Agenda item

The Director of Housing submits a report setting out the proposed Housing Revenue Account (HRA) budget for 2021/22.

The Overview Select Committee is recommended to make any comments on the report, in particular the proposals for delivering a balanced budget and the proposed changes to rent and service charges.

The Director of Housing submitted a report which set out the proposed Housing Revenue Account (HRA) budget for 2021/22. The Overview Select Committee was recommended to make any comments on the report, in particularly the proposals for delivering a balanced budget and the proposed changes to rent and service charges.

Councillor Cutkelvin, Assistant Mayor for Education and Housing introduced the report. She gave thanks to the Director of Housing, Finance Team, and the tenants and leaseholders for meaningful engagement. It was acknowledged there were still some significant pressures to the budget, not least from the cumulative impact with right to buy. What had been put forward was a balanced budget that continued to invest in the quality and standards of stock.

The Director of Housing presented the report and highlighted the following points:

·         The headlines to the HRA budget proposal was that a balanced budget is proposed by recommending to only increase core rent by 1.5%, and service charge by 2%. On average tenants would see a £1.11 increase in their weekly rent.

·         Appendix D, Page 44 set out that Leicester City Council had significantly low rents with them being almost 50% cheaper than private sector rental rates in Leicester.

·         Over 60% of tenants would be unaffected by the proposal because they were in receipt of either housing benefit or universal credit.

·         The Council has been legally bound for the past four years of having to reduce the rents by 1% each year whilst having to manage ongoing pressures. The proposed increase would help to address a number of budget pressures, as set out at Page 33, 4.21 in the report, namely:

o   Ongoing Right to Buy stock loss and associated rental income loss of £1.135million

o   Inflationary pressures of £1.676million

·         In order to balance the budget it had been necessary alongside the proposed rent increase to identify and implement balancing items as outlined on Pages 34 and 35, 4.31 in the report. Headlines included:

o   Additional rent through properties acquired

o   A saving linked to the homes not hostels offer

o   Reductions to budget in repairs and gas materials, and the structural works budget.

·         The overall proposed capital budget was £87.8million with £70million of the budget related to Council house acquisitions and new build, with the remainder mostly going into property improvements. The additional commitment would take the Council’s investment into new council housing to £100million, set out in more detail in Appendix B, page 41 to the report.

·         The Council would continue to invest at same level in existing stock with ongoing programs involving kitchen, bathroom or boiler replacements, and rewires.

·         Main changes to the budgets included an increase in the roof budget of £150k to £900k linked to an increase in need for roof replacements.  The was also a proposed decrease in the fire risk budget due to reduced demand following strong investment for a number of years in communal area programmes of fire related improvements.

·         The capital budget included an ongoing budget proposal for public realm investment in the St Matthews and St Peters areas with £1.9million proposed to be invested in Council housing estates.

·         A new budget was proposed to be added, linked to retrofitting to address fuel poverty and climate emergency on existing stock, outlined on Page 54, App F, priorities 37 – 39. The Technical Team in Housing were working with the Energy Team to procure an organisation to lead on the decarbonisation of Council’s housing stock by 2030. There would be an additional capital budget need in future years for this work.

·         It was proposed in the capital budget to add a budget associated to a pilot on new fencing piece of work that would help drive and determine what the council housing fencing strategy would be going forward.

·         Included was an additional budget link to ongoing work to change the family temporary accommodation offer in moving to homes not hostels, and enhancing the Bridlespur Way accommodation offer.

·         Attention was drawn to the financial pressure on the HRA proposals for delivering a balanced budget, and the consultation feedback at Appendices G and H from the Housing Scrutiny Commission, and Tenants and Leaseholders’ Forum on Pages 60 and 63 in the report.

·         It was noted that whilst there was reservation from both groups on the 1.5% rent increase due to the current economic climate, and the impact on vulnerable people, overall both groups supported the budget proposals, including the rent increase.

The Chair invited Members to comment.

Councillor Westley, Chair of Housing Scrutiny Commission welcomed the report which had received thorough scrutiny. Also, whilst no one wanted to see rent increases, tenants’ representatives had welcomed the report and had noted the requirement to invest in the Council’s housing stock.

In response to questions the following points were made:

·         With regards to adaptations for those with disabilities, it was commented on that the budget was being reduced for existing disabled people with a view to putting £300k into a new budget for adapting properties. The Director responded that investment of over £1.2million in adaptations for existing tenants had been made for some years, and requests for adaptations were up-to-date. Some money could now be diverted for people who were waiting for properties due to the lack of adapted properties coming forward. £500k had already been put into the budget in relation to completing extensions as part of the acquisitions programme, along with a review of those most in need on the Housing register. It was stated the £300k was a starting point with a review for the need for additional funding going forward.

·         The 2% increase in service charge was on all council tenancies and not just elected ones.

·         It was noted that Border House was closed in February 2020. The pausing of any evictions over rent arrears had seen a reduction in family homelessness during the past year. During that period people had been moved on positively and gradually people had been moved out of Border House. It was further noted there were no plans to utilise the building and would receive corporate consideration as to what should happen to the site, but it would not be associated to housing the homeless. Information on when the decision was made would be provided to Councillor Porter.

·         As an update, the purchase of Hospital Close had progressed well and the Council was at the point of tying up legal aspects, and was a prime example of utilising 170 units for those most in need that would probably have been knocked down if the Council hadn’t stepped in to purchase them.

·         For a 10-year period beyond the Council purchasing a property, there was a cost floor associated with buying them back under Right-to-Buy, namely the purchase price paid for the property.

·         The priority to ‘provide 1,500 more council, social and extra care homes’ was referenced (Page 47). Since the manifesto commitment officers had been working hard to deliver to the commitment in the first year, and 340 units had been delivered, and there would shortly be a press release focussing on Ross Hill Crescent new build houses and other properties coming available. Work would continue over the four-year duration of the commitment and would try to exceed the 1,500 manifesto commitment.

·         The priority to ‘ensure that no-one has to sleep rough on our streets’ (Page 47) was also highlighted, and it was stated that there were still people who were sleeping on the streets, even one camping outside of the Dawn Centre. It was noted on the annual count the authority had the lowest number of rough sleepers on the night for a number of years at 12 people. The Commission was assured the Council had the ability and capacity to take anyone in and the ‘everyone in’ offer continued. Sadly, it was reported there were some individuals who would not accept offers of accommodation or engage until there was a change in their own personal circumstances.

·         Reference was made to a report from the Fire and Rescue Service around culture, ethnicity and response. The Director stated he would welcome a copy of the report. It was further noted the Council met regularly with Leicestershire Fire and Rescue Service over existing stock and had a strong relationship with them.

The Chair commented that there were report of people living in appalling private sector accommodation, and it was good to see Leicester City Council’s public housing being looked after and invested in to a high standard.

The Chair noted the proposal for a balanced budget, and comments made by the Overview Select Committee, the views of the Housing Scrutiny Commission, and the Tenants and Leaseholders’ Forum that the proposed rent increase was valid and ensured continued investment in housing stock.

AGREED:

That:

1.    The report be noted.

2.    The proposals for delivering a balanced budget, and the proposed changes to rent and service charges be noted.