Housing Revenue Account (HRA) Business Plan 2025 to 2055

2.1 The HRA operates within a political environment and therefore any changes in national housing policy can have a significant impact on the HRA Business Plan.

2.2 National Social Rent Policy

2.2.1 The Welfare Reform and Work Act 2016 included a statutory obligation for registered providers of social housing to reduce their rents by 1% per year, irrespective of inflation, from April 2016 to March 2020.

2.2.2 From April 2020, the Regulator of Social Housing's (RSH) Rent Standard made provision for a maximum annual increase in social housing rents of CPI plus 1% with effect from April 2020 for a period of five years.

2.2.3 In the Autumn Statement 2022 the then Chancellor announced a cap on rent increases of 7% for 2023/24. Whilst this applied to current tenancies it did not apply to the calculation of the maximum initial rent when properties are first let or subsequently re-let. In particular, the restriction does not apply to the calculation of formula rent that apply to social rent properties; these continue to increase by CPI plus an additional 1%.

2.2.4 In January 2024 the regulator confirmed the limit on annual rent increases for 2024/25 to be CPI plus an additional 1% and in April 2024 it was confirmed this formula will continue to apply to rent increases in 2025/26.

2.2.5 To provide much-needed stability in the sector and greater long-term certainty, in June 2025 the Government confirmed a ten-year social housing rent settlement from April 2026 of CPI+1%, plus the commitment to consult on how to implement social rent convergence.

2.2.6 In July 2025 the Government issued the consultation on how to implement social rent convergence, which proposed either £1 or £2 maximum additional weekly amount and requested view on the timing (meaning, should it fall in line with the new rent policy). Currently the outcome of the consultation is unknown.

2.2.7 Any increase in rent will mean an impact on tenants' household budgets, but the additional income is vital to maintain and improve the services we provide to tenants, invest in our existing housing stock in accordance with the stock condition surveys and develop new social housing to address the needs of local people.

2.2.8 Future rent increases will not mitigate against the reductions during 2016-2020 or the rent cap in 2023/24 as it means that rents are set against a lower baseline than they would have been. However, the introduction of a convergence mechanism will ensure rents can recover and assist in the sustainability of Housing Revenue Accounts.

2.3 Welfare reform and benefit take-up

2.3.1 To provide much-needed stability in the sector and greater long-term certainty, in June 2025 the Government confirmed a ten-year social housing rent settlement from April 2026 of CPI+1%, plus the commitment to consult on how to implement social rent convergence.

2.3.2. In July 2025 the Government issued the consultation on how to implement social rent convergence, which proposed either £1 or £2 maximum additional weekly amount and requested view on the timing (meaning, should it fall in line with the new rent policy). Currently the outcome of the consultation is unknown.

2.3.3. Any increase in rent will mean an impact on tenants' household budgets, but the additional income is vital to maintain and improve the services we provide to tenants, invest in our existing housing stock in accordance with the stock condition surveys and develop new social housing to address the needs of local people.

2.3.4. Future rent increases will not mitigate against the reductions during 2016-2020 or the rent cap in 2023/24 as it means that rents are set against a lower baseline than they would have been. However, the introduction of a convergence mechanism will ensure rents can recover and assist in the sustainability of Housing Revenue Accounts.

2.4 The Social Housing (Regulation) Act 2023

2.4.1 The Social Housing (Regulation) Act 2023 was introduced in response to serious failures in the social housing sector including the Grenfell Tower fire (2017) and the death of Awaab Ishak (2020).

2.4.2 The Regulator of Social Housing (RSH) now has powers to regularly inspect larger landlords (including local authorities) to ensure compliance with a new set of consumer standards:

• Safety and Quality
• Transparency and Accountability
• Neighbourhood and Community
• Allocations and Lettings

2.4.3 The RSH has the power to impose unlimited fines for non-compliance with these consumer standards.

2.4.4 From 1 April 2023, it is a regulatory requirement that all social-housing landlords in England must collect data on Tenant Satisfaction Measures (TSMs). Annually we are required to submit performance results to the Regulator of Social Housing as well as publishing on our website.

2.4.5 TSMs are designed to show tenants how well their landlord is performing in areas such as maintaining homes, ensuring homes are safe, respectful and helpful engagement, effective complaint handling, and responsible neighbourhood management.

2.4.6 A key provision of the Act was the introduction of Awaab's Law in response to the death of Awaab Ishak, who died due to mould exposure. This new law has placed legal obligations on social landlords to

• investigate and fix health hazards - especially damp and mould - within strict timeframes
• provide written reports to tenants outlining findings and repair plans
• take emergency action within 24 hours if a hazard poses serious risk
• to raise professional standards across the sector it also introduced new qualification requirements for certain posts and grades within Housing Management

2.4.7 The Act also strengthened the relationship between the Housing Ombudsman Service (HOS) and the RSH, formally recognising the key role that the HOS has in the regulation of social housing. The Act empowered the HOS to introduce a Statutory Complaint Handling Code that social landlords must follow. The Act promotes a coordinated approach; the HOS may identify patterns of poor complaint handling and the RSH may act on systematic failures in service delivery. They share data, coordinate on cases, and exchange intelligence on sector risks.

2.4.8 The Act also provides for the RSH, HO and the Building Safety Executive to share information on failing landlords.

2.4.9 During 2024/25 the council was inspected by the Regulator of Social Housing (RSH) under the new regulatory framework and our housing service has been awarded a C2 grading. This result indicates the council is delivering services that meet the consumer standards set out by the regulator, while also recognising that some areas offer room for further improvement. The rating was informed by an intensive onsite inspection process where tenants, officers, councillors - including the Leader of the council and the Cabinet Member for Housing - contributed through meetings, observations, and a wide-ranging document review.

