HRA Capital Monitoring Report - 1 April 22 to 6 January 23
North Lanarkshire Council · 15 February 2023
Back to Housing Committee — 15 February 2023 and its agenda
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North Lanarkshire Council Report Housing Committee Does this report require to be approved? ☐ Yes ☒ No Ref AN/GT Date 15/02/23 HRA Capital Monitoring Report – 1 April 2022 to 06 January 2023 From Brian Lafferty, Chief Officer Housing Property Services E-mail Telferg@northlan.gov.uk Telephone Greg Telfer, Business Finance Manager, 01698 302836 Executive Summary The purpose of this report is to review progress towards agreed spending plans within the 2022/23 HRA capital programmes. An overspend of £1.233m is projected for the Mainstream programme, this is due to increased material costs, approved contractor uplifts and the acceleration of some programmes, including energy efficiency specific works, to offset contractual risks elsewhere in the programme and support tenants due to increasing energy costs by improving the thermal efficiency of their homes. The New Build Programme is projecting an overspend of £2.941m. This is mainly due to the early availability and purchase of land and off the shelf developments not anticipated in this financial year. This overspend has been partially offset by additional Scottish Government grant. Due to a lack of demand within the Council Buy Back and Mortgage to Rent Schemes, an underspend of £2.589m is projected. Recommendations It is recommended that Committee: (1) Acknowledges the financial position of the 2022/23 HRA Capital Programmes. The Plan for North Lanarkshire Priority Improve North Lanarkshire's resource base Ambition statement (25) Ensure intelligent use of data and information to support fully evidence based decision making and future planning
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1. Background 1.1. Mainstream Working Programme 1.1.1 The Housing and Regeneration Committee on 16 February 2022 approved an outline mainstream programme for 2022/23 based on targeted expenditure of £60.245m, this has been enhanced by a further £5m to support the Ukrainian Resettlement Programme tower refurbishment. The overall programme is funded as follows: £000 Prudential Borrowing 30,474 Capital Funded from Current Revenue (CFCR) Scottish Government Grant (Net Zero) 22,476 2,000 Total projected resources 54,950 Slippage allowance 5,295 Mainstream Working programme Additional Scottish Government Grant (Ukraine) 60,245 5,000 Working Programme 65,245 1.1.2 A grant of £2.42m has been awarded from the Scottish governments Net Zero Fund. This will be utilised over two financial years with £2m allocated to 22/23 and the remaining £0.420m included in the 23/24 programme of works. This year’s programme has been updated to reflect the additional £2m funding. 1.1.3 Committee also approved an additional £2.5m EESSH allowance to be utilised during the year if conditions permit. 1.2. New Build Programme 1.2.1 The 2022/23 working programme for new build is £39.436m, with 170 completions expected for the year and is funded as follows: £000 Prudential Borrowing 21,788 Capital Funded from Current Revenue (CFCR) 4,670 Scottish Government Grant 12,978 Total projected resources 39,436 1.3 Council Buy Back Schemes 1.3.1 As part of the 2022/23 Revenue Estimates, the budget provided for the continuation of both the Council’s Empty Homes Purchase Scheme (EHPS) and the Open Market Purchase Scheme (OMPS). This will allow approximately 130 properties to be brought back into Council use. 1.3.2 In addition to the EHPS and OMPS, the Mortgage to Rent scheme (MTR) was also added to the overall Council Buy Back scheme and is anticipating an additional 3 properties to be brought back into council use in 2022/23. 1.3.3 Funding requirements for 2022/23 for the Council Buy Back Scheme is made up as follows:
