Agenda item

Housing Revenue Account

(To Follow)


The Head of Finance (Finance, Investment and Risk) introduced the report and the following was noted:


  • The Housing Revenue Account (HRA) operated as a single entity managed through various divisions. Primarily, Repairs & Maintenance, Financial Planning & Monitoring as well as Tenancy & Caretaking Services.


  • Following a four year rent level reduction that was implemented by Central Government policy, as of 1st April this cap was being lifted and LA’s would be able to increase rent levels by CPI plus 1%.


  • In 2012, a retention agreement was signed which enabled two thirds of receipt of sales from right to buy schemes to be retained. As a result of the borrowing cap being lifted, the Council had more opportunities to invest in Council homes, which had been included in the Housing Strategy.


  • The department operated a 40 year business plan on the budget which was reviewed and updated each year to establish continued financial viability of the ring fenced budget.


  • GLA funding was received which was partly utilised on the purchasing of Brick by Brick properties.


  • As part of the affordable housing programme, the department explored how to fund additional street property acquisitions. This may be through available right to buy receipts and a proposal would be submitted to Cabinet on options later this year.


The Sub-Committee was given the opportunity to ask questions on the content of the report.


In response to a Member question on whether Council officers offered help to residents in securing mortgages to purchase their properties, officers said that residents were encouraged to seek independent advice on obtaining a mortgage. The extent of the information given was purely on the right to buy process as the loss of Council homes through right to buy was detrimental to social housing stock.


A Member commented on a letter that was sent to the Secretary of State which made allegations on the inappropriate use of the funds received from the GLA. The officer made clear that some of the funding received from the GLA was used to part purchase Brick by Brick properties and the remainder of purchases were through HRA borrowing.


It was further asked what was being done to ensure that value for money was received to ensure that the HRA was not overpaying for properties bought. The officer said that as part of their business plan, the asset acquisition team explore all avenues to ensure that purchases were affordable as well as providing value for money. The price agreed for affordable homes was one set price regardless of the size and mix of the property. The officer also agreed to provide a detailed briefing on the impact on HRA of purchasing Brick by Brick properties.


It was asked whether the Council could have taken any other steps to improve the process of the transition to paying water rates directly to Thames Water for its tenants. Officers said that the decision around the change was made by Thames Water and not the Housing service. The department conducted publicity, sent out letter well in advance of the changes with contact details of officers for further information, ran surgeries in sheltered accommodation blocks and supported tenants as best as possible. It was further commented by a Member that there were issues in communication with vulnerable residents that their rent bill was being reduced as a result of the changes.


A Member asked how the Council prioritised property maintenance against the money placed in reserves for fire safety. Officers said that stock condition surveys were conducted and reviewed regularly as well as repairs data which enable prioritisation. It was highlighted that Council’s homes continued to meet the decent homes standards.


At the conclusion of this item the Chair thanked the officers for their attendance at the meeting and their engagement with the Sub - Committee and questions.


Information request by the Sub-Committee

  • Impact of HRA on purchasing of Brick by Brick properties.
  • Provide financial information to reassure the committee HRA getting VfM for the properties it purchases

In reaching its recommendations, the Sub-Committee came to the following Conclusions:

  1. The Sub-Committee recognised that Housing Grants provided by the Government to the Mayor of London for purchases was cost effective and provided good value for money for the Housing Revenue Account. As such the continued lobbying of the Government to increase the housing grant by the Administration was both welcomed and supported.
  2. The Sub-Committee was concerned about the level of transparency on acquisitions of housing stock funded by the Housing Revenue Account and agreed that improvement was needed in this area.
  3. The Sub-Committee acknowledged that the provision of temporary accommodation was a significant challenge for the Housing Service, both in terms of resources and the number of households affected.
  4. In light of the impact upon the general Council budget the various initiatives undertaken to reduce the cost of temporary housing provision was welcomed.
  5. The Sub-Committee agreed that a review of temporary accommodation would be included on its work programme for 2020-21

The Sub-Committee resolved to recommend to the Cabinet Member for Homes and Gateway Services that:

  1. That the administration continues to lobby Government to increase housing grants to the Mayor of London.
  2. That quarterly reports be published by the Housing Service on transactions relating to the acquisition of housing stock funded by the Housing Revenue Account.


Supporting documents: