Agenda item

The Director for Housing presented the Housing Revenue Account Budget for 2026/27:

• The Director of Housing advised that the proposed budget for the year was balanced but there were significant pressures that the HRA faced this coming year which totalled over £6 Million.
• The key factors that were causing these pressures were explored. New legislation such as Awaab’s Law, regarding mould and damp, which came into place in 2025, had added additional responsibilities to the authority as well as shorter timeframes to handle damp and mould cases. The new Housing Regulator and Consumer standards required new unfinanced actions and tasks. The Regulator also introduced a new Conduct & Competency framework to further professionalise the Housing for all Housing employees. This resulted in the authority putting a considerable number of housing staff through new training to ensure that the authority was compliant with the new standards. It was explained that these combined factors alone made up £3 Million of the £6 million total pressures.
• Other pressures included the continued loss of housing stock which was expected to cost the City Council an additional £1 million in the upcoming year as well as increased running cost expenses due to inflation, which was predicted to cost £750,000. A furthermore, £1 million was also added to the Capital budget for 26/27.
• An increase of 4.8% on core rent, garage rent, and hostel rent for all Council tenant, garages and hostel rents was proposed to help balance these pressures. An increase in rent of 4% for Gypsy and Traveller was also proposed, the difference in percentage increase was due to the different legislation around Traveller plots.
• Regarding district heating, there was a proposed decrease of 16% in the variable charge for metred heat as well as for those on fixed charges. A further 22% reduction was proposed in the fixed metre charges for tenants with metres.
• There was an increase of 3.8% in service charges proposed.
• It was noted that a number of the capital items were due to remain ongoing and unchanged from the previous year including, boilers, rewires, district heating, soffits and fascias, door entry replacements, kitchens and bathrooms.
• It was also proposed that there would be a reduction in the funding for disabled adaptations to Council properties from £1.2 Million to £725,000. It was explained that the authority was handling demand as currently there was no waiting list for adaptations. Consequently, this reduction would cause minimal impact to the area and help balance the budget The Director of Housing committed to keep an eye on this area and review the funding pot in year if there was any change in the demand.
• A preventative programme of increasing the re-roofing budget was proposed to help tackle the issue of roof repairs and leaks in Council houses. In the previous financial year, it was noted that there was an increase in demand for roof repairs and therefore, the budget of £1.5 million was proposed to increase to £2 million to enable this.
• A programme to upgrade and replace the windows and doors in Council Houses was also proposed. It was stated that the programme which would take place over several years, would have its budget increased from £50,000 to £500,000 to intensify the programme’s progress.
• A one-off investment of £500,000 was planned for the St Matthew’s Centre. While the building was owned by Housing it was being utilised by Libraries, communities and other groups. At the time, plans were being drawn up for the future of the centre, but nothing had yet been decided. It was explained that regardless of what happened, the centre needed investment for any of the proposed plans and that the money had been set aside to provide the necessary headroom.
• A new £200,000 capital line was proposed for a new supported housing project. A unit was identified where alterations could be made to convert it into a new supported housing unit which would further support the work that was being carried out in this area.
• A sum of £400,000 was put aside for water heater and tank replacements This project had become linked with the water safety and Legionella checks which the authority routinely carried out on water tanks. The Director of Housing emphasised that the risk of Legionella could be significantly reduced by having direct fed water rather than having water tanks.
• It was noted that the Housing department was not requesting any additional funding in the year 2026/27 for creating additional affordable housing. This was due to the fact that the authority already had £159 Million in the funding pot and was in discussions with Homes England to gain an additional £60 Million. Therefore, it was deemed that no additional funding was need for the year. The Director of Housing wanted to make it clear that just because further funding was not being requested, it did not mean that the affordable housing delivery was stopping.
• The Director explained that in both online and face to face discussions with tenants and members of the tenant scrutiny board, the reception to the budget changes were overall supported by a majority.

Comments:

• The tenant’s responses were commented on by the Chair and the fact that although the majority approved, it was a small majority. The Chair requested further clarification as to what the causes of this slim approval margin was. It was detailed by the Director of Housing that the main cause of concern among tenants surveyed, was the impact these changes would have on the most vulnerable. Particularly with bills increasing, the cost of living and the impact it would have on those working, who would be required to pay the increase. The Housing department were aware of these concerns and reassured and reminded the commission that the Council had tenancy sustainment rates of 96%, which was due the support services provided by the authority. Notably, the Income Management Team, who worked directly with tenants to ensure they were able to make sustainable payments while maximising income for the Council.
• The affordability of the increase in rents was commented on by Members who wished to learn about the broader impacts of this increase on tenants. The Director of Housing commented that these increases were offset by other pay increases to tenants. It was commented that 60% of Council tenants were on Housing Benefit so they would not be affected, in other areas, Universal Credit increase by 6.2% for 2026/27. Pensions had increased by 4.8% and salaries had increased by 5%. This meant that the overall increase was equivalent to those increases in income people had.
• The topic of Service Charges was raised by the Members who requested further detail on these increases. It was detailed that the authority only charges tenants what it costs the authority, CPI and inflationary pressure had increased to 3.8% hence the proportionate increase. Further reviews of services charges were planned for the rest of the 2026/27 year.
• Questions were raised about the reduction in district heating costs and why they were reducing while several other prices increased across the board. In response it was explained that the City Council only charges its tenants what it costs the authority to buy the fuel. The Council bought gas when it was cheap and in bulk, so the authority has passed those savings on to the tenants.

AGREED:

• The report was noted by the Commission.