Agenda item

Report of the Cabinet Member Finance

The Cabinet Member Finance introduced the report. She advised that there had been significant changes in the Government Housing Policy during the year, most notably the abolition of the HRA debt cap. She explained that this coupled with the certainty on rent policy until 2025, would have a positive impact on HRA resources, enabling the Council to increase investment in new build and stock improvements. The Cabinet Member finance also made the following comments:

·           Rents would again be reduced by 1% and the Government had confirmed that rent policy would then revert back to the previous guidelines of allowing annual increases of up to CPI + 1% per annum for the following 5 years before a further review.

·           The 30 year HRA Business Plan has been updated to reflect:

o  The anticipated revenue outturn for 2018/19;

o  The current development programme for the period from April 2019 to March 2022;

o  Contingency budgets for market acquisitions and the purchase of new affordable units on sites where Section 106 planning agreements are in place; and

o  A refreshed assessment of the 30 year “need to spend” on existing stock for both capital and revenue expenditure.

·           CBH had taken a balanced approached in order to maintain existing service levels, retain the decent homes standard, continue delivery of the major windows and doors replacement, complete the new build programme, and deliver the new showers programme.

·           With regards to UC, she advised that CBH were conducting a proactive campaign to provide support and information to all tenants affected by these changes.

·           Significant variations within the 2018/19 revised forecast greater than £30,000 have been identified in budget monitoring reports and were summarised at 5.1 of the report.

·           She explained that a new agreement for the HRA grounds maintenance work undertaken by Ubico would commence in April 2019 and that those facing an increase in charges would be protected by transitional arrangements with increases being phased in over three years.

·           She reported that garage rents would be increased by 3% from April 2019 in line with the Retail Price Index.

·           Significant changes to the HRA greater than £30,000 in 2019/20 as compared to the revised forecast for 2018/19 were itemised in the table at 6.5.

·           Revenue contributions totalling £8,436,600 would be required to fund capital expenditure in the year, reducing revenue reserves to £1,568,100 at 31st March 2020.    

·           CBH had made substantial progress to modernise and transform the housing management and maintenance services delivered to tenants.

·           The capital programme would require CBH to carry out procurement on behalf of the council.

·           The proposed funding of the capital programme, together with a statement of balances on the major repairs reserve, was shown at Appendix 3. She advised that the main sources of funding remained the major repairs reserve and contributions from the revenue account. The Government’s policy to stimulate Right to Buy had also increased the availability of capital receipts and that a proportion of those receipts were only retained by the Council if they were used to fund new affordable housing within 3 years. She reported that further borrowing would be required in 2020/21 and 2021/22.

·           She confirmed that 1 in 10 homes in Cheltenham were managed by CBH and they also provided a multitude of other services including advice for people dealing with benefits and money issues and support for people looking to find work and training opportunities.

The Cabinet Member Finance thanked all of  CBH’s finance team for ensuring that despite the challenges they faced, they still delivered the same level of service to tenants. She reiterated that the budget provides additional resources to support a significant increase in the pace and scale of new supply within the HRA and complements the resources also made available to CBH through the Housing Investment Plan to deliver new market rented units.

In the debate that followed, Members made the following comments:

·           CBH provided an exemplary service and Members had huge confidence in both how they build houses and invest money.

·           Of  note was the fact that 99% of all emergency, urgent and routine repairs were completed on target, with 93% being resolved on the first visit. Some Members highlighted that you wouldn’t get the same level of service in many private and social housing service providers.

·           There was inevitably a need to invest in more housing and Members agreed that they had a great housing provider to do that.

·           The Cabinet Member housing wished to place on record his thanks to all the staff at CBH for the service they provide.

·           The Cabinet Member housing confirmed that each spend in the £100 million  allocated for future works would come via the governance arrangements as set out in the report on a case by case basis.

RESOLVED (unanimously) THAT

a)    the revised HRA forecast for 2018/19 be noted.

b)    the HRA budget proposals for 2019/20 (shown at Appendix 2) be approved including a proposed rent decrease of 1% and changes to other rents and charges as detailed within the report.

c)    the proposed HRA capital programme for 2019/20 as shown at Appendix 3 be approved.

For (32)  Atherstone, Babbage, Baker, Britter, Brownsteen, Clucas, Collins, Cooke, Dobie, Fisher, Flynn, Harman, Hay, Hegenbarth, Hobley, Horwood, Jeffries, Jordan, Mason, Oliver, Parsons, Payne, Savage, Seacome, Stafford, Stennett, Sudbury, Wheeler, Whyborn, Wilkinson, Williams, Willingham