2.4.10  While the council welcomed the positive findings, it acknowledged the areas highlighted by the regulator that required further improvement. Plans are already underway with some actions already being implemented to address the recommendations.

2.5 Housing growth

2.5.1   Addressing the housing shortage is a priority issue for the new Government and one that carries clear expectations on how housing supply is increased to meet local housing needs. The Government has committed to restoring mandatory housebuilding targets, building 1.5m homes by the end of this parliament, including affordable and council homes and prioritising brownfield and grey-belt land for development to meet housing targets.

2.5.2  In July 2025 the Government announced the Social and Affordable Homes Programme, which will make £39 billion available between 2026 and 2036. It is anticipated that there will be significant emphasis on social rent, marking a significant shift in tenure priorities from previous programmes. The grant funding prospectus is expected to be made available in October 2025.

2.5.3  The Government is also providing £950 million of capital investment for the fourth round of Local Authority Housing Fund between 2026/27 and 2029/30 to support local authorities to increase the supply of good-quality temporary accommodation.

2.5.4  At the same time the Government announced further reforms to Right to Buy which build on the reduction in maximum cash discounts and the ability for councils to retain 100% of receipts:

• increasing the length of time someone needs to have been a public-sector tenant to qualify for Right to Buy from 3 to 10 years
• reforming discounts so they start at 5% of the property value, rising by 1% for every extra year an individual is a secure tenant up to the maximum of 15% of the property value or the cash discount cap (whichever is lower)

and

• exempting newly built social homes from Right to Buy for 35 years, ensuring councils are not losing homes before they have recovered the costs of building them.

2.5.5 The Government also confirmed that there would be further reform of the receipts regime and the extension indefinitely of the current flexibilities on spending of Right to Buy receipts:

• the maximum permitted contribution being up to 100%
• RTB receipts will be permitted to be used with section 106 contributions
• the cap on the percentage of replacements delivered as acquisitions is removed

2.5.6 The Government also confirmed that from 2026/27 councils would be permitted to combine receipts with grant funding for affordable housing to accelerate council delivery of new homes.

2.6 Climate change and the low-carbon future

2.6.1 The Government has committed to reviewing the Decent Homes Standard and launched a consultation on changes to the standard that concluded in September 2025. Reform to the standard is broadly welcomed. The standard has not been updated for almost two decades. The changes that are proposed to the standard and the energy efficiency requirements in it do come with new and unfunded financial burdens. In recent years the sector has needed to respond to an increasing number of necessary new standards and regulations which come with no additional support. Collectively this additionality adds significant pressure to the Housing Revenue Account. While the Government considers changes to the standard, the RSH expects social landlords to be working to the existing standard to understand the potential costs of making carbon reduction improvements to our assets. The HRA stock currently has an average SAP rating of EPC C. An interim Net Carbon Zero Strategy is in place to supplement the HRA Asset Strategy. The strategy lays out the steps that will be needed to introduce a full Retrofit Strategy in 2024, to support the prioritisation and delivery of Net Zero work packages.

2.7 Building Safety Act 2022

2.7.1 The Building Safety Act was passed in April 2022 and is in effect its response to the Grenfell Tower fire tragedy in 2017.

2.7.2 The Act requires the council to register its in-occupation, high-rise buildings with a newly established Building Safety Regulator (BSR). All buildings over 18m in height or with seven or more storeys are captured in the scope of the Act. The council's Principal Accountable Person must register each high-rise building, and provide each building's key information and a building safety case report. The building safety case report will show how building risks are being proactively managed and residents kept safe.

2.8 Fire Safety Act 2021

2.8.1 The Fire Safety Act 2021 makes amendments to the Regulatory Reform (Fire Safety) Order 2005 ("the FSO") and extends the provisions of the FSO to the following parts of a multi-occupied residential buildings:

• the building's structure, external walls and any common parts. The external walls include doors or windows in those walls, and anything attached to the exterior of those walls, for example balconies and cladding
• all doors between the domestic premises and common parts

2.8.2 Under Article 3 of the FSO, the "responsible person" of a premise (either a building or any part of it) is the person who has control of the premises ("the Responsible Person"), which may include building owners, leaseholders or managers.

2.8.3 The council will take a pro-active approach to ensure compliance with the provisions. This has included a full and intrusive survey of the construction of the external wall system of each building, and an ongoing fire door inspection programme.

2.9 Securing the future of council housing

2.9.1 In September 2024 over 100 local authorities, including Gateshead Council, joined together to publish the Securing the Future of Council Housing report calling for urgent action to bring council housing budgets back from the brink and enable them to deliver new and better homes. The key recommendations were:

• Establish a new fair and sustainable HRA model: including a long-term and certain rent-settlement, an adjustment of HRA debts and more favourable conditions for council investment.
• Reform unsustainable Right to Buy policies: by reducing discount levels and eligibility, as well as protecting newly built council homes from sale.
• Remove red tape on the Affordable Homes Programme and other funds, including extending the strategic partnership model to councils. Funding should be streamlined, allocated simply, reflect recent cost inflation, and allowed to be used flexibly to meet local housing need.
• Announce a Green and Decent Homes Programme: a long-term, capital funded programme to bring all council housing up to the new standard of safety, decency and energy efficiency by 2030 - and a road map for achieving net zero by 2050.
• Fund the completion of new council homes: limit the short-term loss of housing supply and construction sector capacity caused by the unfolding market downturn, by funding councils to rescue and complete stalled development projects.

2.9.2 As part of the spending review 2025, the Government announced several measures and intentions to consult on certain areas (which have since been issued and are discussed within this plan) that contribute to delivering the recommendations in the report.