Agenda item

Please find attached a power point presentation by Nicky Debbage, followed  by the 24th January 2017 Cabinet report and Appendices.

Nicky Debbage gave a presentation on the above issue and made the following points:

(1)        The HRA is a ring-fenced separate account. The proposals for 2017/18 budget will be done in the context of a Business Plan;

(2)        The Government policy in respect of subsidy was noted;

(3)        15% of budget savings were required. Since there were no rising balances, there was a need to address this issue. Rent levels needed to be controlled by Government as a mechanism for achieving more from less. If costs were carried through from previous years, this provided maximum flexibility;

(4)        Bristol City Council operated as a landlord since 90% of funding was derived from rents. The Council needed to find ways to manage existing homes, build new homes, meet the costs of unrecoverable debts and ensure appropriate rent levels were maintained;

(5)        The average rent level was now at £80 for the city’s properties and since this comprised 90% of income, some re-thinking was required by the Council in respect of areas such as voids. Under current arrangements, the average sale of properties was £56,000 once the sale had been applied and match funding was set at 70%;

(6)        Whilst the Council did lose income from bad debts, it did not write off very much – approximately 2.5% on an annual basis. The level of debt remained fairly steady at £12 Million per year

(7)        The current focus was on repair and investment. Information was being gathered from stocks – existing tower blocks were 50 to 60 years old;

(8)        The income had decreased, whilst the expenditure had increased between 2016/17 and 2017/18 with current reserves set at £0.5 Million. Whilst the Business Plan was balanced for 16 years, there would then be a gap in unfunded capital stock which would require funding.

Councillors asked the following questions and officers replied as appropriate:

Renting

Whilst the renting of garages was one area where the Council could obtain revenue, the rent formula was set by Government in respect of garages, parking spaces and shops. Officers were in the process of examining their assets to see if there were ways that they could operate with some of them in a more commercial way.

Empty Homes

In response to a Councillor’s question concerning the need to reduce the number of empty homes, officers confirmed that there were targets which had been set by Councillor Paul Smith (Cabinet Member for Homes). However, it was pointed out that many of the Council’s clients were vulnerable individuals and the Council frequently found them in a poor state. As a result, officers were considering ways in which the inspection regime could be improved to address this. Paul Smith confirmed the importance of proactive estate management and stated that there was a target to reduce the number of empty properties from 550 to 250 and reduce the turnaround time from 49 days to 20 days – some initial success had already been achieved in this area.

Communication

In response to Councillors’ questions concerning the need for improved communication to Ward Councillors concerning issues of empty properties in their wards, officers explained that there would remain difficulties with temporary accommodation since frequently Council House property owners were waiting for offers on other properties elsewhere. In addition, Paul Smith pointed out that this problem was exacerbated by the fact that the Council’s rent was one third of the average private sector rent which was reaching the point of being unsustainable and aggravating this problem.

Emergency Accommodation

Whilst it was acknowledged that emergency accommodation was a cost, this was a General Fund cost not in the HRA.

Re-Lets

Councillors applauded the saving of £484 a month from re-lets by changing the way in which these were dealt with.

Alternative Methods of Funding

Officers confirmed that 30% came from right to buy receipts and 70% from rents. Almost every possible method which had been used in the past to fund the HRA had now been closed off. Officers were considering some possibilities, such as cross tenure developments but these were limited due to upfront costs. In addition, officers had confirmed that legal advice had been received to confirm that the use of private housing for sale to ensure development was acceptable.

Paul Smith confirmed that one of the reasons for the forthcoming Cabinet report to set up the Housing Company was to address this issue so that it could be directly managed through the HRA.

Members thanked officers for providing a very cogent and helpful report.

Resolved – that officers provide members with information on the meaning of the acronyms contained in the report.

Action: Nicky Debbage