Agenda item

Colleen Warren, Financial Services Manager, presented her report on the Council’s Housing out-turn position for 2022/23. She highlighted key points within the content of the report as follows:

·         The report provided members with the provisional summary of actual income and expenditure compared to the revised budget for Housing Revenue Account (HRA) and Housing Repairs Service (HRS) and showed how any surpluses had been allocated to reserves.

·         For 2022/23 the Council’s HRA net revenue budget was set at £38,670, which resulted in an estimated level of general balances at year-end of £1,063,872.

·         The HRA financial performance quarterly monitoring report for the 3^rd quarter predicted an underspend of £961. The provisional outturn for 2022/23 now indicated an improvement of £119,614, resulting in an overall budget underspend of £120,575 (including additional transfers to/from earmarked reserves). This would result in HRA balances at 31 March 2023 of £1,184,447.

·         Paragraph 3.3-3.8 of her report highlighted movement and variances to the outturn position and outfall summary.

·         For 2022/23 the Council’s HRS net revenue budget was set at zero, reflecting its full cost recovery nature.

·         The HRS deficit figure reported at Quarter 3 was £403,727; resulting in a movement from Quarter 3 to Outturn of £181,882.

·         The net trading deficit of £221,845 was the result of several year-end variations in income and expenditure against the approved budget. as detailed in Appendix F, while the key variances were summarised at paragraph 4.3 of her report:

·         The main contributory factor to the deficit was the ongoing recruitment and retention challenges, being felt not just by the council but across the construction industry as a whole. This inability to attract and retain staff resulted in a greater reliance on the use of sub-contractors to ensure that service demands were met. The cost of using sub-contractors was however more expensive than the HRS’s own workforce, due to the ongoing impact of Covid19, the current inflationary crisis and a reduced pool of contractors from which to secure services. These additional costs were therefore not fully offset by the vacancy and material savings achieved by not carrying out the work internally. These increased costs were further compounded by increased demands resulting from the higher level of voids currently being experienced, although this was partially offset by a reduction in responsive repairs works being requested.

·         As the increased subcontractor costs were not reflected in the service hourly rate and overhead recovery was not recouped on sub-contractors this resulted in an under recovery of full costs from the HRA. Despite this, the overall level of rechargeable income was overachieved due to the volume of voids works being undertaken (of both a capital and revenue nature), albeit at a higher cost, compensating for a reduction in responsive repairs works.

·         The forecast deficit also included the impact of the nationally agreed pay award implemented in December, which was significantly over and above the assumptions included within the MTFS, and the impact of increased inflation on utilities as a result of the escalating cost of gas and electricity supplies, as outlined in both the General Fund and HRA variances.

Members discussed the content of the report in further detail.

Councillor Hewson, Chair, raised concerns that the 2022/23 insurance claims expenditure budget of £168,930 had been overspent by £115,330 at £284,260 actual expenditure.

Colleen Warren, Financial Services Manager, detailed the background behind the increase in disrepair claims. Private finance companies were targeting tenants of council homes and rented accommodation promising compensation payments, with the finance companies ultimately benefitting and little refunds ever reaching the tenants. This was a growing trend nationally which all local authorities and rented accommodation providers were having to manage.

Matthew Hillman, Assistant Director, Investment confirmed there had been an increase in disrepair claims in terms of damp/mould and condensation. Operatives would always enquire when visiting properties whether there were any condensation problems. It was difficult to identify such problems in circumstances when operatives were refused access to carry out repairs. A short life working group had been set up to look at the issues. New processes

had also been introduced with test products being tried such as sprays, fans and humidity devices to help with condensation.. Additional administrative resources were also being employed together with an Insurance Officer within the Finance Section.

Councillor Nannestad, Portfolio Holder for Quality Housing highlighted that the Government was taking steps to restrict the operation of these type of finance companies.

Mick Barber, Chair of LTP, highlighted that tenants were aware of these unscrupulous companies. Additional warnings on social media platforms would be used to make people aware.

Colleen Warren emphasised that any disrepair claims received which were not reported by the tenant were shut down immediately as there was nothing to report.

RESOLVED that the provisional out-turn position for the HRA and HRS for 2022/23 be noted.