Agenda item

The Chair has advised that a report on the Draft Housing Revenue Account Budget for 2023/24 will be considered at the meeting as a matter of urgency. The report will be circulated as soon as it is available.

The Overview Select Committee is recommended to consider the report and

pass its comments on to the meeting of Council for consideration.

The Director of Housing submitted a late report on the Draft Housing Revenue Account Budget for 2023/24.

The Committee was asked to consider the Draft Budget and the comments and suggestions from the Housing Scrutiny Commission and the Tenants and Leaseholders Forum and pass its comments to the meeting of Council for consideration.

The Strategic Director of City Development and Neighbourhoods presented the item, it was noted that

·         The context to the budget was a 1% rent reduction from 2016-2020, inflationary costs, and lost income from right to buy sales. The budget was legally required to be balanced.

·         The proposed rent changes were a 7% increase to core rent which was the cap, a 5% increase to Gipsy and Traveller Plot Rent, and a 10.1% increase to garage rent. 

·         Proposed service charges increases were increasing the charges for District Heating which would be covered in more detail shortly, a 100% increase in the charge for way lighting, and increases to all other service charges of 10.1%. 

Councillor Westley as Chair of the Housing Scrutiny Commission thanked Tenants Groups for their input into the Budget process. He noted that the Tenants and Leaseholders Forum supported a 200% increase in District Heating charges and that a metering programme would soon begin for properties receiving District Heating. He expressed frustrations at the Government’s failure to support the Council in providing more social housing. It was noted that the Housing Scrutiny Commission supported that Draft Housing Revenue Account Budget for 2023/24 though sought further detail on an alternative proposal in relation to District Heating.

The Strategic Director of City Development and Neighbourhoods then gave a detailed presentation on proposed changes to District Heating charges as well as covering the Capital Programme, it was noted that:

·         The energy crisis had resulted in a 300% increase in gas prices in 2022/23.

·         The proposal was a 247% increase in District Heating charges, with charges standing at £3135 on average per property before metering and  £2545 on average per property after metering. The management costs of District Heating would still be sustained with the HRA and it was highlighted that this alone would be cost £4.4m.

·         In order to reduce usage and therefore reduce costs, it was proposed that meters would be installed into all properties using District Heating. The proposed metering programme would run from April-October 2023.

·         If District Heating charges were no increased then a £4.5m cost to the General Fund and a £10.2m cost to the HRA would have to be sustained.

·         The Energy Price Guarantee would continue for 12 months, other Government support included a £900 payment for households on benefits, £300 to pensioner households, and £150 for those on disability benefits.

·         The Council provided Housing Benefit alongside support from various teams such as STAR.

·         Reductions had been made in the Capital Programme to sustain the HRA.

·         The proposals the Tenants and Leaseholders Forum and Councillor Kitterick had been modelled to look at the impact on the HRA and General Fund.

The Chair noted that Councillor Kitterick was present at the meeting. The Chair allowed Councillor Kitterick to speak on the issue of the proposed changes to District Heating charges. Councillor Kitterick noted that his proposal was to increase charges only to the point where the average cost for users was £1611, this was the proposal as it would be in-line with the price cap paid by customers on the open market for the same service due to the Energy Price Guarantee. This was proposed as a stop-gap measure while meters were installed, once meters were installed then the power to determine costs would be passed to the users. The proposed increases were felt to be unfair as users had no power over the charges as they were not currently based on usage and were a flat fee. It was noted that District Heating users were some of the poorest residents of the city on average. Councillor Kitterick also noted that if any issues caused the metering process to be delayed then this would further increase the burden on users as they would pay the increased flat costs for even longer.

Officers noted that if Councillor Kitterick’s proposal was implemented it would result in a £859k impact on the HRA and a £386k impact on the General Fund.

The City Mayor spoke, noting that all were in favour of bringing in metering. The difference of opinion was in how charges should be handled in the meantime. The City Mayor reminded the Committee that the HRA was ringfenced and could not be subsidised from the General Fund, therefore any extra burden on the HRA would be funded by tenants’ rents.

In response to questions from Members it was noted that:

·         In relation to comparators Councils, it was noted that Sheffield had brought in a 200% increase in their District Heating Charges.

·         The gas on District Heating was bought wholesale from the market at a rate of 9.5p per kwh.

·         Metering would take around 4.5 hours per property with the bulk of work being in the enabling works beforehand.

·         The additional cost to the HRA from Councillor Kitterick’s proposal would require the removal of the environmental works programme from the HRA programme.

A Member urged any Councillors who were proposed to the District Heating proposals to vote against them at Full Council.

Councillor Westley noted that many District Heating users had informed him that they would rather not be on the service at all and be on the open market. Councillor Westley moved that the Committee would request the Council to consider a consultation on allowing District Heating users to enter the open market instead. This was seconded by Councillor Porter, and upon being put to the vote that motion was CARRIED.

The Chair moved that the Committee note and endorse the comments of the Housing Scrutiny Committee and the Draft Housing Revenue Account for 2023/24, this was seconded by Councillor Westley, and upon being put to the vote, the motion was CARRIED.

AGREED:

1.    That the Committee notes the comments of the Housing Scrutiny Commission and endorses the Draft Housing Revenue Account for 2023/24.

2.    That the Committee requests that the Council consider a consultation for District Heating users on being able to enter the open market.

3.    That the Committee requests that Officers circulate the modelling on the proposals of Councillor Kitterick and the Tenants and Leaseholders Forum.