The statistical appendices to this year's business plans have been reformatted. Authorities now have to identify more specifically the amount they need to spend on different components and how they actually intend to spend the money available.
The spending need should, in the first instance, be developed around the decent homes standard.
The range of financial issues facing local authorities is as varied as ever and there will, of course, be other investment priorities.
For many authorities, the standard will be the minimum they want to achieve.
Assembling the information remains a big issue for some councils. Never has there been a bigger demand for dynamic databases based on reliable, well-structured, stock condition data. The new statistical appendices should be drawn up in conjunction with the model so that there is a clear link between the proposed spend profile and the resources assumptions.
The introduction of the major repairs allowance in 2001 has helped provide some certainty to the resource assumptions but other areas will require careful analysis.
Calculating the amount of revenue resources available has become slightly more complicated following the introduction of rent restructuring and, from April 2003, the Supporting People arrangements.
In particular, authorities should look carefully at subsidy assumptions for both guideline rents and management and maintenance allowances.
The July 2001 consultation paper on rent restructuring suggested that a useful benchmark for management and maintenance allowances would be inflation plus 4%. Whether this continues to be deliverable until 2011 remains to be seen.
A key policy area awaiting guidance is that of service charges, especially the extent to which service charges should be taken into account in the rent limit calculations used for subsidy. Authorities will need to take a view on this in the interim.
Another area still to be clarified is the subsidy arrangements for prudential borrowing. The local government bill provided a few clues, so authorities will probably want to continue with present assumptions on borrowing (credit approvals and right-to-buy receipts) for the time being.
The impact of right-to-buy sales on the investment profile and on future management costs and structures remains a key issue which authorities should continue to examine as this has both short- and long-term consequences.
The July deadline looms large, but there are clearly a number of changes which need to be kept under review after that.
I think this simply emphasises all the more that business planning should be seen as an continuing process, not merely an annual burden to be dealt with. Evidence in the past two years indicates that many authorities are beginning to embrace the business planning philosophy and are involving tenants and members in that process.
The challenge of meeting decent homes targets remains a daunting one in many cases, but the business planning process can only help improve our understanding of the tasks ahead.
Source
Housing Today
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