Agenda item

That the Committee would refer its views to Mayor and Cabinet, as follows – the Committee recommends that the Council open discussions with the Ministry of Housing, Communities and Local Government about actions which can be taken to stabilise the HRA Budget should sufficient overspend reductions and once-off-funding not be identified.

4.1        Nick Penny (Head of Service Finance) introduced the report – noting the challenging financial situation facing the Council and highlighting pressures in key areas across the general fund, housing revenue account (HRA), dedicated schools grant and capital programme. Nick also provided an update on the savings, cost avoidance and cuts measures projected through the medium-term financial strategy to balance the Council’s budget in coming years.

4.2        Nick Penny and David Austin (Executive Director for Corporate Resources) responded to questions from the Committee – the following key points were noted:

·        Of the savings outlined for 2024-25 £6.8 million had been achieved. £200k were unachievable and £1m were under review as potentially unachievable.

·        The HRA reserves were recognised as being below the optimal level. The intention was to keep 10% of the overall budget in reserve.

·        Work was taking place to stabilise the HRA over the medium term – and to rebuild the reserves.

·        Work was taking place to ensure that the repairs service was functioning as well as possible – to reduce costs and improve the service for residents.

·        Work was still taking place to finalise the budgets for the Lewisham Homes legacy company.

·        The process for recharges was currently being reviewed which might reduce some of the charges on the HRA as all of Lewisham Homes’ services were reincorporated into the Council.

·        The return of right to buy receipts was carried out for a number of reasons – including the benefits of accessing alternative funding as well as slippage in the timing of the capital programme.

·        The implementation of some savings proposals had been delayed by practical issues, hampering implementation.

·        The largest risk of slippage in the capital programme was on the delivery of new homes.

·        The later programmes were delivered through the capital programme the more costly they were (in terms of construction and also due to foregone rents for housing related schemes)

·        There were a number of initiatives being carried out to reduce the Council’s costs. Collecting Council debts was one part of this.

·        Work was taking place to streamline the management of debts and improve the availability of reporting.

·        An assessment was being made to determine what the correct level of resourcing was for the council tax and business rate collection teams.

·       None of the measures being taken to manage overspending in the HRA had an impact in the general fund (they were kept entirely separate)

·        A number of the measures being taken to manage the HRA budget were time limited and would only control costs in the short term.

·        Measures were being developed on medium and long term approaches to managing the HRA.

·        Officers were ensuring that there was early engagement with the government over the pressures facing the HRA.

4.3        Councillor Amanda de Ryk (Cabinet Member for Finance, Resources and Performance) was invited to address the Committee – the following key point was noted:

·        It was clear that the performance of Council tax and business rate collection teams needed improvement – and work was taking place to ensure that they had the correct levels of resources.

·        It was recognised that early warning to the government about the pressures facing the HRA was necessary – this would also help to demonstrate that the issues were widespread amongst local authorities.

·        It was important to recognise that the Council’s housing team had done a great deal of work to ensure that the repairs service was functioning as well as possible.

4.4         Actions:

·        That the turn around time for void housing be provided to the Committee.

4.5        Resolved: that the Committee would refer its views to Mayor and Cabinet, as follows – the Committee recommends that the Council open discussions with the Ministry of Housing, Communities and Local Government about actions which can be taken to stabilise the HRA Budget should sufficient overspend reductions and once-off-funding not be identified.