HRABP - Draft 8 - Flipbook - Page 25
repayment reserve whilst servicing the debt
as planned. It is intended that any surpluses
in future years will be transferred to a new
Housing Development Reserve instead to
help us meet our challenging development
targets. This reserve was set up in 2017/18
with an initial transfer of £1m.
11. Rents, Service and other
charges
The previous HRA Business Plan was
updated to reflect the 4 years annual rent
reduction imposed by the Government and
the subsequent reduced level of income. The
Government has subsequently announced
that social landlords can increase dwelling
rents to a maximum of CPI +1% for the
five years 2020/21 to 2024/25. We have
revised our budget and taken a prudent
approach to rental income for this period,
forecasting a 3% increase for 2020 – 2022
and 2% increase thereafter. The revised
rent increases allow the Council to service
the current debt, set aside provision for
debt repayment, maintain investment in
the stock and fund the current Housing
Development Programme.
The Government expects the majority of
new properties to continue being let at an
Affordable Rent which is typically higher
than Social Rent. The intention behind this
flexibility is to enable councils to generate
additional capacity for investment in new
affordable homes. We have been applying
Affordable Rents to our new or re-let
properties since 2015, with an agreement
allowing us to retain our Right to Buy
receipts for investment in new affordable
rented homes.
Charges for services such as communal
heating, servicing and sheltered housing
support reflect the additional services
provided to some tenants and are reviewed
annually to ensure they cover costs rather
than to make a profit .
Additional income is received through
garage rentals (2018/19 has an income
budget of £140k) and other rentals,
leases and wayleaves (an income budget
of £43k for 2018/19).
12.
Repairs and Maintenance
The HRA repairs and maintenance (R &
M) programme is split between capital
and revenue. Both have historically been
funded from the revenue income derived
from rents. In 2018/19 a budget of (£471k)
was included in both the R&M revenue and
capital budgets for additional works on the
Council’s only tower block at St Peters
Court. These will include new window seals,
door replacement, water tank replacement,
and a new sprinkler system. These works
(with the exception of the water tank
replacement) have been included in the
programme in response to the issues
identified by the tragic Grenfell Tower fire
in 2017 and demonstrate the Council’s
commitment to ensuring the safety of
tenants of the building.
The amounts included in the R&M revenue
budget enable the Council to carry out all
the necessary major works to maintain our
homes to a good standard for the life of the
business plan. However, events such as the
Grenfell Tower tragedy demonstrate that
unforeseen events can have a substantial
impact on planned budgets, indicating
the importance of maintaining sufficient
reserves.
13.
HRA Capital Programme
The HRA capital programme consists
of capital budgets for housing repairs,
project redevelopment and the housing
development programme. The capital
programme is funded via the rental income
we retain, the Major Repairs Reserve (MRR),
Right-to-Buy (RTB) receipts, external
funding and capital receipts held.
The chart below identifies the capital
investment projected within the existing
housing stock to ensure it is maintained
and improved. The detailed breakdown
of the expenditure on the housing stock
is provided within Appendix A of this
business plan.
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