Agenda item

A report was submitted to enable the Committee to consider a draft HRA revenue budget and capital programme for 2022/23. This explained that the HRA is a separate, ring-fenced account, paid from tenants’ rents and service charges and governed by a regime based on a national system of self-financing. The report highlighted:

·           new rules for the Right to Buy (RTB) although these would not provide additional resources for Tandridge given the relatively low number of RTB’s in the District per annum;

·           the ceiling for annual ‘social’ and ‘affordable’ rent increases of 4.1% (i.e. CPI at September 2021 + 1%)

The report explained that the current HRA business plan was based on a scheduled £2.85m loan repayment for 2022/23 being refinanced to allow sufficient resources for funding the Council house building programme. It also confirmed that the opening revenue balances for 2022/23 were approximately £6.5m, £1.7m of which was earmarked to support new build schemes.  Any surplus generated by the HRA in the year would be apportioned between the ‘new build’ and ‘repairs’ reserves on a two-thirds / one-third basis as previously agreed. The permitted 4.1% increase for ‘social’ and ‘affordable’ rents was recommended. It was also proposed that rents for garages and service charges be increased by the same percentage. 

The Committee received a presentation from Jeremy Cookson, the Council’s HRA Consultant, which illustrated:

·           the budget changes for 2022/23 in terms of the variations in costs and savings relative to the current year – this would reduce the transfer to reserves by £124,000 (although the HRA would still generate a surplus)

·           the HRA capital programme, with provision for £16.5m of new build expenditure between 2022/23 and 2024/25

·           base projections to 2050/51 of HRA debt / balances and sources of funding for the capital programme

·           the impact of alternative new development scenarios on the HRA business plan from 2024/25 to 2031/32 (i.e. 9 units per annum to replace those sold via the Right to Buy; an accelerated programme of 35 units per annum; and the same accelerated programme but with rent increases limited to CPI).

The presentation concluded that, while there was a scope for sustaining a Council house building programme in future years, longer term grant funding should be sought to offset limitations in the availability of finite Right to Buy receipts. The potential advantage of borrowing now for investment in future years was also highlighted. Jeremy Cookson responded to Members’ questions following the presentation.

During the following debate on the report, the intention to install new gas boilers in housing properties (as part of the energy efficiency scheme within the capital programme) was discussed, including a suggestion that this was at odds with the statement that there were no significant climate change implications. Officers also undertook to explain to Members (after the meeting) how the summary budget table in paragraph 3.9 of the report reconciles with Appendix F to these minutes (the main difference being that the latter includes the allocation of staffing costs).

The Executive Head of Communities confirmed that the proposed increases in service charges (including those for sheltered and older persons services) were necessary to absorb increased costs and were not intended to generate profits.   

In accordance with Minute 240, the Chair left the meeting for the discussion and voting on the setting of garage rents for 2022/23. Councillor Lockwood took the Chair and presided over that matter before closing the meeting.     

R E S O L V E D – that:

A.     social rents (excluding service charges) and affordable rents (including service charges) for 2022/23 be increased by 4.1% in accordance with government social rent policy guidance;

B.     the draft capital programme for 2022/23 in the sum of £11,585,700 and the subsequent years, as shown at Appendix E, be agreed;

C.     the draft revenue budget for 2022/23 with a net operating surplus of £2,401,800, before allowing for revenue contributions to capital expenditure and interest charges, as shown at Appendix F, be agreed;

D.     rents for garages be increased by 4.1% for 2022/23 to produce a standard weekly rent of £13.53 to tenants, or £16.25 (including VAT) for let to private tenants;

E.     service charges be increased by 4.1% for 2022/23 to produce an average weekly charge of £7.12;

F.     sheltered and older persons service charges be increased by 4.1% for 2022/23 to £14.33 and £3.13 respectively.

G.              the PWLB HRA Loan of £2.85m, due for repayment in 2022/23, be re-financed and programmed funding of £5.1m (£1.3m in 2022/23 and £3.8m in 2023/24) to finance the capital programme be financed by PWLB borrowing.