Agenda item

The Director for Corporate Services & The Head of Place and Regeneration to provide a Report to set the rents of Council dwellings, approve the HRA estimates for 2018-19 and set the working balance for 2018-19

The Director for Corporate Services and the Head of Place and Regeneration submitted a report to set the rents of Council dwellings, approve the HRA estimates for 2018-19 and set the working balance for 2018-19.

The Corporate Services Manager noted that this report is the annual paper for members to approve a rent decrease of 1% for all Council dwellings from 020418. 3.1 (a) of the report notes that the Council is under a legislative duty to publish an annual budget for  the HRA which avoids deficit.

Due to the Chancellor’s promise in the 2015 budget to reduce social rents by 1%, the rents in 2018-19 will be up to 5% less or £360k, as per 3.1 (b). This equates to around £74.99 per week less.

Members were directed to 3.2 (b) which showed the estimated year end position as an approximate £252,000 surplus. The working balance for 18-19 is estimated at £1.4 million. The Corporate Services Manager advised that the deficit estimated for 18-19 is a result of the Capital Programme and otherwise looks to be in a healthy position.

The Corporate Services Manager noted that as of 010418, Severn Trent Water have ended our agency agreement for which we collect water rates from tenants on their behalf, as per 3.2 (g). This has resulted in a loss of £76k per year. Currently, we are negotiating with Severn Trent to agree an amount to prevent the Council being left with write-offs.

Members were also advised that the estimates include a continuing contribution of £80k in 18-19 to support the Me and My Learning Scheme due to the impact of Universal Credit. (3.4).

A Member queried line 34 of Appendix A: Revenue Estimates 18-19. This shows a considerable expenditure increase. The Corporate Services Manager noted that this was due to higher reserves and a greater rate of return; average return on investment is 0.95.

A Member noted the appalling rent decreases when rural areas struggle to rent for less than £750 p/month. The Head of Place and Regeneration noted that this is part of a four year settlement and going forward is not sustainable at -1%. Four years at -1% is equivalent to £33m rent loss, hopefully we will see rents start to increase.

The Chair asked for clarification with regards to 3.4(g) Severn Trent Water.

The Corporate Services Manager clarified negotiations with Severn Trent to avoid unfair debt collection.

The Chair noted the importance of engaging since Grenfell.

The Chair sought a proposer and seconder. All members were in favour.

RESOLVED that

(1)  The Committee approved a rent decrease of 1% for all Council dwellings for 2018-19 with effect from 2nd April 2018 and that when a property is re-let the rent continues to be brought into line with the Governments formula rent;

(2)  The estimates for 2018-19 were approved subject to the receipt of the limit rent Determination, with delegated authority given to the Director of Corporate Services in consultation with the Head of Place and Regeneration to amend the estimated working balance based on any changes to this determination;

(3)  A working balance of £966,869 is budgeted for at 31st March 2019 based on a 1% rent decrease.

(4)  In addition to these estimates a contribution of 25% per year to be made to support the work of the Priority Neighbourhood Management Team within the Melton Mowbray town area through the additional allocation of support costs as per paragraph 3.4 (c).