Agenda item

Neale Cooper, Corporate Finance Business Partner, outlined  a report, presenting changes in the Housing rents and service charges for 2016/17. The report set out the context and implications for the Council over the setting of housing rents and service charges for the next four years and the likely impact on the local community. The report was presented to Cabinet on the 18^th January 2016.

The Committee was requested to scrutinise and comment on aspects of the report which would be considered by the Council at its meeting on 26th January 2016.

The Officer advised that in the ten years prior to 2015/16, the setting of Council social rents had been guided by the government policy known as ‘rent convergence’, the intention of which was to bring parity to council social rents across the country, and reduce the ‘gap’ between council social rents and Housing Association rents. Members noted that a government prescribed formula drove these changes and linked the following year’s rent changes to the previous September’s RPI; weighted for regional differences e.g. salaries and house prices.

It was noted that in May 2014, the Department for Local Communities and Government had issued a document which laid out the Government’s policy on social rents for the ten year period from 2015/16 for stock-owning local authorities. Under the changed rent policy, from the 1^st April 2015, rent convergence was to be discontinued and rents were to increase by no more than CPI + 1% for 2015/16 to 2024/25. Subsequently in the summer budget on 8^th July 2015, the Chancellor announced that “rents paid in the social housing sector would not be frozen, but reduced by 1% a year for the next four years”. In previous years, the Government had always allowed Councils discretion in changing their rents but produced a rent policy to guide Councils in the setting of their rents. Slough BC had followed Government rent policy and set its rents accordingly.

The Committee was advised that the Government had now departed from the previous practice of issuing rent ‘guidance’ to setting social rents across the country through primary legislation and work was underway to legislate through ‘The Welfare Reform and Work Bill’, the impact of which was discussed. The resulting effect was that for the 2016/17 year, the Council would need to set its social rents (HRA), 1% lower than the rents current in this year with a base line date of 8 July 2015.

The Officer updated the Committee on the HRA, 30 Year financial Business plan which was updated in January 2015. It was highlighted that the estimated average weekly rent for the current year was £104.70 and that Government proposals would produce a total estimated loss in potential rental income of £9.7m and an average decrease of 3.9% in weekly rent over the next four years. This equated to an approximate loss of 60 new social properties and over a ten year period the cumulative estimated loss of rental income could be £30m.

Members noted the position over the next four years where in addition to the rent decreases, the HRA would progress with the re procurement of its Repairs, Maintenance and Investment contract. This would continue to require investment until the new contract was in place but would result in a new contract that offered better value for money, focussing more effectively on meeting tenants’ housing needs and aspirations and other improvements.

The Officer discussed further proposed changes that would likely impact on the HRA and the Council’s tenants in the new few years, relating to ‘Pay to Stay’ and the sale of high value council houses, which was linked to the proposed introduction of ‘right to buy’ for Housing Association tenants.

A Member raised whether the proposed increase in service charge would result in improved services to residents. The Committee agreed that issue of an increase in fee service charges and the service provided for this be discussed at a future meeting of the Neighbourhoods Scrutiny Panel.

Resolved -   That the Committee note the following, which would be considered at 26^th January Council meeting: 

(a)  Council house dwelling rents for 2016/17 to decrease by 1% over the 2015/16 rent with effect from Monday 4^th April 2016. This is in line with current government guidelines and legislation.

(b)  Garage rents, heating, utility and ancillary charges to increase by 0.8% with effect from Monday 4^th April 2016. This is based upon the September RPI figure.

(c)  Service charges to increase by 0.8% with effect from Monday 4^th April 2016. This is based upon the September RPI figure.

(d)  ‘Other committee’ property rents to increase by an average of 0.8% from Monday 4^th April 2016 in line with the September RPI figure.