Agenda Item No. 7(d)












Members were presented with the 2013 Housing Business Plan.


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 business model incorporated the most recent investment requirements based on the 2007 Stock Condition Survey, adjusted for works carried out since that date.


Average rents were £78.57 in 2013/14 calculated on a 52 week basis.  Rents assumed an increase by inflation plus 1% from 2014/15 onwards in line with the notional rent guideline increase as per WG guidance.


The Major Repairs Allowance was £2.8million per year.  No inflation had been allowed for the grant.


All other Revenue income and expenditure was based on the 2013/14 revised budget plus inflation. There had also been an increase of £200,000 per annum for a proposed restructure from 2014/15 onwards. The proposed restructure was intended to strengthen the service in terms of dealing with anti-social behaviour, statutory compliance (e.g. fire risk assessment work, gas and electrical safety) asset management and rent recovery and make it fit for forthcoming challenges.


To deal with the specific impacts of Welfare Reform an additional staffing budget of £100,000 had been included within the plan for years 1-4. 


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 £165,000 (real terms) which amounted to 1.02% of gross rental income. 


The latest projections were attached at Appendix G(i) and G(ii) to the Business Plan  and outlined the total amount of prudential borrowing required over years 2 – 7 increasing from £32.4 million to £33.9 million. The date anticipated that all prudential debt could be repaid was now 2032/33 (previously (2031/32). 


Additional amounts had been included in the Housing Improvement Programme and were as follows:-


An increase in the annual amount for Aids and Adaptations of £171,000 per annum from 2014/2015 onwards, increasing with inflation. This was based on the current high demand for the service.


An additional £500,000 per annum for years 2 to 4 inclusive, for works to Leasehold properties.  Whilst capital and revenue works to Leasehold properties were recoverable from the leaseholder it was thought that a prudent approach would be to include the cost of the works in the Business Plan.  It remained however, critical that a procedure was in place to minimise any recoverable costs.


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



December 2012

December 2013


WHQS Target



No Change

Prudential Borrowing

£32.4 million

£33.9 million

+£1.5 Million

Peak Debt

£30.1 million

£31.5 million

+£1.4 million

Repayment of Debt



+ 1 years

Revenue Surplus in year 30

£98.2 million

£103.5 million

+£5.3 million


One of the major risks to the Council was the impact of prudential (unsupported) borrowing that was required to ensure WHQS was met by April 2017.  The costs of borrowing must be able to be met from the HRA, and it must be considered that any outstanding unsupported borrowing repayments would fall on the general fund should the housing stock transfer at any point in the future before the debt was repaid. The implications of this were set out in the business plan.


There were extensive monitoring and regulatory arrangements that govern the Council’s finances.  In reality the council would take steps to avoid severe financial consequences and so the risks were consequently more likely to impact on the level of improvement to properties and level of service to tenants.


Leaseholders would be responsible for a proportion of costs of the improvement works (external works).  There was a need for formal consultation as there were a set number of legal steps that would need to be followed in order to ensure the costs of works would be recouped by the Council. The process for consultation had commenced and all leaseholders had been issued the required formal notices in accordance with the Service Charges (Consultation Requirements)(Wales) Regulations 2004.


The figures in the Housing Business Plan were based on current projections and if financial conditions worsened then the level of investment proposed may not be achievable.


The total level of required Prudential Borrowing is £33.9m and the peak debt was £31.5m.


The Housing Revenue Account working balance at 1 April 2013 was £13.570m.


This was a matter for Council decision.


RESOLVED – T H A T the Housing Business Plan 2013 be recommended to Council for approval.


Reason for decision


To obtain approval for the Housing Business Plan 2013