Agenda item

This report sets out the 2025/26 revenue and capital budgets for this Committee to consider and recommend for submission to the Policy and Finance Committee on 13 February 2025 so recommendations can be made to Full Council on 26 February 2025.

The Group Head of Finance and Section 151 Officer was invited by the Chair to present the report, which set out the 2025/26 Housing Revenue Account (HRA) revenue and capital budgets for inclusion in the Council’s 2025/26 budget and rents and service charges for 2025/26.  The agreed budgets will be recommended for submission to the Policy and Finance Committee on 13 February 2025 so recommendations can be made to Full Council on 26 February 2025. 

He explained that all housing and garage rents, and existing service charges were proposed to be increased by 2.7%, the maximum amount that the Housing Regulator would allow, and consisted of a CPI increase of 1.7% plus an additional 1% on top.  Members were also asked to approve the implementation of the new service charges. He explained that whilst he understood that members may not wish to increase tenants’ rents in light of the cost-of-living crisis, he pointed out the impact on the HRA’s financial position following Government imposed rent freezes between 2016 and 2020.  Had the Council been able to increase its rents by 1% per annum during those years that would have made a significant impact to the HRA reserve balance of about £1.4m.  If members chose to freeze rents there would not be an opportunity to recover from the loss of income in future years and members were urged to accept the recommendations in the report.  The HRA budget proposed a surplus of approximately £660k during 2025/26 taking the HRA balance to £1.5m, which was still below the £2m minimum balance.  Referring to Movements at paragraph 4.2 there had been some realignment between the Service and Management costs and the Repairs and Maintenance costs, largely driven by the insourcing of the Repairs and Maintenance contract

Moving to the Capital budget, one of the recommendations was to reprovision the amount of money in the Housing Improvement Works budget.  This would be dealt with when the outcome of the Warm Homes Social Housingfunding bid was considered by the Committee and the required adjustments to the budget made at that time. 

The recommendations were proposed by Councillor Butcher and seconded by Councillor Wiltshire.

The Chair invited questions and comments from members.  A member asked if the computer software and licences budget of £134k, which seemed high, were reoccurring costs. The Group Head of Housing, Wellbeing and Communities advised he would provide an answer outside of the meeting to the Committee.  In response to a question concerning the introduction of de-pooling charges, he explained that it was expected that 74% of tenants would not be impacted by the increase in charges as the full cost would be met through Housing Benefit and Universal Credit.  In terms of affordability, a cap of £10 had been applied to the weekly service charge and 10 % of the total service charge revenue will be set aside for a hardship fund for individual cases.  This did not apply to garage rents, as they did not have any utilities.  The Group Head of Finance and Section 151 Officer clarified that the 2023-2024 rent increase was 7.7%.   

          The Committee

RECOMMENDS TO THE POLICY AND FINANCE COMMITTEE for inclusion in the overall Budget report on 13 February 2025:

(a)    the 2025/26 HRA Revenue Budget set out in Appendix A;

(b)    that HRA rents for 2025/26 are increased by 2.7%, to an average rent of £115.64 per week in accordance with the Regulator of Social Housing guidance (Rent Standard 2020 and Limit on annual rent increases 2025-26 publications);

(c)    that HRA garage rents are increased by 2.7% to an average rent of £16.04 per week (excluding VAT);

(d)    that existing HRA sheltered service charges for communal heating, lighting and water/sewerage charges be increased by 2.7% plus additional increases on a scheme-by-scheme basis to cover retrospective increases in utility costs, with the aim of balancing costs with income;

(e)    that new communal service charges are introduced from 1 April 2025 as agreed in the Service Charge Policy and De-pooling of Charges report to Housing and Wellbeing Committee on the 18 June 2024. The new de-pooled charges will include grounds maintenance, communal cleaning, window cleaning, door entry systems, fire alarm systems maintenance, lift maintenance, TV aerials, and emergency lighting tests; and

(f)     the 2025/26 HRA Capital Programme set out in Appendix B, including the reprovisioning of £2.2m of the HRA Housing improvement works to the Warm Homes programme should the 2025/26 bid for the Warm Homes Grant (Social Housing Funding Phase 3) be successful.

(g)    and notes that the HRA 2025/26 Budget will provide a surplus of £0.66m which will increase HRA balances to £1.55m bringing them closer to the Council’s set minimum level of HRA balances of £2 million.