Issue - meetings

Joint Report of the Cabinet Member Finance and Community Development and the Chief Finance Officer (to follow)

Resolved that:

1. The HRA revised budget for 2010/11 be approved.
2. The HRA 2011/12 interim budget proposals for consultation be approved including a proposed average rent increase of 5.43% (applied in accordance with the rent restructuring guidelines) and increases in other rents and charges as detailed at Appendix 5.
3. The revised HRA capital programme for 2010/11 at Appendix 6 be approved.
4. The draft HRA capital programme for 2011/12 for consultation at Appendix 6 and Appendix 7 be approved.
5. Authority be delegated to the Chief Finance Officer, in consultation with the Cabinet Member for Finance, to determine and approve any additional material that may be needed to support the presentation of the interim budget proposals for consultation
6. Consultation responses be sought by 22^nd January 2011.

The Cabinet Member Finance and Community Development introduced the report. The report summarised the HRA revised budget for 2010/11 and the Cabinet’s interim budget proposals for 2011/12 for consultation. Cheltenham Borough Homes (CBH) had performed well throughout the year and as far as its finances were concerned it had three strategic aims:

• To adequately fund activities
• To maintain the revenue reserves of £1 million
• To put additional funds into capital activity to fund development

The revised HRA budget showed a surplus of £800K. He explained that the stability of CBH’s finances resulted from the ring fenced Housing Revenue Account.  The important news for tenants was the rise in rents detailed in appendix 4. This would hit those tenants not in receipt of housing benefit the hardest. The council needed to understand what the impact of such rent rises would be and how changes in the benefits system may affect HRA finances in the future.

He concluded that CBH was well managed and effective and its finances were in sound order.

Bob Dagger, the Assistant Chief Executive, CBH, advised that the new Housing Minister had recently announced some details on the move to a self financing regime for local authority housing planned from April 2012. The discount rate would be 6.5% and not the 7% in the original discounting model. This would reduce the amount of money available for borrowing for new building. The new model did take account of disability housing adaptations. It was disappointing that the current pooling arrangements for the sale of HRA properties would continue. Under this arrangement 75% of receipts on Right to Buy properties would continue to go to government and other receipts could be retained but would have to be 100% allocated to regeneration projects.   The self financing model will be amended to reflect stock loss. The Treasury is now anticipating a net receipt of £6.5 billion from the self-financing settlement which was an increase on the previous indicative figure of £4.5 billion.

Resolved that:

1. The HRA revised budget for 2010/11 be approved.
2. The HRA 2011/12 interim budget proposals for consultation be approved including a proposed average rent increase of 5.43% (applied in accordance with the rent restructuring guidelines) and increases in other rents and charges as detailed at Appendix 5.
3. The revised HRA capital programme for 2010/11 at Appendix 6 be approved.
4. The draft HRA capital programme for 2011/12 for consultation at Appendix 6 and 7 be approved.
5. Authority be delegated to the Chief Finance Officer, in consultation with the Cabinet Member for Finance, to determine and approve any
   additional material that may be needed to support the presentation of the interim budget proposals for consultation.
6. Consultation responses be sought by 22^nd January 2011.