Submitted – A report (previously circulated) of the Director of Economic Growth and Neighbourhood Services which had been considered by Cabinet at its meeting on 7 January 2020, to propose the revenue budget, rent levels and service charges for the Council’s Housing Revenue Account (HRA) for the financial year 2020/21 in the context of the HRA Medium Term Financial Plan to 2023/24 and the 30-year Business Plan.
It was reported that for the first time since 2016/17 the Council had been given the discretion to inflate rents by CPI plus one per cent which equated to an average weekly rent increase of 2.7% for 2020/21, with average social rent of £71.30 and affordable rent of £82.55. Members were advised that 68% of tenants would have their rent and most services charges covered by Housing Benefit or Universal Credit.
The Assistant Director Housing and Building Services reported that the Government had also lifted the borrowing cap on the HRA, enabling the Council to borrow an extra £9million to fund the housing capital programme; and that this could be supplemented with Homes England grant with the overall plan being to provide 100 affordable homes per annum for the next ten years. It was also reported that over 220 households had already benefitted from the Council’s current new build programme which had taken place at various locations around town and demand for these houses continued to be exceptionally high.
Details were provided on the priorities identified within the Housing Business Plan and particular reference was made to the investment in housing stock, with Northgate ward identified as a key area for investment.
A discussion ensued in respect of the feasibility of purchasing properties which had been subjected to recent drug raids in the town. It was reported that the Council would work with landlords to raise the standards of properties in the borough; had considered work undertaken to improve housing standards in other areas in the North East; and Members noted that two properties on Skinnergate had been purchased to be developed into a mixture of houses and apartments, helping to improve the general amenity of the Skinnergate area whilst increasing residential occupation.
RESOLVED – That this Scrutiny Committee supports the average weekly rent increase of 2.7 per cent for 2020/21, increases to the garage rents and services charges, the budget and Housing Business Plan, as appended to the submitted report.
The Cabinet Member with the Health and Housing Portfolio introduced the report of the Director of Economic Growth and Neighbourhood Services (previously circulated) requesting that consideration be given to the proposals for the revenue budget, rent levels and service charges for the Council’s Housing Revenue Account (HRA) for the financial year 2020/21,in the context of the HRA Medium Term Financial Plan (MTFP) to 2023/24 and the 30-year Business Plan.
The submitted report stated that the key decision to made regarding the HRA was the balance between rent and service charge levels and investment in housing stock; it was the first time since 2016/17, that Local Authorities had the discretion to inflate rents by the Consumer Prices Index (CPI) plus one percent, following four years of compulsory reductions; 68 per cent of tenants would have their rent and services charges covered by benefit payments; the Council’s rent and service charges tended to be much lower than other Social Landlords operating in Darlington; as Central Government had lifted the borrowing cap on the HRA, the Council could now borrow £9m to fund the housing capital programme, which could be supplemented with Homes England grant; and that the Council intended to build 100 affordable homes per annum for the next 10 years.
Particular references were made at the meeting as to how the properties were selected for works, such as replacement of doors and windows, and on the viability of building new properties when those properties could be purchased through the ‘Right to Buy Scheme’. The Cabinet Member with the Health and Housing Portfolio, Director of Economic Growth and Neighbourhood Services and Managing Director responded thereon.
RESOLVED - That the following recommendations be agreed for wider consultation, namely:-
(a) an average weekly rent increase of 2.7 per cent for 2020/21 be implemented giving an average social rent of £71.30 and affordable rent of £82.55;
(b) garage rents and service charges be increased, as shown in Table 3 of the submitted report;
(c) the budget, at Appendix 1 of the submitted report, be approved;
(d) the Housing Business Plan, at Appendix 2 of the submitted report, be agreed.
(e) that the Director of Economic Growth and Neighbourhood Services be given delegated powers to proceed with new build schemes for affordable rent using the funding, as identified at paragraph 16 of the submitted report; and
(f) that the Director of Economic Growth and Neighbourhood Services be given delegated powers to acquire dwellings in the private sector as opportunities arise, particularly as part of regeneration initiatives as discussed at paragraph 17 of the submitted report.
REASON - To enable the Council to deliver an appropriate level of service to tenants to meet housing need and to support the economic growth of the Borough through housing development.