Waverley Borough Council Committee System - Committee Document
Meeting of the Executive held on 04/12/2007
Draft Housing Revenue Account Revenue Estimates 2008/09
Waverley Borough Council
EXECUTIVE - 4TH DECEMBER 2007
DRAFT HOUSING REVENUE ACCOUNT REVENUE ESTIMATES
[Portfolio Holder for Finance: Cllr M H W Band
Portfolio Holder for Housing: Cllr Mrs P M Frost]
[Wards Affected: All]
Summary and purpose:
As part of the budget process, this report seeks the views of the Executive on the first draft of the Housing Revenue Account (HRA) Estimates for 2008/09. The report provides Members with a preliminary indication of the base estimated position for 2008/09.
There are no direct environmental implications as a result of the recommendations attached to this report.
Social / community implications:
The current lack of resources within the landlord service in Waverley has implications for the quality of life of Waverley’s housing tenants and the environment in which they live.
There are no e-government implications.
Resource and legal implications:
There are no direct legal implications as a result of the recommendation of this report. Resource implications are contained throughout the report.
1. The annual Finance Seminar that took place on 29th October highlighted the key issues affecting Waverley’s landlord service and the difficult decisions that will need to be made as part of the 2008-09 budget process and for the longer term.
2. The HRA revenue estimates at
show the issues in greater detail. Service delivery is already under review, both in light of the difficult financial situation and as a result of the recently held ‘mock inspection’ that highlighted areas where the service could be improved.
2008-09 Draft Revenue Estimates
3. At the time of writing this report the Draft HRA Subsidy Determinations for 2008-09 had not been received from the Department for Communities and Local Government (DCLG). The figure of £10.3m for subsidy, an increase of £764,000 over 2007-08 at line 23 column 5 of the HRA summary, that is required to be paid to the Government, is therefore an internal estimate of the likely situation. It includes an assumption that guideline rents will increase by 4.4%.
4. Rent income at line 12 of the summary has been re-based, taking into account the likely outturn in 2007-08 and possible further stock losses in 2008-09.
5. Support costs show a reduction attributable largely to the closure of Rowland House. Further significant cost reductions are anticipated once the re-organised sheltered service is fully operational early in the new financial year. It is hoped that this can be quantified later in the budget process. There are however, likely to be further funding cuts and meetings are due to take place with Surrey Supporting People during November.
6. An increase of 1% on average rents will generate some £212,000 of rent income but the amount of negative subsidy payable will increase by some £110,000 due to the operation of rent rebate subsidy limitation.
7. The draft budget currently takes no account of any potential rent increase. The summary at line 26 illustrates the resources that would be required to fund the budget as currently drafted, a clearly unsustainable position. As a 1% increase in average rents will only have a net benefit of around £100k there clearly is still much work to be done to reduce costs.
8. If Members agree to a rent increase at the Government guideline, the estimated budget shortfall will be around £800,000 that will need to be met from savings before the budget is set in February.
9. The detailed consideration of the budget during the ‘star chamber’ process will need to find very significant cost reductions that do not undermine the required standard of landlord service but that make it possible to levy a reasonable rent increase and maintain the working balance at around £1m.
It is recommended that the Executive
1. asks the Community Overview and Scrutiny Committee to consider the detailed HRA budget papers for 2008-09 and identify spending priorities within the landlord service; and
2. gives further consideration to the HRA budget for 2008/2009 at its meeting on 8th January 2008.
There are no background papers (as defined by Section 100D(5) of the Local Government Act 1972) relating to this report.