Agenda item

To consider and provide feedback on the Housing Revenue Account (HRA) Business Plan 2026-2056 and HRA Asset Management strategy 2026-2035 (report of the Assistant Director – Housing enclosed).

Consideration was given to the report of the Assistant Director - Housing which asked members to provide feedback on the Housing Revenue Account (HRA) Business Plan 2026-2056 and HRA Asset Management Strategy 2026-2035.

The Assistant Director – Housing and the Portfolio Holder for Strategic and Operational Housing attended for this item, with support from the Director of Finance.

The Assistant Director - Housing introduced the report to members and the following main points were highlighted by way of a presentation (appended to the minutes at Appendix 2):

• Background;
• Headlines;
• Consultation: November 2025;
• Sewage treatment works: update;
• Asset Management Strategy: outcome;
• Stock investment requirements;
• Approach to financing;
• A summary and next steps.

Members considered the report and made the following comments:

• Members reported that residents had given positive feedback regarding the tenant engagement work.

• Members had queried whether an alternative plan had been considered to avoid the Council going into further debt.
  • The Assistant Director - Housing had explained that, based on current modelling and government requirements for energy efficiency and Decent Homes standards, additional borrowing was necessary, however grants and potential rent-setting changes may reduce reliance on debt. The plan would be reviewed annually as part of the budget setting.

• Members asked if divesting housing stock had been considered.
  • The Assistant Director - Housing had confirmed that stock transfer had not been considered as part of this work.

• Members raised concerns about underinvestment in sewage treatment works and pumping stations and whether assets would fail before funding was available.
  • The Assistant Director - Housing responded that, in her opinion, there had not been an underinvestment. An intensive maintenance contract was in place, all sites had been surveyed independently approximately two years ago and are subject to ad-hoc inspections by the Environment Agency. While a capital programme was not in place at present, the existing Medium-Term Financial Strategy had a contingency for capital investment, and the programme would commence during 2026/27.

• Members queried whether South Holland Homes should be brought into the HRA.
  • The Assistant Director - Housing had noted that the acquisition of the units by the HRA was subject to ongoing discussion. Tenant consultation would be necessary; however they would benefit from additional rights under the HRA.

• Members had sought clarification on tenant feedback suggesting disposal of high-cost homes.
  • The Assistant Director - Housing had confirmed that an asset performance evaluation would be undertaken as part of the strategy to identify properties that might be costly to maintain or obsolete. Findings would be reported back to councillors.

• Members had asked whether investment in properties would increase stock valuation.
  • The Director of Finance (Section 151 Officer) explained that valuations were based primarily on rental income rather than component upgrades however poor-quality stock could negatively affect valuation;
  • The Assistant Director - Housing added that capital improvements reduced repairs expenditure and reduced fuel costs for tenants.

• Members had queried the borrowing strategy and options.
  • The Director of Finance (Section 151 Officer) highlighted that borrowing for investment was not inherently negative if affordable and linked to asset enhancement. Options included maturity loans, equal instalment of principal, or annuity-based repayment, each with merits depending on circumstances.

• Members had questioned why repair and management costs were high compared to other authorities.
  • The Assistant Director - Housing had explained that costs related to the maintenance of sewage treatment works, which were unique to South Holland. The Council could not fully recover these costs through tenant charges due to regulatory limits -maximum rates needed to align with those charged by Anglian Water. Efforts to reduce running costs were planned, such as exploring the installation of solar panels to reduce electricity costs.

• Members had asked when the maintenance contract was last tendered and plans for future tendering.
  • The Assistant Director - Housing had confirmed the contract had last been tendered approximately two years ago. Plans were in place to retender and potentially break down the contract into smaller packages to achieve better value following capital investment.

• Members had queried why staffing and workforce capacity implications were listed as 'none'.
  • The Assistant Director - Housing had clarified that the Delivery team had been repurposed to focus on wider HRA capital investment, and most works were contracted out. The main requirement was contract management rather than direct delivery.

• In conclusion, members acknowledged the huge amount of work that had taken place to produce the report and thanked all involved. Nonetheless, members commented on the general uncertainty of planning for a 30-year period and stressed the need for ongoing monitoring. Both financial and human resources needed to be reviewed annually to avoid slippage and ensure programme delivery. The committee agreed that this feedback be relayed to Cabinet for consideration.

• Upon invitation by the Chairman, the Portfolio Holder concluded with her acknowledgement of the work undertaken in the production of the documents by the Assistant Director – Housing and her team, the consultant (Savills) and the PSPS Finance team, and for the support of members.

AGREED:

a)    That following the Panel’s review of the HRA Business Plan 2026-2056, and the noting by Cabinet of the Panel’s comments in respect of monitoring and resources, the recommendation to Cabinet to adopt the Plan be endorsed;

b)    That the recommendation to Council to delegate minor operational and legislative amendments to the HRA Business Plan 2026-2056 to the Assistant Director for Housing in consultation with the s151 Officer and the Portfolio Holder for Strategic and Operational Housing, be supported;

c)    That following the Panel’s review of the HRA Asset Management Strategy 2026-35, and the noting by Cabinet of the Panel’s comments in respect of monitoring and resources, the recommendation to Cabinet to adopt the Strategy be endorsed; and

d)    That the recommendation to Council to delegate minor operational and legislative amendments to the HRA Asset Management Strategy 2026-2035 to the Assistant Director for Housing in consultation with the s151 Officer and the Portfolio Holder for Strategic and Operational Housing, be supported.