Agenda item

Kim Trotter, Finance Manager, Resources, outlined a report which was presented to Cabinet on 7^th February, 2011.  It was noted that the late release of the government’s final subsidy determination had meant that the report was not available in time for the previous meeting of the Committee.  The report proposed the Council’s HRA budget for 2011-2012 and highlighted arrangements to fund the operation now that the Council had returned to in-house service provisions following the termination of the contract with People 1^st (Slough) Ltd.  The Committee was referred to Appendix 1 of the report which showed the 2011/2012 budget and included a forecast surplus of £0.087m for the year after a contribution of £1.93m to capital funding.  It was anticipated that £1m of the revenue contributions to capital would be held in the capital expenditure reserve account as a contingency for the Decent Homes project expected to be completed in December 2012.  The Committee noted the detail of the HRA base budget 2011/12 and that the final subsidy determination had seen management and maintenance allowances increased by 7.9% and 3.9% respectively.  It was also noted that for the coming year HRA expenditure had been revised to take account of the new service structure and the cost centre hierarchy would be restructured so that individual service managers had clear responsibility for expenditure and budgets within their area.  The Committee was advised that the Housing Repairs budget had been increased by 4.5% to allow for inflationary increases but it was difficult to make an accurate estimative inflation in the current economic climate.  The Finance Manager discussed the use of £2.85m of HRA balances to maintain the current level of investment in homes and to complete the decent homes project in accordance with the Government’s target.  The Committee noted that the draft Tenant Participation Strategy would be considered by Cabinet at its meeting in March and would allow tenants to become engaged and help to plan and regulate the new service.  The Committee noted the HRA Business Plan projections which would give the Council a period of relative stability in the medium term with moderate in year surpluses and healthy balances.  The Officer concluded that the HRA Business Plan was now sustainable into the medium term and had sufficient balances to allow continued levels of expenditure, introduced 2 years ago to clear historic backlogs of under investment. 

In the ensuing debate the Finance Manager provided a response to a number of questions regarding changes to future housing subsidies. He advised that

the housing subsidy system would be replaced by “Self-financing” regulations in 2011/12.  HRA Income and costs had been projected over a 30 year period and a surplus had been forecast. This has an estimated value, using an average discount factor of 6.5%, at 31 March 2012, of £160m which was then taken as the total borrowing assumed to be payable by the Council into the national loan pool for all HRA dwellings. The Council currently had supported borrowing of £40m from this pool which would be deducted leaving a final payment to the treasury of £120m, to be actioned at the end of the year.

Resolved  -   That the Committee notes the recommendations that were approved by Cabinet at its meeting on 7^th February, 2011.

(a)  That the Housing Revenue Account Budget for 2011/2012 be approved.

(b)  That the growth items, identified in paragraphs 5.8 & 5.13, amounting to £303,000 in 2011/12 be approved.