The Strategic Resources Accountant addressed Members informing them the 2019/20 financial year was the fourth and final year of the governments rent reduction policy. From 2020/21 Local Authorities and registered providers would have the ability to increase social and affordable rents in line with the newly issued Rent Standard.
Member further head how the majority of properties within the HRA were charged a social rent, however, the newly developed units were based on affordable rents. The assumption had been made that the usual rate for CPI would be 2.2%, however this was to be confirmed at the end of September 2019 and on that basis, the rent would be increased by 3.2% compared to the 2019/2020 level.
The Strategic Resources Accountant continued to advise the Committee the Committee, the rent setting process for the existing affordable rent properties would follow the same guidance as applied to the properties within the HRA that were charged a social rent. In addition to the existing affordable rent properties currently within the HRA, it would be required to calculate the rent levels for the HRA new build schemes that will complete in the near future this included Topps clubs and Claudian Way.
Members were then notified that service charges for both tenants and leaseholders were based on the actual costs of providing services and were set on the basis of full cost recovery. It was explained that Councils were entitled to recover the costs of these services from all users for example leaseholders and tenants. The cost of providing the services was reviewed annually as part of the budget setting process and the charges were then set accordingly.
Details of the service charges for the current financial year, were within the report, Officers explained it had been estimated that in order to ensure the cost of service delivery was fully recovered, charges would be likely to increase in line with rents at 3.2%. The full details of any increases to the service charge would form part of the HRA budget estimates for 2020/21.
It was further outlined how HRA rents compared to other levels of charges, it was explained that whilst there was a requirement and recommendation to increase the current rents level in line with the government’s proposals, social rent levels were still significantly lower than those of the local housing allowance and market rents.
Councillor Abbas thanked Officers for the report and enquired as to how the consultation with residents was to be completed. The Strategic Resources Accountant confirmed consultation with residents would take place, along with officers working with the Tenants Excellence panel and the tenant representative groups. He commented that consultations would be towards the end of October.
The Chair of the Committee, Councillor Worrall, followed up asking what if residents didn’t want an increase in charges. The Assistant Director explained this was the first report it was due to come back to the Committee before being presented to Cabinet in the New Year for the final say.
The Housing Tenant Representative enquired how the consultation was to be held. It was explained the consultation would include meeting with residents and giving a presentation following with a discussion to answer any questions residents may have. It was further confirmed that Officers would also be at the October Excellence Panel.
Councillor Worrall stated, she felt the committee should have been given more options to consider, as a complete raise of 3% didn’t feel right. The Assistant Director of Housing informed Members this was the first version of the report, it was possible to make amendments following the Committees discussion and a report would be presented back to eh Committee.
During the discussion, it was queried as to the service charges for the Piggs Corner Complex. The Assistant Director explained the service was contacted out so this included staff costs. She further explained that this was to ensure that shift patterns and annual leave were covered; Members were advised this was only the case at the flat blocks which had a concierge service provided.
The Committee continued to discuss the possibility of there being a service charge increase. It was stated that Officers had hoped to know the CPI before publication of the agenda, unfortunately this was not the case and it was now expected to be released in the next few weeks. Officers assured the Committee they would receive an update as soon as the figures were known.
That the Housing Overview and Scrutiny Committee comment on the proposal for rent and service charge increases within the Housing Revenue Account