A presentation will be given in respect of the current position of the Housing Revenue Account.
Contact:
Isabel Brittain - Service Director, Finance
Naz Parkar - Service Director, Homes and Neighbourhoods
Minutes:
Councillor Crook, Cabinet Member for Housing and Highways, set out the context to the Housing Revenue Account (HRA). The key priorities were outlined as follows;
· to improve service standards and aim for a minimum Energy Performance Certificate (EPC) grading of ‘C’ for all stock;
· to continue to invest in housing stock, to provide safe, efficient, dry, and secure homes that tenants could afford to live in and live well;
· to take any available opportunity to increase the housing stock, to help meet the high and increasing demand that the Council faced.
Councillor Turner, Cabinet Member for Finance and Regeneration was also present for this item.
Naz Parker, Service Director from Homes and Neighbourhoods, provided an overview as set out below:
· The HRA was a separate income and expenditure account for the Council’s social housing stock.
· Income was primarily made up of rent and service charges.
· The expenditure was mainly capital, which covered maintaining and repairing council stock, and management costs.
· HRA income was separate from the Council’s General Fund and the account was self-financing; it was ringfenced to expenditure that would benefit tenants.
· There were a number of new regulatory provisions, arising from the Building Safety Act 2022 and the Social Housing Act 2023, which would come into force in April 2024. Whilst the robust approach to building safety was welcomed this had put additional pressure on the HRA.
Jacqui Fieldhouse, Head of Finance - Homes and Neighbourhoods, gave a presentation which provided an update on the Month 6 position. The following points were highlighted:
· the Government formula restricted any annual increase in rent to CPI (Consumer Price Index) +1%.
· £5.5 million from the Reserve Fund would be used to address additional budget requirements for investment into building safety works.
· The overspend on the repairs and maintenance budget was associated primarily with priority work to address damp and mould.
· A summary and explanation of the current position on reserves.
· A breakdown and explanation of the variances under each service area/budget heading.
Questions and comments were invited from Committee Members, with the following issues being covered:
· Although it was acknowledged that use of Energy Performance Certificates to measure improvement in energy performance was not perfect, it did provide a relative measure. The commitment to improve the thermal performance of the stock was positive and the achievement of a grade of C was a minimum expectation.
· A rent increase of CPI +1 % was the maximum permitted and this had been implemented this year in order to fulfil the commitment to improve the standard of living for tenants. The Council’s rents remained one of the lowest in the region despite the increase.
· The aim was to provide social housing to a high standard at low rent.
· No additional funding was anticipated from the Government associated with the recently announced obligation to undertake repairs within 24 hours. This requirement had been anticipated and the Service’s single point of contact had been set up to ensure that prioritisation of the vulnerable was undertaken.
· Housing management staffing had started to stabilise further to re-organisation of the relevant teams. The importance of the retention of local intelligence and knowledge was recognised, and the induction process took into account the need to ensure experience in a particular area.
· The figure of 15% of the total budget for reserves was relatively high in terms of social housing providers and was considered to be a prudent level to maintain in the case of Kirklees.
· It was acknowledged that the HRA was under significant pressure due to the investment needs. The HRA contributed significantly to the Council’s General Fund costs where this was legitimate and of benefit to its tenants.
· The Income and Money Advice Team signposted to other agencies and provided assistance to tenants where possible.
Resolved –
That the Service Director and the Head of Finance, Homes and Neighbourhoods be thanked for attending the meeting and providing an update in respect of the Housing Revenue Account.