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£000 Prudential Borrowing 6,828 Scottish Government Grant Subsidy Income 3,900 244 Total projected resources 10,972 1.3.4 Approval was given at the Housing and Regeneration Committee held on the 24 November 2021 to expand the scheme to acquire homes where this would enable planned common works to progress, with owner occupiers given the option to remain as a Council tenant. It is estimated that this could enable a further 50 properties to be purchased during the year. The target has currently remained at 130 properties due to the current buoyant property market which may lead owners to sell on the open market, although every effort will be made to secure as many suitable properties as possible. 2. Report 2.1 Mainstream 2.1.1 A summary of the mainstream working programme and actual spend to 06 January 2023 (Period 10) is included within Appendix 1, highlighting that at this stage in the financial year: • £55.819m (93% of the working programme) has been legally committed; and • £41.042m (75% of the projected resources) has been spent. 2.1.2 Legal commitments and spend to date are higher than historic trends and the programme is projected to overspend by £1.233m due to increased material costs, approved contractor uplifts and acceleration of some works to offset contractual risks. 2.1.3 In order to support the Scottish Government’s Ukraine Resettlement Programme, the Council is recommissioning two towers (Birkshaw, Wishaw and Highcoats, Coatbridge) previously being prepared for demolition in 2023/24. Appendix 1 has been updated to show the projected costs of £5.255m which will be fully offset fully by Scottish Government funding with no additional cost to the Council. 2.1.4 It is anticipated that the full £2m Net Zero grant allocated to this financial year will be fully spent. 2.2 New Build 2.2.1 A summary of projected outturn spend on the new build programme is contained within Appendix 2. Projected spend totals £42.377m, an overspend of £2.941m, and is funded by Prudential Borrowing, CFCR and Scottish Government Funding. 2.2.2 There are currently nine projects on site at Lindsaybeg Road, Chryston; Dykehead Road, Airdrie; Northburn Place, Airdrie; Community Road, Bellshill; Former Orrs
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Building, Airdrie (off-the-shelf purchase); Castlehill Road, Wishaw; Berwick Street, Coatbridge; Gateside Farm, Stepps (off-the-shelf purchase); and Ravenscliff Road, Ravenscraig. 2.2.3 Following a revision of Scottish Water’s surface water policy, the Council is continuing to progress financially viable solutions for connection issues that will allow a contract award to be made at Laburnum Road, Viewpark. 2.2.4 To date, 970 new build homes have been completed as part of the Council’s ambitious new supply programme of 5,000 new homes. Currently, 421 homes are under construction, with 117 homes expected to complete in 2022/23, subject to current delays. 2.2.5 Sites have been identified and approved at Committee for a further 1,346 homes across 35 sites, with site investigations, title checks and design development on these sites progressing. 2.2.6 The Council has appointed contractors who are progressing layouts and designs for several sites, with site investigations underway. 2.3 Council Buy Back Scheme 2.3.1 A summary of projected outturn spend on the Council Buy Back Schemes is also contained within Appendix 2. Projected spend currently totals £6.366m collectively between the Council buy back schemes, £6.098m attributable to EHPS and OMPS and £0.268m to the MTR scheme. This is funded by Prudential Borrowing, Scottish Government Funding and Subsidy Income. 2.3.2 The original target of 130 homes to be purchased through the OMPS in 2022/23 has been revised and the current projection is now 60 homes. This is due to lack of demand along with more homes selling on the open market. This will be reviewed over the remaining periods. 2.3.3 To date, 44 properties have been brought back into use as affordable housing in 2022/23. A Scottish Government grant contribution of £1.5m has been secured for 2022/23, with further funding to be made available depending on progress. 2.3.4 Agreement has been reached with the Scottish Government to apply a sliding scale for buy back grant funding, based on property value as follows: • £35k grant per unit, for homes up to an £80k purchase price • £40k grant per unit, for homes with an £80-£90k purchase price • £45k grant per unit, for homes with a £90-£100k purchase price • £50k grant per unit, for homes with a purchase price above £100k Previously, any buy back purchases were eligible for a maximum grant contribution of £30k per unit. The new scale is applicable to any buy back grant claimed from 6 December 2022. 2.3.5 The final revenue cost of borrowing will equate to a potential drawdown of £0.196m in 2022/23 from the amounts set aside for “Our Ambition”
