Agenda item

The Interim Director of Housing and Health presented the report which summarised the current financial pressures facing the HRA. The need for additional new borrowing to meet budget shortfall in 2023/24 and for capital investment in 2024/25 to ensure regulatory compliance was highlighted. It set out plans to improve the short-term sustainability of the HRA and outlined work underway to consider longer term options for the effective management and maintenance of the Council’s Housing stock.

Discussions included the following:

·       Why was the overspend just being reported now? The Housing Review Board had not presented this financial situation. It needed to probe deeper and ask difficult questions. This needed action.

·       EDDC were not the only council in this situation, many councils were having issues with shortfalls over the coming years. EDDC had identified the issue and responded to deliver for its residents.

·       There was encouraging information in the report including the KPIs being meticulously monitored and seeing progress with them going in the right direction, with our tenants seeing the benefits.

·       Taken aback by the levelling of borrowing being asked to sanction in order to fund a historical spend, which had come as a complete surprise with no indication to the need for this level of borrowing.

·       It was difficult to turn off such levels of spending once started especially when we cannot afford such high rates of spend.

·       It was important for members and officers to know the strategy and plan going forward. We must make sure we get value for money to avoid additional costs.

·       This was a tricky situation as eating into reserved was a major risk, this was a good plan and worked for now. Monitoring the spend was a important.

In response the Director of Finance said the revised budget was brought to Cabinet because of the Housing Team’s review of the housing stock and what was needed to be spend in terms of compliance. The Chief Executive stated the council was being open and transparent to the funding required to make the housing stock safe for next year. The council was waiting for reports from national bodies and the results of the housing stock condition survey to be confident in what spend was needed for the medium- and long-term strategy for the council’s housing stock.

The Portfolio Holder Sustainable Homes & Communities suggested that as part of his monthly briefings with the Directors of Housing, if any issues were raised as concerns then the Chair of the Housing Review Board would be asked to call an extraordinary meeting to highlight this to the committee.

RECOMMENDED to Council:

1.     Approve £2.5m of additional borrowing to balance the HRA budget for the 2023/24 financial year.

2.     Approve a revised HRA Budget for 2024/25 as set out in Appendix 3, and a

revised Capital Programme Budget as set out in Appendix 4.

The approval to include:

a)    That up to £1.75m be allocated from the HRA Balance Reserve to fund the 2024/25 forecast revenue budget shortfall.

b) That a target annual revenue saving of £250k per annum be sought over 3 years to replenish the HRA Balance Reserve.

c) That £4.4m of Voluntary Revenue Provision be used to reduce the level of additional borrowing required within the HRA.

d) That £7.3m of new borrowing be agreed to fund the 2024/25 Capital Programme.

3.     Note that £2.415m of savings and/or new additional revenue is required in

2025/26. This is needed to achieve a balanced budget, meet the increased cost arising from new borrowing in 2024/25, contribute toward the replenishment of the HRA Balance Reserve and fund additional new borrowing for Capital Programme investment in 2025/26.

4.     Note the work currently underway to investigate options and establish a longer-term strategic plan to ensure the sustainable and effective management and maintenance of the Councils Housing stock.

5.     Approve a £35k budget within the HRA to increase provision to a Full-Time HRA accountant to support the service.

REASON:

To balance the budget and provide the necessary investment for regulatory compliance and for the provision of good quality safe, affordable and warm homes for residents.