The report provides an update of the current Housing Revenue Account (HRA) Business Plan, taking into account the Council’s HRA self-financing settlement, and discusses some of the potential resource issues and strategic options to be considered when a new Business Plan is developed and published in early 2012/13. 

The Executive considered a report which provided an update to the current Housing Revenue Account (HRA) Business Plan and which took into account Sutton’s HRA self-financing settlement.  They also considered some of the potential strategic options and resource issues when a new Business Plan was developed and published in early 2012/13. 

It was proposed to take out a 30 year loan from the Public Works Loan Board for £141.1m to cover the settlement payment required.  The interest rate had been confirmed as 3.5%.  This would result in total costs to the HRA to cover interest and debt management expenses of £5.9m.  It was noted that under the Business Plan model, a significant reserve should be built up. This could be used (a) to improve revenue funded, day to day services for Council tenants, (b) for further investment in the existing stock, (c) for other housing purposes such as regeneration or new build or (d) a combination of some or all of these options.

Details of the financial modelling that had been undertaken with a view to paying off the loan at the end of the thirty year period were reported.

            Resolved:  (i) That the strategic investment options available to the Council in light of self-financing and, in particular, options for the early development of local authority new build housing, are presented in the revised HRA Business Plan to be produced in early 2012/13;

(ii)  To endorse the recommended approach for treasury management and dealing with the borrowing requirement, which reflects a debt repayment strategy that minimises future risks and optimises flexibility for housing investment.

(iii)  To thank Simon Latham for his work on producing a satisfactory outcome for the authority.