22 01 2004

Consideration was given to a joint report of the Financial Services Manager and the Housing Services Manager (a copy of which is affixed in the Minute Book as Appendix "A"), which considered the Housing Revenue Account (HRA) budgets for 2004/05 and made recommendations on rent levels for that financial year.

 

Members were advised that the housing maintenance budget for 2003/04 was £2.645 million, which represented an increase of £0.105 million on the original budget, the principal cause of this increase being higher than anticipated void property expenditure. An increase of 22% on void property expenditure was anticipated for the year but the revenue cost increase was expected to be more than compensated for by an overall projected surplus on the HRA of £206,000 against a planned deficit of £5,000 in the original budget for 2003/04.

 

The proposed housing maintenance budget for 2004/05 was £2.515 million representing a £130,000 decrease on the 2003/04 revised estimate. This was largely due to a decrease in maintenance and related staffing costs due to the proposed transfer of the Council's tower blocks.

 

It was anticipated that the HRA balance level would increase to £896,000 by the end of the current year. This was primarily due to a one-off payment to the HRA for its set-up costs in relation to the supporting people scheme. The HRA balance was predicted to reduce to £638,000 by the end of 2004/05. This projected balance level was above the 5% of budgeted expenditure (£530,000) currently recommended by the Borough Treasurer as a minimum prudent level. It equated to an average of £187 per property, which was well below the national average of £300 per property. Members were advised that maintaining prudent HRA levels was regarded as important in order to safeguard against the financial effect of risks identified within the HRA Risk Assessment.

 

Members were advised that, for the first time, the HRA in 2004/05 would show a negative figure alongside the subsidy line in the HRA budget of £2.155 million. However, this would be completely offset by the removal of the rent rebates expenditure from the HRA as of 1 April 2004.

 

Members were advised that the Government's rent restructuring policy had come into effect in 2002/03 although authorities had been given the option not to implement the restructuring on an individual basis until 2003/04. This Authority agreed to the implementation for 2003/04.

 

 In order for rent convergence to be achieved by the Government deadline of 2012, it was recommended that the proposed rental increase in accordance with 'rent restructuring' guidelines (zero to £3.14 per week) be approved together with 2.5% rental increase for garages, car ports, parking lots and four non-HRA properties.

 

 

RECOMMENDED: That with effect from 1 April 2004

 

(i)                 Council dwelling rents be increased in line with national 'Rent Restructuring' guidelines – the effect of these proposals for 2004/05 ranging from a zero rent increase to a maximum increase of £3.14 per week; and

 

(ii)               Garage, carport and parking lot rents increase by 2.5%.

 

 

Further consideration was given to the joint report of the Financial Services Manager and the Housing Services Manager (a copy of which is affixed in the Minute Book as Appendix "A").

 

Members were advised that the proposed HRA Capital Programme for 2004/05 totalled £3.467 million and was primarily funded from the Major Repairs Allowance (MRA). This would decrease by approximately £110,000 in 2004/05 to £2.312 million due to larger than normal reduction in stock levels in 2002/03 and a reduction in the allowance per property as calculated by the Office of the Deputy Prime Minister. The MRA was a 'ring fenced' capital grant for expenditure on housing stock and had been introduced as part of a move to Resource Accounting within the HRA in 2001/02.

 

The remaining elements funding the proposed Capital Programme for 2004/05 (£1.155 million) were to be financed by revenue contributions from within the HRA of £400,000 and £755,000 from the supported Housing Capital allocation. This allocation was similar in nature to the Basic Credit Approvals awarded in previous years and an allowance had been included in Housing Subsidy to cover the associated borrowing costs.

 

 

RESOLVED: That the Policy and Organisation Board be requested to approve the Housing Board's requirements for:

 

a)     the Housing Revenue Account Budget (revised 2003/04 and estimate 2004/05); and

 

b)  the Capital Programme (HRA) 2003/2004 to 2009/10.

 

 

 

 

Consideration was given to a report of the Deputy Chief Executive and Borough Treasurer (a copy of which is affixed in the Minute Book as Appendix "B").

 

Members were advised of an error in the report and that paragraph 3.1 should read "The revised budget for 2003/04 for this Board is £540,530, an increase of £135,700 (33.5%) on the original budget for 2003/04 of £404,830".

 

 The proposed budget for 2004/05 was £539,220, an increase of £134,390 (33.2%) on the original budget for 2003/04 of £404,830 and a decrease of £1,310 (0.24%) on the revised budget for 2003/04 of £540,530.

 

Members were advised that the main variance in the Housing General Fund budget related primarily to the homelessness budget and in particular bed and breakfast expenditure. From 1 April 2004 the ODPM would be introducing a suitability of accommodation order, which would have the effect of restricting the use of bed and breakfast accommodation. It was reported that the Council's policy of increasing its use of self-contained private rented and lodging accommodation would continue to be developed in order to provide good quality temporary accommodation and minimise net expenditure.

 

RESOLVED: That the Policy and Organisation Board be requested to approve:

 

a)     the  requirements of the Housing Board for the revenue budget (revised 2003/04 and estimate 2004/05);

 

b)     the requirements of the Housing Board for the Capital Programme 2003/04 to 2009/10; and

 

c)      the fees and charges for 2004/05 as set out in the report of the Deputy Chief Executive and Borough Treasurer.

 

 

 

CHAIRMAN