Agenda item

HRA Budget 2024/25

Meeting of Cabinet, Tuesday, 27th February, 2024 10.30 am (Item 79.)

Decision:

*RESOLVED –

1. That the forecast outturn for the Housing Revenue Account for the current financial year, 2034/24 be noted.

That it be recommended to Full Council that:

2. The draft estimates for the Housing Revenue Account for 2024/25 and future financial years be approved.

3. That authority be delegated to the Service Director – Housing, in consultation with the Cabinet Member for Housing and the Service Director – Finance, within the total funding provision of £700k to identify and progress service transformation projects and spend to save initiatives, and to respond to possible in-year changes in legislation or national housing policy to ensure that the authority continues to meet its statutory obligations and has a social housing offer which is fit for purpose.

4. That authority be delegated to the Service Director – Housing, in consultation with the Cabinet Member for Housing, within the total funding provision of £1m (£750k revenue and £250k capital), to progress the immediate procurement of contractors to undertake the work on void properties as set out in paragraph 4.18 of the officer’s report.

REASONS FOR RECOMMENDATIONS

1. To provide an updated assessment of the Council’s Housing Revenue Account forecast outturn for the financial year 2023/24 and report on the progress made in addressing a number of financial challenges facing the council’s Housing Service.

2. To provide the necessary authority for the council’s Housing Service to take forward a number of transformation projects and other response measures to address the ongoing financial challenges facing the social housing sector.

3. To present a balanced Housing Revenue Account for the financial year 2024/25 for recommendation to Full Council.

Minutes:

The Service Director – Housing presented a report asking Cabinet to consider the forecast outturn for the Housing Revenue Account (HRA) for the current financial year, 2023/24, the draft HRA budget for 2024/25 and the Medium-Term Financial Plan (MTFP) for the years 2024/25 to 2028/29.

The deficit for 2023/24 was forecast to be £858k (as at period 8), which was an improved position of £2.223m against the original budget, primarily due to a number of funding and financing adjustments such as removing the planned £3.389m revenue contribution to fund the capital programme and pausing the voluntary repayment of debt (£1.841m).

Table 1 in the officer’s report summarised the forecast outturn for 2023/24 against the original budget. The main variances included:

· Rents

· Repairs and maintenance

· Depreciation charges

· Provision for the repayment of debt

· Direct Revenue Financing

The financial strategy for the HRA was to deliver a balanced and sustainable budget which was self-financing in the longer term, and which reflected both the requirements of tenants and the strategic vision and priorities of the Council.

The HRA was not permitted to run at an overall deficit and risks would need to continue to be identified and managed effectively. A minimum working balance of £3.5m (increased annually by inflation) was maintained to avoid the risk of the HRA moving into a position of negative balance in the event of an exceptional cost(s) arising.

The MTFP, in Appendix 1 of the officer’s report, showed that the HRA balance was anticipated to fall to £5.071m in 2024/25.

New service pressures of £3.673m had been included within the budget for 2024/25, some of which were one off, whilst £1.625m were ongoing and had been built into budgets from 2025/26. These pressures were essential activities but in the short-term represented costs over and above the base budget. However, many of the activities would deliver savings in future financial years. A full breakdown of the service pressures was set out in Appendix 2 of the officer’s report.

It was reported that savings proposals for 2024/25 included:

· Savings from Vacant Posts

· Phasing out Voluntary Sector Advice Agency Grants

· Changes to Careline

The budget estimates for 2024/25 were shown in Table 2 of the officer’s report and compared the movements to the original budget estimates for 2023/24. The MTFP shown at Appendix 1 evidenced a working balance, over and above the minimum of £3.5m (updated by inflation), in all years through 2028/29. However, the 2024/25 budget had a gap of £729k which had been covered by an allocation from the working balance and, whilst the deficits over the MTFP reduced year on year, it was not until 2028/29 that the MTFP did not rely on the use of the working balance to achieve a balanced budget position.