Appendix 2 - HRA Executive Summaries 2025-30
Perth and Kinross Council · 22 January 2025
Back to Housing and Social Wellbeing Committee — 22 January 2025 and its agenda
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Appendix 2 Date: 11 December 2024 REVENUE BUDGET 2025/30 SERVICE – HOUSING REVENUE ACCOUNT EXECUTIVE SUMMARY Activity Expenditure Pressure & Impact Analysis Un-Funded Expenditure Pressures 2025/26 £000 2026/27 £000 2027/28 £000 2028/29 £000 2029/30 £000 1 Increase in Staff Costs The increase in staff costs allows for a pay increase of 3% for Single Status and Trades staff for 2025/26 onwards plus the cost of incremental progression. The costs for 2025/26 also includes the cost of the increased level of pay award in 2024/25 and the increase in Employer’s National Insurance rates from 2025/26. Strategic Objective Impacted: Organised to Deliver 780 385 400 415 430 2 Adjustment to Bad & Doubtful Debt Provision The increases relate to annual uplifts required in line with the anticipated increased income levels each year to maintain the provision at 4%. Strategic Objective Impacted: Organised to Deliver 0 68 55 57 55 3 Movement in Loan Charges The capital investment programme has been revised to ensure we continue to meet the SHQS obligations arising from the Stock Condition Survey, any future new Scottish Housing Quality Standard and our tenant’s priorities. These commitments alongside an increase in the Council House Stock programme will result in revisions to the profile of Loan Charges arising from the revised prudential borrowing assumptions to fund these works. Strategic Objective Impacted: Creating a Safe and Sustainable Place for Future Generations 500 500 500 500 500 4 Void Rent Loss Increase in the void rent loss budget as a result of an increase in the number of voids and an increase in rent levels. Strategic Objective Impacted: Organised to Deliver 180 0 0 0 0
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Activity Expenditure Pressure & Impact Analysis Un-Funded Expenditure Pressures 2025/26 £000 2026/27 £000 2027/28 £000 2028/29 £000 2029/30 £000 5 Increased cost of Materials We continue to face difficulties in accessing some construction industry supplies and materials. The supply of more commonly used materials is proving problematic for suppliers. It is anticipated that current supply shortages will continue through to next year. The Housing Repairs Service procures materials and supplies via Scotland Excel. Scotland Excel have advised that there is a risk of shortages in commonly used materials but also significant price increases. It is estimated that prices will continue to rise between 10% and 20% over the next 3 years. Strategic Objective Impacted: Creating a Safe and Sustainable Place for Future Generations 175 193 212 0 0 6 Electrical Inspection Condition Reports (EICR) As a landlord Perth & Kinross Council (PKC) are legally obligated to ensure all its domestic properties, including common areas of sheltered housing, have a current Electrical Inspection Condition Report (EICR). Properties are required to be tested every 5 years and when there is a change of tenant i.e., void properties. A rolling program of EICR’s will be undertaken to ensure all properties always remain compliant. The contract to commence this process was procured in 2021. The key driver for this project is for PKC to meet its legal obligations as a landlord by having a current EICR for all its properties within the Council’s Housing stock. This pressure ensures we have the appropriate budget to carry out the work over the 5-year period and an ongoing basis thereafter. Strategic Objective Impacted: Creating a Safe and Sustainable Place for Future Generations 135 100 0 0 0
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Activity Expenditure Pressure & Impact Analysis Un-Funded Expenditure Pressures 2025/26 £000 2026/27 £000 2027/28 £000 2028/29 £000 2029/30 £000 7 Garden Maintenance Contract Increased cost of Garden Maintenance contract following the procurement of a new contract. Strategic Objective Impacted: Creating a Safe and Sustainable Place for Future Generations 115 5 0 0 0 8 Service & Maintenance Costs As a landlord Perth & Kinross Council (PKC) are legally obligated to ensure that servicing and maintenance is carried out to all emergency lighting within the communal areas of the Council’s housing stock and the maintenance of mains fed sprinklers installed our new