Agenda item

The Director of Housing submits a report to the Housing Scrutiny Commission to consider the proposed Housing Revenue Account (HRA) budget for the 3 years from 2020/21 to 2022/23.

The Housing Scrutiny Commission are recommended to:

      i.        Note the financial pressures on the HRA and comment on the proposals for delivering a balanced budget;

    ii.        Note the comments from the Tenants’ & Leaseholders’ Forum for discussion;

   iii.        Comment on the proposed changes to rent and service charges for 2020/21:

- 2.7% increase to core rent

- 2.7% increase to garage rent

- 2.0% increase to hostel rent

- 2.0% increase to service charges

- no changes to sundry payments and charges.

The Director of Housing submitted a report, which considered the proposed Housing Revenue Account (HRA) budget for the 3 years from 2020/21 to 2022/23.

In presenting the report, the following was noted:

·         Several pressures bought about by government were noted, including the requirement to reduce rents by 1% during 2016-2020, despite this the HRA still delivered balanced budgets. However, further pressures from central government included Right to Buy sales whereby Leicester City Council lost in excess of 400 properties last year, the rollout of Universal Credit and inflationary pressures, reference was made to 4.2.1 table 1.

·         The 2019/20 capital programme was £48m, with more than half of this relating to the Council House Acquisition and New Builds Programme. A further £70m was added in November 2019 following Council approval to extend the programme of increasing affordable housing, this would also help to deliver the commitment of quality, energy efficient new homes and acquisitions.

·         Appendix B detailed the proposed HRA Capital Programme 2020/21 to 2022/23 and it was noted that there would be an investment of £5m for Public Realm Works including communal areas and estates.

·         Reference to Appendix E noted planned Capital works in Council dwellings, it was noted that works were only undertaken after the item was inspected and the repair history for the property was checked ensuring money was only spent where it was absolutely necessary.

·         The report recommended that the budget for 2020/21 was set as a balanced budget, continuing the approach of only drawing on reserves to fund time-limited or one-off schemes.

In response to Commission Members’ questions, the following issues were discussed and noted:

·         In order to see where money would be best spent for housing and estates, district managers had been meeting with Ward Councillors to get information on priorities that would be included in proposals and a satisfaction survey to tenants would be carried out to obtain input of improvement areas.

·         The Assistant City Mayor for Housing had offered to do housing briefings with Ward Councillors, for members to provide information as to what the priorities were for their ward areas.

·         The Director of Housing clarified the proposed rent and service charges percentage increase in terms of costs. On average a two-bedroom property house with the 2.7% increase converts to approximately £2.76 on average. Service charge increase was pence, the increased hostel rents were to cover additional financial pressures. To not increase the rent and service charges would mean that investment would have to be reduced from the proposed budget. It was noted that 99% of hostel rents were covered by Housing Benefit.

·         The core programme remained at a consistent level.

·         Talks were in progress with the Sustainability Section of Estates and Building Services regarding proposals to improve energy efficiency and reduce carbon emissions from existing properties including installing PV panels, further external wall installation, with the overall aim of reducing carbon emissions and reducing tenants’ heating costs.

·         Over 340 heat metres had already been installed in properties connected to the District Heating. Consideration would now be given to the other 2000 units on District Heating.

·         Increases to loft insulation and the installation of energy efficient boilers would also continue to take place. The district heating scheme was proposed to have further investment to upgrade pumps and heating exchanges in sub stations.

·         Time would be spent this year looking into what could replace gas Boilers e.g. hydrogen boilers and ground source heating. In addition, the installation of solar PV panels – possibly with battery storage – would be considered as longer-term solutions to provide renewable electricity for waylighting of communal areas. However, due diligence would need to be first carried out prior to any proposals.

·         It was noted that the figures for the demolition of Goscote House were provisional until a detailed specification could be provided, and procurement completed.

·         It was agreed that the Director of Housing would circulate papers to Members of the Commission about the free WIFI proposal and also papers on the social value of Goscote House were requested.

Discussion took place on the feedback provided from the consultation with Tenants and Leaseholders’ Forum in relation to rent and service charge proposals which was to;

     I.        Increase rents by 2.5% (not the proposed 2.7%)

    II.        Increase service charges by 1.7% (not the proposed 2.0%)

  III.        Increase the hostel rents by 0.0% (not the proposed 2.0%)

It was proposed that the Commission should support Tenants and Leaseholders’ Forum views. Upon being put to the vote the proposal was carried.

Agreed:

1.    To note the financial pressures on the HRA and comment on the proposals for delivering a balanced budget.

2.    To recommend to Council that the increases proposed by the Tenants and Leaseholders’ Forum should be supported.

3.    All other aspects of the budget were agreed.