Agenda item

The Business Manager - Financial Services presented a report in relation to the Housing Revenue Account Budget and rent setting for 2019/20.  The report showed the actual outturn of the Housing Revenue Account for the year 2017/18; examined the proposed income and expenditure on the Housing Revenue Account for 2019/20; and in accordance with Section 76 of the Local Government and Housing Act 1989, made recommendations to avoid a deficit on the Housing Revenue Account.  The report also set out indicative figures of income and expenditure for the financial years 2020/21 to 2022/23.

The report also made recommendations to set rent levels and service charges with effect from April 2019 and sought to determine charges for garage rents, plots and garage ports and housing support service charges.

In respect of the annual management fee payable to Newark and Sherwood Homes in accordance with the Management Agreement it was reported that this was still to be formally agreed with Newark & Sherwood Homes.

The setting of the Housing Revenue Account budget and the approval of rent levels would be presented to the Full Council Meeting in February 2019 which would allow the required time to notify tenants of proposed changes to rents in accordance with the legislation. 

Since April 2012, following the housing finance reforms, the Housing Revenue Account had been operating within a 30 year self-financing HRA Business Plan. Officers had been working with colleagues from Newark and Sherwood Homes to monitor and review the Business Plan, which informed the 2019/20 budget process and medium term financial plan 2020/21 to 2022/23.  The HRA budget proposed in the report was based on the Government announcement made on 8 July 2015, stating that local authorities must secure that the amount of rent in the relevant year by a tenant of social housing is 1% less than the amount that was payable by the tenant in the previous 12 months.  This 1% per year rent reduction commenced in 2016/17 and would continue for 2019/20. The cumulative impact of the 1% rent reduction had been factored onto the HRA Business Plan and was reflected in the proposed budget.

It was also noted that in 2019/20, 53 Mondays fall in the financial year which had created further issues which required consideration. In light of this the budget had been prepared with rent for 52 weeks which had also been factored into the HRA Business Plan.

AGREED (unanimously) that the following recommendations be made to Council at its meeting on 12 February 2019:

i.                    the Housing Revenue Account budget for 2019/2020 be approved; 

ii.                  delegated authority be given to the Director of Governance and Organisational Development to agree the Management and Maintenance Fee with Newark and Sherwood Homes which was to be included within the Housing Revenue Account budget for 2019/20;

iii.                additional payments for the management of Gladstone House be made to Newark and Sherwood Homes;

iv.                 the rent of all properties in the Housing Revenue Account, as at 31 March 2019,  be decreased by 1% in accordance with Welfare Reform and Works Act;

v.                   the rent on temporary accommodation be increased by CPI plus 1% (3.4% from 1 April 2019;

vi.                 that all services charges and support charges should be increased by CPI plus 1% (3.4%) with effect from April 2019; and

vii.       that garage, garage plot and garage port rents are increased by 3.4% in line with CPI + 1% with effect from 1st April 2019. 

Reason for Decision

To advise Members of the proposed HRA budget for 2019/2020, the rent levels, garage rent, garage plots, garage ports and Housing Support Service Charge levels and for all to be recommended to Full Council.