Issue - meetings

Received a report from the Cabinet Member for Housing on the Housing Revenue Account (HRA) estimates, rents and other related charges for 2011/12, together with proposals to enable the implementation of the full first phase of the Council’s Estate Renewal Programme. 

The Government’s rent restructuring policy has determined that Council dwelling rent levels must increase by 7.06%, which equates to an average weekly increase of £5.22.  The Divisional Director of Housing Strategy confirmed that if the Council was to resist implementing the mandatory increase it would not only receive a comparative reduction in subsidy from the Government but also that there would be an equivalent shortfall in HRA income.  This would, in effect, place a double burden on the HRA and, in turn, Council tenants. 

The same percentage increase is proposed for garage rents while communal heating and hot water charges need to increase by 22% to address recent energy price increases and the deficit accrued in 2009/10 when a projected reduction in energy prices did not materialise.

The Cabinet Member recognised that these enforced increases will place a significant extra burden on many tenants and he outlined some of the steps that are being taken by the Council to help mitigate the impact of the rent increase.  The point was also made that current inflation levels and other price increases from April 2011 will only add to the difficulties that all local residents will face in the current economic climate.  In response, the Divisional Director of Housing Strategy suggested that effective lobbying and also enhancing access to benefits could prove effective.

The Cabinet Member also referred to a range of reductions in expenditure which will enable the HRA working balance to be brought back to a prudent level without impacting of service delivery. 

The Cabinet Member confirmed that the Council will be required to contribute £18.931m from the HRA to the Government’s National Housing Subsidy System in 2011/12 (a revised version of Appendix 6 showing the detailed figures was tabled at the meeting).  Although the Government is expected to introduce new, fairer arrangements by April 2012 the Cabinet Member stressed that the ability to move forward on key tenant aspirations will continue to be difficult until the Council is in a position to retain all of its income and have greater discretion over how it is spent. 

With regard to the Estate Renewal Programme, capacity has been created to support the proposal to borrow £16.4 million which, together with the £7.1m agreed by Minute 49 (2 November 2010), will enable the full first phase to be implemented at a total cost of £23.5m.

Agreed, in order for the Council to meet its statutory responsibilities, ensure rent levels conform to the Government’s rent restructuring proposals, produce a balanced HRA and support the Community Priority of “Prosperous”, to:-

(i)  The HRA estimates for 2011/2012, as set out in Appendix 1 to the report, and in particular;

(a)  A Council dwelling rent increase of 7.06%, calculated in accordance with the Government’s  ...  view the full minutes text for item 109