Agenda and draft minutes

To receive any apologies for absence.

Apologies were received from Councillors Bhullar, Webb and Ms Brown (Co-Opted Member and Chair of Tenant and Leaseholder Scrutiny Group).

Members to declare any interests and party whips in relation to matters to be discussed at the meeting.

There were no declarations of interest made.

To confirm the minutes of the meeting held on 1 November 2022.

Resolved that the minutes of the meeting held on 1 November 2022 be confirmed as a correct record.

To determine whether there are any additional items of business to be considered as a  matter of urgency.

There were no additional items of business to consider.

An urgent item was considered under urgency provisions

To consider and comment on the draft Housing Revenue Account 30 Year Business Plan.

Further to Minute No. 40/22 (1 November 2022), the Board received the Housing Revenue Account (HRA) 30 Year Business Plan.

The Associate Director of Savills delivered a presentation to the Board and outlined that the HRA Business Plan set out the strategic plan for managing the Council’s housing stock.  The Council’s HRA owned over 28,200 properties for rent, the freehold on over 1,252 leasehold flats and other buildings across the borough.

The HRA was a ring-fenced income (from rents and service charges) and expenditure account for council housing and sits separate to the Council’s other budgets.  Expenditure related to operational costs, maintenance, debt costs, major refurbishments and new build developments through its capital programme.  The Council has had a self-financing model since 2012, this led to the Council adopting additional debt (approximatively £25m) to ‘buy’ its housing stock from the Government, however it allowed greater autonomy from central government with better long- term financial planning.

The Council had not produced a 30 Year Business Plan before and the Plan had been authored to ensure the sustainability of the HRA.  The Board was advised that it was a draft document and would be amended in future years to address factors including:

•        The results of the 14,000 stock condition surveys due to be procured.

•        The new Decent Homes Standard is expected shortly, with new Housing requirements due to be introduced.

•        The cost of compliance with new building legislation including the Building Safety Act 2022

•        Improving energy efficiency; the Council’s climate change strategy had identified that the cost of retrofitting Council housing stock was an estimated £600m, with external funding needed to achieve this.

Benchmarking exercises had been conducted with demographically similar local authorities and both the operating margin and reserve levels were comparable.  Sandwell’s repairs expenditure was higher than others, however the Council management costs (£906 per unit – 2020/ 2021 average) were an average of £300 lower than other comparable local authorities.

Following assessments and desktop exercises, the following risks had been identified:

•        Government Rent Policy had capped increases by 7%, with costs in the sector up by 11.5% on average.

•        Energy efficiency challenges, over 50% of housing stock met EPC C standards across the borough.

•        Properties lost via the right to buy scheme were expected to increase due to discount rates for tenants under that scheme to go up by 10.1% next year.

•        Changing regulatory demands and associated cost pressures.

The existing development programme, due to be completed for 2026/ 2027 was due to provide 475 homes, at a cost of £109.6m and funded by borrowing, grants from homes England and right to buy receipts.  However, it was expected that a greater number of properties would be lost via the right to buy scheme during this period resulting in an overall loss of council housing stock.  Three scenarios had been modelled for additional new builds, based on an average cost of £250,000 per property.

The HRA debt stood at £484.886m, having been  ...  view the full minutes text for item 5/21

To receive an update from the Chair of the Tenant and Leaseholder Scrutiny Group.

The Board deferred the update until the next Safer Neighbourhoods and Active Communities Scrutiny Board meeting.

To note and review the Boards Work Programme 2022/23 and the Cabinet Forward Plan.

The Board noted its Work Programme for 2022/23 and received the Cabinet Forward Plan.