Decision details

To agree a revised indicative Financial Plan.

To agree the final Financial Plan, following the final CLG debt settlement.

(1)        That the report of CIHConsult, the Council’s Housing Revenue Account (HRA) Business Planning Consultants, as attached at Appendix 1 of the report, be noted;

(2)        That, having taken account of the views of the Tenants and Leaseholders Federation and the Joint Meeting of the Housing and Finance & Performance Management Scrutiny Panels, the general strategic approach for the HRA Financial Plan be as follows:

(a)        That provision be made within the Financial Plan to fully maintain the Council’s housing stock to a modern standard, based on current stock condition and standard industry life cycles, as opposed to maintaining the stock at the current minimum Decent Homes Standard;

(b)        That, in order to achieve the Council’s aspirations to commence a new Council Housing Building Programme, provision be made within the Financial Plan to fund such a Programme on the basis that individual development packages were self-funding, without any support or funding from the General Fund, subsidised if necessary from:

            (i)         grant from the Homes and Communities Agency (HCA);

(ii)        Section 106 Agreement contributions from developers, in lieu of on-site affordable housing provision;

(iii)       if allowed by the Government, the proceeds of Right to Buy (RTB) sales as a result of the Government’s proposal to increase RTB discounts whilst ensuring that a new affordable home was provided to replace the affordable home lost;

            (iv)       Housing Revenue Account (HRA) surpluses; and/or

(v)        cross-subsidy from the sale of other development sites within the House Building Programme on the open market;

(c)        That average rent increases included within the Financial Plan be based on the following rent increases in order to achieve rent convergence by April 2017:

(i)         average rent increases of 6%  in April 2012;

(ii)        average rent increases of the Retail Price Index (RPI) + 1.96% for the four years between April 2013 and April 2016 inclusive; and

            (iii)       average rent increases of RPI + 0.5% from April 2017, as assumed by       the Government within the HRA debt settlement;

(d)        Notwithstanding the provision for rent increases included within the Financial Plan, consideration be given each year during the HRA budget process, to the possibility and appropriateness of making a lower rent increase for the following year, having regard to the short and long term effects on the Financial Plan, the need to meet the Council’s housing and financial objectives, Government guidance and the effects on tenants; and

(e)        Provision be made within the Financial Plan to fund £770,000 per annum for housing improvements and service enhancements for the next eight years, increased to £5.47million per annum from Year 10;

(3)        That the Indicative HRA Financial Plan, attached at Appendix 2 of the report, based on the above assumptions be adopted, and that the final version of the Financial Plan be adopted by the Cabinet on 30 January 2012 or 12 March 2012, dependent on the date the final HRA debt settlement for the Council was confirmed by the Government;

(4)        That, following consultation with the Tenants and Leaseholders Federation, the Housing Scrutiny Panel be requested to consider and recommend to the Cabinet a range of potential housing improvements and service enhancements that could be undertaken, funded from the additional £770,000 per annum provision made within the Financial Plan;

(5)        That a further report be submitted to the Cabinet by the Housing Portfolio Holder on the additional staffing requirements for delivering a full maintenance programme to a modern standard; and

(6)        That the Council’s Treasury Management advisers, Arlingclose, be requested to continue to provide advice to the Council on the effects of the HRA debt settlement (if any) on the Council’s General Fund.