Agenda item

To review council tenant rents and housing related charges and agree the revision of charges for the new financial year.

Approval was sought to authorise the Director of Housing to make several amendments to council tenant rents and housing related charges for 2022/23.

This included increasing housing service charges by the consumer price increase (CPI) which was 3.1% plus 1% which was equivalent to a 4.1% increase. Approval was also sought to increase rent at the traveller’s pitch site in Hillside View, Tipton, by the lower level of either 2% or the consumer price increase (CPI) plus 1%.  For 2022/23, this would be an increase of 2%. This increase to be implemented, subject to consultation with residents of the site contract, was to be awarded following a compliant further competition and evaluation process under the NHS Shared Business Services, Digital Workplace Solutions Framework agreement. The rental charge for garage sites was proposed to be increased by £4.13 to £11 per week.

Approval was also sought for properties managed by Riverside under the Private Finance Initiative (PFI) agreement to be subject to a 2% rental increase and 4.1% increase in service charges.

Additionally, properties that sat outside the Housing Revenue Account (including service tenants for Parks, Sandwell Valley and Caretaking) received a 4.1% increase in rental charges and service charges. This was equivalent to CPI plus 1%. Furthermore, it was proposed to increase the leaseholder annual fee by CPI plus 1% in 2022/23 to £104.10.

Reasons for Decision

On an annual basis, council tenants, leaseholders and other residents werenotified of the rent and other related housing charges to be set from April.Approval was sought to agree the revision of these charges for thenew financial year 2022/23.

The rental income was essential to the financial robustness of the Housing Revenue Account (HRA). Rental income offsets operational costs and financial charges and the surplus was used to invest in capital improvements; in particular, to fund the council’s affordable homes new build programme.

Approval had already been granted by Cabinet on 8January 2020 to increase rents by 2% in each of 3 financial years: 2020/21, 2021/22 and 2022/23. This report sought approval for service charges and other rental charges only.

Alternative Options Considered

It was recommended from April 2022 to increase rents by 2% for tenants within the Riverside managed PFI estate of Wednesbury. The council did have the discretion to set PFI rents. This increase was consistent with the increase in the council’s rents.

The Department for Levelling up Housing and Communities (DLUHC) policy allows social landlords to increase their annual rents by Consumer Price Index (CPI) plus 1%. This would be a 4.1% increase for our tenants. The lower 2% increase proposed in January 2020 was agreed by Cabinet. The lower increase recognised the impact of the rise in fuel costs, the ending of furlough and ending of the universal credit uplift, on our tenants.

An alternative to increasing rental and service charges would be to reduce services where costs could not be met through operational budgets.

Agreed that in relation to council tenant rents and housing related charges for 2022/23, the Director of Housing be authorised to:

(1)          increase housing service charges by the consumer price increase (CPI) which is 3.1% plus 1% which is equivalent to a 4.1% increase;

(2)          increase rent at the traveller’s pitch site in Hillside View, Tipton, by the lower level of either 2% or the consumer price increase (CPI) plus 1%, for 2022/23, this will be an increase of 2% subject to consultation with residents of the site

(3)          increase rental charges for garage sites by £4.13 to £11 per week;

(4)          that properties managed by Riverside under the Private Finance Initiative (PFI) agreement be subject to a 2% rental increase and 4.1% increase in service charges;

(5)          that properties that sit outside the Housing Revenue Account (including service tenants for Parks, Sandwell Valley and Caretaking) receive a 4.1% increase in rental charges and service charges. This is equivalent to CPI plus 1%;

(6)          increase the leaseholder annual fee by CPI plus 1% in 2022/23 to £104.10.