Agenda item

The Housing Revenue Account (HRA) Provisional Outturn Report 2024/25 was introduced by the Leader of the Council.

The report outlined the following HRA budget priorities throughout the year:

• Meeting the housing needs of tenants

• Facilitating the delivery of new housing across a range of tenures

• Enabling those whose independence may be at risk to access housing

• (including their current home) that meets their needs

• Supporting investment in homes for affordable warmth for our tenants

• Meeting compliance requirements and ensuring resources are allocated

appropriately.

HRA Revenue Budget 2024/25

For the purposes of the outturn variance analysis the budget carry forwards were removed and the actual surplus for the year was £5.674m, resulting in an overspend of £1.314m as part of the continued investment in addressing the backlog of repairs and ensuring statutory compliance.

Additionally, there was also an increased focus to decrease void turnaround times which contributed towards this overspend but this led to increased rent receipts of £458k and reduced void times from 136 days to 79 days. This overspend reduced the overall budgeted surplus for the HRA hence the proposal for the overspend to be funded from the Priorities Reserve in order to protect the Major Repairs Reserve.

HRA Capital Programme 2024/25

For the purposes of the outturn variance analysis, the proposed budget carry forwards of £842k were removed from the report which reduces the budget for comparative purposes to £24.365m.

HRA Reserves 2024/25

HRA Priorities Reserve movements included:

• £1.3m was used from this reserve to fund capital programme projects

including new build feasibility work and match funding the LAHF grant to

enable the purchase of 8 houses.  

• A new HRA Climate Reserve was established in 2023/24 and the report proposed to increase the balance to £500k as at 31 March 2025 which would be transferred from the HRA Priorities Reserve. 

• The report also proposed a further £1m be transferred to a new reactive Repairs Reserve.  This reserve would be used to fund reactive and urgent works that were not able to be met from the approved revenue budget.

• A contribution of £2m was proposed from this reserve to fund the revenue

overspend to ensure the balance on the Major Repairs Reserve remains at a

level to support the HRA business plan and associated compliance works.

During discussions, Members commented on the following:

-       Members praised the investment in social housing and suggested that any surplus could be used to purchase further property. The Assistant Director of Finance clarified there was a 30 year business plan that underpinned the HRA and outlined the budgets required to support maintenance and improvement in the Councils housing stock.  Periodically, there would be a budgeted surplus in order to create reserve balances to then meet future investment.

-       It was clarified that the Larch Close development had experienced a delay due to drainage survey findings.

-       Members praised the reduction in void times but noted that the bad debt provision had risen. The Deputy Chief Executive and Section 151 Officer acknowledged that this was the result of challenges with the collection of former tenant arrears. 

-       Clarification was given that tenants had been charged the correct level of charges for services and facilities, however, an incorrect level had been transferred onto the new housing system, distorting the budget. This had since been corrected.

-       Members were assured that all repair programs were effectively delivered as planned in 2024/25 and the underspend of the repairs vehicle budget was because the existing fleet was still adequate.

-       Confirmation was given that the full grant had been received for the Decarbonisation Scheme and all subsequent commitments had been paid for. The overspend was the result of an invoicing error which had been corrected within the year-end process to ensure this was fully accounted for.

Following discussions, it was proposed, seconded, and AGREED to:

1 – Approve the provisional HRA Revenue and Capital Outturn position for the financial year 2024//25.

2 – Approve the following revenue reserve movements in respect of the Housing Revenue Account:

• Transfer £400k from the HRA Priorities Reserve to the HRA Climate Change Reserve.

• Transfer £1m from the HRA Priorities Reserve to create a HRA Reactive Repairs Reserve.

• Transfer £2m from the HRA Priorities Reserve to the Major Repairs Reserve.

3 - Delegate authority to the Deputy Chief Executive and s151 Officer, in

      consultation with the Cabinet Member for Finance, HR & Economic

      Development, to finalise the reserve movements in order to ensure the Working Balance level for the Housing Revenue Account are maintained at prudent levels.