Agenda item

Minute 4: Housing Revenue Account, Rents and Charges

Cabinet recommends to Council

(a)               that the Housing Revenue Account revised revenue estimates for 2003/04 and estimates 2004/05 be approved;

(b)               that the HRA rents for 2004/05 be increased by £1.25 per week (i.e. this means a maximum plus or minus variation of £1.25 per week)

(c)               that the following proposed charges be adopted:

Services and Facilities – Charges to Tenants

Services and Facilities – Sheltered Housing Service Charges to Equity Shareholders

(d)               that the Portfolio Holder for Housing be given delegated authority to vary any charges that qualify for aid from the Supporting People Pot in order to bring such charges in line with the level of financial assistance available in 2004-05.

Council RESOLVED that:

(a)               the Housing Revenue Account (HRA) revised revenue estimates for 2003/04 and estimates 2004/05 be approved;

(b)               the HRA rents for 2004/05 be increased by 50 pence per week (i.e. this means a maximum plus or minus variation of 50 pence per week);

(c)               the following proposed charges be adopted:

Services and Facilities – Charges to Tenants

Services and Facilities – Sheltered Housing Service Charges to Equity Shareholders

(d)               the Portfolio Holder for Housing be given delegated authority to vary any charges that qualify for aid from the Supporting People Pot in order to bring such charges in line with the level of financial assistance available in 2004/05.

The government penalised Housing Revenue Accounts (HRAs) for authorities in receipt of housing subsidy whose rents went above the set guideline rent limits.  Although South Cambridgeshire District Council rents were above the guideline, the Council had not received housing subsidy and was thus not penalised.  However, housing benefits were to be transferred to the General Fund and subsidised by the government, therefore the Council would be penalised if it failed to abide by the guideline rent.  To avoid penalty would require a variation in rent of no more than 50p.

Cabinet had recommended a variation of £1.25 per week, having been concerned that otherwise the HRA reserves would fall below the recommended £1 million in future years.  The Head of Shire Homes was confident that the reserve could be kept at £1 million by slowing progress on the Decent Homes Standard (DHS) target and by other measures. The Council was on schedule to complete the DHS programme in 2006, well ahead of the 2010 deadline.

Councillor Mrs EM Heazell, Housing Portfolio Holder, urged Council not to approve the Cabinet recommendation, reminding Members that Council had objected to previous government requirements to levy charges to help fund housing projects elsewhere in the country.  She proposed a variation in rents of 50 pence per week, which would bring £143,000 into the HRA without incurring any rent rebate penalty, which was a penalty on tenants.

For an increase of a maximum of £1.25 per week

·                      A compromise solution;

·                      The last nil increase in rents had been followed by a large percentage increase the following year;

·                      The £99,000 rent rebate penalty was a one-off if rents were held at guideline levels but the additional £116,000 to the HRA would be on-going;

·                      Council rents were lower than open market rents and mortgages;

·                      If rents were not raised this year, a larger increase would follow next year and it was easier for tenants if increases were phased in, especially with the Council Tax rise in 2005/06;

·                      Tenants would not suffer any reduction in service if the penalty were paid to the government, but the Council would suffer if there was not sufficient funding to carry out necessary works;

·                      It was important to be practical and not emotional about the increases.

For an increase of a maximum of 50 pence per week

·                      An increase of an average of £1.25 per week would bring £116,000 more into the HRA, but incur a £99,000 penalty;

·                      The use of the rent rebate penalty was uncertain as it would be paid to the Department of Work and Pensions;

·                      Tenants were the least able to pay an increased rent, especially with an increased Council tax in 2005/06;

·                      It was unfair to ask Council tenants to pay money which would be going to the government, especially in light of the low government grant received in return;

·                      Increasing charges for Council tenants was a moral issue.

Councillor Mrs DP Roberts defended her support of the £1.25 increase, explaining that, although she objected to large Council tax rises, the rent increase was not a tax but a payment to the Council as a social landlord and an amount in line with inflation.

Councillor R Page, citing the case of an elderly couple in Barton whose request to be included on the sheltered warden scheme had been refused, queried why Supporting People appeared to be putting red tape before people.  Councillor Mrs Heazell explained that Supporting People funding was based on designated properties rather than people.  Upon learning of the situation she had asked the local commissioning body for a variation and had received an encouraging response.  A meeting had been scheduled at which it was hoped that the scheme would be altered to allow people to be designated for sheltered warden services.  She commended the work of officers, in particular the Head of Shire Homes, noting that they had to work within the current legislation, and queried why Councillor Page had not contacted her directly about the situation in Barton.

Councillor Mrs Heazell clarified that recommendation (d) referred to indications that Supporting People funding could change as the government wanted to decrease expenditure, although it was uncertain how this would be implemented.  She noted that South Cambridgeshire already had more sheltered housing per head of population than the other Cambridgeshire Districts, so was not perceived as needing additional schemes.  The Acting Head of Housing Strategic Services was preparing a report for Members explaining this more fully, and the report would include a statement about Supporting People which it was hoped would clarify issues. 

Councillor SGM Kindersley, seconded by Councillor Page, proposed that the Housing Revenue Accounts for 2004/05 be varied by 50 pence per week (i.e. a maximum plus or minus variation of 50 pence per week).  At the request of Councillor Kindersley, supported by at least 5 other Members, a recorded vote was taken:

Council RESOLVED that:

(a)               the Housing Revenue Account (HRA) revised revenue estimates for 2003/04 and estimates 2004/05 be approved;

(b)               the HRA rents for 2004/05 be increased by 50 pence per week (i.e. this means a maximum plus or minus variation of 50 pence per week);

(c)               the following proposed charges be adopted:

Services and Facilities – Charges to Tenants

Services and Facilities – Sheltered Housing Service Charges to Equity Shareholders

(d)               the Portfolio Holder for Housing be given delegated authority to vary any charges that qualify for aid from the Supporting People Pot in order to bring such charges in line with the level of financial assistance available in 2004/05.