Issue - meetings

(Cabinet Member with Special Responsibility Councillor Leytham)

Report of the Head of Resources and the Head of Health and Housing

(Cabinet Member with Special Responsibility Councillor Leytham)

Cabinet received a report from the Head of Resources and Head of Health and Housing to consider options for adopting a medium term council housing rent policy and wider medium term financial strategy for council housing, in context of housing regeneration priorities and potential future funding options. 

The options, options analysis, including risk assessment and officer preferred option, were set out in the report as follows:

Members had reaffirmed that the strategic housing regeneration priorities for the foreseeable future were:

(a)     To increase the supply and delivery of affordable housing schemes.

(b)     To complete existing unfinished schemes in the West End (the completion of outstanding housing regeneration projects at Chatsworth Gardens and Marlborough Road/Bold Street).

(c)     To bring empty properties back into use.

Options:  Future Rent Setting Policy

The Council needed to decide whether it wished to achieve rent convergence, as assumed by the Government, or whether it wished to set alternative rent objectives.

If the Council chose to move away from the Government’s social rent policy of convergence, the amount of future funding available within reserves would decrease as illustrated in the report.  In addition, there might be new or greater risks to the income available particularly through the impact of future welfare reforms, and this would affect financial and investment planning.  In particular there might be a need to increase the minimum level of HRA balances held.

It was recommended, therefore, that the Council established a stable method of determining the annual review of rent.

·               Option 1:

To continue to follow the Government’s social rent policy including convergence factors (Actual rents are increased by RPI +0.5% plus (an amount equal to the difference between the guideline rent and the actual rent) divided by the number of years remaining to convergence.  This was subject to a maximum capped increase of RPI+ 0.5% + £2 in order that rents were not subject to extremely high rent increases)

·               Option 2:

      To continue to follow the Government’s social rent policy excluding convergence factors (Actual rents are increased by RPI +0.5%)

·               Option 3:

         To establish a local social rent setting policy that supported the future investment needs of the Housing Revenue Account, drawing on the annual rent increase scenarios outlined in the report.