Agenda item

To consider and approve the Housing Revenue Account Rents and Service Charges 2023-24.

Further to Minute No. 122 of the meeting of the Cabinet held on 13 February 2023, consideration was given to the report which was seeking approval for the proposed values of the housing rents, non-dwelling rents, District Heating and service charges and the draft Housing Revenue Account (HRA) Budget for 2023/24.

The report was also considered alongside the HRA Business Plan report for 2023/24.

The council was required to produce an annual business plan that covered a 30-year period. The plan was refreshed annually.  The key priorities that influenced the plan remained largely as they were previously.  These were:

·      Investing in future housing growth.

·      Replacing homes lost through Right to Buy.

·      Maintaining Decent Home standards and service standards.

·      Ensuring compliance to statutory functions, part of which was achieving energy performance C across the housing stock.

·      Sustaining the current levels of investment in front line services.

·      Safeguarding and supporting the most vulnerable tenants.

A critical consideration of the plan was to set the rents at a level to enable the Council to meet those priorities and ensure long term viability over the plan.

A significant change that the plan responded to this year was the national introduction of the social rent cap had set rents at a maximum of 7%.  The report was very clear on what could and could not be achieved.  The proposed way forward meant there would be no cuts to existing housing stock, there would be no reduction to current build standards, there would be continued delivery of new homes to replace those lost through right to buy. 

The proposal within the report was that dwelling rents were increased by 7% which included shared ownership. A 6% increase to service charges, which included garages and parking.  District heating costs were proposed to in-line with national Government’s proposed dual fuel cap. 

It was recommended to support the proposals presented at the meeting.

In seconding the reports Councillor Allen explained the Council was legally required to review rents and make such changes as required.  The circumstances everyone found themselves in were significant, challenges from increasing gas and electricity costs and high inflation. The Authority had a duty to balance the financial considerations as affected by those considerations and then impact on tenants.  Under the proposal of a 7% increase, the average weekly rent would increase by £5.54 per week. 

The Council had 19,807 properties and 16,227 of those households, who were in receipt of benefits would not be directly affected by those rent increases.  Similarly on the district heating charges, there was an increase, but the increase would remain within parameters that all other tenants were experiencing.  She explained that there were some drop-in sessions planned for residents to talk about what support was available around the district heating charges.

She explained that other options had been considered.  A 5% increase had been considered.  The difference between a 5% and a 7% increase was significant.  If the Council levied a 5% increase it would not raise enough income to cover inflationary costs, it would mean that the Council would be able to deliver far less in terms of affordable housing and it would be delivered to a lower specification.  A 7% increase gave the Council the ability to deliver a further 140 houses, bringing the total to around 700 in the years up to 2029.  It also allowed continued investment in housing growth and allowed achievement of the energy rating across the borough and to maintain the work carried out on decent home standards. It also allowed the Council to sustain current levels of investment in frontline services. 

The business plan was about promoting growth rather than managing decline and it was for that reason she was seconding the proposals of the two reports.

Councillor Bennett-Sylvester explained he would not be voting on the proposals as he was a council tenant.  His questions related to charges to tenants in bungalow complexes linked towards neighbourhood centres.  Considering the changes to fees for those, for example fees of £10.60 per hour for a commercial body to book those centres.  He queried if that was a commercial rate in terms of what people were paying into those. Was that enough to cover the costs and ensure that people did not have to pay on top of the rents to take part in activities.  He asked if a specific review could be carried out into the overall package that people pay for these centres to ensure it met the requirements and was efficient.

Councillor Tinsley expressed concern with the unit rises for district heating and he queried if last years tapered increase was short sighted.  He was pleased to know that community engagement sessions had been arranged to inform and highlight the areas of support that residents could receive.

Councillor Reynolds expressed a need for a review of this because a number of residents lived in sheltered accommodation with many rules and regulations imposed on the rooms, visitors, and priority around booking rooms.  He felt this needed to be brought up to date to follow proper procedures.

In response to the discussions Councillor Brookes acknowledged that she would provide information on the collection of the extra fees, and this response would also include intelligence around the best commercial price.  In conclusion she noted that the key thing regarding district heating was that there would be parity across all the tenants. 

Resolved: That Council approved:

1.    That dwelling rents are increased by 7% in 2023/24 (Option 1) in line with the latest Government policy on rents for social housing which caps rent increases to 7% for 2023/24.

2.    That shared ownership rents are increased by 7% in 2023/24 (Option 1) as per the increase on Council dwelling rents.

3.    That there is a 6% increase in charges for garages and parking spaces, communal facilities, cooking gas and use of laundry facilities.

4.    That the Council retain the Energy Bill Relief Scheme amounts to offset some of the deficit incurred in cushioning tenants from energy price rises.

5.    The unit charge per Kwh is increased by 186.43% and weekly prepayment charges are increased by 44% to 150%, depending on property size, for District Heating Schemes in 2023/24 (Option 1) to enable the Scheme to break even in the long term.

6.    Approve £2.593m ‘cushioning’ effect that the Council has put in place through the District Housing Scheme for 2023/2024 (which was £1.65m in 2022/2023).

7.    Approve the draft Housing Revenue Account budget for 2023/24 as shown in Appendix 2.

8.    That the Council retain the policy of realigning rents on properties at below formula rent, to the formula rent level when the property is re-let.

Moved by: Councillor Brookes                           Seconded by: Councillor Allen