Agenda item

The Director of Housing submits a report on the District Heating Service Charges proposals which includes an overview of the charging arrangements for tenants and leaseholders in receipt of heating and hot water through the District Heating network and the recommendations which will be presented to Full Council for an in-year increase to service charges.

Members will be asked to comment upon and note the recommendations being taken to Full Council.

The Director of Housing submitted a report on the District Heating Service Charges proposals which included an overview of the charging arrangements for tenants and leaseholders in receipt of heating and hot water through the District Heating network and the recommendations which would be presented to Full Council for an in-year increase to service charges.

The Director of Housing presented the item, it was noted that:

·         The District Heating (DH) network provided a low carbon source of heat and hot water to 2500 tenants, private leaseholders, and other organisations.

·         Since the last budget had been set in February 2022, gas prices had increased by 95%, this was caused by many factors including the war in Ukraine. When the budget was set only a 20% rise in prices was forecast.

·         To help offset energy bills, the Government was providing a £400 rebate to all on energy bills. There was also a £150 council tax energy rebate and low-income households were also eligible for a £650 payment to assist in general with the cost of living.

·         The Government energy price cap was only linked to unit price, so many would be paying more based on their energy usage.

·         The HRA was legally required to be ring fenced and to be balanced. If prices were not increased there would be a shortfall on the HRA of £1.7m by the end of the financial year, extending to over £8m by 2024.

·         The incoming Government rent cap would mean that a rent rise would not be able to cover the extra pressures of gas prices.

·         If DH prices were not increased, then there would have to be a significant reduction in Housing Services in order to balance the HRA.

·         The Council had no obligation to subsidize energy costs for private leaseholders at the expense of tenant rents.

·         Therefore, an in-year DH price increase of 70% was proposed, this would lead to an average monthly price increase of £10.31 depending on the level of energy usage and the size of properties.

·         The price increase for the rest of the financial year could be covered by the Government’s various support. 

·         Even with the new price increase, DH users would still have much cheaper prices than customers on the open market.

·         Other Councils such as Hull were proposing to raise their gas charges by as much as 300%.

Joe Carroll from the Tenants’ and Leaseholders’ Forum raised concerns about the ability of residents to pay the new prices with extra cost of living pressures. He also noted that the prices were not linked to use as there was no metering in DH properties.

Peter Hookway from the Tenants’ and Leaseholders’ Forum stated that he would not be happy if Housing Services were cut due to the Council subsidizing DH prices for private leaseholders and tenants on DH.

There was discussion regarding the possibility of installing meters into DH properties. It was noted that meters would be trailed in the St Peters area as it would be easier to install them there, and then once the success of that was understood the metering of other areas could be considered. It was noted that it would be very hard to install meters into certain areas due to the piping infrastructure not being compatible. It was also noted that installing meters would not necessarily lower prices for DH users and could lead to price increases for some.

The Chair stated that although a DH price rise was regrettable, the extra burden on Council tenants of cuts to Housing Services would be unacceptable.

The Chair moved that the Commission support the proposed price rises to DH, this was seconded by Councillor Pantling, and upon being put to the vote, the motion was CARRIED.

AGREED:

1.    That the Commission supports the proposed price rises for District Heating.

2.    That the Commission requests that comments from Members and Tenant Representatives be taken into account by Officers.