build housing. Strategic Objective Impacted: Creating a Safe and Sustainable Place for Future Generations 6 6 6 6 6 9 Schedule of Rates Uplifts Contract price increases for Term Maintenance Contracts and Domestic Gas Contracts. Strategic Objective Impacted: Creating a Safe and Sustainable Place for Future Generations 153 0 0 0 0 10 Increased Energy Costs Increased energy costs as a result of increasing Gas and Electricity prices. Strategic Objective Impacted: Organised to Deliver 50 30 20 0 0 11 Corporate Recharges Increased recharges in relation to corporate services such as Finance, HR, Legal. Strategic Objective Impacted: Organised to Deliver 85 80 0 0 0 12 Increased Staffing Requirements As a landlord we are responsible for the cyclical servicing and maintenance of many systems and items of equipment in domestic dwellings, multi-storey flats, and our sheltered housing complexes. Our current staffing resource is insufficient to ensure that we are meeting all the requirements and obligations of these servicing and maintenance aspects. 187 69 0 0 0
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Activity Expenditure Pressure & Impact Analysis Un-Funded Expenditure Pressures 2025/26 £000 2026/27 £000 2027/28 £000 2028/29 £000 2029/30 £000 In addition to servicing and maintenance staff, we also require additional staff to deal with the EICR contract, planned maintenance, multi-storey strategy and scheduling of repairs. Strategic Objective Impacted: Creating a Safe and Sustainable Place for Future Generations 13 Planned Maintenance An increase in the planned maintenance budget to undertake an additional 225 properties per year which enables us to meet the 8-year cycle. In addition to the increase in properties, additional budget is required for increases in rhone maintenance from an 8-year to a 4-year cycle. The benefits of this approach are: • Protecting the fabric of the building and preventing resulting damp and condensation issues. • Reduction in the need for responsive repairs to leaking gutters and associated timber and masonry work. • As a landlord it would enhance our reputation with our tenants and provide reassurance that their homes are being maintained regularly. Strategic Objective Impacted: Supporting People to Live Independent, Healthy and Active Lives 181 37 38 38 0 14 Internet of Things Project Over the last 18 months, the service has been undertaking a pilot project using sensors to monitor property condition against set parameters and real-time alerts. Data is captured and reported, providing insights into property health, that enables better allocate of resources to support tenants and avoid costly repairs. To date there are 211 properties which have these sensors. This pressure will provide funding for the ongoing costs for monitoring the output of the data. Strategic Objective Impacted: Supporting People to Live Independent, Healthy and Active Lives 17 9 9 9 9 15 Property Condition Staff Resource The Scottish Housing Regulator places a critical importance on tenant and resident safety as part of the work of social landlords. It is therefore important that as a landlord PKC have a good level of assurance about how we are managing and responding to damp and mould issues. 105 0 0 0 0
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Activity Expenditure Pressure & Impact Analysis Un-Funded Expenditure Pressures 2025/26 £000 2026/27 £000 2027/28 £000 2028/29 £000 2029/30 £000 Our aim as a landlord is to prevent problems with damp and mould developing and potentially harming tenants’ wellbeing by taking a proactive approach to identifying any issues across our stock. The creation of a dedicated team to draw insight from as many sources as possible to identify instances of damp and mould and their causes. This will involve using more than stock condition surveys as a sole mechanism for identifying issues not reported by tenants. For example, as part of an annual home visit programme, we could check for damp and mould in all rooms and use this as an opportunity to talk to tenants and ask about any specific concerns they may have. Strategic Objective Impacted: Supporting People to Live Independent, Healthy and Active Lives 16 Fire Risk Assessments Remedial Work As a landlord Perth & Kinross Council (PKC) are legally obligated to ensure all its domestic multi storey properties, including common areas of sheltered housing and Greyfriars House, have a valid fire risk