Agenda item

The Leader of the Council presented the report.

The report had previously been presented and approved by Cabinet on 4 November 2025.

The forecast pressure had previously been highlighted in the budget monitoring report presented to Cabinet on 9 September 2025. Since the report, the forecast has since increased to a projected overspend of £2.781m.

This overspend was due to the clearance for maintenance backlog, tackling void turnaround times and improving performance from 79 days in March 2025 to 54 days in August 2025. Another factor was properties being left in a poor condition by outgoing tenants, the increase in material costs and emerging legislative responsibilities and new statutory obligations. 

A preliminary breakdown of the forecast overspend is attributable to the factors revealed:

-       £1.7m on addressing backlogs and meeting performance targets.

-       £0.35m in inflationary and other additional material costs.

-       A potential £0.85m in regulation changes.

It was requested the Committee support the report to tackle the issue and ensure sufficient resources were available for the service to continue working on backlog.

The Deputy Chief Executive (S151 Officer) clarified the spend pressures on this particular budget first came to Officers attention in February 2025 (Q3 report). It was noted social landlords were experiencing a high amount of pressure from regulators and lack of funding.

A concern was raised that the 30-year business plan for the HRA needed to show a solvent and sustainable financial outlook, however, problems were arising for the next 2-3 years.

In order to meet these unbudgeted costs, the only viable option available is to propose the use of the HRA reserves in the following way:

• £1.000m from the Reactive Repairs Reserve

• £1.781m from the HRA Priorities Reserve

Governance and Audit Committee had previously created a £1m reserve to deal with the HRA overspend at year end.

Collection of £14.761m as of 5 October 2025 against an annual debt of £29.856m, as shown in table 4 of the report, the collection rate was 0.65% below target equating to £0.167m.

One Member requested further clarification on the breakdown of the overspend as a third of the money was projected for legislation changes.

Concern was raised on the possibility of providing ‘value engineering’ in the future in terms of housing in order to save money. It was felt that housing may fall behind again due to the lack of funding.

The Government had consulted on rent convergence, where social rents could be harmonised to affordable rent levels. There are opportunities for the Council to consider a £1-2 increase on those properties per week. This model could result in around £600,000 additional rental income.

Concern was raised around the New Renters Right Bill and how this would accumulate pressure on the Council via repairs.

It was confirmed any obligations and pressures would be included within the budget reported to Cabinet.

One Member highlighted that more legislations, responsibilities, obligations and costs given to social landlords, the greater the demand for social housing be brought onto local authorities as private landlords were selling their properties.

It was requested whether a figure for the cost of void properties in terms of lost rent could be provided.

Some tenants left properties in poor condition, one Member felt that more regular inspections were necessary.

The Leader of the Council clarified problems around access to tenants’ properties related to essential maintenance, fire, and electrical safety inspections. In some cases, Court Orders were sought on some Council tenants where they had refused to leave.

One Member shared his disappointment that the HRA had a projected overspend of £2.781m. 

The Leader of the Council highlighted the overspend was a direct consequence of the neglect of housing services from the previous administration. It was felt housing should be expanded in order to accommodate many individuals on the housing register.

The Cabinet Member for Housing clarified the housing service area had made major improvements in their team.

The Deputy Chief Executive (S151 Officer) emphasised the £2.7m figure was a forecast for March 2026. As at the end of September 2025, the Council were not overspending on that line, however, resources were being put into place to expect a possible overspend of £2.781m. 

A query was raised on whether the Council could request S106 contributions from housing developers.

The HRA was a ringfenced fund and S106 contributions would be for health, education and not for housing. 

Concern was raised that another aspect may expedientially take the HRA out of scale. 

Each time re-let a house, new carpets AWABS Law – make buildings fit without significant increases in rent.

Housing developments had a requirement for 10-30% of the properties to be affordable or social housing (housing associations or Council).

The Committee were reminded that reserves were set out in the Council report.

The Committee:

Reviewed and noted the forecast 2025/26 outturn position for the HRA Revenue and Capital budgets as at the end of September 2025.