Agenda item

The Housing Revenue Account (HRA) is a separate account within the council’s budgets that ring-fences the income and expenditure associated with the council’s homes. 

It sets out the proposals regarding the rents, service charges and other charges to tenants and leaseholders. Arrangements for increasing rents and service charges are separate to arrangements for increasing fees elsewhere in the council and are set out in law and regulation. The report also sets out plans for expenditure on services to residents, repairs and improvements to homes and provision of new homes.

There are significant challenges facing the HRA including the cost-of-living crisis, higher inflation impacting on costs, building safety commitments, increased regulation and the need to ensure that homes are energy efficient.

In July 2022 the management of the council’s homes in Poole was brought in-house. A new housing management service, BCP Homes, has been created to oversee the management of the council’s HRA stock.

The proposals for the delivery of services are set out in the HRA Delivery Plan which supports the council’s corporate strategy.  

With inflation high, the government has set a cap of 7 per cent on rent increases that prevents rents rising in line with inflation as would normally be expected from April 2023/24. There are exceptions for sheltered housing or on re-lets where the normal inflationary increase is allowed. However, a 7 per cent increase will also be applied to sheltered housing.

Although significant increases for some service charges such as heating and electric charges are unavoidable, measures have been put in place to limit the increase in these charges.

The Portfolio Holder for People and Homes presented a report, a copy of which had been circulated to each Member and a copy of which appears as Appendix 'A' to these Minutes in the Minute Book.

Cabinet was advised that the Housing Revenue Account (HRA) is a separate account within the council’s budgets that ring-fences the income and expenditure associated with the council’s homes, and that it sets out the proposals regarding the rents, service charges and other charges to tenants and leaseholders.

Cabinet was informed that arrangements for increasing rents and service charges are separate to arrangements for increasing fees elsewhere in the council and are set out in law and regulation, and that the report also sets out plans for expenditure on services to residents, repairs and improvements to homes and provision of new homes.

Cabinet was advised that there are significant challenges facing the HRA including the cost-of-living crisis, higher inflation impacting on costs, building safety commitments, increased regulation and the need to ensure that homes are energy efficient.

Further to this Cabinet was informed that in July 2022 the management of the council’s homes in Poole was brought in-house, and that a new housing management service, BCP Homes, has been created to oversee the management of the council’s HRA stock.

Cabinet was advised that the proposals for the delivery of services are set out in the HRA Delivery Plan which supports the council’s corporate strategy, and that with inflation high, the government has set a cap of 7 per cent on rent increases that prevents rents rising in line with inflation as would normally be expected from April 2023/24. Cabinet was informed that there are exceptions for sheltered housing or on re-lets where the normal inflationary increase is allowed however, a 7 per cent increase will also be applied to sheltered housing.

Cabinet was informed that although significant increases for some service charges such as heating and electric charges are unavoidable, measures have been put in place to limit the increase in these charges.

RECOMMENDED that: -

(a)     Revenue budgets for 2023/24 and provisionally for 2024/25 to 2027/28 are set using the following principles:

(i)                That rents for general needs, sheltered and shared ownership accommodation are increased by 7 per cent from 3 April 2023, in line with the national rent cap announced by the Department of Levelling Up, Housing and Communities.  

(ii)              That rents for all accommodation on re-let’s continue to be set at the formula rent, increased by 11.1 per cent, from 3 April 2023, in line with the Department of Levelling Up, Housing and Communities Policy statement on rents for social housing.

(iii)             That rents for garages, garage bases and parking plots are increased by 10 per cent from the 3 April 2023.

(iv)            That leasehold services are charged to leaseholders in line with estimated costs from 3 April 2023.

(v)              That the changes to service charges are agreed as set out in appendix 2 from 3 April 2023, and that the service charge cap for new service charges in Bournemouth continues to be set at £5.00 for a further year.

(vi)            That the annual bad debt charge is maintained at £0.4 million.

(vii)           That the depreciation budget is set at £11.79 million.

(viii)         That HRA reserve should be maintained at a minimum level of 5 per cent of total expenditure at £1.98 million in line with good practice.

(b)     Capital budgets for 2023/24 and provisionally for 2024/25 to 2027/28 are set using the following principles:

(i)             That the planned maintenance programme as set out in Appendix 5 is agreed.

(ii)           That the major project capital programme as set out in Appendix 6 is noted.

(iii)         That 2023/24 budgets of £0.4 million for feasibility works and £3 million for the acquisition of individual properties (“Acquire and Repair”) are approved.

(c)     The Delivery Plan for BCP Homes to support the key principles for the HRA and the Council’s Corporate Strategy are agreed as set out in Appendix 7.

Voting: Unanimous

Portfolio Holder: People and Homes