Agenda item

To consider a report by the Director of Environment and Housing which provides an update on the revenue financial position for the Housing Leeds (HRA) service as at the end of February 2016. The report also sets out the financial strategy in respect of rents and service charges from 2016/17.

(Report attached)

The Director of Environment and Housing submitted a report which provided an update on the revenue financial position for the Housing Leeds (HRA) service as at the end of February 2016.

The report also set out the financial strategy in respect of rents and service charges for 2016/17

Richard Ellis, Head of Finance, Environment and Housing, presented the report and responded to Members comments and queries.

Detailed discussion ensued on the contents of the report which included:

·  Key variances to Income  – Income projected to be £694K

·  Expenditure, particularly around disrepair provision projected to be £243K, above the original estimate

·  Repairs budget projected to overspend by £696K

·  Net savings of £874K are projected in relation to employees: vacant posts, savings on training and occupational health

·  Savings of £369K projected in relation to premises costs

·  Other key variations include a reduction in heat lease schemes £775K, additional contributions for large insurance claims £364K and saving to the tenant mobility scheme £170K

·  Right to buy sales (RTB) sales – 397 completed sales to end of February, total sales being projected at 410 to year end. Anticipated total receipts could generate £11.7m

·  Collection Rates – 97.17% for dwelling rents, compared to the target of 98.06%

·  Arrears – Currently £6.24m compared to £5.8m at the end of 2014/15

Referring to paragraph 6.1 of the submitted report Andrew Feldhaus queried the technical arrears and the effect of delays with benefits.

In responding the Head of Finance said the technical arrears would arise when there was a time difference in the collection of direct debits.

Mr Feldhaus questioned if there was a similar time lag in recovering benefits.

In responding the Head of Finance said any such time lag did not affect the overall performance.

Councillor Anderson referred to section 7 of the submitted report “Financial Strategy – Rents & Service Charges” and queried how the predicted loss of £283m of rental income over the 10 year period (2016/17 – 2024/25) had been calculated.

In responding the Head of Finance said the figures were based on assumptions from previous years.

Referring to the reduction in rental income Councillor Ritchie questioned how any shortfall would be managed and queried if an increase in the level of service charges was adequate and sustainable.

In responding the Director said the bulk of the difference would be made up by the use of HRA reserves together with staffing efficiencies and improved targeting of resources. There would also be a need to review our long term strategy and a new Business Plan for summer 2016 would be prepared.

In offering comment Jo Hourigan said a shortfall in rental income could not be addressed through the use of reserves for a long period.

Ted Wilson referring to a potential increase in service charge each year requested to know how much would such an increase generate?

In responding the Director said that there was scope to increase the charges but at this stage no decision had been taken.

The Chair thanked Members for their contributions

RESOLVED – That the contents of the report be noted