Decision details

Members considered a report which advised of the revenue estimates for the Housing Revenue Account (HRA) for the financial year 2007/2008.  Annex 1 provided a detailed analysis of the HRA’s proposed budget.

The report advised that the result of all the variations outlined in paragraphs 17 - 22 was an in-year surplus of £1,530k. The brought forward working balance of £4,835k from 2006/07 was to be used to make a revenue contribution to capital schemes of £912k.  The remainder brought forward of £3,923k together with the in year surplus of £1,530k leaves a working balance of £5,453k on the account. The HRA surplus was broadly in line with that forecast in the HRA business plan.  It was therefore suggested that the HRA surplus, after using £912k as a revenue contribution, remained on the account to be reviewed once the HRA business plan was updated to reflect both the budget detailed in this report and the 06/07 outturn position. Members were reminded that the HRA surplus was needed to fund future years in line with the Business Plan approved at Housing EMAP in July 2005.

It was highlighted that due to the removal of the payment of rent rebates through the HRA there was now a net surplus on the ‘notional HRA’ as the rent income now exceeded the subsidy payable by the government for HRA expenditure on management and maintenance etc. This resulted in a ‘negative’ subsidy payable by the authority to the government of £5,354k for 2007/08.  This compared to £4,902k for 2006/07.

Members queried about why the negative subsidy went back to the government. Officers explained that all local authorities had to have a HRA assessment on the number and type of properties to work out how much income the local authority should make. If the local authority makes more than this, then the negative subsidy had to go back to the government.

The Labour Group reserved their position.

Advice of the Advisory Panel

That the Executive member for Housing be advised to consider the budget proposals for Housing Revenue Account for 2007/08 contained in this report and listed below, and provide comments to be submitted to the Budget Executive on 16 January 2007.

Ø      2007/2008 Estimate as set out in paragraphs 17 – 20 and Annex 1.

Ø      Growth proposals as set out in paragraph 21.

Ø      Savings / additional income proposals as set out in paragraph 22.

Ø      The brought forward surplus of £4,835k be included within next financial year to be used as outlined in paragraphs 24 -25.

Decision of the Executive Member for Housing

RESOLVED:             That the advice of the Advisory Panel as set out above be accepted and endorsed.

REASON:                  To ensure a balanced 2007/08 HRA budget is submitted to the Executive.