HRABP - Draft 8 - Flipbook - Page 20
The chart below shows the key variables of the current years Business Plan: the debt cap (set
by government under the self-financing settlement); the debt (total borrowing requirement);
capital programme expenditure; and the working balance of the HRA. Each of these is explained
further below. It illustrates that the HRA can fund new build, redevelopment, stock maintenance
and improvement as well as other identified investment opportunities from expected income
without the need for additional borrowing.
HRA Business Plan Key Variables 2018/19
2018/19
2019/20
2020/21
2021/22
2022/23
2023/24
2024/25
2025/26
2026/27
2027/28
2028/29
2029/30
2030/31
2031/32
2032/33
2033/34
2034/35
2035/36
2036/37
2037/38
2038/39
2039/40
2040/41
2041/42
2042/43
2043/44
2044/45
2045/46
2046/47
2047/48
£100,000,000
£90,000,000
£80,000,000
£70,000,000
£60,000,000
£50,000,000
£40,000,000
£30,000,000
£20,000,000
£10,000,000
£0
HRA Debt Cap
HRA Debt
Debt Cap - each local authority HRA has a
debt cap imposed by government as part
of the 2012 self-financing settlement. This
limits the amount of borrowing that the
HRA can undertake. Our cap is £87.26m.
As the chart shows, the borrowing limit
remains the same over the 30 year period
so the maximum amount the HRA can
borrow is in line with government rules.
The HRA will be debt free on
current projections from 2043/44.
Debt - As the chart shows, the council is
able to fund the investment programmes
outlined in this business plan without
undertaking any additional borrowing. Our
borrowing reduces from £76m in 2021/22
to £65.2m the following year when the first
tranche of borrowing (£10.7m) is repaid.
The plan assumes that maturing debt will
20 East Suffolk HRA Business Plan 2018 - 2048
HRA Working Balance CF
Capital Programme
be paid down as long term loans expire.
The HRA will be debt free on current
projections from 2043/44. The borrowing
headroom is £11.29m currently though this
will increase with each loan that is repaid.
This gives an opportunity for us to take
further loans if required to meet future
development objectives to achieve our
strategic aims.
Revenue Working Balance – We have
a minimum reserves balance of 10% of
total income received in any given year.
In 2018/19 the minimum reserve balance
required is £2m, however, it is budgeted
to be £3.7m. This balance is intended
to mitigate potential risk. This level of
reserves in the business plan is felt to be
prudent in light of the future uncertainty
around Brexit, Government housing policy,
inflation, interest rates and cash flow. As
the charts shows, the revenue balance is
estimated to rise to £14.3m by 2048/49.
