Item 14 - Housing Revenue Account Budgetary Control Report to 30 June 2026 - Period 3
West Dunbartonshire Council · 26 August 2026
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Official WEST DUNBARTONSHIRE COUNCIL Report by the Chief Officer – Resources Council – 26 August 2026 ___________________________________________________________________ Subject: Housing Revenue Account Budgetary Control Report to 30 June 2026 (Period 03) 1. Purpose 1.1 The purpose of this report is to advise members on the 2026/2027 HRA revenue budget position on 30 June 2026 and the forecast position for HRA reserves on 31 March 2027. 2. Recommendations 2.1 Members are asked to: i. note the HRA revenue account is forecasting a deficit of £0.863m. If required, HRA reserves will be used to fund the deficit. ii. note that the forecast deficit would reduce HRA reserves to £0.259m on 31 March 2027, significantly less than the HRA revenue prudential target for 31 March 2027 of £1.222m. iii. note that work will continue to explore opportunities to remove the in-year deficit and to rebuild reserves, including the targeting of efficiencies across all areas of the HRA revenue account budget. 3. Background Revenue 3.1 The Council approved a 2026/2027 HRA revenue budget of £60.880m on the 4th of March 2026. A prudential reserve target of £1.222m was also set (2% of the revenue budget). HRA prudential reserves were £1.122m on 31st March 2026. 4. Main Issues 4.1 This report advises of the key issues contributing to the Housing Revenue Account (HRA) forecasting a 2026/27 deficit of £0.863m. The forecast deficit would require a call on HRA reserves and leave forecast HRA reserves of £0.259m on 31 March 2027. Using existing reserves to address the funding deficit adds risk to the wider financial position of the HRA with reduced capacity to absorb any unforeseen future costs until the HRA rebuilds its reserves. 4.2 There are a range of unfavourable / favourable variance contributing to the forecast deficit and the main variances are detailed below. ITEM 14
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Official Adverse Variances > £50,000 Central Support Allocation - £0.535m Adverse 4.3 The draft outcome from the review of the Council’s Central Support Allocation (CSA) model during 2025/26 assessed the appropriate allocation of corporate support costs to service users including the Housing Revenue Account. The review determined that the Housing Revenue account CSA charge was understated and needed to be increased. The 2026/27 HRA CSA budget was set based on the older recharge model. Consequently, the amount that will be charged to the Housing Revenue Account in 2026/27 is projected to exceed budget and create an overspend / adverse variance. Repairs & Maintenance - £0.410m Adverse 4.4 There continue to be cost pressures due to the high demand across the responsive repair and void service. A range of mitigations are in place to minimise the cost pressure including tighter controls on contractor use and the stringent application of the rechargeable repairs policy. Loan Charges - £0.221m Adverse 4.5 The main cost pressure is a forecast increase in the interest payable on HRA capital debt. The 2026/27 HRA estimates assumed a pooled interest rate of 4.25% on HRA capital debt on 31 March 2027. The current pooled interest rate forecast is 4.4%, higher than estimated and creating a cost pressure. 4.6 Members will be aware of the significant risk and uncertainty around forecasting local authority borrowing costs and geopolitical events have contributed to an increase in the interest rates payable on new temporary and new Public Work Loans Board (PWLB) borrowing. Consequently, there is a risk of a further increase to the pooled interest rate during 2026/27. Favourable Variance > £50,000 Employee Costs - £0.335m Favourable. 4.7 The favourable variance is due to savings from vacant posts across the service and an increase in HRA employee costs recharged to non HRA revenue services including homelessness and HRA capital. 5. People Implications 5.1 There are no people implications. 6. Financial and Procurement Implications 6.1 Other than the financial position noted above, there are no financial implications of the budgetary control report. There are no procurement implications arising from this report.
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Official 7. Risk Analysis 7.1 The main financial risk is the HRA going into deficit due to unforeseen costs being identified between now and the end of the financial year. The Housing (Scotland) Act 1987 specifies that if a HRA deficit arises in any one year, the local authority must make a General Fund contribution to make good the deficit. In this event, the HRA would be expected to repay that contribution from future HRA surpluses. 8. Equalities Impact Assessment (EIA) 8.1 The report is for noting and therefore no Equalities Impact Assessment was completed for this report. 9. Consultation 9.1 All services involved in delivering the HRA revenue budget have been consulted during the compilation of this report. 10. Strategic Assessment 10.1 Proper budgetary control and sound financial practice are cornerstones of good governance and support Council and officers to pursue the five strategic priorities of the Council’s Strategic Plan. This report forms part of the financial governance of the Council. This report is for noting and, therefore, does not directly affect any of the strategic priorities. Laurence Slavin Chief Officer – Resources Date: 26 August 2026 ___________________________________________________________________ Person to Contact: Jim McCarron - Business Unit Finance Partner Telephone: 07772 322055 e-mail james.mccarron@west-dunbarton.gov.uk Appendices: Appendix 1 - Budgetary Position (Revenue) Appendix 2 - Variance analysis (Revenue)