Housing Revenue Account (HRA) Business Plan 2024-2054

Risk

Risk management

Likelihood

Impact

Inflation (negative risk)
Rent increases linked to CPI with the majority of other costs linked to RPI.

HRA balances are risk assessed and budget contingency built into the annual cost to ensure variations in inflation rates can be managed.
Service charges based on actual cost recovery but linked to the rent increases in the plan.

Moderate

Medium

Interest rate increases (negative risk)
The impact on the cost of borrowing and therefore assessment of affordability of the capital programme.

Interest rates in the plan have been forecast to decrease over the medium term assuming they will not stay at the current higher rates.

Moderate

Medium

Rent and service charges (negative risk)
The Government could impose further limits on rent increases beyond 2023/24.
Service charges may not be fully recovered.

Lower than anticipated rent increases would require reductions in spending plans within the plan and need to reassess the assumptions.
Service charge costs are set based on forecast actual costs any increase above the forecast would be considered in the following year with the same applying if there are reductions.

Unlikely

High

Stock investment (negative risk)
Investment needs exceed planned expenditure due to unforeseen investment requirements or changes to the prescribed standards.

HRA Asset Management Strategy to be considered alongside this plan. The investment plan is based upon stock condition information. Stock viability assessments are undertaken. There is additional coverage in the plan to deal with cost increases or additional expectations.

Moderate

High

Right to Buy sales (negative/positive risk)
External factors mean that RTB sales in terms of numbers or value are either higher or lower than forecast without a corresponding change to stock through acquisition or new build.

RTB assumptions are adjusted annually based on the prior year trend. There is a tapering assumption built into the plan.
The new build in the plan is not a direct replacement for the RTB sales and therefore it is unlikely plans would be altered dependent on the RTB sales.

Moderate

Low

Anticipated savings/ efficiencies are not achieved (negative risk)
The plan includes efficiency savings required to ensure investment plans are sustainable.

Regular monitoring and reporting takes place. The cumulative impact over the medium term may make savings in the later years more challenging.
Non achievement of savings/efficiencies will require a reassessment of investment priorities.

Moderate

High

Welfare support (negative risk)
Tenants and leaseholders impacted by welfare changes have insufficient income to pay the rent/service charges.
There could also be an increase in the need for Council housing services.

The impact of the welfare support changes continues to be planned for and monitored through the Council Scrutiny Framework.

Likely

Medium

Legislative change (negative risk)
New legislation/regulation is introduced which results in increased financial pressures.

Ongoing tracking and horizon scanning in relation to emerging policy and legislation and an annual review through the business plan updated.

Moderate

High

Inspection outcome (negative risk)
Inspection outcomes are poor and impact on the reputation of the Council, potentially the imposition of financial penalties.

Creation of an inspection team and self / external assessment against the consumer standards to identify areas for improvement. Improved assurance through reporting to Members and tenants as appropriate. Delivery and embeddedness of the Housing Improvement Programme.

Unlikely

High