Issue - meetings

Report of the Cabinet Member Finance & Community Development and Chief Finance Officer

The Cabinet Member Finance and Community Development introduced the joint report of himself and the Chief Finance Officer as circulated with the agenda. 

He explained that the HRA budget has been prepared to meet 3 financial objectives:

• To adequately fund services to tenants
• To maintain a revenue reserve of at least £1m
• To put additional funds into capital investment in the stock
  
  

The disappointing news for tenants was that, according to the Government formula that seeks to adequately finance housing, rents will rise from (on average) £66.88 to £70.51 – or £3.63 a week over a 52 week year. This amounts to a total of £188.76p – greater than the entire annual Band D Council Tax for Cheltenham. 

A key risk in the self-financing proposals is future Government rent policy and associated welfare reform, with over 70% of tenants reliant on housing benefit. It was important to understand what the impact of such rent rises will be and how changes in the benefits system may affect HRA finances. CBH have proposed the employment of a money and benefits officer – to give advice on benefits, borrowing and help in controlling rent arrears. This will give much needed additional help to our tenants in these difficult times.

The Finances are in sound order. CBH is well managed and effective and The CBH Board had endorsed the budget for 2011/12.

He moved the recommendations which were seconded by Councillor Jordan.

The Cabinet Member Finance and Community Development responded to questions on the HRA budget proposals.

Upon a vote it was

Resolved that;

1. The HRA revised budget for 2010/11 be approved;
2. The HRA 2011/12 budget including a proposed average rent increase of 5.43% applied in accordance with the rent restructuring guidelines (subject to restraints on individual property increases when aggregated with service charges) and increases in other rents and charges as detailed at Appendix 5 be approved;     
3. The revised HRA capital programme for 2010/11 at Appendix 6 be approved;
4. The HRA capital programme for 2011/12 at Appendices 6 and 7 be approved;
5. Receipts of up to £3m from the sale of HRA assets (other than through Right To Buy) in the period 1^st April 2011 to 31^st March 2014 be used for affordable housing provision.

(CARRIED, with 1 Abstention)

Joint report of the Cabinet Member for Community Development and Finance and the Chief Finance Officer.

Resolved that it be recommended to Council that:

1. The HRA revised budget for 2010/11 be approved;
2. The HRA 2011/12 budget including a proposed average rent increase of 5.43% applied in accordance with the rent restructuring guidelines (subject to restraints on individual property increases when aggregated with service charges) and increases in other rents and charges as detailed at Appendix 5 be approved;
3. The revised HRA capital programme for 2010/11 at Appendix 6 be approved;
4. The HRA capital programme for 2011/12 at Appendices 6 and 7 be approved;
5. That receipts of up to £3m from the sale of HRA assets (other than through Right To Buy) in the period 1^st April 2011 to 31^st March 2014 be used for affordable housing provision.

Having declared a personal and prejudicial interest in this item the Cabinet Member Corporate Services left  the room for this item and did not participate in the debate.

The joint report of the Cabinet Member for Community Development and Finance and the CFO had been circulated with the budget papers.  The report explained that following the Cabinet meeting on 21 December 2010 where the draft HRA budget proposals for 2011/12 were approved for consultation, the Cabinet was now required to make recommendations to Council on the 2011/12 budget, having regard to the responses to the consultation.

The Assistant Chief Executive, Cheltenham Borough Homes highlighted the changes that had been made since the draft budget and these were set out in paragraph 2.2 of the report. One important change was the bid to fund an additional post of Money and Benefits Officer at a cost of £31,500. This was needed to assist the implementation of the CBH financial inclusion strategy.

Referring to section 8 of the report, he advised members that the coalition government had now confirmed that pooling arrangements would continue for the next four years. Therefore the recommendation was that the policy of using capital receipts to fund investment in affordable housing should continue during that period to protect them from government pooling.

The coalition government had now confirmed their plans for Self Financing. He highlighted the main changes from the former Labour proposals and indicated he would be providing a full briefing to members in due course. Overall it looked like a good deal for Cheltenham with some uplifts. There would be full consultation with members, the CBH Board and the public before the final figure was set in 2012.

The Cabinet Member Finance said that overall CBH had performed well. The 5.4% average increase in rents would be difficult for tenants and therefore he welcomed the additional Benefits Officer post. He was also concerned about those tenants in full-time work, where their salaries were frozen and they too may also be in need of some financial advice.

The Cabinet Member Housing and Safety welcomed the additional post and thought it would also complement the advice services already available in the town.

Resolved that it be recommended to Council that:

1. The HRA revised budget for 2010/11 be approved;
2. The HRA 2011/12 budget including a proposed average rent increase of 5.43% applied in accordance with the rent restructuring guidelines (subject to restraints on individual property increases when aggregated with service charges) and increases in other rents and charges as detailed at Appendix 5 be approved;
3. The revised HRA capital programme for 2010/11 at Appendix 6 be approved;
4. The HRA capital programme for 2011/12 at Appendices 6 and 7 be approved;
5. That receipts of up to £3m from the sale of HRA assets (other than through Right To Buy) in the period 1^st April 2011 to 31^st March 2014 be used for affordable housing provision.