Agenda item

Report of the Director of Placemaking and Housing.  To be introduced by the Cabinet Member for Housing Services, Private Renters and Planning.

The Cabinet Member for Housing Services, Private Renters and Planning introduced the report which sought approval for Heat and Communal Lighting Charges for 2023/24, the allocation of £300,000 from the Housing Revenue Account 23/24 budget to a Tenant Hardship Fund and to agree the debt management policy and new metered policy and tariff.

In response to questions from Councillor Emery, the following was noted:

-              At the moment, all tenants on a District Energy Network were paying a flat rate.  The purpose of this report was for resident with meters to be moved onto a metered rate.  All residents would see an increase in their bills due to the increase in gas prices, but the amount would depend on their usage.  There would be a delay in moving tenants to metered usage between now and July which would allow residents to understand their usage and where charges might be higher than expected, to allow the Council to investigate where improvements could be made to the properties to ensure that they would not be using more heat or hot water than expected.

RESOLVED to

1.         Agree the Heat and Communal Lighting Charges for financial year 2023/24 as set out in paragraph 6.18, including the 25% discount in the majority of properties for Heat Charges

2.         Agree that the Heat Charges for all properties with meters will switch to metered charges as set out in paragraph 6.49

3.         Agree the metered charging policy and tariffs, as set out in Appendix 1

4.         Agree the debt management policy and process for metered tenants, as set out in Appendix 2

5.         Direct that the new metered policy and tariff will be introduced in July 2023 following a period of engagement with affected tenants

6.         Note the support available from the Council and partners to all tenants to help them with the rising cost of living

7.         Approve the allocation of £300,000 from the Housing Revenue Account 23/24 Budget to a Tenant Hardship Fund.

8.         Delegate to the Director of Placemaking and Housing, after consultation with the s151 Officer (Director of Finance) and the Cabinet Member for Housing Services, Private Renters and Planning, authority to establish the detailed operation of the Tenant Hardship Fund

9.         Approve the transfer of £1m from the HRA reserve to the HRA to meet the estimated net financial impact of the proposals in this report, regarding heating and lighting charges and a tenants’ hardship fund.

Reasons for decision

Heat charges 23/24

Heat charges for 2023/24 would generally be set to recover the cost to the Council of buying gas to power district energy networks. In light of the very significant rise in the cost of gas, for this financial year the Council will provide a 25% discount.

Communal Lighting Charge

Communal lighting charges for 2023/24 are set to recover the cost to the Council of providing lighting to the communal areas in the blocks.  As this service charge is set at a relatively low level and is covered by housing benefit, charges to recover the full cost of providing the service are proposed.

Metered charging policy

Requirements set out in the Heat Network (Metering and Billing) Regulations 2014 (“HNM&B Regs”) mean that tenants whose homes are heated by a district energy network and who have a heat meter installed shall be charged for their heat based on consumption, and therefore a new charging policy and tariffs are needed to ensure this.

Debt management policy

The debt management policy is needed to:

-      Transparently set out debt management processes to tenants; and

-      Ensure that the third party sending out bills and collecting income on behalf of the Council is clear as to Council policy.

Tenant Hardship Fund

The Tenant Hardship Fund is required to assist tenants for whom the rising cost of living is pushing them into arrears.

Alternative options considered

Heat and communal lighting charges 23/24

The Council could have set charges to fully recover costs. This would have meant a more significant cost increase to tenants. The decision not to do so was taken to allow the council to protect these tenants from the full impact of the rise in the cost of gas for 2023/24.

The Council could also have recovered a smaller percentage of costs incurred. This would have meant that tenants’ heat charges for 23/24 would have been set lower. The decision to provide a 25% discount was taken to balance protecting tenants on the one hand and prudentially managing the Housing Revenue Account on the other.

The Council considered providing a 25% discount on communal lighting, but it was rejected as this charge is set at a relatively low level, is covered by housing benefit and would have a significant financial impact on the HRA if discounted.

Other options considered included capping all costs at a fixed increase from 2022/23 charges. This was rejected since it would mean that the council was recovering a different percentage of heat charges from different blocks.

Remaining with the current flat rate charge for heat charges is not possible because there is a legal obligation to charge metered customers based on consumption. In addition, in the context of rising heat charges, this allows tenants with a meter to have more control over their heat costs.