Agenda item

The Director - Finance presented the draft revenue and capital budgets for 2024/25 for consideration by the Board. 

At the same time as preparing the draft budget, draft service plans had been prepared for members consideration.  Service plans and budgets were aligned and linked back to the Council Plan.

The Housing Revenue Account (HRA) was underpinned and influenced by a business plan.  This plan needed to be updated with revised financial modelling once the housing condition survey work was complete.

The draft 2024/25 budget approach had been similar to the current year with variations as noted in the report.  The budget was balanced in that income raised by rents covered current expenditure. The budget was seen as an interim solution whilst restructured teams bedded in, which could also result in the re-organisation of budgets but within the same financial envelope. All planned expenditure was met from available income.

The Director – Finance highlighted to the Board that the budget did not reflect the stock condition survey results.  It could be necessary to undertake a reallocation of budgets or the use of additional reserves to meet priorities in the financial year to reflect the findings of the housing stock condition survey but at this stage it was considered there were sufficient resources available. The Housing Review Board would be updated on any reallocations.  Other pressures on the HRA budget were decarbonisation of the housing stock as well as expanding the housing stock.

The increase in any individual tenants rent was normally limited to inflation + 1% for the forthcoming financial year. Inflation was taken as the Consumer Price Index (CPI) rate at the prevailing rate for September 2023, which was officially registered at 6.7%.  The draft budget assumed an increase in Council house rents to this level with a factor included for a reduction in stock numbers and voids giving £21.48m, an increase of £1.47m.  An increase of 3.5% had been assumed on garage rents giving an additional £8k in income, but members might consider this not to be appropriate.

The proposed Housing Revenue Account draft budget presented was a balanced budget, with any surplus to be included within an increased contribution to capital of £1.2m to invest in stock and fund capital projects. The HRA Balance was currently predicted to meet the £3.1m level at the end of 2023/24 once contributions to and from reserves were taken into account.  There was an additional £1.6m being held in the HRA debt Volatility Fund, which remained unchanged.

A summary of the capital funding position was also provided for the Board.  The HRA proposed expenditure in 2024/25 was £4.906m, funded from the HRA.  This represented the same level of investment as currently provided and seen by the service as suitable to meet the requirements at present, until a full stock condition survey was completed and maintenance and improvement plans were fully developed.  It was likely that further funding would be needed and a report would be brought back to the Board detailing any significant capital investments required.

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Explanations were provided for the staffing and contractor spends and pay awards in the budget and a request was made for an update on the cyclo boiler project.

RECOMMENDED:  that Cabinet approve and recommend to Council the draft Housing Revenue Account revenue and capital estimates, including the proposed rent increases for 2024/25.