Agenda item

Objective: To provide a monitoring position statement for the HRA against the budget approved by Council on 23 February 2024, highlighting any key variances, together with an update on rent collection performance for the financial year 2024/25

The Director of Finance & Assets introduced the Housing Revenue Account (HRA) outturn report for 2024-25 against the revised budget approved by Council in February 2025 (originally approved before the transition of housing service in February 2024). The revised budget forecast the HRA would generate an £89k surplus in year which would maintain the revenue reserve at just over £1m. Historically the target has been at £1.5m and forecasts had shown this would drop in the medium-term. Efficiencies achieved through bringing the housing service back in-house will be key to recovering that reserve. As the operating accounts show a deficit of £332k has been reported which has taken the reserves down to just over £600k. The main drivers of this deficit are delays in void turnarounds, including additional council tax liabilities and rent loss, and the structure of the original budget where slippage in funded planned maintenance has led to more costs being charged to the HRA for reactive repairs. This overspend shows the importance of having really accurate data and forecasting, which will be provided through the changes to the service area currently being undertaken. Whilst this is not ideal, similar issues with the general balances have been overcome in recent years and the same discipline will be applied to the HRA with a full review of the structure of the budget, the data underpinning forecasts and the feasibility of savings post-transition. There is a balance to be struck between addressing compliance and safety and continuing to be financially sustainable.

The Committee’s discussion raised the following points:

-       The change from the forecast in February is due to what the Finance Team have been able to draw and utilise from the housing management system, QL. A significant amount of work has been carried out on the inputs into the system and as data improvements continue, we are confident that forecasting will be better.

-       The Local Government Pension Scheme (LGPS) is subject to a triennial evaluation which will occur in the 2025-26 financial year. It is anticipated that the output of this evaluation will see savings in both the general fund and HRA from the 1 April 2026.

-       The data from the stock condition surveys will inform the planned maintenance programme. Once this data is in QL the cost implications will be included within the next forecast.

-       CBH reserves have supported a lot of transition activity during the last year. The CBH draft accounts are currently being finalised, with audit scheduled for August, and will be published in due course.

-       Provision of bad debt has seen a huge improvement over the last year, with the amount of write offs reduced due to the teams’ positive performance. Aware of the current national challenges but are comfortable with the position of the bad debt provision.

The Head of Housing Services provided a presentation on rent collection performance for 2024-25. He highlighted how the Rent Accounting Team, Income Team, Benefits and Money Advice Team and Training and Employment Services work to support tenants through a range of mechanisms, sustain tenancies and recover rent arrears. He explained what steps had been taken over the last year and the improvements in figures that had resulted.

The Committee’s discussion raised the following points:

-       It was fantastic to see the community support and training and employment measures provided, reflecting that social responsibility sits alongside rent collection.

-       Repayments are commonly paid to tenants due to overpayments made during rent-free weeks and to address backdated payments from the Department of Work and Pensions (DWP).

-       The Tenant Representative’s personal experience of the benefits brought by the Money and Benefits Advice Team and the Skills Hub was highlighted. They are excellent initiatives that have helped many tenants gain jobs and have changed peoples’ lives.