Agenda item

RESOLVED:-

That the Executive:

a.     Noted the draft 2022/23 Housing Revenue Account Budgets consisting of the Corby Neighbourhood Account and the Kettering Neighbourhood Account as set out in Appendix A to the report, which will be consulted upon with Tenants, which includes:

i)       an increase in dwelling rents for 2022/23 of 4.1% (based on the Consumer Price Index (CPI) for September 2021 3.1% + 1%) which is in line with the Department for Levelling Up, Housing and Communities (DLUHC) Policy statement on rents for social housing.

b.    Noted the draft Housing Revenue Account Medium Term Financial Plan beyond 2022/23 consisting of the Corby Neighbourhood Account and the Kettering Neighbourhood Account, for 2023/24 to 2026/27 as set out in Appendix B of the report.

Reason for Decision: To ensure that the Council complies with its Constitution in setting the budget for North Northamptonshire.

Cllr Lloyd Bunday, Executive Member for Finance and Transformation introduced a report that set out the proposed draft budget for the Council’s Housing Revenue Account (HRA) for 2022/23 and the key principles on which it is based, together with the Medium-Term Financial Plan (MTFP) that covered the following four years (2023/24 – 2026/27). The report also set out the proposals regarding rent increases for 2022/23.

It was noted that the Housing Revenue Account was a separate ring-fenced account within the Council for the income and expenditure associated with its housing stock. Local Government Reform had resulted in the Council operating two separate neighbourhood accounts, namely Corby and Kettering. It was noted that although at present these were run as two separate accounts, these would need to be amalgamated into a single HRA in future, a decision as to when this would occur had yet to be taken.

As part of the future HRA amalgamation, a 30-year business plan would be developed. Members noted that the social rent policy of previous governments has resulted in a cumulative loss of rental income amounting to some £130m which would have a significant impact on the plan going forward.

The meeting heard that the HRA did not directly impact on the Council’s wider General Fund budget or on the level of Council Tax, with income to the HRA being primarily received through the rents and other charges paid by tenants and leaseholders.

Government guidelines for rent increases, to maintain service provision and continue investment was a calculation involving the Consumer Price Index (CPI) plus 1%, totalling 4.1%.This would result in an average rise in rental to £85.54 in Kettering and £81.07 in Corby. It was proposed that these increases be the subject of a consultation, details of which would be submitted to the Executive at its meeting on 10^th February 2022.

Rental increases as detailed above would result in a balanced budget for 2022/23. However, the medium-term position 2023 to 2027 indicated a deficit for Corby HRA of £1.860m and a surplus for Kettering HRA of £3.921m, mainly due to the structuring of loans against the housing stock.

It was noted that North Northamptonshire Council owned in excess of 8200 properties, combined with a further 884 leasehold properties amounting to a projected rental income in excess of £34m. The numbers of Right to Buy properties and the number of empty properties had also been factored in, and it was predicated that this would reduce revenue by approximately £0.5m.

New properties had been added to the Council’s stock during 2021 and it was envisaged that there would be further additions in coming years.

Cllr Bunday confirmed that since the HRAs were ring fenced, self-financing accounts with rental levels set by the Housing Rent Regulator, there was little room for movement save in efficiencies in aggregation and service improvement.

RESOLVED:-

That the Executive:

a.     Noted the draft 2022/23 Housing Revenue Account Budgets consisting of the Corby Neighbourhood Account and the Kettering Neighbourhood Account as set out in Appendix A to the report, which will be consulted upon with Tenants, which includes:

i)       an increase in dwelling rents for 2022/23 of 4.1% (based on the Consumer Price Index (CPI) for September 2021 3.1% + 1%) which is in line with the Department for Levelling Up, Housing and Communities (DLUHC) Policy statement on rents for social housing.

b.    Noted the draft Housing Revenue Account Medium Term Financial Plan beyond 2022/23 consisting of the Corby Neighbourhood Account and the Kettering Neighbourhood Account, for 2023/24 to 2026/27 as set out in Appendix B of the report.

Reason for Decision: To ensure that the Council complies with its Constitution in setting the budget for North Northamptonshire.