Council and democracy

Agenda item

Housing Revenue Account - Business Plan and Budgets 2020/21

Minutes:

The Assistant Director introduced the report to the Committee advising it set out the base budget position for 2020/2021 following the review and update of the 30 year Housing Revenue Account (HRA) Business Plan. 

 

She continued to inform Members the report recommended an increase in rents and services charges for next year, and following a rent reduction over the past 4 years of 1% per year, this had lead the Council to have less than £18million to spend on its properties. It had also lead to on average tenants paying £10 less in rent on average, should the rents had been increased per 1% over the last 4 years.

 

Members heard the Council should have been spending a minimum of £15million a year on the condition of its stock according to the stock condition survey, however, since the rent reduction had been brought in, an average of around £10milllion had been spent on Council properties.

 

The Assistant Director of Housing explained a consultation into the rent and service charges had been carried out with residents; who expressed they were unhappy with not having communal decoration and general upkeep within properties. Therefore the Council had included £600 thousand from next year to carry out a communal decorating programme including door entry.

 

The Strategic Resources Accountant commented that there was a lot of information within the tables attached to the report should Members want any additional clarification he was happy to answer any in-depth questions.

 

Councillor Worrall, Chair of the Committee enquired as to why within the report there was not a section on the reserves within the HRA as this was normally mentioned within past reports and how much the Council had in the HRA reserves; in addition how much was in the General Fund reserves for the Housing Department. The Strategic Resources Accountant explained that although the reserves were not within the current report it would be in the February Budget Setting Report. He continued to explain the way the reports were structured over the long term 5 year capital program, was trying to capital the expenditure from the use of reserves.

 

Members then queried the consultation mentioned within the report, with Councillor Muldowney raising concerns with how the consultation was carried out and remarking local Councillors had not been included.  The Assistant Director of Housing explained that resident meetings were held across the borough, where there was a presentation and questions answered for residents who attended. She further commented, at the meeting there were no concerns raised by residents as to the increase in charges.

 

Councillors Muldowney and Worrall remarked as to the online consultation offered to residents. Councillor Worrall stated that when she looked for the online consultation, she couldn’t find it. Officers explained that at the time when Councillor Worrall had checked on the Council’s website for the consultation, it had finished.

 

It was further commented by the Chair of the Committee, that she didn’t feel the consultation carried out was completed well. She stated that she had seen the letter which was sent to residents; which didn’t give them much, if any information as to what the meeting was to be about. Councillor Worrall stated that the letter should have included additional information, such as the increase in service charges.

 

The Assistant Director of Housing explained that officers held eight additional meetings for residents, than other local boroughs; with some not holding a consultation and just increasing the rents. She apologised that Members felt the consultation was not held to a high standard, however it was held within a tight timeframe.

 

Councillor Redsell observed that unfortunately most people were not aware of the consultation being held and agreed that more information should have been included within the letter sent to residents.

 

The Housing Tenant Representative advised the Committee that at the consultation held in Purfleet, only two residents attended and they spoke with her afterwards, as they didn’t understand what it was regarding.  

 

Members heard from the Strategic Resources Accountant who explained the initial point raised by residents was the Civic Offices, which was raised at every meeting. He continued to advise Members that once it had been explained to residents that any increases would be put back into Housing services, people were much more understanding and appreciated that if they paid more, then they would get more, such as door entry systems and internal and external decorating of blocks.

 

Councillor Redsell commented the vibe from her Ward was that people were pleased with the works being undertaken.

 

Member’s discussions then turned to the repairs bill for the year, with Councillor Worrall seeking if there had been an overspend of £2 million, comparing the report with the same report for the previous year.  The Strategic Resources Accountant explained that the two reports should not be compared as they presented the figures in a different way.  The Committee were further advised that the Council had regular meetings with Mears which included discussions on controlling spending.

 

Councillor Worrall stated that the increase suggested within the report was too high and too much, she remarked that these were working families, who were struggling. Officers commented the rent increase on the new builds was the only way the developments could be completed. Councillor Worrall observed residents had had four years of reductions and then an increase in one go; there were no options given to residents of slight increases.

 

The Assistant Director of Housing advised the Committee that during the consultation the different options were not responded to by residents. She accepted there were families who were struggling, and advised them to speak to the Councils Financial Inclusion Officers as they were there to help.

 

Councillor Muldowney seconded Councillor Worrall’s comment and mentioned that families were having to go to food banks. She commented she was concerned the increase could lead families to be homeless if they couldn’t keep up with the charges.

 

Members heard how Officers were speaking with residents as early as possible, so to avoid them coming into arrears or giving up their homes.

 

The Housing Tenant Representative advised the Committee that residents were sent letters with information on who to contact when seeking for help. She also informed Officers that many residents were unsure what a Financial Inclusion Officer was or did.

 

It was enquired as to whether the money for the garages was from the HRA. Officers confirmed it was from the Capital Programme. Members were advised any garage which were able to be repaired would be done so and should for any reason it was not possible to repair then they would demolished and used for parking.  Councillor Redsell cited that too many of the garages had been left for too long and they were usually not used for parking but storage purposes.

 

Councillor Worrall, Chair of the Committee, sought if the Committee were in agreement with the recommendations, she continued to state that would like to include an additional recommendation, as Members were disappointed with the consultation and suggested she felt that a freeze should be offered on the charges.

 

Officers advised the Committee that should they agree to freeze the rent and service charges this would mean the Council would not be able to complete certain works which were required such as continuing with the Transforming Homes programme, and work to improve thermal insulation in properties of non-traditional construction as some residents were struggling to heat their homes.

 

After discussions Members agreed the following recommendation be included:

 

The findings of the Committee using the information presented is:

 

               No efficiency savings are presented within the budget

               Budget proposals are not good value for money

               Consultation results within the report do not evidence any support for either a rent or service charge increase

 

We cannot endorse this recommendation and propose to Cabinet a freeze on both of the increases.

 

RESOLVED that the Housing Overview and Scrutiny Committee:

 

1.            Comments on the assumptions included in the HRA Base Budget assumptions as summarised in the report.

2.            Comments on the proposed budget for 2020/21.

3.            Comments on the proposals for increases to rents and service charges in 2020/21.

4.            The findings of the Committee using the information presented is:          

               No efficiency savings are presented within the budget

               Budget proposals are not good value for money

               Consultation results within the report do not evidence any support for either a rent or service charge increase

 

We cannot endorse this recommendation and propose to Cabinet a freeze on both of the increases.

 

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