The Strategic Lead for Finance presented the report. He confirmed that the report sets out the base budget position for 2023/24 following the review and update of the 30 year Housing Revenue Account business plan. The Government launched a consultation on limiting rent increases in 2023/24 to help tenants with the cost of living. Without a cap, social landlords would have been permitted to increase rents by the consumer price index (CPI) measure of inflation in September 2022 plus 1%, allowing a maximum increase of 11.1%. It has now been announced that rents for 2023/24 will be capped at 7%. The report recommends that the rent increase is 7%.

The Strategic Lead for Finance further explained that table 1 in the report shows that the 7% increase will still result in a 1.295 million deficit. This means reductions in expenditure will need to be made and these are detailed at paragraph 3.6 of the report.

Councillor Redsell noted the garage rents had gone up and queried whether garage repairs were still ongoing on the Blackshots estate. Councillor Redsell also queried what a 0 bedroom property is and queried the care taking standards of bronze, silver and gold.

The Strategic Lead for Finance confirmed a 0 bedroom property is a bedsit. The Strategic Lead for Finance responded that the standard boils down to if they have a dedicated care-taker service or not. Gold reflects the level of time spent there and where a more dedicated service is required for example in the high-rise blocks.

Councillor Liddiard raised that many tenants do not know what they are paying for in terms of service charges and it would be really helpful if the services and charges were discussed to see if tenants feel they are getting value for money.

The Interim Director of Housing responded that service charges are at the heart of the service delivery and there is more information they can give regarding the services being provided, a learning session could be done and that may invite challenges from tenants who are paying for things they didn’t realise.

Councillor Kent commented that as a result of the Government intervention, the 30 year HRA business plan is subject to review, he queried what the timetable is for the review and if there is sufficient flexibility to take into account the outcome of that review.

Councillor Kent stated that he was very disappointed no local consultation with tenants had been completed about the rent increases and stressed that this is not good enough.

The Strategic Lead for Finance confirmed it has been debated nationally. When rents were reduced it took 200 million pounds out of the HRA business plan. The rent increase could have been 11.1 % to meet the inflationary costs and as a result of the cap a 7 % increase could be looked at as a rent reduction. The certainty around rents is crucial and affects large scale capital works as you have to commit at some point and therefore income streams need to be certain.

The Interim Director of Housing confirmed they did debate internally if they should complete a local consultation however the Government opened the consultation to tenant’s groups as well as landlords.

Councillor Hebb referred to the rent increase and queried if the Council did push further and went up to 11% or below 7% what effect would that have on the Council’s obligations. Councillor Hebb commented that 7% is hard at any time for anyone but especially hard in the current economic climate. He also queried if the Authority were ready to support those who are struggling to make ends meet.

The Strategic Lead of Finance confirmed that even with a 7% increase it does still create a deficit of 1.295 million. If this was reduced to 3% it would create a deficit of 3.295 million. The assisted decorating is the only thing that is discretionary in the budget. If rent increases were lower there would be genuine cuts which would affect operational service delivery.

The Interim Director of Housing confirmed they do have their own income recovery team and they have welfare benefits advisors who are well equipped to assist people who may get into difficulties and they try to engage with them before they get into arrears.

Councillor Redsell queried if transforming homes had finished.

The Interim Director of Housing confirmed that transforming homes is still running.

Councillor Liddiard queried how many vacant posts there are that are not going to be replaced.

The Interim Director of Housing confirmed they are not trying to not replace posts but are looking at the natural churn and trying to slow it down.  The underspend is then being captured as a saving.

Councillor Churchman raised concern about the Tevitt Avenue flats and explained that the residents are upset about the amount they are paying currently as there is not much you can do to transform the properties as they are very out of date.

The Interim Director of Housing confirmed she is well aware of the issues and the team are working tirelessly to make a viable financial case for development and will carry on repairing the homes in the meantime.

The Chair stated that table 7 on page 31 really highlights the situation and although nobody wants to put up rents, nobody wants to see cuts to the service either.

Councillor Kent highlighted that he welcomed the carbon reduction programme and getting ahead of the curve on that. He commented that he understood the need to pause the assisted decorating scheme but asked that all is done to bring it back as soon as possible as it does have an impact well beyond housing especially on vulnerable elderly residents as it is one of the only times when someone from the Council can see what is going on and it has a benefit well beyond housing.

Councillor Kent stated he could not support a rent increase of 7%, service charge increases of 10.1% and garage increases of 10%, too many tenants are going to be close to being tipped over the edge with food, fuel and heating and possible Council Tax inflation also. Councillor Kent noted the increase in traveller pitches of 4% and stated that he would like to have seen a figure closer to 4% for all the increases across the board. Councillor Kent also commented that in respect of Transforming homes, it would be useful to see the schedule published to members on a rolling basis so everyone could see where work would be done next so they could explain this to residents.

The Chair stated that nobody wants to be asking residents to pay more. A lower rent increase would mean cuts and therefore rents have to be put up.

Councillor Hebb requested more information on the impact of not increasing the rents on the Council’s obligations statutory or otherwise.

The Strategic Lead of Finance responded that in effect they would have to find the bigger deficit figure. A more detailed analysis of repair and maintenance would need to be completed. Legally they couldn’t reduce anything to do with essential testing and health and safety. The only other areas would be operational service delivery or the capital programmes. He further explained that if works are not completed it will likely become a cash drain with constant repairs and maintenance that may be more expensive in the long term. It will have a serious impact and the Council will fall behind on the business plan.

The Chair stated that he could not support cuts to the service.

RESOLVED:

1.1          That the Committee consider and comment on the proposed base budget for 2023/24 (as set out in Table 1).

1.2          That the Committee consider and comment on a proposed increase in domestic rent charges of 7%, in line with the 30-year HRA business plan, to be implemented from 3 April 2023.

1.3          That the Committee consider and comment on the proposed increase in service charges to reflect the cost of running each service in line with the budget estimate from 3 April 2023.

1.4          That the Committee consider and comment on the proposed charges for garage rents (para 3.10) to be implemented from 3 April 2023.

1.5          That the Committee consider and comment on the proposed increase in Travellers sites rent (para 3.11) to be implemented from 3 April 2023.