Agenda item

To consider a report by Councillor Julian Thompson-Hill, Lead Member for Finance, Performance and Strategic Assets (copy enclosed) seeking Cabinet approval for the Denbighshire Housing annual rent increase, the Housing Revenue Account Capital and Revenue Budgets for 2021/22 and Housing Stock Business Plan.

RESOLVED that –

(a)       the Housing Revenue Account Budget for 2021/22 (Appendix 1 to the report) and the Housing Stock Business Plan (Appendix 2 to the report) be adopted;

(b)       rents for Council dwellings be increased in accordance with the Welsh Government Policy for Social Housing Rents to an average weekly rent of £93.89 with effect from Monday 5 April 2021;

(c)        the additional report (Appendix 3 to the report) on Cost Efficiencies, Affordability and Value for Money be noted, and

(d)       Cabinet confirms that it has read, understood and taken account of the Well-being Impact Assessment (Appendix 4 to the report) as part of its consideration.

Councillor Julian Thompson-Hill presented the report seeking Cabinet approval for the Denbighshire Housing annual rent increase, the Housing Revenue Account Capital and Revenue Budgets for 2021/22 and Housing Stock Business Plan.

Councillor Thompson-Hill guided members through the report elaborating upon the budget figures and income level assumptions calculated to enable delivery of revenue services, the capital investment programme to maintain housing quality standards and to develop the new build programme.  In terms of the annual rent increase the Welsh Government announced a five year rent policy in December 2019 for social housing rents and the setting of rents had been calculated taking that policy into account and the mechanism for uplifting rents.  The uplift for 2021/22 was 1.5% resulting in an average weekly rent of £93.89 (average weekly rent increase £1.38).  There was no proposal to use the discretionary charge of up to £2 per week for properties.  As part of the rent setting process consideration had been given to affordability for tenants, value for money and an assessment of cost efficiencies.  The annual review of the Housing Stock Business Plan showed it remained robust and financially viable and there were sufficient resources to support the housing service and the investment needs of the stock. 

The Lead Officer – Community Housing highlighted the need to balance the level of rent increase to meet future costs against affordability for tenants.  Due to the level of inflation it was the lowest rent increase for some time and for tenants in receipt of housing benefit the benefit entitlement would rise to cover the rent increase.  The overall service charges, whilst varying between properties, had decreased slightly.

During consideration of the report the following issues were further discussed with Councillor Julian Thompson-Hill and Lead Officer – Community Housing –

·         Councillor Mark Young stated that it was honest report which clearly set out the reasoning behind the rent increase but he sought further assurances regarding the affordability element, particularly given the potential reduction in Universal Credit payments and financial hardship faced by tenants.  He was advised that regardless of the level of Universal Credit if tenants were eligible for the benefit any increase in the rent and service charge would be covered.  Assurances were provided that the service had been proactively supporting tenants and affordable repayment terms were offered if they fell into arrears with no threat of legal action.  Tribute was also paid to Citizens Advice Denbighshire in providing value support and budgeting advice for tenants.  All Registered Social Landlords in Denbighshire had the same responsibilities in terms of decarbonisation standards and housing stock investment but the Council’s rents were lowest with no lesser service provided.  Previous years’ data showed the Council’s rents to be on the lower end of the scale in terms of Welsh Government target rent and it was likely that more tenants would fall below the target rent this coming year demonstrating an excellent service at a low cost to tenants

·         whilst appreciating the need for an annual review and the case made for the rent increase, Councillor Bobby Feeley questioned the timing of the increase in light of the financial hardship caused by the pandemic and whether it would be possible to shelve the increase until the following year.  It was explained that the legislation did not permit retrospective claiming back of income and next year it would only be possible to consider CPI + 1%, and potentially the £2 discretionary charge, but that would place a bigger increase on tenants in one year rather than spreading it across two years.  It would also result in less income in the next financial year which would potentially impact on the viability of the Housing Stock Business Plan going forward.  The welfare of tenants was a key consideration and the increase had been discussed with Denbighshire Tenants and Residents Federation.  It was noted that the increase would be covered by housing benefit in over two thirds of cases and the remaining tenants would be supported as much as possible.  Previously the rent increase had been worth around £800k a year but the current proposal would result in around £240k and a stagnant rent with no increase would result in a loss of close to £1m in four years.  This would impact on the investment in housing stock and service provision for tenants.  Whilst appreciating the increase for tenants, the rent was still well below the Welsh Government target rent level

·         in terms of the Welsh Government five year rent policy for social housing rents it was reiterated that the policy agreed an annual rent uplift annually of no more than CPI + 1% with an additional £2 per week charge on individual homes on condition that the total rent increased by no more than CPI + 1%.  Other North Wales local authorities were also increasing rents with some intending to utilise the £2 weekly increase instead of CPI + 1%.  Welsh Government target rents had risen by 11.5% over the last four years but the Council’s rents had only increased by 9% over that period.  Even taking into account the proposed rent increase Denbighshire’s rent levels still remained well below the Welsh Government target rent.  Reference was also made to the investment to be made in the housing stock including making properties more fuel efficient which would result in decreasing fuel bills for tenants

·         Councillor Glenn Swingler raised concerns regarding the terminology used in the Well-being Impact Assessment (WBIA) referencing the fear that Denbighshire Housing would have a disproportionate amount of poorer households due to its lower rent.  The Lead Officer accepted the point and agreed to reword the document.  He explained that the WBIA had been undertaken with tenants and there had been a previous concern regarding the approach taken by other housing associations in terms of the affordability assessment and eligibility for tenancies which was outdated.

Cabinet paid tribute to the work of housing services, in partnership with Citizens Advice Denbighshire, in supporting tenants to effectively manage their finances and maximise their income, and the sensitive approach to dealing with tenants in financial difficulty.  Having considered the budget figures and proposed rent increase, and taking into account affordability for tenants and the future level of investment in housing stock, there was overall support for the recommendations.

RESOLVED that –

(a)       the Housing Revenue Account Budget for 2021/22 (Appendix 1 to the report) and the Housing Stock Business Plan (Appendix 2 to the report) be adopted;

(b)       rents for Council dwellings be increased in accordance with the Welsh Government Policy for Social Housing Rents to an average weekly rent of £93.89 with effect from Monday 5 April 2021;

(c)        the additional report (Appendix 3 to the report) on Cost Efficiencies, Affordability and Value for Money be noted, and

(d)       Cabinet confirms that it has read, understood and taken account of the Well-being Impact Assessment (Appendix 4 to the report) as part of its consideration.

At this juncture (11.25 hrs) the meeting adjourned for a refreshment break.