25 01 2006

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

 

 

 

 

Apologies were received on behalf of the Mayor and Councillor Mrs Salter.

 

 

 

 

There were no declarations of interest.

 

 

 

 

There were no deputations.

 

 

 

 

 

 

 

The Board received the Housing Services Manager’s report (a copy of which is attached in the Minute Book as Appendix ‘A’), which considered the Board’s revised 2005/2006 budget and the 2006/2007 budget for the Housing Revenue Account and made recommendations on rent levels for 2006/07.

 

 

Members were advised that the revised council house maintenance budget for 2005/2006 was £2.587M, a reduction of £0.043M on the Original budget. The principal cause of this was a change in the apportionment of recharging from the Housing administration accounts. The council house maintenance budget for 2006/2007 was £2.525M representing a £0.062M reduction on the 2005/2006 revised estimate.  This reduction was due to the apportionment of recharges from the housing admin accounts.

 

It was anticipated that HRA balance level would decrease to £790,000 by the end of the current year. The HRA balance would increase to £820,000 by the end of 2006/2007. £820,000 equated to an average of £251 per property and also represented 5.20% of budgeted expenditure. The balance was also in line with the recommendations laid out in the Audit Commission annual letter of October 2003, which was considered adequate for present needs.

 

The Capital Programme for 2005/2006 to 2010/2011 was shown on page 84 of the draft budget book. The HRA Capital Programme totalling approximately £4.497M in the revised budget for 2005/06 was funded from the Major Repairs Allowance (MRA) £2.100M, supported capital expenditure £0.822M, revenue contributions £0.410M and capital receipts £1.165M. The Capital Programme for 2006/07 was £4.500M as the Council worked to achieve the Decent Homes Standard by December 2010.

 

The expenditure for 2006/07 of £4.500M was to be financed from MRA £2.154M, revenue contributions from within the HRA of £400,000. The level of SCE (supported capital expenditure) was now wholly determined by the Regional Housing Boards and, at the time of writing the report, the level of borrowing approvals was still unknown. The remainder of the programme would be financed from useable capital receipts.

 

The Government had published the Final Housing Revenue Account Subsidy and Item 8 Determinations for 2006-07 and the calculations for 2007-08 would probably be the same. General formula for the subsidy calculation remained the same for 2006/07.

 

There had been a slight increase in the formula for Maintenance allowances and the allowance for Gosport Borough Council had increased from £957 per property in 2005/06 to £1017 per property in 2006/07, an increase of 6%. The management allowance formula had also been increased. The allowance had increased from £482 per property in 2005/06 to £513 per property in 2006/07, an increase of 6%. These increases were significantly lower than the previous two years.

 

The Major Repairs Allowance (MRA) had increased from £639 per property in 2005/06 to £645 in 2006/07, an increase of only 1%. The MRA provided the Council with the resources to maintain the condition of the housing stock over the long term. 

 

In order to maintain the move towards target rents in equal annual steps, a national average increase of 5.4% would be needed. However the ODPM had estimated by using the RPI+0.5%+£2 rule this would limit the increases to an average of 5% by using the tolerances within the system. The guideline rent was a major factor in determining the level of subsidy an authority received. The guideline rent, set by the ODPM, for Gosport Borough Council had increased by 7.5% in 2006/07 and the impact of this when input in subsidy calculation was a net loss of subsidy to Gosport of £165,000 for 2006/07. Aligning of guideline rents to actual rents was a fundamental part of rent restructuring.

 

The introduction of the new proposals meant target rents had increased significantly and actual rents would have to increase by £2.87 on average or 5% in order for Gosport to achieve rent convergence by 2012. It was a Government requirement that the Council achieve rent convergence by 2012, so it would have to implement the necessary level of rent increase each year to achieve that fundamental objective. If the Council failed to implement the required annual rent increases it may face financial penalties, which would impact on its ability to achieve the Decent Homes Standard by 2010.    

 

It was proposed to increase rent levels for garages, carports and parking lots by 5% from April 2006. 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 5%.

 

A net loss of subsidy to Gosport of £165,000 for 2006/07 was disappointing, but the Council had a robust HRA Business Plan and would continue to make the necessary investment in its housing stock to keep on-track to achieve the Decent Homes Standard by 2010. 

 

 

RECOMMENDED:  That, with effect from 3 April 2006:

 

a)

the average weekly Council Dwelling rent increase by 5.0%; and

 

 

b)

garage, car port and parking lot rents increase by 5.0%.

 

 

 

 

 

The Board received the report of the Housing Services Manager (a copy of which is attached in the Minute Book as Appendix “B”), which considered the Board’s revised 2005/2006 budget and the 2006/2007 budget for the Housing General Fund with budget recommendations being made to the Policy and Organisation Board for inclusion in the Council’s overall budget proposals.

 

Members were advised that the revised budget for 2005/2006 for this Board was £515,810, an increase of £74,050 (16.76%) on the original budget for 2005/2006 of £441,760.

 

The budget for 2006/2007 for this board was £533,640, an increase of £91,840 (20.79%) on the original budget for 2005/2006 of £441,760 and an increase of £17,830 (3.5%) on the revised budget for 2005/20065 of £515,810.

 

The draft capital programme for the Housing Board for 2005/06 to 2011/12 was contained within the draft budget book for approval. The Policy and Organisation Board would subsequently consider the overall programme in the light of available financing resources.        

 

 

RESOLVED:  That the Board recommend to Policy and Organisation Board its requirements for the Revenue Budget (revised 2005/2006 and estimate 2006/2007) and the capital programme 2005/2006 to 2011/2012.