To consider any requests received in accordance with Standing Orders.
Minutes:
Deputation from Paul Burnham - Consultation on Service charges
Mr Burnham put forward representations concerning the 2020/21 Budget report and 2020 – 2025 MTFS, objecting to the proposed increase to the rent charges for the Council’s 18 affordable rent tenancies within the Housing Revenue Account and further objecting to proposed increases in service charges as no consultation had taken place.
Mr Burnham commended the Council on its policy for supporting social rents rather than affordable rents and highlighted that there were still 18 properties with affordable rent tenancies, paying 80% of normal market rents and paying double the rate of Council rents. The deputation did not want these tenants to be forgotten and contended that they should be included in the Council rents scheme. The deputation expressed that the Mayor of London had created confusion on the definition of social rents and asked the Council to use the social rent formula as required by government guidance and not to set the rents at cap.
The deputation requested that the Council be open on how it sets every social rent in the borough, as this was the only way to provide certainty that they were charging tenants normal Council rent and no more.
Mr Burnham continued to object to the proposed services charge increases for tenants and leaseholders. He contended that the evidence was incontrovertible that something had gone wrong with converted properties cleaning service charges. The tenants were charged 12 months before the service began. He highlighted that there were tenant’s charges for the leaseholder contribution in this financial year and Council tenants were set to pay leaseholder contributions for next year as well. This was while leaseholders were also paying contributions. In the deputation’s view, this was a revenue driven service and they recommended that the Council deliver this particular service at nil charge to the tenants next year. The deputation felt that this proposal was justified, once Cabinet Members examined the figures.
The deputation highlighted that there was one service charge that had been consulted upon. This was the consultation was undertaken on estate parking. The deputation called on the Council to publish these findings. They contended that the results would demonstrate tenant’s rejection of new and additional charges and would also reject the subsidy argument which was the main focus for the increase in charges.
The deputation asserted that tenants and leaseholders would not be spilt and were unified in wanting a say in the charges being put to them. There was £18m of proposed income arising from charges made to residents without a consultation.
The deputation concluded by asking the Cabinet to work with residents instead of against them, especially with the current government in place. The deputation called on the Cabinet to make the proposed changes put forward by them and offered to work with the Council to make these changes.
The Cabinet Member responded to the deputation, thanking them for the issues that they had raised which were noted.
It was the Cabinet Member’s understanding that there was no requirement to carry out a consultation where only an increase in tenant service charge was proposed. There was no requirement even where a change is proposed in what services are charged for.
The Cabinet Member continued to advise that the existing policy provides that tenant’s service charges are set at a level that recovers the cost of the service, and no more than that. The amount tenants pay increases where the cost of providing the service is anticipated to increase and reduces when the cost of providing the service reduces.
The Cabinet Member emphasised that in preparing the service charge for 2020/21, consideration was given to consultation, and the Council took into account its methodology for calculating the services charges and this was entirely consistent with its existing policy, on which there was consultation. Therefore, under the policy, there was no expectation or requirement to consult further.
The Cabinet Member expressed that the Council would not be consulting on this matter and further outlined that the proposed tenant service charges were in any case set to increase by an average of 1.1%. This was less than the rate of inflation and so represented a reduction in cost in real terms.
The Cabinet Member further responded to the issues raised on the 18 homes being charged affordable rents. He reiterated the Council’s programme for delivering 1,000 Council homes at Council rents was founded on the idea that these will be new homes at true social rents and this was known in technical jargon as formula rents.
The Cabinet Member advised that existing Council homes, when they come up for re- letting, were let at these formula rents and it was not the current policy to convert any of the Councils homes to Affordable Rent or any other type of rent.
The Cabinet Member accepted that there was an anomaly that these 18 households are charged a higher rent than tenants who move into all these other Council homes and was sympathetic to the arguments made that these rents should be reduced. However, it would be premature to change this situation at this meeting.
The Cabinet Member outlined that Council stock had previously fallen into disrepair and pointed to the low level of decent homes due to historic decisions made by previous administrations to hold all rents down to a level that starved the HRA of the funds that it needed to reinvest in the stock. The move towards formula rents that was introduced by the last Labour Government’s rent restructuring programme and the lifting of the HRA borrowing cap provided the means to change this situation.
The Cabinet Member underlined that the Budget report was making the funds available not just to finally bring stock up to the decent homes standard, but to make it fire safe and fit for the low carbon future. It was also funding a new generation of Council housing. All this was based on borrowing against the Council’s rental income. So to make any change to that projected rental income, without properly modelling the impacts on these hugely important investments would not be appropriate.
The Cabinet Member concluded by acknowledging the anomaly and providing assurance that he would instruct officers to urgently model the impact of this proposed change and, if it was viable for the HRA, the Cabinet Member committed to bring a report addressing this point back to the first Cabinet meeting where it was feasible to do so.