Agenda item

Report by the Head of Housing and Neighbourhoods.                 (Enclosure)

The Strategic Director – Community and Environment Focus presented the draft Housing Revenue Account Business Plan which set out the Council’s priorities for the management, maintenance and development of its housing stock, how it helps delivery of the council’s wider strategic priorities and how it would be financed. Members were reminded that the document, appended to report number H&N05/14 was a working draft and would be subject to further change before final consideration by Cabinet.

The PDG had fed into the development of the draft Plan during a series of workshops, considering areas including:

·         Overall approach to rent policy

·         Agreeing the 30-year income and expenditure assumptions were sound

·         Agreeing to a pilot fencing scheme and evaluation of outcomes

·         Use of alternative construction approaches and new technology

·         Agreeing to bring housing balances down releasing a further £8m for investment in new housing

·         Keeping the impact of right to by sales under review

·         Targeting house building to meet varying needs with a particular focus on older people, subject to further evaluation of the age profile of existing tenants

·         Repayment of Housing Revenue Account loans to facilitate more significant levels of investment

The Strategic Director summarised the structure of the draft document, specifically drawing members’ attention to plans for improved services and asset management and investment in new housing.

Some concern was expressed about why the use of Procurement Lincolnshire to assist with the letting of major contracts was specified in the plan. Members were advised that the Council contributed to the service and had experienced some significant savings with its support. They were also reminded that the text within the draft said that the service would be used “where appropriate”.

Members noted that right to buy sales exceeded budgeted levels in 2013/14 with 20 enquiries to date in 2014/15 (against a budgeted figure of 17). They were also informed that since 2006 approximately 120 homes had been sold through this route.

Discussion ensued on financing options and the potential for investment in new housing. Members of the PDG recommended as a minimum the utilisation of existing balances to release £8m for investment in new houses immediately. They recommended that this should be reviewed following the 2015 elections taking account of the financial landscape at the time and the continuing need for affordable housing to be provided. In view of the overwhelming and growing demand for affordable housing the Portfolio Holder and officers suggested flexibility with regard to financing to improve the pace of delivery for new homes. It was suggested that the period until May 2015 should be used to evaluate opportunities to use alternative solutions for delivery of housing and investigate alternative construction technology.

The suggestion that the Council could look at providing funding for affordable housing was supported. This could provide a cheaper way to finance new build housing and provide an income stream for the HRA.

Section 7 of the draft document covered financial strategy and planning; additional actions related to this would consider value for money. The Strategic Director also suggested that some non-housing HRA assets might sit more appropriately in the General Fund and work would be undertaken to understand potential impacts of this.

There was some discussion around the provision of council housing in villages. To increase stock in rural areas, the suggestion was made that the Council might look at setting up an “equity release” scheme. Views on the proposal were mixed. A proposed alternative to equity release concentrated on re-design and configuration of existing assets. It was suggested further work could be undertaken to identify potential opportunities associated with both proposals.

Recommendation:

1.    Reduce the working balance to release initial tranche of funding to invest in new housing.

2.    Consider opportunities for lending to alternative providers of affordable housing.

3.    To review the recommendation related to financing options following the elections in 2015