assessment. Properties are required to be assessed or assessments reviewed regularly and when there is a change. Best practice is to review or renew fire risk assessments every 5 years. This pressure creates a budget for any remedial requirements be carried out following the fire risk assessment. Strategic Objective Impacted: Creating a Safe and Sustainable Place for Future Generations 0 86 0 0 0 17 Energy Performance Certificates As a landlord Perth & Kinross Council (PKC) are legally obligated to ensure all its domestic properties, have a current Energy Performance Certificate (EPC). The EPC is valid for 10 years but require to be updated as and when any works are carried out in the home. The EPC will inform the works required to ensure that they meet the Scottish Government requirements in relation to Energy Efficiency Standards. Strategic Objective Impacted: Organised to Deliver 0 75 75 0 0 18 Housing Enabler The Corporate Plan 2022 – 2027 identifies the provision of new social housing units as a key indicator in meeting its tackling poverty priority. The Local Housing Strategy (March 2023) sets a target of affordable housing delivery of 210 average per year over 2022- 2027. 60 0 0 0 0
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Activity Expenditure Pressure & Impact Analysis Un-Funded Expenditure Pressures 2025/26 £000 2026/27 £000 2027/28 £000 2028/29 £000 2029/30 £000 To ensure the target of 80 units per for new build for PKC housing is achieved, a dedicated, HRA, Housing Enabler is required. The post holder would solely progress the Council’s social rented new build programme - with support from the wider Housing Strategy Team and clear direction from the New Build / Capital Improvement Team. Strategic Objective Impacted: Creating a Safe and Sustainable Place for Future Generations 19 Gypsy Traveller Project Officer A permanent Gypsy Traveller Project Officer to take forward the improvements within our Gypsy Traveller sites. Strategic Objective Impacted: Creating a Safe and Sustainable Place for Future Generations 62 0 0 0 0 20 HRA Roads & Footpaths The maintenance of the HRA owned roads and footpaths within our housing estates are a key part of Housing Service delivery and tie in with Housing’s key strategic priorities. It is proposed that a small annual budget is allocated to allow repairs to roads and footpaths within our estates that are owned by the HRA. Strategic Objective Impacted: Creating a Safe and Sustainable Place for Future Generations 15 0 0 0 0 21 Housing Repairs Out of Hours Service Increased inflationary costs for the repairs out of hours service. Strategic Objective Impacted: Organised to Deliver 5 3 0 0 0 22 Movement in relation to Contribution to Capital Projects (CFCR) As a result of the net movement between pressures and income/savings options this is the projected movement in CFCR. It is recommended that any surplus (CFCR) is used to fund capital spending, thus reducing the borrowing requirement in the Housing Investment Programme and reduce Capital Financing Costs in future years. The level of CFCR available each year will be as follows: (197) 63 67 400 372
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Activity Expenditure Pressure & Impact Analysis Un-Funded Expenditure Pressures 2025/26 £000 2026/27 £000 2027/28 £000 2028/29 £000 2029/30 £000 2024/25 - £1,680,437 2025/26 - £1,483,437 2026/27 - £1,546,437 2027/28 - £1,613,437 2028/29 - £2,013,437 2029/30 - £2,385,437 Strategic Objective Impacted: Organised to Deliver TOTAL 2614 1709 1382 1425 1372
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Compensating Saving / Budget Flexibility & Impact Analysis Net Saving Staffing Implications 2025/26 £000 2026/27 £000 2027/28 £000 2028/29 £000 2029/30 £000 2025/26 2026/27 2027/28 2028/29 2029/30 1 Increase in Council House Rents To deliver on tenant’s priorities, meet the fixed costs borne by the HRA, and any efficiency savings, a 6% rent increase will be required for 2025/26. The proposed rent strategy for the next four years will be set at an indicative rate of 3.5% for 2026/27 and then 2.2% for the following three years. This provides a baseline level to highlight the indicative rent increase required to deliver the future capital investment programme and running costs of the HRA. The indicative rate for future years may vary reflecting future priorities identified by tenants. 2025/26 – 6.0% 2026/27 – 3.5% (Anticipated minimum increase) 2027/28 – 2.2% (Anticipated minimum increase) 2028/29 – 2.2% (Anticipated minimum increase) 2029/30 – 2.2% (Anticipated minimum increase) Future provisional rents will be adjusted each year to reflect anticipated levels required to meet the needs of the HRA Business Plan. These updated income figures reflect revised assumptions regarding increases in housing stock, based on the planned progress in delivering the new build and new supply programmes. There are no increases attributed to Shops & Offices. 2192 1704 1382 1425 1372 0.0 0.0 0.0 0.0 0.0
