Agenda item

Housing Services – (C-039-2021-22) – to note and approve the safe and prudent HRA business plan.

(1)          That Cabinet noted the verbal update from Stronger Communities and noted their recommendation to Cabinet for approval;

(2)       The Cabinet agreed to receives a yearly performance update, which would include stringent stress testing;

(3)       The Cabinet agreed to implement the proposed business plan, noting that the business plan included all assumed costs but not all income streams, as such the Cabinet also noted appendix B of the report which was an alternative plan including some potential income; and

(4)       The Cabinet noted the opportunity to improve our estates which would improve the life span of our assets and feed into our ongoing work to ‘create great places where people want to live’.

The Housing Services Portfolio Holder introduced the report.

The HRA business plan had been developed in partnership with our retained consultant Abovo-Consult.  A bespoke HRA model is used which enables the Council to provide a reasonable cashflow projection for the next 30 years. It was based on evidential data from the Council’s current systems and projections for economic assumptions in the social housing sector. Furthermore, the plan gave the Council the ability to stress test.  This was vital given key dynamic risks such as the borrowing rate and changes in Government legislation regarding Social Housing.

Officers had taken both a safe and prudent approach when developing the business plan, with a balance between borrowing, developing, and improving the housing stock.  The agreed minimum £2m revenue working capital balance was maintained throughout the plan.

Councillor Bedford thanked officers and the Portfolio Holder for recognising the need for investment in the Shelley area.

Councillor Philip welcomed the business plan and the fact it was to be reviewed every year.

Councillor Patel wondered what was a ‘decent home standard’ and how were we benchmarking ourselves. He was told that the decent home standard was set out by the government in 2002 and was seen as the standard we had to work to, although we now worked to a higher standard, the ‘passive home’ standard. Councillor Patel said that this higher standard should be reflected in the report. Did this standard also encompass the drive to a carbon neutral standard. He was told that the decent homes standard referred to the council’s existing estates. The new builds conformed to the higher standards and the drive to net zero homes. The Council was also currently in discussion with ‘Eon’ for a pilot project for 50 houses to retro fit these houses to achieve net zero and were also looking to install solar panels on current properties to investigate their value. Councillor Lea was glad to hear this especially due to the current rise in fuel prices.

Decision:

(1)          That Cabinet noted the verbal update from Stronger Communities and noted their recommendation to Cabinet for approval;

(2)       The Cabinet agreed to receive a yearly performance update, which would include stringent stress testing;

(3)       The Cabinet agreed to implement the proposed business plan, noting that the business plan included all assumed costs but not all income streams, as such the Cabinet also noted appendix B of the report which was an alternative plan including some potential income; and

(4)       The Cabinet noted the opportunity to improve our estates which would improve the life span of our assets and feed into our ongoing work to ‘create great places where people want to live’.

Reason for decision:

Although stock holding councils no longer must summit a Housing Revenue Account Business Plan, it was still prudent to produce one as it acts as a planning tool for both financial and personnel resources.

Options considered and rejected:

·         To not meet decent homes standard was considered, however that would lead to increase spend in the future as the life span of the asset would be minimised.

·         To stop development.  This would lead to a net loss of stock due to the RTB, in addition there would not be a compounded increase in income, which may impact the investment in stock in the future

·         To not invest in the urgent works and continue to repair on an ad-hoc bases.  This would lead to a long-term deterioration of stock, leading to an increase in costs.