Agenda item

Consideration was given to a report of the Director of Finance which set out the latest Housing Revenue Account (HRA), the detailed budget estimates for 2021/22, the strategic estimates for the four years 2022/23 through to 2025/26 and outturn estimate for 2020/21. The report also set out the recommended

dwelling, non-dwelling rents and service and concierge charges to be applied from April 2021.

The Cabinet Member for Housing presented the report.

The Select Committee noted the report set out the HRA proposed 2021/22 original budget and the forecast outturn for 2020/21 along with the provisional strategic budgets for 2022/23 through to 2025/26.

HRA activities were a key element of the Council’s Housing Strategy (approved by Council on 10 July 2019) which aimed to provide a diverse Oldham housing offer that was attractive and met the needs of different sections of the population at different stages of their lives.

After taking all relevant issues into account, the projected financial position for 2020/21 was estimated to be a £1.384m positive variance when compared to the original budget forecast for 2020/21 approved at the Budget Council meeting, 26 February 2020. Most of this variance was attributable to the re-profiling of HRA funded capital schemes into later years due to revisions to planned spending profiles. The balance at the end of 2020/21 was projected at £19.614m.

The financial position for 2021/22 showed an estimated HRA closing balance of £17.463m which was sufficient to meet future operational commitments and the potential financial pressures identified in the risk assessment.

The 2021/22 position had been presented after allowing for an increase in dwelling rents of 1.5%, an increase in non-dwelling rents in line with individual contracts, the freezing of all service charges and the setting of Extra Care Housing concierge charges to fully recover costs.

Members noted that the Government had previously advised that PFI properties were exempt from Central Government’s 1% Social Rent Reduction policy. This policy ended on 31 March 2020. Since this date, Central Government had reverted to its pre-2015 guidance for the period 2020-2025 for all properties, confirming all rents were calculated based on the Consumer Price Index (CPI) rate at September of the preceding year plus 1%. All Oldham’s budget projections for the 2021/22 budget would follow the rent  setting guidance of CPI plus 1%, resulting in an increase of 1.5% (CPI was taken as at September 2020).

The financial projections for the HRA over the period 2020/21 to 2025/26 showed an overall reduction in the level of balances from £19.614m at the end of 2020/21 to £3.906m at the end of 2025/26. HRA resources were to be used to support several major approved housing capital projects including development within the town centre and on numerous smaller sites around the borough. There was also a commitment to purchase currently empty

properties owned by private sector landlords to increase the number of Council owned housing stock.

The HRA detailed budget for 2021/22 and strategic estimates for the four years 2022/23 to 2025/26 and the outturn estimate for 2020/21 were presented to the Select Committee for consideration and comment.

Member were informed that, as set out in paragraph 2.10, homes had been acquired at Primrose Bank. The Council had now taken possession of seven of the new homes at Primrose Bank, which had the benefit of additional energy-saving measures under the Red Wolf Programme and these had now been let. It was anticipated that the remaining eleven would be handed over by mid-February.

Members noted that paragraph 2.15 showed the projection for the HRA moving forward. Income for the HRA was interest and investment income, and also included the rents paid to the Council by tenants. It was projected that the balances would reduce in 2023/2024, to reflect the investments being made as part of the Creating a Better Place initiative to provide new homes through implementing the Housing Strategy. This would provide much-needed homes for residents.

RESOLVED that the following be accepted:

1.    Forecast HRA outturn for 2020/21 (as per Appendix A)

2.    Proposed HRA budget for 2021/22 (as per Appendix B)

3.    Strategic estimates for 2021/22 to 2025/26 (as per Appendix D)

4.    Proposed increase to dwelling rents for all properties by 1.5%.

5.    Proposed increase to non-dwelling rents as per individual contracts.

6.    Proposal that service charges were unchanged.

7.    Proposal to set Extra Care Housing concierge charges to fully recover actual costs; and

8.    That the report be commended to Cabinet.