Agenda item

Report of the Deputy Leader and Cabinet Member for Finance and Transformation is attached

The Cabinet member for Finance and Transformation presented the report to members.  The report highlights the proposed Housing Revenue Account (HRA) Annual Revenue Budget and Capital Investment Plan Programme for 2026-27, including the proposed increases in rents, garage rents, service charges and any other relevant charges within the HRA for 2026/27 Councillor Vernon advised members that the Overview and Scrutiny Committee did scrutinise the budget at their meeting on 10 February 2026, and thanked the Director of Finance and staff for the work they had undertaken.

Councillor Mike Smith queried rent convergence and whether there is an aim to close the gap between affordable and social rent? 

Neil Kissock, Director of Finance advised that there has been a consultation around it however there has been a delay in being able to implement it. 

Councillor Mike Smith also sought assurance around the debt peaking on HRA, and whether this was a doomsday scenario. 

Neil Kissock, Director of Finance responded that this is worst case scenario and work will be completed over the next few years around this. 

Decision  Cabinet: 

1. Approved the 2026/27 budget for the Housing Revenue Account 
2. Agreed and approve the proposed HRA Capital Investment Plan for 2026/27. 
3. Approved the setting of individual social formula rents for 2026/27 based on the current National Social Rent Policy, giving a real rent increase of 4.8% with effect from 1st April 2026 (being September 2025 CPI (Consumer Price Index) 3.8% plus 1%). 
4. Approved the setting of individual actual affordable rents for 2026/27 based on the current National Social Rent Policy, giving a real rent increase of 4.8% with effect from 1st April 2026. 
5. Approved shared ownership rents to be increased by RPI (as at February 2026) plus 0.5% in line with provisions set out within shared ownership agreements with effect from 1 st April 2026. 
6. Approved an increase in Garage rents of 4.8% with effect from 1st April 2026. 
7. Approved an increase in Sheltered Management and Support Charges of 4.8% from 1 st April 2026. 
8. Approved an increase in Service and Amenity Charges of 4.8% from 1st April 2026. 
9. Approved an increase in Support and Heating charges of 4.8% from 1st Apri l 2026. 
10. Approved an increase in Furnished Tenancy charges of 4.8% from 1st April 2026. 
11. Approved continuation of the policy that when a social rent property is re-let to a new or transferring tenant the rent level will be revised to match the formula rent (target rent) for that property. 
12. Noted in accordance with the Rent Standard, that where an affordable rent property is re-let to a new or transferring tenant the rent level be set by reference to 80% of the market rent (including service charges where applicable) for a similar property at the time of letting or the formula rent for the property, whichever is the greater. 
13. Approved in principle in line with Government’s commitment confirmed in January

14.2026, the re-introduction of Rent Convergence for Bury’s HRA stock, which will come into effect from April 2027, with an additional rent charge of £1 per week in 2027-28, and £2 per week from 2028-29 onwards until Rent Convergence is achieved. 

15. Noted that Government has confirmed its commitment to the re-introduction of rent convergence from April 2027, with a proposed additional £1 per week charge from April 2027 and £2 per week from April 2028. Until the changes are finally confirmed the additional income has not been assumed in the revenue plan. 
16. Noted that following the Cabinet decision to wind down and close Six Town Housing

17.(STH), a working group has been set up to oversee this process, led by Management Consultants Campbell-Tickell. This process will take at least 12-18 months, and at this stage it is not possible to state what implications if any there will be for the Council’s General Fund and HRA. The options as to what will happen to the remaining assets currently held by STH will be presented to Cabinet at the appropriate time for any decisions to be made. 

18. Noted and approved the revisions made to the HRA 30-Year Business Plan.

Reasons for decisions:

To ensure that there is a balanced budget in place for the HRA, covering both revenue and capital requirements for 2026/27. The approval of these budget plans for 2026/27 will mean that Bury Council can continue to provide critical housing services to our current tenants and invest in maintaining and improving their homes. This sits within a core set of key policy principles for the housing service: - 

·         Ensure the application of the principles of economy, efficiency and effectiveness.

·         Continue to invest in the existing stock to maintain the Decent Homes Standard. 

·         Maintain and develop effective engagement with tenants. 

·         Continually monitor the impact of welfare changes such as Universal Credit on tenants and ensure that they have the appropriate support. 

·         Work with private landlords to improve their stock where appropriate. 

·         Undertake environmental improvements to estates if and when possible, acknowledging the impact that this can have in creating safe and clean estates.

·         Support the delivery of Affordable Homes across the Borough. 

·         Undertake direct development, acquisition and refurbishment to bring properties back into use if appropriate and affordable. 

·         Create sustainable tenancies and maximise rental income collection. 

·         Undertake sustainability measures across the housing stock as appropriate and affordable to help address the Climate Change Emergency.