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Compensating Saving / Budget Flexibility & Impact Analysis Net Saving Staffing Implications 2025/26 £000 2026/27 £000 2027/28 £000 2028/29 £000 2029/30 £000 2025/26 2026/27 2027/28 2028/29 2029/30 Impact Analysis and Risk Assessment Promote Fairness/Reduce Inequality/Address Socio Economic Disadvantage: An affordability assessment has been undertaken and evidenced that our rents are affordable to 87% of the population (without housing costs being taken into account). They remain the most affordable social rent in the area and are the 4th lowest local authority rent nationally. Increases will affect all tenants Workforce: None Customer: Tenants will be consulted on the Standard Delivery Plan and proposed levels of rent increase. Equalities / Diversity: No identified equality/diversity issues Outcome and Performance: This will allow Perth & Kinross Council to continue to meet the requirements of the Scottish Quality Housing Standard. Climate Change: No significant impact identified. Strategic Objective Impacted: Supporting People to Live Independent, Healthy and Active Lives
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2 Increase in Staff Slippage Target Increase in the staff slippage target to 5% to match the general fund slippage target. Impact Analysis and Risk Assessment Promote Fairness/Reduce Inequality/Address Socio Economic Disadvantage: The efficiencies identified allow us to maintain rents at an affordable level. Workforce: Delay in filling posts. Customer: None Equalities / Diversity: No identified equality/diversity issues Outcome and Performance: None Climate Change: No significant impact identified. Strategic Objective Impacted: Organised to Deliver 72 0 0 0 0 0.0 0.0 0.0 0.0 0.0 3 Reduction in Bad Debt Provision Due to improved arrears performance, from the creation of a centralised Arrears Team, the current level of bad debt provision can be reduced. The saving sees a reduction in bad debt provision from 5% of income to 4%. Impact Analysis and Risk Assessment Promote Fairness/Reduce Inequality/Address Socio Economic Disadvantage: The efficiencies identified allow us to maintain rents at an affordable level. Workforce: None Customer: None Equalities / Diversity: No identified equality/diversity issues Outcome and Performance: None Climate Change: No significant impact identified. Strategic Objective Impacted: Organised to Deliver 210 0 0 0 0 0.0 0.0 0.0 0.0 0.0
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4 Review of Garden Maintenance Scheme Increase in charges for the Garden Maintenance Scheme to allow for full cost recovery of the service to Council tenants who choose to opt into the service. Impact Analysis and Risk Assessment Promote Fairness/Reduce Inequality/Address Socio Economic Disadvantage: The efficiencies identified allow us to maintain rents at an affordable level and Council tenants are not subsidising the cost to tenants who opt into the service. Workforce: None Customer: Increased charges to tenants who choose to opt into the service Equalities / Diversity: No identified equality/diversity issues Outcome and Performance: None Climate Change: No significant impact identified. Strategic Objective Impacted: Organised to Deliver 115 5 0 0 0 0.0 0.0 0.0 0.0 0.0 5 Reduction in Staff Travel Budgets A reduction in staff travel budgets due to increased usage of pool cars. Impact Analysis and Risk Assessment Promote Fairness/Reduce Inequality/Address Socio Economic Disadvantage: The efficiencies identified allow us to maintain rents at an affordable level. Workforce: None Customer: None Equalities / Diversity: No identified equality/diversity issues Outcome and Performance: None Climate Change: No significant impact identified. Strategic Objective Impacted: Organised to Deliver 25 0 0 0 0 0.0 0.0 0.0 0.0 0.0 TOTAL 2614 1709 1382 1425 1372 0.0 0.0 0.0 0.0 0.0