balance requirement of
£4.305m.
 
Noted
the financial risks and mitigations in section 4 of
the report, alongside the comments of the finance team.