Housing Rents Increase 2009/10
(Exempt under Paragraph 3 of the Act - information relating to the financial or business affairs of any person (including the Council))
Minutes:
The Temporary Finance Manager presented a report setting out the proposed rent increases for 2009/10 based on guidance issued by the Department for Communities and Local Government (DCLG) and of the key elements of the Housing Revenue Account budget for 2009/10.
The national rent setting regime had been in place since 2002/03 which required all authorities to use a prescribed formula to calculate each tenant’s rent and to apply annual increases to actual rents to achieve the Formula Rent by 2011/12. This had produced actual rent increases for Rotherham Council tenants averaging 6.6% between 2002/03 and 2005/06. For 2006/07 and 2007/08 the DCLG had capped all authorities’ rent increases at 5% and compensated for the financial impact by paying an additional Housing Revenue Account subsidy know as the Rental Constraint Allowance (RCA).
For 2009/10 and 2010/11 the DCLG had removed the 5% rent cap and payment of the RCA but had extended the timescale for achieving the Formula Rent by 13 years to 2024/25. Due to Rotherham’s historically low rents, and an element of catching up for the effects of the 5% rent cap as actual rents moved towards the Formula Rent, the average annual rent increase needed to be approximately 6.9% to achieve the Formula Rent in 2024/25.
It was noted that the Cabinet would consider the report at its meeting on 21st January, 2009.
Resolved:- That the Cabinet be requested to recommend to Council:-
(1) An average rent increase of 6.9% based on the DCLG subsidy and rent proposals which result in an average increase of £3.79 to £58.69 per week when collected over 48 weeks.
(2) That Housing subsidy Determinations, as detailed in the report submitted and the impact on the HRA budget, be approved.
(3) That garage rents be increased by 4.5% in 2009/10 and the ringfencing be removed.
(4) That an increase in the charges to clients receiving the Wardens Services by an average of 2.5% and Communal Facilities Charges by 2.5% in 2009/10 from the current average weekly charge of £3.98 to £4.08 be approved.
(Exempt under Paragraph 3 of the Act - information relating to the financial or business affairs of any person (including the Council))