Agenda item

5.1

Mick Watts questioned what assurances Members could give to ensure that the projected underspend in the Housing Revenue Account was fully allocated.

Richard Palmer stated that now the Council had a self-financing Housing Revenue Account, resulting in the Council holding all risks, there was a need to maintain a substantial reserve to mitigate any such risks or problems that may arise and therefore, a large proportion of the underspend might need to be placed in reserves.  A reserves strategy was under development, to establish the size of the reserve required.  A particular risk was the potential impact of welfare benefits reform on the ability of tenants to pay their rent.  Initially, any unallocated underspend at year end would be carried over into reserves at the year end and would not be lost to the Housing Revenue Account.  The Cabinet would be making a decision on this issue at its meeting to be held in February 2013.  Councillor Harry Harpham, Cabinet Member for Homes and Neighbourhoods, attending as an observer, confirmed that the Council needed to be aware of the risks involved in terms of the transfer of the Housing Revenue Account, stressing the need for robust plans in terms of any uncertainties, hence the need for considerable reserves.  He stated that it was the aim of the Council to have a high quality housing service therefore, reserves would not be maintained at a higher level than needed and any surplus would be reinvested into housing services.