Agenda item

The report analyses the key the issues that have led to the anticipated overspend and the resulting depletion of the Housing Revenue Account (HRA) balance by 31 March 2023 unless the recommended action is taken. 

The report requests that the Committee recommends a revised budget for eventual approval by Full Council.

(Councillor Cooper arrived at the meeting at 18:31pm)

The Interim Group Head of Finance and Section 151 Officer gave a brief introduction to the report where she advised members that it covered the change in the Capital financing of the Housing Revenue Account (HRA) which resulted in a minimum estimated outturn balance of £600,000 at the end of March 2023.  Members were asked to agree a revised budget for 2022/23 before consideration at Policy and Finance committee and final approval by Full Council in January 2023.

Members took part in a detailed debate where they scrutinised the figures detailed in the report and appendix A. Questions were raised regarding the table presented in the report at paragraph 3.5 where it detailed a difference of £1.1million and what had happened to this money. Clarity was sought on the meaning of the term ‘reprofiled’ used in paragraph 3.3 in relation to the Civica project. The repairs and maintenance budget had increased by £2million against the original budget along with a 10% increase in the supervision and management costs clarity was sought as to why these increases were now being seen. Discussion was also had regarding the rents received declining and was this due to residents being unable to afford their rents at the current time.

It was confirmed by officers that the rent figures were linked to the number of newly built properties being recorded as ‘live’. It was also confirmed that there was an overspend in the last financial year on the repairs and maintenance budget and this was a continuation of the situation that was being experienced now. Combined with when the original budget was produced in December 2021 at that time inflation was not at 10% or being predicted to rise to that level. It was also explained that the term ‘reprofiled’ was that the project had seen a delayed ‘go live’ date as it was originally planned for November 2022, however upon the Interim Head of Housing’s review when joining the council, he took the decision that the planned date in November 2022 was not achievable at that point and therefore reprofiled the projects ‘go live’ date accordingly.

The Chief Executive reemphasised that the significant rise in inflation costs had been on a such a high level it was unexpected back at the time the budget for 2022/23 was being forecast. He also restated that the building industry had been impacted early on by the increase of inflation and was still being impacted today. Further to this the council had had a relatively limited repairs programme previously and as a consequence, reactive repairs can then become disproportionate to the number of repairs the council completes. It was confirmed that officers are working hard to reverse this trend with an emphasis on a more proactive approach. Finally, he confirmed that members would receive further briefings in the New Year where these issues will be picked up and discussed.

 In returning to the discussion regarding the increase in supervision and management costs it was confirmed that the council still had a higher proportion of agency staff in place, however, this was being addressed through the trainee programme that had been introduced earlier on in the year. It was confirmed that it was expected that a number of permanent posts that were due to be advertised shortly could be filled by those on the trainee programme.

It was also queried by the Committee if the work regarding the Fire Door programme also included in the increased costs for the repairs and maintenance budget. It was explained that the funding for the Fire Door programme had come from the Capital budget and was, therefore, not included in the increased figures for repairs and maintenance. Finally, there was a discussion as to whether the number of void properties had had an impact on  the decrease in rents against budget. . It was confirmed that the number of void properties was low and therefore was not causing a significant impact on the figures.  The Committee requested that the Interim Head of Housing provide the void property figures to the committee by the end of December 2022.

The recommendations were then proposed by Councillor Madeley and seconded by Councillor Cooper

The Committee

          RESOLVED that

1)    the agreed the revision to the HRA Revenue Budget set out in Appendix 1; and

RECOMMEND TO THE POLICY AND FINANCE COMMITTEE that

2)    it reviews the changes to the HRA budget prior to approval by Full Council.