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Waverley Borough Council Committee System - Committee Document

Meeting of the Executive held on 08/01/2008
DRAFT HOUSING REVENUE ACCOUNT REVENUE ESTIMATES 2008- 09



Summary & Purpose
In December, Members considered the base estimated position for the Housing Revenue Account (HRA) revenue budget for 2008/09. Since that time much work has been done to review the level of individual budgets and the draft housing subsidy determinations have been received from the Department for Communities and Local Government (CLG). This report gives Members an opportunity to consider the latest position.

APPENDIX B.2
Waverley Borough Council

EXECUTIVE - 8TH January 2008

Title:
DRAFT HOUSING REVENUE ACCOUNT REVENUE ESTIMATES
2008- 09
[Portfolio Holder for Finance: Cllr M H W Band
Portfolio Holder for Housing: Cllr Mrs P M Frost]
[Wards Affected: All]

Summary and purpose:

In December, Members considered the base estimated position for the Housing Revenue Account (HRA) revenue budget for 2008/09. Since that time much work has been done to review the level of individual budgets and the draft housing subsidy determinations have been received from the Department for Communities and Local Government (CLG). This report gives Members an opportunity to consider the latest position.

Environmental implications:

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.

E-Government implications:

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.

Introduction

1. Much detailed work has been carried out since the December Executive with a view to improving the difficult financial position of the HRA. A list of proposed changes is attached at Annexe 1.

2. In addition, the draft housing subsidy determinations were received from CLG on 26 November (3 weeks later than usual) and were subsequently amended on 10 December as the Department realised that the draft contained major errors. The consultation period is due to close on 9th January and the final determinations will be issued after this date.

2008-09 Draft Revenue Estimates

3. The effect of the draft subsidy determinations is to increase Waverley’s contribution to the Government by an estimated 898,000 to some 10.3m before the application in the budget of any rent increase.

4. The savings and changes proposed by the star chamber process are now incorporated into the draft estimates, together with a rent increase assumed at the guideline 4.4% for illustrative purposes.

Rent Levels

5. 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. If Waverley increases rent by the Government’s guideline rent increase of 4.4%, subsidy is estimated to increase to some 10.8m which is illustrated together with the impact of a range of rent increases at Annexe 2.

Conclusion

6. It is estimated that Waverley’s HRA will need to pay a minimum of 898,000 additional subsidy to the Government in 2008-09. In order to do this and remain within the rent restructuring guidelines, savings must be found within the HRA.

7. The savings and changes being proposed impact on many of the individual budgets that make up the HRA and officers will need to maintain strict control throughout 2008-09 and beyond to ensure that, if approved, the required changes are delivered.

8. The potential for a number of significant claims on the HRA resulting from issues still to be resolved necessitates the retention of a higher working balance than usual. This also further compounds the problem of delivering a good housing service to Waverley’s tenants whilst remaining financially viable. The Council will be updated at the meeting on 19th February 2008.

Recommendation

It is recommended that

1 the Executive gives further consideration to the HRA budget 2008-09;
2 considers the list of budget changes at Annexe 1 that are now incorporated in the draft estimates and that will be discussed by the Community Overview and Scrutiny Committee; and

3 gives final consideration to the HRA budget for 2008/2009 at its meeting on 5th February 2008;

Background Papers (DoR)

Draft housing revenue account (Item 8) and draft housing revenue account subsidy determinations 2008-09.

CONTACT OFFICERS:

Name: Glennis Pope Telephone: 01483 523252
E-mail gpope@waverley.gov.uk

Name: Paul Wenham Telephone:01483 523238

Comms/exec/2007-08/212