Agenda item

(Director of Housing) To consider the attached report.

The Panel received a report from the Director of Housing regarding the Housing Improvements and Service Enhancements Fund 2013/14.

In December 2011 the Cabinet approved the strategic approach to the new 30 Year HRA Financial Plan in readiness for the introduction of self financing for the HRA from April 2012. The approach agreed was to plan the repayment of the required loans from the Public Works Loan Board to be taken out to fund the CLG’s required debt settlement over a 30 year period. This enabled the Council to maintain the housing stock to a full modern standard implement a new Council Housebuilding Programme, and allow a lower average rent increase in April 2012 (6%) than assumed by the Government. It also funded an additional £770,000 per annum of housing improvements and service improvements.

The Cabinet had asked the Panel to consider and recommend a proposed list of housing improvements and service enhancements to the Cabinet, utilising the additional funding, which the Panel undertook in March 2012 and its report and recommendations were considered and agreed by the Cabinet in April 2012. At the same time the Cabinet had asked the Panel to consider and recommend to the Cabinet at this meeting the proposed use of the Housing Improvements and Service Enhancements Fund for 2013/14.

The estimated amount available to the Housing Improvements and Service Improvements Budget each year was, in effect, a balancing figure for the Housing Revenue Account (HRA) as a whole, over the 30 year period of the HRA Financial Plan.

Since housing-related income and expenditure was ring fenced to the HRA, and the Council had a policy of achieving rent convergence by April 2017, any annual HRA surpluses that were not required for any specific purpose therefore needed to be spent, otherwise they simply resulted in increased HRA Balances, which was why the Housing Improvements and Service Improvements Budget had been introduced from 2012/13. However, since the amount available each year would vary and because some projects would inevitably cost less or more than originally envisaged, or slip, it was suggested that, in future, the budget should be operated as a Housing Improvements and Service Enhancements Fund. 

The Cabinet agreed the Panel’s recommendation that 14 housing improvements and service enhancements be undertaken in 2012/13. Bearing in mind this list was not approved by the Cabinet until after the commencement of the current financial year, it was felt that very good progress had been made with all of the projects over the remaining period of the year. The following summarised the budget position for the overall 2012/13 programme:

(a)        Original budget 2012/13 - £770,000;

(b)        Latest anticipated expenditure forecast - £674,000; and

(c)        Savings/slippage carried forward to 2013/14 - £96,000

The main slippage carried forward was £85,000 for the acceleration of the mains-powered smoke detector installation programme, which was mainly due to the amount of installations required and the late approval of the expenditure for 2012/13 by the Cabinet.

When the HRA Financial Plan was produced in March 2012, it identified that an additional £750,000 per annum should become available for improvements/enhancements from April 2013, on top of the £770,000 per annum from April 2012. However, the latest iteration of the HRA Financial Plan had identified that it was no longer possible to fund an additional £750,000 per annum from April 2013. This was mainly due to:

(i)         Rental income to the HRA from dwelling rents over the 30 year period of the Financial Plan being less than previously forecast;

(ii)        The requirement to repay part of the loan portfolio (£31.2m) in 2021/22;

(iii)       A higher capital expenditure requirement; and

(iv)       A higher debt provision being required, due to the effects of the welfare reforms.

Nevertheless, since many of the improvement/enhancement projects agreed for 2012/13 were one-off projects, there was still some substantial funding available for new projects from April 2013/14.

Although £580,000 per annum was available for new projects from 2013/14, the Cabinet had already agreed that one-off and on-going revenue expenditure of £163,000 to deliver the following projects within the Cabinet’s Welfare Reform Mitigation Action Plan should be met from the Fund in 2013/14:

• Additional two Housing Management Officers – Annual - £56,000
• Increase in budget provision for financial incentives for downsizing – Annual - £22,000
• Grant to CAB to employ two Debt Advisors for 18 months – 2 years - £67,000
• Direct Debit Marketing Campaign – One Off - £10,000
• Census of Tenants – One off - £5,000
• Purchase of Welfare Reform Personal Calculators – One off - £3,000

Therefore, this left £407,000 available to spend on further new housing improvements and service enhancements in 2013/14. Following consultation with the Housing Management Team and all the Housing Managers, new projects for 2013/14 were put forward for recommendation to the Cabinet. They were:

• Appointment of Senior Cleaner
• Renewal of lounge chairs at communal lounges of sheltered housing schemes. (It was advised that the budget here should be increased £14,000 for 2013/14 and £18,000 per annum for the following two quarters)
• In-year Housing Improvements and Enhancements Fund. (It was advised that an In-Year Housing Improvements and Enhancements Fund of £50,000 per annum be set aside
• Major Capital Housing Project Reserve. (That around £300,000 in 2013/14 and £850,000 be allocated in the years 2014/15 and 2015/16, to the reserve)

It should be noted that, even utilising all of the resources available to the fund in 2013/14, there would still be a further £640,000 and £770,000 available to spend in 2014/15 respectively, based on current forecasts. It was therefore proposed that a further recommendation be made to the Cabinet that, at its meeting in January 2014, the Panel consider and recommend to the Cabinet the use of the Housing Improvements and Service Enhancements Fund for 2014/15.

RECOMMENDED:

(1)        That the following recommendations be made to the Cabinet:

(a)        That, in future, the budget for housing improvements and service enhancements be operated as a Housing Improvements and Service Enhancements Fund, with:

(i)         The Housing Revenue Account (HRA) contributing an agreed amount to the fund each year, based on the estimated surplus available through the HRA Financial Plan;

(ii)        The Cabinet agreeing the amount to be contributed to the Fund each year for housing improvements/service enhancements; and

(iii)       Any underspends or overspends on the Fund at the end of the year being carried forward within the Fund to the following year.

(b)        That the progress and latest out-turn forecasts for each of the housing improvement and service enhancement projects agreed for 2012/13 be noted;

(c)        That the associated expenditure for any further slippages on individual projects in 2012/13 be carried forward to complete the projects in 2013/14;

(d)        That the proposed list of housing improvements and service enhancements for 2013/14 and the associated recommendations for each project be approved, including the creation of a Major Capital Housing Projects Reserve; and

(e)        That at its meeting in January 2014, the Housing Scrutiny Standing Panel be asked to consider and recommend to the Cabinet the proposed use of the Housing Improvements and Service Enhancements Fund for 2014/15.

(2)        That the Panel’s report to the Cabinet be based on the content of the report submitted to the Panel; and

(3)        That the Chairman of the Panel present the Panel’s report to the Cabinet at its meeting on 11 March 2013.