HRA Subsidy
Presentation followed by debate and recommendation to the Executive.
Minutes:
Members received a presentation from Steve Partridge regarding the HRA subsidy buyout and possible options for borrowing and repayment. The Deputy Chief Executive (Corporate Direction) then provided a document showing five different options.
Each option was explained. It was suggested that the debt be structured so there is both long and short term borrowing, with the long term borrowing fixed for a 30 year period with no repayments until year 14/15.
During discussion the following points were raised:
· The option of building more houses would be explored but the costs may not be recoverable within a reasonable period, particularly if the land costs are also taken into account.
· The possibility of acquiring housing stock from developers as part of Section 106 agreements would be explored.
· Options for council to deliver new housing would be the subject of a future report.
· The third option presented to Members provided the most flexibility.
· The wish to see much of the housing provided in the SUEs as Council housing rather than owned by a housing association.
· The need to keep current housing up to date and to implement necessary improvements.
Members asked that any updated information be sent to them as soon as it became available.
RECOMMENDED -
1. That the Executive adopts a debt repayment structure for the buyout of HRA subsidy that gives maximum flexibility and headroom: from the options presented, that was the model commencing repayment in year 15, as that option currently maximises the potential for the council to increase its stock capacity over time (new build and acquisitions), as well as improving the quality of the existing stock within 30 years overall debt repayment period.
2. That detailed recommendations on the use of the headroom generated be conceived during 2012, as part of the development of the long term business plan and investment strategy on the use of available funding.
3. That council confirms the change to the funding structure at its next scheduled meeting.
Councillors Bannister, Bessant, Camamile, Cope, Gould, Ladkin, Lynch, Richards and Taylor left the meeting after the conclusion of this item.