Agenda item

The Leader of the Council presented the report which outlined a review of the Housing Revenue Account.

 

The recent pressures and financial challenges facing the HRA, and the repairs and maintenance budgets, have been consistently communicated to the Committee. Firstly, via the HRA outturn £2.3m overspend in 2024/25, and more recently to the Full Council meeting of 20 November 2025 when a further £2.7m to the revenue budget was approved.

 

The HRA has encountered and continues to face financial challenges caused by a combination of: changes to legislation; increasing landlord responsibilities; and improving a range of local performance targets including backlog repairs, repair times, and void times.

 

However, as has been stated at previous meetings, the continued uplift in repairs and maintenance budgets is unsustainable. There was an overspend in 2024/25, an uplift in 2025/26 and three-year budget projections are set at a similar high level.

 

One Member queried whether the Council undertook repairs and maintenance above and beyond their legal requirement to do so.

 

The Leader of the Council confirmed Council properties were brought up to a decent, habitable standards as set out by Local Government.

 

It was emphasised that the Council were aiming to put financial resilience and sustainability back into the HRA.

 

A report on rent convergence was due to be heard at Cabinet in June 2026, to request approval on the adoption of it. This would then be implemented from 2027/28, which would make a contribution to the income side of the HRA.

 

Savilles had been appointed alongside the Council to provide peer support and provide an action plan to break down actions into metrics with clear timelines.

 

One Member noted a change in legislation from Government meaning some responsibility lay with them. It was queried whether any money would be given to Local Authorities from Government for the HRA.

 

The Leader of the Council highlighted that Government could be lobbied, alongside the Local Councils Network and the LGA.

 

The HRA did not receive any funding from Council as it does not operate in the same way as the general fund in terms of grants and business rate retentions.

 

It was noted that the table of repairs and maintenance spend, and budget summary forecasted over £13m being spent in 2025-26. It was queried how future estimations would be calculated on how a forecast of £13m per year could be reduced and by what extent.

 

The Deputy Chief Executive and S151 Officer clarified the table demonstrated at what point the Council moved away from a sustainable HRA. During 2022/23 and 2023/24, the HRA was balanced against budgets set at that time. In 2024/25, the Council started to move around £1.6m away from the set budget, which then increased by £3.6m in 2025/26. It was noted that majority of the money was spent clearing repairs and maintenance backlog.

 

One Member requested this item being a standing item on all Committee meetings.

 

Concern was raised that a root cause of overspends could not be viewed within the report. A detailed breakdown was requested to further scrutinise the overspends. 

 

Clarification was sought on which of the actions outlined within the report would actually deliver cashable savings and by how much.

 

The Leader of the Council confirmed comments within the report reiterated that the financial challenges facing the repairs and maintenance budgets were well understood and had been consistently communicated to members.

 

The Deputy Chief Executive and S151 Officer highlighted previous reports to the Committee had identified overspends, specifically the report to Council in November 2025 where the proposed budget framework amendment was approved for the £2.7m additional funding. The breakdown covered: Maintenance backlog, voids and improving performance; Inflationary and additional material costs; and regulation changes.  

 

It was confirmed that the target figure for the HRA would be a balanced budget. The HRA was ringfenced and only received income from rent and the sales of houses.

 

The Council had produced a set of proposals for both income and expenditure which would address it, with the assistance of external consultants.

 

A query was raised on how much the external consultants were costing. 

 

The Deputy Chief Executive and S151 Officer clarified the external consultant cost was around £5,000.

 

It was noted that tough choices would need to be made on what the Council offers tenants and what tenants expect from the services from this Council. This may include investment put into properties and time in which the Council responds to ‘noncritical’ repairs and the replacements outside of decent homes.

 

A query was raised on whether the Council was making more use than previously of smaller contractors to deal with ‘one-off’ items of repair.

 

The Leader of the Council confirmed the Council had an aspiration for a local suppliers framework. The Council were analysing the changes in contract procedure rules, which means the Council could allow more quotes to be received by local suppliers. A good proportion of over 50% of the Councils spend with local suppliers within the contract procedure rules.

 

A query was raised on the 30-year business plan and when this would be completed, it was hoped to be completed sooner rather than later.

 

Further clarification was sought around the external expertise working with the Council.

 

One Member sought clarity around review service charge levels in response to the review of sheltered housing communal areas income.

 

Further information was requested on the review of rechargeable policy for repairs and where it can be identified that property damage has been caused by tenants.

 

It was noted the 30-year finance business plan was reviewed on a regular basis as a statutory requirement. The plan set out expectations and assumptions around CPI, RPI, rental levels, right to buy sales etc. The plan anticipates the overall balance level of the HRA on an iterative basis.

 

The Leader of the Council clarified the review of service charges related to the hire of community rooms by tenants and outside bodies.

 

The Rechargeables Policy related to tenants of Council properties and how the properties are left. The Policy allows the Council to chase any outstanding rent arrears and any damage to the property.

 

A query was raised on when the Committee would see prioritisation of the budget and decisions made in order to get the HRA budget under control. It was felt that income increases of the HRA would not cover the £3m overspend.

 

A point of information was outlined to clarify that rental increases were limited in accordance with the Government’s rent setting guidance.

 

One Member noted the HRA money was rightly spent on properties where a new tenant takes over a property. Council inspections would take place alongside repairs where necessary.

 

The Deputy Chief Executive and S151 Officer confirmed the report was a scoping document. Progress update reports would be brought back to future meetings, as requested.

 

The Committee:

 

1. Supported the actions as set out in the proposed HRA Financial Action Plan.

 

2. Agreed to receive periodic updates on progress.