20 01 2005

The Mayor (Councillor Edwards)(ex-officio) (P), Chairman of the Policy and Organisation Board (Councillor Hook)(ex-officio) (P), Councillors Burgess (P), Carter (P), Mrs Champion (P), Mrs Cully (P), Davis (P), Foster (P), Gill (P), Philpott (P), Rigg and Mrs Wright (P).

 

 

 

 

 

There were no declarations of interest.

 

 

 

 

 

Consideration was given to a joint report by the Borough Treasurer and Housing Services Manager (a copy of which is affixed in the Minute Book as Appendix ‘A’), which considered the Board’s revised 2004/2005 budget and the 2005/2006 budget for the Housing Revenue Account and made recommendations on rent levels for the next year.

 

Members were advised that:

 

The Revised council house maintenance budget for 2004/2005 was £2.597M, an increase of £82,000 on the original budget. The principal cause of this was an increase in costs due to expenditure on non-capital works. The council house maintenance budget 2005/2006 was £2.630M representing a £33,000 increase on the 2004/2005 revised estimate.  This increase was largely due to recharge costs from housing and other corporate areas.

 

It was anticipated that HRA balance levels would decrease slightly to £890,000 by the end of the current year. This was primarily due to a reduction in debt management and associated interest costs now that the HRA was debt free. The HRA balance would increase to £933,000 by the end of 2005/2006. This projected balance level represented an increase on what had previously been considered necessary and was above the minimum prudent level. £933,000 equated to an average of £280 per property, which was only just below the national average of £300 per property and represented 7.30% of budgeted expenditure. The increase in the balance was in line with the recommendations laid out in the Audit Commission annual letter of October 2003.

The Capital Programme for 2004/2005 to 2009/2010 was shown on page 84 of the draft budget book. The HRA Capital Programme totalling approximately £3.817M in the revised budget for 2004/05 was funded from the Major Repairs Allowance (MRA) £2.177M, supported capital expenditure £791,000, revenue contributions £285,000 and capital receipts £564,000. This was an increase on the original budget and primarily due to the additional capital receipts, which the council had been able to retain as a result of it being free of long-term debt. It was currently projected that an additional £3M would be available over a 3 year period and the capital budget for these years reflected this increase in available funding. The Capital Programme for 2005/06 was £4.447M and would help the Council progress further towards the Decent Homes Standard.

 

The expenditure for 2005/06 of £4.497M was to be financed from MRA £2.1M, revenue contributions from within the HRA of £512,000, £822,000 from the supported Housing Capital allocation and £1.063M from useable capital receipts.

 

The general formula for the subsidy calculation remained the same for 2005/06 with the exception of the removal of a one off payment for anti-social behaviour. Rent rebates had been transferred to the General Fund and removed from the HRA and the HRA subsidy determination, resulting in a net payment due to the Government.  The original estimate 2004/2005 of negative Housing Subsidy payable had been £2,155,000 although as a result of a fall in the number of properties affecting subsidy (and in particular the cost of capital calculation) in both 2003/2004 and 2004/2005 this had increased to £2,365,000 in the revised estimate.  The position did, however, improve in 2005/2006 when the payment due was estimated to decrease to £2,039,000..

 

The formula for Maintenance allowances had been expanded and the     allowance for this authority had increased from £781 per property in 2004/05 to £957 per property an increase of 22%. The management allowance formula had also been extended and revised and now utilised the 2004 index of deprivation instead of the previous 2000 index. The allowance had increased from £440 per property in 2004/05 to £482 per property in 2005/06, an increase of 9.5%.

 

The Government had stated that it wanted rent restructuring to be completed by March 2012. However it had been decided that there must be a limit on how much an individual tenants rent may increase. The limit was set at RPI + 0.5% +/- £2 per week. This did mean that for many authorities it would take longer than 10 years. This authority believed that all bar a very small percentage of properties would achieve restructuring by 2012.

 

This Authority had applied property specific rent restructuring from 2003/04 using the governments prescribed formula and calculated that an average increase of 3.0% was required this year and a similar increase in future years until 2012 to fully comply with rent restructuring and achieve rent convergence. If a lower rent increase were levied it would lead to a widening of the gap between this Council’s average rent levels and those it was expected to reach under rent restructuring which would lead to greater increases being required in the future. In addition less income would be available to support housing repairs and other expenditure. A rent level higher than that calculated by the formula would result in the rent subsidy limitation rules coming into effect with the resulting loss of subsidy.

 

It was proposed to increase rent levels for garages, carports and parking 

lots by 3.0%.

 

There were a small number of other committee properties where the rent levels were assessed in line with HRA properties.  The proposal was to also increase these by 3.00%.

 

RECOMMENDED: That, with effect from 1 April 2005:

 

a)     the average weekly Council Dwellings rent increase by 3.0%; and

 

b)     garage, car port and parking lot rents increase by 3.0%

 

 

 

 

 

 

 

Consideration was given to a joint report by the Borough Treasurer and Housing Services Manager (a copy of which is affixed in the Minute Book as Appendix ‘B’).

 

Members were advised that:

 

The revised budget for 2004/2005 for this Board was £488,570, a decrease of £50,650 (9.4%) on the original budget for 2004/2005 of £539,220.

 

The budget for 2005/2006 for this board was £441,760, a decrease of £97,460 (18.0%) on the original budget for 2004/2005 of £539,200 and a decrease of £46,810 (9.6%) on the revised budget for 2004/2005 of £488,570.

 

The past year had seen the levels of homeless applications remain fairly static.  The costs for using commercial Bed and Breakfast continued to rise and the Council had attempted to counter this by adopting the Office of the Deputy Prime Minister’s recommendation strategy for Homelessness.  This involved the use of self-contained private rented accommodation.  The result of this was that increased levels of Housing Benefit subsidy were paid to the Council thereby reducing the costs of the Homelessness budget.  There was a stable requirement for approximately 40 units of emergency accommodation at any one time, and the Council was currently progressing the option of providing a hostel in order to reduce reliance upon commercial bed and breakfast and save costs.

 

The draft capital programme was presented for approval in Appendix 3 of the report. 

 

RESOLVED:  That the Board recommend to the Policy and Organisation Board its requirements for the Revenue Budget (revised 2004/2005 and estimated 2005/2006) and the Capital Programme 2004/2005 to 2010/2011.

 

The meeting commenced at 5.30 pm and concluded at 5.33 pm.