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Agenda Item No. 7(a)

 

 

THE VALE OF GLAMORGAN COUNCIL

 

EXTRAORDINARY COUNCIL MEETING:  23rd JANUARY, 2013.

 

REFERENCE FROM CABINET: 17th DECEMBER, 2012.

 

C1943       HOUSING BUSINESS PLAN (L) (HBMCS) (SCRUTINY – CORPORATE RESOURCES) –

 

Members were presented with the Housing Business Plan 2012.

 

The Welsh Government (WG) required all local authorities who retain their housing stock to submit an acceptable Housing Business Plan annually that indicated a detailed financial forecast in the form of a 30 year financial model.

 

The Business Plan was the primary tool for a local authority’s housing landlord service and included all assets within the Council’s Housing Revenue Account (HRA).

 

The Plan would need to be submitted to WG no later than 31 December, 2012, and would form the basis of the Major Repairs Allowance (MRA) grant application, a pivotal financing component for the Housing Improvement Programme (to meet the Welsh Housing Quality Standard).

 

The report indicated that average rents had increased from £72.24 to £75.87 calculated on a 52 week basis.  Rents were increased by inflation plus 1% from 2013/14 onwards in line with the notional rent guideline increase as per WG guidance.

 

The Major Repairs Allowance had increased from £2.7 million per year to £2.8 million per year.  No inflation has been allowed for this grant.

 

All other Revenue income and expenditure was based on the 2012/13 revised budget plus inflation.

 

The provision for doubtful debts had been increased to allow for the negative impact of the welfare reform on rent collection.  The Provision had been increased by £220,000 (real terms) which amounted to 1.4% of gross rental income.  The sensitivity analysis explored the scenario of 100% of this shortfall in housing benefits impacting on rent collection.  Taking this into consideration, the business plan would still be viable.

 

An additional staffing budget had been included within the plan of £50,000 in year 12/13 and £100,000 (plus inflation) for each year after, until 2016/17.  This budget would be used to fund staff to work with tenants providing them options to prevent them falling into arrears and/or becoming homeless as a direct result of the welfare reform.

 

Void days had increased due to the length of time taken to bring these properties up to WHQS (at the same time as void maintenance works). An additional sum of £160,000 had been included in both years 2013/14 and 2014/15 to account for the loss of rental income due to the delay.  It was anticipated that void days would reduce and return to normal by 2015/16.

 

The latest projections were attached at Appendix H(i) and H(ii) to the Business Plan and illustrated a reduction in the total amount of prudential borrowing required over years 3 – 8 from £32.9 million to £32.4 million. However, the date anticipated that all prudential debt could be repaid was now 2031/32 (previously (2029/30). 

 

A summary of the movement in the financial position is included in the table below.

 


 

December 2011

December 2012

Difference

WHQS Target

2016/17

2016/17

No Change

Prudential Borrowing

£32.9 million

£32.4 million

-£0.5 Million

Peak Debt

£31.7 million

£30.1 million

-£0.7 million

Repayment of Debt

2029/30

2031/32

+ 2 years

Revenue Surplus in year 30

£102.2 million

£98.2 million

-£4 million

 

RESOLVED - T H A T the Housing Business Plan 2012 be recommended to Council for approval in January 2013.

 

Reason for Decision

 

To approve the Housing Business Plan.

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