Agenda item

[To consider the Housing Revenue Account Business Plan 2023-2024 including rent and service charges.  The report going to Cabinet on 18 January 2023 is attached].   

The Cabinet Member for Resources and Digital City presented the report on the Housing Revenue Account (HRA) Business Plan 2023-2024 including rent and service charges.  The Council appreciated the difficult times people were living in and the report recognised that fact. The plan enabled the Local Authority to meet their housing requirements and the needs of tenants.   

The Director of Finance remarked that the report set out the HRA budget for next financial year and the longer-term business case.  There had been an error in one of the appendices which was circulated with the original report.  A revised appendix had been issued.  She stated that the financial modelling underpinning the budget proposals was based on a set of key assumptions.  Inflation was one of the key factors.  Increasing inflation had put pressures on the revenue and capital costs.  The report outlined the inflation levels assumed over the medium term.  The assumptions would need to be kept under review in light of the economic climate. 

The Director of Finance commented that the HRA took into account potential right to buy sales and the purchase of new build of properties to offset the reductions.  The Council were forecasting an overall decline of housing numbers over the next five years.  This in turn had an impact on rental income.  The HRA Capital Programme relied on borrowing to fund the investments and therefore interest forecasts were another key element of the financial assumptions.  The report set out the forecast over the medium term but these would have to be kept under review.  Interest rates had increased over the last twelve months.    

The Director of Finance remarked that the expenditure budgets had been formed by advice and information through Housing Strategy colleagues and from Wolverhampton Homes.  The plan sought to ensure that the Council had sufficient resources for revenue, such as repairs and maintenance.  The levels of reserves had been reviewed in light of the risks facing the HRA.  It was her advice that the £7 million in reserves was adequate at the current time.  Having taken into account the business requirements, the proposal was to increase rates by 7%.  The report outlined the background to the cap on the rents and the consultation the Government undertook which led to a rent cap being imposed of 7%.  It was recognised that in light of the increased costs in living that tenants could struggle to pay additional rent.  There was a proposal in the report to set aside a funding pot to provide support during the next financial year, which would be kept under review. 

The Director of Housing and Environment commented that the Council did have an ageing stock of social housing.  The HRA paid for refurbishments, repairs of voids, improvements, de-carbonisation and energy efficiency, the replacement programme for non-traditional housing and new build programmes.  Even with that investment there was still an estimated overall reduction in housing stock. 

The Vice-Chair commented that almost a quarter of all homes in the City were managed by Wolverhampton Homes.  He stressed the difficult times people were living in.  Council Tax rates and Social Housing rates were increasing by the maximum possible allowed.  He was of the view that had the Government not imposed a cap on social housing rate increases, that rents would have increased by a higher amount.  The increase would impact on thousands of residents living in Wolverhampton.   He commented that this was a choice of the Council and it did not need to take this particular course of action.  Referring to capital expenditure, in his own Ward, he was not certain where this was being spent.  He had been trying for several months to have some new garage doors installed at some of the garage sites.  Some of the garages did not have any doors on them. 

The Vice-Chair commented that he felt that there had been a disproportionate amount of investment on the East of the City, compared to the West.  He felt the investment should be spread across the City in all Wards, with every Wolverhampton Homes tenant having value for money from the rents they paid.     

A Panel Member stated that the Council were combatting a 11.1% inflation rate at the present time against a back drop of an inflation rate of 9.2% over the last few months.  Over the last twenty years the average inflation rate had been 2.7% in Britain.

Members discussed the cost of living, the rising rates of inflation, the importance of maintaining investment in the Social Housing in the City and the needs of other residents in different types of housing.

The Cabinet Member for Inclusive City Economy spoke on the packages of support that would be available to vulnerable residents.  It was important that residents which were struggling contacted the Council to ensure the Council could help them where possible. 

The Cabinet Member for Digital Resources and Digital City commented that the Council had no choice other than to increase the rents due to the rising costs of inflation.  A support fund was available for residents which would be reviewed as time progressed.

A Panel Member quoted statistics comparing housing rents to other Councils in England.    

The Chair spoke on the challenges in Social Housing with regards to maintenance and investment. 

Resolved: That the report be noted.