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3. Measures of success 3.1 The successful delivery of the HRA capital programmes, providing high quality housing stock. 4. Supporting documentation 4.1 Appendix 1 – 2022/23 HRA Capital Programme – Mainstream Budget Monitoring Period 10 Appendix 2 – 2022/23 HRA Capital Programme – New Build / Council Buy Back Scheme Budget Monitoring Period 10 Brian Lafferty Chief Officer, Housing Property Services
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5. Impacts ( http://connect/report-template-guidance ) 5.1 Public Sector Equality Duty and Fairer Scotland Duty Does the report contain information that has an impact as a result of the Public Sector Equality Duty and/or Fairer Scotland Duty? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? If Yes, has an assessment been carried out and published on the council’s website? https://www.northlanarkshire.gov.uk/your-community/equalities/equality- and-fairer-scotland-duty-impact-assessments Yes ☐ No ☐ 5.2 Financial impact Does the report contain any financial impacts? Yes ☒ No ☐ If Yes, have all relevant financial impacts have been discussed and agreed with Financial Solutions? Yes ☒ No ☐ If Yes, please provide a brief summary of the impact? The financial implications are outlined throughout the report. 5.3 HR policy impact Does the report contain any HR policy or procedure impacts? Yes ☐ No ☒ If Yes, have all relevant HR impacts have been discussed and agreed with People and Organisational Development? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 5.4 Legal impact Does the report contain any legal impacts (such as general legal matters, statutory considerations (including employment law considerations), or new legislation)? Yes ☐ No ☒ If Yes, have all relevant legal impacts have been discussed and agreed with Legal and Democratic Solutions? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 5.5 Data protection impact Does the report / project / practice contain or involve the processing of personal data? Yes ☒ No ☒ If Yes, is the processing of this personal data likely to result in a high risk to the data subject? Yes ☐ No ☐ If Yes, has a Data Protection Impact Assessment (DPIA) been carried out and e- mailed to dataprotection@northlan.gov.uk Yes ☐ No ☐ 5.6 Technology / Digital impact Does the report contain information that has an impact on either technology, digital transformation, service redesign / business change processes, data management, or connectivity / broadband / Wi-Fi? Yes ☐ No ☒
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If Yes, please provide a brief summary of the impact? Where the impact identifies a requirement for technology, has an assessment been carried out (or scheduled) by the Enterprise Architecture Governance Group (EAGG)? Yes ☐ No ☐ 5.7 Environmental / Carbon impact Does the report / project / practice contain information that has an impact on any environmental or carbon matters? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.8 Communications impact Does the report contain any information that has an impact on the council’s communications activities? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.9 Risk impact Is there a risk impact? Yes ☒ No ☐ If Yes, please provide a brief summary of the key risks and potential impacts, highlighting where the risk(s) are assessed and recorded (e.g. Corporate or Service or Project Risk Registers), and how they are managed? All activities undertaken by the Council are subject to risk, and in acknowledging the Council’s approved Risk Management Strategy (September 2012), Services manage these as part of their overall corporate and service planning processes. The current economic climate has the potential to impact upon the Council’s ability to provide quality services within approved budget levels. To minimise risk this report has been prepared by service based Financial Solutions personnel in consultation with budget managers, in accordance with Financial Regulations. 5.10 Armed Forces Covenant Duty Does the report require to take due regard of the Armed Forces Covenant Duty (i.e. does it relate to healthcare, housing, or education services for in-Service or ex- Service personnel, or their families, or widow(er)s)? Yes ☐ No ☒ If Yes, please provide a brief summary of the provision which has been made to ensure there has been appropriate consideration of the particular needs of the Armed Forces community to make sure that they do not face disadvantage compared to other citizens in the provision of public services.
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Appendix 1
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Appendix 2