Issue - meetings

Purpose of report

This report provided details of the Housing Revenue Account (HRA) outturn position for the financial year 2024/25, and covered the Revenue Budget, Capital Programme and Reserves.

Decision

Cabinet noted the provisional HRA Revenue and Capital Outturn position and the supporting appendices for the financial year 2024/25.

Alternative options considered and rejected

The option of not producing a provisional outturn report was discounted as Cabinet should have oversight of the Council’s budgets.

Reasons for the decision

During the course of the financial year, the HRA budgets had continued to focus on meeting the housing needs of tenants, facilitating the delivery of new housing across a range of tenures, and meeting compliance requirements and ensuring resources were allocated appropriately.

The budget set by Council on 29 February 2024 showed a budgeted operating surplus of £7.004m. This surplus was used to provide funding for the external loan and to enable reserve levels to be maintained that subsequently funded the capital programme and service improvements. For the purposes of the outturn variance analysis the budget carry forwards had been removed and the actual surplus for the year was provisionally £5.674m. This surplus reduction was a consequence of an overspend of £1.314m due to investment in addressing the backlog of repairs and ensuring statutory compliance.

During the financial year, there had been significant expenditure in repairs and maintenance which had led to an overspend of £2.3m. This expenditure enabled the Council to reduce the backlog of repairs and to remedy damp and mould cases. Material costs had also increased above standard inflation, in some cases as high as 15%; together with the increase in productivity this had also contributed towards this overspend. There had also been an increased focus to decrease void turnaround times which had contributed towards this overspend but this had led to increased rent receipts of £458k and reduced void times which reduced from 136 days to 79 days.

The budget set by Council on 29 February 2024 for the 2024/25 HRA Capital programme was £21.315m. Budgets have been amended as projects have commenced, and these changes increased the 2024/25 budget to £27.207m.

It was important that members were aware of the financial position of the HRA to ensure they made informed decisions that were affordable and financially sustainable for the Council. Effective budget management was critical to ensuring financial resources were spent in line with the budget and were targeted towards the Council’s priorities.

This report had been considered by the Finance and Economic Overview and Scrutiny Committee (OSC), and the Governance and Audit Committee prior to the summer recess.