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 2022/23 and Housing Stock Business Plan.

RESOLVED that –

(a)       the Housing Revenue Account Budget for 2022/23 (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 £97.27 with effect from Monday 4 April 2022;

(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 2022/23 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.  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.  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 2022/23 was 3.1% CPI only resulting in an average weekly rent of £97.27 (average weekly rent increase £2.92).  As part of the rent setting process consideration had been given to affordability for tenants, value for money and an assessment of cost efficiencies which had been set out in the report.  Whilst 2021 had been a difficult year for household finances and would continue in 2022 the affordability of weekly rents was considered reasonable.

The Lead Officer – Community Housing added that the increase would result in £500k extra funding in the business plan every year and he provided an overview of spend, advising that the efficient use of funds had been recognised by council tenants in the tenant survey with 85% stating they had value for money from their rent.  The impact on household finances had been recognised and a supportive approach was taken with the service providing budgetary advice and support.  At the request of Councillor Tony Thomas, the Lead Officer reported on the rental income software introduced to predict rent arrears which had been successful in mitigating/reducing arrears, allowing staff more time to support tenants.

Cabinet recognised the need to balance the level of rent increase to meet future investment needs of housing stock against affordability for tenants.

Officers responded to members’ questions as follows –

·         balances had been carried forward with some capital spend delayed due to the pandemic – it was council policy to retain a minimum balance of £1m

·         72% of tenant households received financial support for housing costs and for those households the increase would be covered by that benefit

·         elaborated upon the affordability measures providing examples of different households to illustrate the complexities of those assessments

·         the Council’s rent level was generally slightly below other local authorities and housing associations with an equivalent or better service provided

·         the need for investment in housing stock was vital to meet quality standards and decarbonisation targets, and build new homes to meet housing need

·         the rent increase was in line with Welsh Governmnet policy and CPI had since increased to 5.1% which would impact on financing future housing works

·         freezing rent levels would result in a recurring £500k loss and a detrimental impact on future investment in housing stock which could not be recouped in future years

·         the rent increase could not be mitigated from reserves given a regular payment would be required every year and a minimal reserve balance of £1m retained

·         it was important to make incremental changes each year in order to keep up with cost increases and provide a basis for investment in future years

·         investment had been made in supporting tenants to maximise income/resilience and specialist support provided by Citizens Advice and Working Denbighshire

·         levels of rent arrears were closely monitored with 3.2% of money owed in Denbighshire compared to the Welsh average of 4.2% across local authorities

·         highlighted the impact of capital receipts on the Housing Revenue Account and the complexities of the budget and borrowing fluctuations

·         following the ITV report on poor housing conditions (predominantly in England) assurances were provided regarding quality standards in Denbighshire

·         50% of housing met the Council’s target of minimum energy performance rating EPC C and 90% met the current Welsh Government’s (WG) target of minimum EPC D; funding support from WG would be required to meet future targets.

RESOLVED that –

(a)       the Housing Revenue Account Budget for 2022/23 (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 £97.27 with effect from Monday 4 April 2022;

(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 point (11.45 am) the meeting adjourned for a short break.