Agenda item

A report presenting the Housing Revenue Account (HRA), the detailed budget estimates for 2025/26, the strategic estimates for the four years 2026/27 through to 2029/30 and outturn estimate for 2024/25.

The report sets out for the Housing Revenue Account (HRA), the detailed budget estimates for 2025/26, the strategic estimates for the four years 2026/27 through to 2029/30 and outturn estimate for 2024/25. The report also sets out the recommended dwelling, non-dwelling rents and service and concierge charges to be applied from April 2025.

The report sets out the HRA 2025/26 proposed original budget and the forecast outturn for 2024/25. The opportunity is also taken to present the provisional strategic budgets for 2026/27 through to 2029/30. HRA activities are a key element of the Council’s Housing Strategy (approved by Council on 10 July 2019) which aims to provide a diverse Oldham housing offer that is attractive and meets 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 2024/25 was estimated to be a £1.643m favourable variance when compared to the original budget forecast for 2024/25 approved at the Budget Council meeting, 28 February 2024. Of this variance, £0.531m is due to increased rental income (mainly backdated rental income in relation to Holly Bank and Primrose Bank), £0.492m is a reduction in forecast capital spend., and the balance is across a number of areas, but mainly utility charges and aids and appliances. The HRA balances brought forward into 2024/25 were also £0.222m greater than had been forecast. The estimated balances at the end of 2024/25 are projected to be £21.214m, which would be sufficient to meet future operational commitments and the potential financial pressures identified in the risk assessment.

The 2025/26 position had been presented after allowing for a proposed increase in dwelling rents of 2.7%, an increase in non-dwelling rents in line with individual contracts, a nominal increase of 2% on service charges and the setting of Extra Care Housing concierge charges to fully recover costs. The majority of HRA tenants are either the recipient of Housing Benefit or Universal Credit and coupled with the recent increase in the Local Housing Allowance, it is assumed that the proposed increase in rents will not be an additional financial pressure to the majority of tenants.

The financial projections for the HRA over the period 2024/25 to 2029/30 show an overall reduction in the level of balances from £21.106m at the start of 2024/25 to £14.625m at the end of 2029/30. These will be supplemented by a new smoothing reserve that will be created to allow for a change in the Council’s Minimum Revenue Provision Policy (MRP), approved in December 2024. Although this will see a significant increase in overall HRA reserves each year until 2036/37, the balances accrued in this reserve will be fully required to pay MRP over the proceeding ten years. For the purposes of this report, the new smoothing reserve balance is not included in the figures shown, as it is not available to fund other HRA activity.

The HRA detailed budget for 2025/26 and strategic estimates for the four years 2026/27 to 2029/30 and the outturn estimate for 2024/25 were presented to the Governance, Strategy and Resources Scrutiny Board on 29 January 2025. The Committee was content to commend the report to Cabinet without amendment.

Options/alternatives considered:
none reported.

Resolved:

That the Cabinet approves the report and commends to Council:

1.    The Forecast HRA outturn for 2024/25 (as detailed at Appendix A, to the report).

2.    The proposed HRA budget for 2025/26 (as detailed at Appendix B, to the report).

3.    the Strategic estimates for 2025/26 to 2029/30 (as detailed at Appendix D, to the report).

4.    The proposed increase to dwelling rents for all properties of 2.7%.

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

6.    The proposal that service charges are increased by 2%.

7.    the proposal to set Extra Care Housing concierge charges to fully recover actual costs.